The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
ANNUAL REPORT
OF THE
COMPTROLLER OF THE CURRENCY
TO THE
THIRD SESSION OF THE FIFTY-FIFTH CONGRESS
THE UNITED STATES.
DECEMBER 5, 1898.
IN
TWO VOLUMES.
VOLUME
I.
WASHINGTON:
GOVERNMENT PRINTING
1898.
OFFICE,
TREASURY DEPARTMENT,
Document No. 2071A.
Vol. I.
Comptroller of the Currency.
O O N T E N T S.
rage.
Condition of national banks
IX
Analysis of reports of national banks made during tho year
X, XI
Investigations and recommendations relative to bank-note currency
XI
Principles of prominent currency plans
XII
Assumptions underlying currency plans
XII
Views in opposition to proposed currency plans
XII
Position of general creditors and note holders
XIII
Distribution of assets of insolvent national banks
XIY
Preference of note-holding creditors not an inherent moral right
XY
Analysis*of statistics relative to insolvent banks
XY
Depositors in smaller banks and newer sections of country will sustain greatest loss by preference of circulation
XX
Effect of passage of law making note holders preferred creditors
XXI
Bank-note currency in European countries
XXII
Canadian bank system
XXII
Summary of views of Comptroller upon proposed currency plans
XXII
Elastic and inelastic? currency
XXIY
Fixed issues of the Bank of England and other banks of issue in the United Kingdom
XXIY
Recommendations of the Comptroller in regard to the present laws governing national-bank
note issues
XXY
Insolvent national-bank statistics
XXVI
National-bank examiners
XXX
Limitation of loans
XXX
Violations of section 5200, United States Revised Statutes
XXXI
Ratio of resources to capital of national banks in reserve cities and elsewhere
XXXI
Effect of the restriction provided in section 5200 on city and country banks
XXXI
Amendment to section 5200 recommended
XXXIII
Comparative statement of the effect of section 5200 on city and country banks
XXXIV
Table exhibiting the number of loans by national banks on November 1,1898, number of excessive loans under section 5200, and number which would be excessive under the law as it is
proposed to amend
XXXY
Insolvent national banks
XXXY
Nominal assets of insolvent national banks
XXXY
Reduction of expenses attending liquidation of insolvent national banks
XXXY
Assessment upon shareholders of insolvent national banks
XXXYI
Holding of the United States Supreme Court relative to liability of shareholders of insolvent
national banks
XXXVII
Illustrations of methods of ascertaining liability of shareholders of insolvent national
banks
XXXVIII
Domestic branch banking, recommendations relative to
XL
Foreign and colonial branch banks, relative to
XLI
Capital and circulation of national banks in operation, the total number of banks organized and
in existence
XLIY
Comparative statement of the amount of bonds on deposit to secure circulation on October 31,
1897 and 1898
XLIY
Geographical distribution of national banks and capital
XLIY
Geographical distribution of national banks organized during the year
XLIY
Extension and expiration of corporate existence of national banks
XLY
Liquidation of national banks and dividends paid since 1893
XLV
Tax paid on national-bank circulation
XLVI
Duration of national-bank circulation, statistics relative to
XLVI
State banks and banking institutions, information and statistics relative to
XLVIII
Resources and liabilities of State banks, 1894 to 1898, inclusive
XLVIII
Savings banks, general information and statistics relative to
XLIX
III
IV
CONTENTS.
Page.
Classification,of deposits in savings banks in Maine and Connecticut
Loan and trust companies, condition of
Principal items of resources and liabilities of State, private, and national banks
Aggregate banking funds of all reporting banking institutions
-.
Specie and other currency held by national and other banks
Failures of banks other than national during the year
Canada, information relative |o banks in
Postal and other foreign savings banks, deposits in
Foreign banks of issue, statistics relative to
Monetary systems and approximate stocks of money in the principal countries of the world.
Conclusion
European banking laws and regulations
CONTENTS OF
L
L
L, LI
LI
LI
LI
LI
LI
LII
LIII
LV
LVI
APPENDIX.
National-bank act
Dige3t of national-bank decisions
1
85
APPENDIX TABLES.
No. 1. Names and compensation of officers and clerks in the office of the Comptroller of the
Currency October 31,1898
No. 2. Expenses of the office of the Comptroller of the Currency for the year ended June 30,
1898
No. 3. Number of national banks organized, number now in operation, and the number passed
out of the system since February 25,1863
No. 4. Number and authorized capital of national banks organized and number and capital of
banks closed in each year ended October 31 since the establishment of the nationalbanking system, with the yearly increase or decrease
No. 5. Number of national banks organized, in liquidation, and in operation, with their capital, bonds on deposit, and circulation issued, redeemed, and outstanding on October
31, 1898
No. C. Number of national banks organized, in voluntary liquidation, insolvent, and number and
capital of associations in active operation on January 1 of each year from 1864 to 1898.
No. 7. Number of national banks in operation October 31,1898, and number in voluntary liquidation and insolvent in each State and Territory since the organization of the
system
No. 8. Number ami capital of national banks organized in each State and Territory during the
year ended October 31,1898
No. 9. Number and capital of all national banks in each State extended under the act of July
12,1882
No. 10. Number, capital, and circulation, by States, of national banks the corporate existence of
which was extended during the year ended October 31,1898
No. 11. National banks, their capital and circulation, that expired during the year, and the associations which succeeded them
«.
No. 12. National banks the corporate existence of which will expire during the year ending October 3, 1899, with the date of expiration, capital, amount of United States bonds and
circulating notes
No. 13. Number, capital, and circulation of national banks that will reach the expiration of their
corporate existence during the period of ten years from 1899 to 1908, inclusive
No. 14. National banks that were closed to business, by voluntary liquidation and otherwise,
during the year ended October 31, 1898, with date of authority to commence business,
date of closing, capital, and circulation issued, redeemed, and outstanding
No. 15. National banks that were closed to business during the year ended October 31, 1898, and
remain at date in charge of national-bank examiners
No. 16. Authorized capital stock of national banks on the first day of each month from January
3,1876, to October 31,1898, bonds on deposit to secure circulation, circulation secured by
bonds, lawful money on deposit to redeem circulation, and national-bank notes outstanding, including notes of national gold banks
«No. 17. Profit on national-bank circulation, based on a deposit of $100,000 United States bonds..
329
330
330
331
332
333
333
334
334
334
335
335
335
336
338
339
344
CONTENTS.
Y
Page.
No. 18. Changes in capital, bonds, and circulation of national banks by geographical divisions.. 345
No. 19. Decrease or increase of national-bank circulation during each of the years ended October
31,1890 to 1898
350
No. 20. National-bank circulation issued, lawful money deposited to retire circulation, from
June 20, 1874, to October 31,1898, and the amount on deposit, by States, at the latter
date
351
No. 21. National-bank notes outstanding, lawful money on deposit to redeem circulation, bonds
on deposit to secure circulation, and public deposits on October 31, 1898, with the
changes during the preceding year and the preceding month
352
No. 22. Quarterly increase or decrease in national-bank circulation from January 14, 1875, to
October 31,1898
353
No. 23. National-bank notes issued, redeemed, and outstanding, by denominations and amounts,
on October 31,1864 to 1898, inclusive
355
No. 24. National gold bank notes issued, redeemed, and outstanding October 31,1898
358
No. 25. National-bank notes issued during the year ended October 31,1898, and the total amount
issued, redeemed, and outstanding
358
No. 26. Additional circulation issued monthly on bonds for years ended October 31, from 1886 to
1898
358
No. 27. Number and denominations of national-bank notes issued and redeemed since the organization of the system, and the number outstanding October 31,1898
359
No. 28. Yault account of currency received and issued by this Bureau during the year
359
No. 29. National banks having no circulation outstanding
359
No. 30. Additional circulation issued and retired, by States, during the year ended October 31,
1898, and the total amount issued and retired since J u n e 20, 1874
360
No. 31. National-bank notes received monthly for redemption during the year by the Comptroller and the redemption agency of the Treasury, together with the total amount
received since J u n e 20, 1874
361
No. 32. National-bank notes received at this Bureau and destroyed yearly since the establishment of the system
361
No. 33. Vault account of currency received and destroyed during the year
362
No. 34. Taxes assessed as semiannual duty on circulation, deposits, and capital from 1864 to
1882
362
No. 35. Taxes assessed as semiannual duty, cost of redemption, cost of plates, and examiners'
fees, 1883 to 1898
.\
362
No. 36. Taxes collected on capital, deposits, and circulation to June 30,1898
362
No. 37. Taxes collected on circulation, deposits, and capital of banks, other than national, by
the Internal Revenue Bureau, 1864 to 1882
363
No. 38. Specie and bank-note circulation of the United States from 1800 to 1859
363
No. 39. Coin and paper circulation of the United States, 1860 to 1898
364
No. 40. Currency and gold, 1862 to 1878
365
No. 41. United States bonds on deposit to secure circulating notes of national banks on June
30, 1865 to 1898, and amount owned and held by banks for other purposes, including
those deposited to secure public deposits
367
No. 42. United States bonds on deposit to secure circulating notes of national banks on October
31, 1882 to 1898
368
No. 43. Interest-bearing bonded debt of the United States, 1865 to 1898
369
No. 44. United States bonds, monthly range of prices in New York, 1860 to October 31, 1898
370
No. 45. Investment value of United States coupon bonds, 1887 to 1898
402
No. 46. Number of national banks in each State, etc., capital, bonds on deposit to secure circulation on September 20, 1898, minimum amount of bonds required, and excess on
deposit, September 20, 1898, and October 5, 1897 .. 403
No. 47. Number of national banks in each State, etc., with capital of $150,000 and under, 1897
and 1898
405
No. 48. Number of national banks in each State, etc., with capital exceeding $150,000, 1897 and
1898
406
No. 49. Comparative statement of the resources and liabilities of national banks, 1864 to 1898... 407
No. 50. Abstract of the resources and liabilities of national banks on September 20, 1898, in New
York, all central reserVe cities, other reserve cities, elsewhere, and the aggregate
in the United States
410
No. 51. Highest and lowest points reached in the principal items of resources and liabilities of
national banks during the existence of the system
411
No. 52. Percentages of loans, United States bonds, and specie to the aggregate funds of national
banks, 1866,1887 to 1898
411
No. 53. Classification of loans made by national banks in reserve cities, etc., in October, 1894 to
1898
412
VI
CONTENTS.
Page.
Ko. 54. Classification of loans by national banks in New York City for the last six years....
414
No. 55. Classification of loans and discounts in national banks in the reserve cities, etc., on September 20,1898
415
No. 58. Loans and discounts, capital, surplus, other undivided profits, and circulation of national
banks on September 20,1898
416
No. 57. Specie and circulation of national banks at date of each report from December, 1897, to
September 20,189S
418
No. 58. Gold, silver, coin certificates, legal tenders, and currency certificates held by national
banks at date of each report since -January 20, 1877
438
No. 59. Specie held by national banks in New York City at date of each, report since February
28,1890
.'
.\
442
No. 60. Deposits and reserve of national banks on or about October 1,1874 to 1898
444
No. 61. Lawful money reserve of national banks December 15, 1897, to September 20,1898
446
No. 62. Deposits in national banks, reserve required and held December 15, 1897, to September
20,1838
466
No. 63. Net deposits of national banks, reserve required and held on three dates in 1893 to 1898. 467
No. 64. Lawful money reserve of national banks at date of each report since September 30, 1892. 470
No. 05. Average weekly deposits, circulation, and reserve of national banks in New York City,
1802 to 1898
472
No. 86. Classification of the reserve held by national banks in New York City during October
for the last seventeen years
473
No. 67. Capital stock, surplus, undivided profits, circulation, individual deposits, and loans of
national banks in cities of 10,000 or more population, etc.; ratio of loans to capital,
profits, and deposits on October 5, 1897
474
No. 68. Abstract of reports of earnings and dividends of national banks from September 1,1897,
to September 1,1898
480
No. 69. Ratios to capital and to cajntal ami surplus of the earnings and dividends of national
banks in each State, etc., from March 1, 1894, to September 1,1898
483
No. 70. Number of national banks, their capital, surplus, dividends, net earnings, etc., 1870 to
1898
490
No. 71. National banks in voluntary liquidation under the provisions of sections 5220 and 5221,
United States Revised Statutes
491
No. 72. National banks in liquidation under section 7, act July 12, 1882, succeeded by associations with the same or different titles
510
No. 73. National banks in voluntary liquidation under the provisions of sections 5220 and 5221,
United States Revised Statutes, for the purpose of organizing new associations under
the same or different titles
512
No. 74. National banks in liquidation under section 7, act July 12,1882
514
No. 75. National banks in the hands of receivers, dates of organization and failure, cause of failure, dividends paid while solvent, circulation issued, redeemed, and outstanding, 1864
to 1898, inclusive
516
No. 76. Insolvent national banks, dates of failure and final liquidation, assets, collections dividends paid, etc., 1864 to 1898
536
No. 77. Capital, nominal assets at date of failure, and disposition of assets of insolvent national
banks the affairs of which have been closed, 1864 to 1898
564
No. 78. Capital, surplus, and other liabilities of national banks which failed during the year...
580
No. 79. National-bank receiverships in an inactive condition
581
No. 80. National banks the affairs of which were closed during the year
582
No. 81. Dividends paid to creditors of insolvent national banks during the year
583
No. 82. Comparative statement for two years of the transactions of the New York clearing
house
586
No. 83. Comparative statement of the transactions of the New York clearing house for ths last
forty-five years
586
No. 84. Clearing-house transactions of the assistant treasurer of the United States at New York
for the year ended October 1, 1898
586
No. 85. Comparative statement of the exchanges of the clearing houses of the United States for
October, 1808 and 1897
587
No. 86. Comparative statement of the exchanges of the clearing houses of the United States for
weeks ended October 31,1898 and 1897
588
No. 87. Comparative statement of the exchanges of the clearing houses of the United States for
the years ended September 30,1898 and 1897
589
Abstracts of reports of condition of State banks, loan and trust companies, savings and private
banks
591
Gold, etc., held by national and other banks at date of latest returns
607
Dividends paid by State banks and loan and trust companies
609
Capital stock of national and other banks in each State
610
CONTENTS.
VII
Pago.
Aggregate and average banking funds in each State
611
Condensed statement of resources of banks of each class in each State
012
Depositors and deposits in savings banks during the past two years
613
Savings bank depositors and deposits, 1820 to 1898
614
Assets and liabilities of banks other than national which failed during the year
615
Resources and liabilities of loan and t r u s t companies in the District of Columbia on September
20,1898
,
616
Resources and liabilities of the first Bank of the United States, 1809 and 1811
617
Resources and liabilities of the second Bank of the United States, 1817 to 1840
618
Capital, circulation, deposits, specie, and loans of banks on various dates from 1774 to 1833
619
Comparative statement of the principal items of resources and liabilities of State banks, 1834 to
1863
620
Number and capital of State banks, 1861 to 1872
621
Comparative statement of the resources and liabilities of State banks, 1873 to 1898
022
Resources and liabilities of the banks of the Dominion of Canada
624
Aggregate resources and liabilities of national banks, 1863 to 1898
625
Abstracts of reports of condition of national banks since December 15, 1897
651
Summary of the condition of national banks in each State, Territory, and reserve city from
December 15, 1897, to September 20, 1898
733
Summary of the important items of resources and liabilities of national banks in each State,
1863 to 1898
787
Index to text of the report
813
Index to the appendix
810
REPORT
THE COMPTROLLER OF THE CURRENCY
TREASURY DEPARTMENT,
OFFICE OF THE COMPTROLLER OF THE CURRENCY,
Washington, December 5, 1898.
SIR: I submit herewith in compliance with law my annual report on
the operations of the Currency Bureau. This is the thirty-sixth annual
report; and is for the year ended October 31, 1898.
CONDITION OF NATIONAL BANKS.
Since October 5,18975 five reports of condition of national banks have
been made, as follows: December 15,1897, February 18, May 5, July 14,
and September 20,1898. The resources and liabilities of the banks at
date of each report are shown in detail in the following table:
SUMMARY OF REPORTS OF CONDITION OF NATIONAL BANKS DURING THE YEAR.
Dec. 15, 1897. j Feb. 18, 1898. . May 5,1808.
3,607 banks.
{ 3 594 banks.
| July 14, 1898. ; Sept. 20,1898.
\ 3,586 banks. I 3,582 banks,
j 3,585 banks.
RESOURCES.
Loans and discounts. :'$2,082,008,324. 81 $2,138,078,280. 43 $2,097,094,235. 23|$2,151,757,655. 60 $2,155,961,627. 91
Overdrafts
17, 741,1)93. 50 14,093.400.41! 12,679,151.37; 11,924,282.56
16,557,982.63
U. S. bonds to secure
222,020,750.00! 212,425,300.00 216, 158,300.00| 218,106,450.00 224,028,840.00
circulation
|
j
IT, S. bonds to secure
45, 367,100. 00
34,760,500.00,! 28,630,500.00< 53,519,100.00; 83,926,230.00
IT. S. deposits
.'
i o I U I 500.
KAA 00
f\f\
if? 365.
'i(KK 000.
f\t\c\ r\c\\
ii
Tit
)sn An
OA
A A-IA
AA
14, 915, 800. 00
13,184,
16,
00
13,
731, 350.
00
30, at614,
010. 00
IT. S. bonds on hand..
Premiums on IT. S.
i
'
I
I
18, 555, 489. 01
bonds
17,789,744.59;
18,271,547.14!
18,947,195.10
18,971,197.22
Stocks, securities,
217,582,980.501 230. 346. 748. 92i 236, 025,116. 53 250,089,375.09; 255,198,927.69
etc
Banking house, furniture, and fix79. 254. 940. 92
78, 894. 056. 33i
79. 463. 235. 21
79, 308, 604. 63
79, 386, 337. 51
tures
I
Other real estate and
i
29, 852,102, 09
30,186, 270. 70
30, 484, 417. 71
mortgages owned..
30,119. 511. 2l|
30, 326, 045. 27
Due from national
!
168: 825. 189. 92!
banks
161,138, 722. 49 159,128, 045.17
170, 808,109. 97j 152, 372,153.15
Due from State banks
48, 012, 498. 55
46, 324, 878. 06
and bankers
43, 248, 800. 85
48, 093, 430. 84
45, 468, 995. 03
Due from approved
309, 569, 861. 34 360, 277, 020. 45 300, 961, 618. 96j 320, 015, 035. 43 ! 320, 002, 050. 90
reserve agents
Checks and other
14, 933, 428. 42!
cash items
17, 308, 976. 92J
16,828,942.11
13,100. 061. 68
16,719,376.27
Exchanges for clear118, 415, 838. 07: 113, 590, 539. 43 126, 234, 933. 64
ing house
94, 276, 408. 07: 110, 286, 935. 55
Bills of other na18, 859,116. 00!
20, 811, 692. Oo! 19, 649, 723. 00
tional banks
18, 600, 745. 00J
21, 338, 292. 00
Fractional currency,
j
925, 465.16;
1.093,
l,040,901.73|
1,057, 0G0. 71
1,023,834.03
nickels, and cents.
r
r
904.16;
IX
REPORT OF THE COMPTROLLER OF THE CURRENCY.
SUMMARY OF REPORTS OF CONDITION OF NATIONAL BANKS DURING THE YEAR—
Continued.
Dec. 15,1897.
Feb. 18,1898. j May 5,1898.
Jul 3 ' 14,1898.
3,607 banks.
3,594 banks, i 3,586 banks.
3,582 banks.
Sept. 20,1898.
3,585 b a n k s .
i
IiESOUKCES—COiit'd.
Gold coin
$119, 747, 044. 72 $125. 710.166. 77 $131, 081, 263. 68 $132, 888, 037. 43 $127, 900, 555. 98
Gold Treasury cer18, 457. 340. 00
18, 323, 870. 00
tificates
19, 484, 500. 0C 18,062,350.00
18,230.690.00
Gold clearing-ho use
certificates
07,801,000.00
79. 0S3, 000. 00 118, 333, 000. 00 133, 576, 000. 00, 104, 356, 000. 00
7, 963, 587. 00
6, 861, 433. 00
Silver dollars
7, 509, 247. 01
7,459,428.00
8,100, 544. 00
Silver Treasury cer36, 458, 014. 00
30, 679, 950. 00
tificates
31. 752, 596. 00 34, 964. 239. 00 35, 316.796.00
Silver coin, frac5, 662 349 41
6, 334,152. 52
tional
5 808, 565. 21
6 098, 741. 84
6,120, 479.16
Legal-tender notes .. 112,564,875.00 120,265,185.00 119,058,681.00 114, 914,997.00 110, 038, 300. 00
II. S. certificates of
16, 810, 000. 00
deposit
45, 840, 000. 00 49, 250, 000. 00 23, 975, 000. 00 20, 385, 000. 00
Five per cent re601,
066.
56
9, 795, 055. 25
9,
demption fund
9,761,568.38
9,315,860.62
9, 520, 530. 82
Due f r o n\ T r e a s u re r
033,
427.
06
4,
019, 551. 74
11,
United States
1,442,901.40
1, 535, 292.19
1,064,313.04
j
Total
3, 829, 213, 776. 003, 946, 947,114. 41 3869, 966. 858. 213,977, 675,445.17 4, 003, 511, 044. 87
LIABILITIES.
Capital stock paid in. 629, 655, 365. 00 628, 890, 320. 00
Surplus fund
246, 416, 688. 48 248, 484, 530. 31
Undivided profits,
less expenses and
95,293 663 02 86 143 789 31
National-bank notes
193, 783, 985. 00 184,106, 322. 00
outstanding
State-bank notes out60, 335. 50
56, 018. 50
standing
Due to other national
445, 061,154. 89 504, 980,175. 82
banks
Due to State banks
t
and bankers
232, 877, 503. 25 259, 972, 293. 60
Dividends unpaid . . .
943, 274. 07
1, 071, 997. 92
Individual deposits. 1,916,630,252.25 1,982,660,933.15:1
II. S. deposits
39, 939, 047. 71 27, 562, 931. 73
Deposits of U. S. disbursing officers
4, 012,185. 36
3, 870, 835. 81
Notes and bills rediscounted
3,161,796.07
2,681,072.89
Bills payable
7, 722, 623. 78
5, 579, 549. 06!
Liabilities other than
those above
13, 655, 001. 62 10, 886, 344. 31
Total
624, 471,670.00
247, 695, 979.44
622, 016, 745. 00'
247, 935. 215. 65:
90 320 999.16
85, 036, 427. 50
621, 517, 895. 00
247, 555,108. 57
93 015 097 86
188, 425, 308. 50 189, 866, 298. 50; 194, 483, 765. 50
56, 007. 50:
55, 907. 50
424, 204, 634. 90 467, 634, 068.18
446, 417, 454. 05
56, 017. 50
245, 643, 049.17 252,182, 773. 37 251, 917, 900. 89
1, 008, 410. 82
2, 704, 832. 25
2, 000, 238.18
999, 308, 438. 962, 023 357,159. 60 2 031, 454, 540. 29
48,
081,
038.
95
70,187,
368. 12
23, 095, 935. 89
3,928,661.49
4, 467, 622. 85
9, 288,156. 89
!
4, 788, 377. 83!
5, 364, 952. 85
9 283, 285. l i :
!
19 368, 262. 88
4, 977, 832. 80
6, 084, 815. 45
11, 283, 332. 33
23, 551, 615. 69
7, 060,145. 28
3, 829, 213, 776. 003,946,947,114.413 869, 966, 858. 213,977 675, 445.17 4 003, 511, 044. 87
i
Notwithstanding that the number of banks in operation on September 20, 1898, is less than at any date of report since December 19,
1890, the amount of individual deposits, loans and discounts, and total
resources is greater than at any time during the existence of the national
banking system. On September 20, for the iirst time, the aggregate
resources reached and exceeded the four-billion-dollar mark, the increase
since October 5,1897, being $298,377,337.16. A comparison of the last
returns with those of October 5,1897, indicates an increase during the
year of $104,952,189.74 in loans and discounts; $79,194,380 in Government securities on deposit with the Treasurer of the United States to
secure circulating notes and public deposits and the amount held by
the banks; $57,304,827.34 in specie and legal tenders. The reduction of $25,465,000 in the amount of United States certificates of
deposit for legal tenders results in a net increase of lawful money of
$31,839,827.34.
The reduction of 25 in the number of banks reporting is accompanied
by a decrease of $9,970,200 in capital stock and $4,436,904.50 in circulating notes outstanding. Necessarily the principal increase in the
REPORT OF THE COMPTROLLER OF THE CURRENCY.
XI
liability side of the statement is in individual deposits. On October 5,
1897, the deposits aggregated $1,853,349,128.50, and on September 20,
1898, $2,031,454,540.29, the increase being $178,105,411.79. The balance
due other banks and bankers shows an increase of $52,627,388.09 and
United States deposits of $59,023,019.27.
By reference to the foregoing table, it will be seen that loans and discounts, which on October 5, 1897, amounted to $2,051,009,438.17, show
a material increase up to February 18, 1898. The returns on May 5
show a decrease since the February report of $40,984,045.20. Compared
with the amount on May 5, the increase on July 14 was $54,663,420.37,
which was further increased on September 20 by $4,203,972.31.
United States bonds on deposit with the Treasurer of the United
States to secure circulation have fluctuated between a maximum of
$227,483,950 on October 5,1897, and $212,425,300 on February 18,1898,
the amount on deposit on September 20 being $224,628,840, a reduction
during the year of $2,855,110.
Specie held by the banks is greater at date of each report during the
year than on October 5, 1897, when it stood at $239,387,702.05. The
maximum holding was reached on July 14, being $335,677,130.95.
Between that date and September 20 there was a decrease of
$41,802,972.56.
Capital stock shows a steady but slight decrease since October 5,
1897. The changes in the surplus and other undivided profit accounts
have been slight, although, as compared with October 5, the increase
in both items during the year aggregates $5,818,205.60.
The circulation account was greatest at date of statement closing the
last report year. The minimum amount outstanding was $ 184,106,322,
on February 18,1898. From that date there was a gradual increase during the balance of the year, but, as heretofore stated, the amount outstanding on September 20,1898, was $4,436,904,50 less than on October
5,1897.
Without an exception, there has been a material increase in individual
deposits at date of each report during the year. Starting at
$1,853,349,128.50, the account reached on September 20 an aggregate
of $2,031,454,540.29, or, as heretofore stated, an increase during the
year of over $178,000,000.
The liabilities of the banks on account of notes and bills rediscounted
and bills payable were at the maximum on October 5, 1897, being
$19,755,556.64. On February 18, 1898, these liabilities amounted to
only about $8,000,000. Thereafter there was a steady increase to the
close of the year, when the amount was $17,368,147.78.
INVESTIGATIONS AND RECOMMENDATIONS RELATIVE TO BANK-NOTE
CURRENCY.
Section 333 of the Kevised Statutes of the United States provides
that the Comptroller of the Currency in his annual report to Congress
shall suggest "any amendment to the laws relative to banking by
which the system may be improved and the security
of the holders of
its notes and other creditors may be increased/7
In suggesting some general amendments to the national banking
law at this time, it is not the purpose of the Comptroller to review in
detail the plans and propositions for the modification of our currency
and banking systems which are now, and for some time have been, the
subject of economic and general discussion throughout the country; but
a reference to them and the principles underlying them is deemed
XII
REPORT OF THE COMPTROLLER OF THE CURRENCY.
imperative in view of the fact that in their present form they seem to
ignore the interests of bank depositors, with whose protection the
Comptroller is peculiarly charged.
The panic of 1893 having directed attention toward the dangers to
the general commercial system, resulting from the disproportion between demand-currency liabilities of the Government, payable in gold,
and the gold held in reserve by the Government for their redemption,
as well as to the inelasticity of the present bank-note currency, the
plans providing for a modification of the banking and currency systems which are now most discussed, may be considered as based upon
the following propositions:
First. That the disproportion between outstanding currency liabilities of the Government payable in gold, and the gold held for their
redemption, should be lessened by a contraction in the amount of these
demand-currency liabilities.
Second. That the void in circulation, caused by such contraction,
should be filled by an extension of the circulation of national banks,
which circulation, redeemable in gold, is ultimately to depend for its
chief security upon a first lien on the commercial assets of the issuing
banks.
The more prominent of these plans, which may be considered as
embodying in the ablest forms the general principles necessarily
involved in a system of bank-note issues secured by the general assets
of banks, look to the ultimate displacement of Government-credit
money with bank credit money, the latter eventually being secured by
a first lien upon the assets of the issuing banks, and by a 5 per cent
redemption fund created in the first instance by taxation upon solvent
issuing banks and thus maintained. It is proposed that a first lien
shall exist upon all the assets of any insolvent bank which may have
issued currency until it has contributed to such fund, to be held by the
Government as trustee, an amount sufficient to redeem its outstanding
notes in full.
Upon any deficiency occurring in such contribution to the guaranty
fund, due to a failure to collect from the assets of the insolvent bank a
sufficient amount to redeem its notes in full, resort is to be had to additional taxation upon solvent banks issuing circulation to supply the
deficiency, one plan providing, however, that such tax shall not exceed
1 per cent on the amount of their note issues per year.
The assumptions which seem to underlie these plans are:
First. That unless we are to have a currency contraction, some radical
extension of bank-note issues is absolutely necessary to the securing
of the proper adjustment of Government currency liabilities to its gold
reserve, by which adjustment the greater safety of the gold standard
is subserved; and,
Second. That through this radical extension and change in the
present form of bank-note issues alone, is elasticity to be secured in our
currency.
As opposed to these propositions, and in connection with the data
given and views expressed hereinafter, relative to changes in the present banking laws, the Comptroller desires to state that his suggestions
are based upon the following assumptions:
First. That there is existing no such condition of the United States
finances, revenues, or credit as to justify the proposition that the shifting of the burden of gold redemption of outstanding currency from
the Government to the banks, is so important as to necessitate of itself
radical changes and concessions in national-banking laws relative to
REPORT OF THE COMPTROLLER OF THE CURRENCY.
XIII
the issue of notes, which changes and concessions would not be considered wise if the interests of the community, irrespective of Government finances, were alone considered.
Second. That if from considerations of general public policy, irrespective of governmental finances, bank-note issues secured only by
commercial assets of banks seem unwise, the resources, credit, and
financial condition of the United States are such that by means of
revenue laws and other amendments to law suggested by the President
in his last annual message, a safer ratio between its outstanding circulation and gold reserve can be attained, the stability of the present
gold standard insured, and the currency maintained upon a sound basis
without contraction.
It must be remembered, in connection with the discussion of changes
in the present banking laws, that by far the most important function of
the national banks is that of an acting middleman between the depositors and borrowers of a community, and that its note-issuing functions
are secondary in importance and usefulness under the present, or any
proposed system of bank-note issues.
It is especially important, therefore, in proposing changes in the laws
governing the note issuing powers of national banks, that the effects
of such changes upon the relation of the bank to its depositors and
borrowers, be carefully studied.
It is the belief of the Comptroller that the proposed preference of
the note holder over the depositor, which is a fundamental basis of all
these plans, is not only inherently wrong, and unjustified by any grounds
of public policy, but that its practical effect upon the present relation
of depositors to banks in the smaller communities of the United States
would be so revolutionary as to bring about the most injurious conditions in the general business of the country.
The essential similarity between the liability of a solvent bank
expressed by a deposit credit and by a bank note, is generally recognized and emphasized by those advocating these plans.
In view of this recognized similarity before the insolvency of a bank,
the radical dissimilarity in their respective treatment when insolvency
occurs, is justified by a course of reasoning which is believed to be
fallacious.
It may be as sound in principle for a bank to issue bank notes as to
take deposits, when the two classes of creditors stand upon the same
basis in relation to the assets of the bank to which they have each
contributed, but it is not as sound in principle when in case of insolvency, the creditor who claims under a note must be x>aid in full, before
the creditor who claims under a deposit can receive anything.
Under these plans the dollar of the depositor, and the dollar of the
note holder, side by side, would be invested by the officers in the assets
of the solvent bank, since it is proposed to change the law under
which at the present time the note holder's dollar from the first must
be invested in Government bonds, to be held separately in trust for his
protection.
Side by side, these dollars of depositors and note holders, would be
redeemed on demand without question by the solvent banks under the
proposed system. Why, then, should the dollar claim of the depositor
be paid nothing out of the assets of an insolvent bank until and unless
the dollar claim of the note holder is paid in full?
In our judgment there is no relevant answer to this proposition save
one, based upon grounds of general public policy, which admits the
injustice to the depositor class, but justifies it by claiming the neces
XIV
REPORT OF THE COMPTROLLER OF THE CURRENCY.
sity for the Government and the community, of additional and different
circulation than that we have at present.
The claim that a difference so radical and fundamental as this in the
treatment of two classes of creditors, can be justified by the fact that
the depositor generally deals directly with the bank and has the opportunity to inform himself as to the trustworthiness of it, whereas the
notes are issued for general circulation and pass into the hands of those
distant from the bank, and therefore unable to form an opinion as to
its strength, is not one which will commend itself generally to practical
men.
Experience demonstrates that in the banking business the detection
of untrustworthiness in banks is, as a matter of fact, not one of the
duties with which the depositor, as a general rule, charges himself.
He has come to leave that to the officials of the National and State
Governments; and while it may be true that as a class he ought to
exercise greater discretion in his selection of banks for his deposits, it
is equally true that as a class, he has come to have that confidence in the
system which has made him comparatively indifferent under normal
conditions to this duty.
Again, he is often compelled, by the very nature of his business, to
be dependent upon the agency of banks at a distance in handling his
funds, in which case he, like the note holder, could not investigate if he
so desired.
Certainly the fundamental right to prefer in the distribution of the
assets of an insolvent bank the note-holding class to the depositor class,
should rest upon some broajder ground than the assumed neglect of the
depositor class to acquaint itself with the nature of the private business
and internal management of banking institutions, whose proper supervision the National Government, as the representative of the depositors
and the public, has taken upon itself.
The lien given to the note holder under the present system, first upon
the Government bonds deposited expressly in trust as security for said
notes, before other assets of the bank can be reached, is far different in
practical effect from the general and unqualified priority in lien upon
the assets of a bank proposed in these plans.
The priority of lien of the note holders under the present system over
the depositor, is first upon the United States bonds deposited in trust
for his benefit, and only secondarily, in case of deficiency in bonded
security, upon the general assets of the bank. In practical operation
this security gives the notes the unquestioned credit necessary to enable
them to circulate, and at the same time does not, as a matter of fact,
interfere with the rights of the depositor in case of insolvency, since
the bonds at public sale bring the amount of the notes, and return to
the insolvent bank for the benefit of general creditors practically all
the equity originally invested in them.
This being the practical effect of the present bank-note system, it can
not rightfully be considered as justifying any assumption that in its
theory the rights of note holders are considered as more sacred in themselves, than the rights of depositors.
Under the present system the relation of the note issues of a national
bank to its general business, is somewhat the same as the relation of
the issue and redemption department of the Bank of England, to its
commercial department. They are in reality almost entirely separate,
and so intended to be.
If under any new system, the note holder and the deposit holder come
into similar relations to the bank, their rights against the common
REPORT OF THE COMPTROLLER OF THE CURRENCY.
XV
assets, to which tlieir money has alike contributed, should be equally
sacred.
If, then, there is no inherent moral right to establish a preference of
the note-holding creditors of an insolvent bank, as against the depositholding creditors, in the distribution of the assets of an insolvent bank,
the question arises, does public policy demand, in the interest of the
common good, that such a preference should be given in order to establish a bank-note system which will give banks such a profit, that to
secure it they will relieve the United States Treasury of the burden of
gold redemirtion, and afford the country a circulating medium having
alleged advantages over that now in use.
In order to determine this question, actual data at command must be
examined critically in order to understand the nature and extent of the
wrong done the depositor class by this preference, and the consequent
effects of this wrong upon the community at large and its business,
Statistics have been quoted to show that the burdens whicli will be
imposed upon depositors by such a preference will be light; but the
force of these figures, so far as their being a guide to the probable economic effect of the proposed laws is concerned, is immediately lost when
it is noted that in them no distinction is made between the rate of loss
of depositors in different communities, and between the rate of loss of
the depositor in the small banks, and that of the depositor in large
banks. They err in assuming that the percentage of loss will be
ratably distributed.
The Comptroller presents herewith a series of tables which indicate
more exactly upon what class of depositors the real burden of this preference will fall with almost crushing weight.
These tables give approximately the loss which under the proposed
plan would result to depositors from the preference of note holders over
deposit holders in case of insolvency, based upon the showing made by
the 195 insolvent national banks, whose affairs have been finally closed
during the existence of the system.
For the purpose of these tables it is assumed in the case of each class
of insolvent banks, that their officers would have made the same proportionate losses upon the commercial assets in which the notes issued
were invested, that they actually did upon the assets in which the
deposits and capital of the banks were invested.
To the good assets of these different classes of insolvent national
banks, as shown by the records of this office, has been added the
amount which would have been realized from the unsecured notes
issued, if loaned or invested with the same rate of loss as was made
upon the money invested in the actual assets.
From the assets thus increased, there is subtracted 95 per cent of the
preferred-note issues proposed (to wit, the par of the notes less the 5
per cent redemption fund held by the Government), which leaves the
amount which would then go to the depositors, and other unsecured
creditors.
This amount, in terms of percentage of their total claims, is then compared with the percentage of their claims actually received, and thp. loss
which would be caused by the preference is thus approximately disclosed
in the difference.
The tables give these results bearing upon the interests of depositors
in banks according to geographical sections, and according to the following classifications of capital: $50,000, $100,000, $200,000, $300,000,
$500,000, and banks with a capital exceeding $500,000.
As under the proposed plans circulation, eventually secured only by
XVI
REPORT OF THE COMPTROLLER OF THE CURRENCY.
bank assets, might be taken out in different amounts, these amounts
have been assumed to be 00 per cent, 80 per cent, and 100 per cent of
the capital of the bank, showing what the loss to depositors would
approximately be in each of these instances.
As illustrating the method of preparing the tables, we will take the
case of a bank of $100,000 capital, which has failed, and upon final
liquidation has paid its depositors 50 j>er cent upon claims of $200,000,
to wit, the sum of $100,000. Under the plan proposed assume this
bank had issued in notes, secured by a first lien upon its assets, an
amount equal to 60 per cent of its capital, to-wit, the sum of $60,000.
Since in investing $300,000, to wit, $100,000 capital and $200,000
deposits, it has lost the sum of $200,000 and has remaining but $100,000, to wit, one-third of its original assets, we assume that of the
$57,000 circulation which the bank had to invest in commercial assets
(to wit, the $60,000 circulation less $3,000 representing the 5 per cent
redemption fund held by the Government) it would have lost the same
proportion, and have left of that investment but one-third in good
assets, to wit, $19,000. We add, therefore, to the $100,000 actually paid
depositors, the sum of $19,000, giving $119,000 for distribution between
depositors and note holders. But, as under these plans, the note holders are preferred for the full amount of their $60,000 notes, of which
but $3,000 is in the redemption fund, there must be subtracted from
this $119,000 the sum of $57,000, leaving for the depositors only $62,000,
as against $100,000 which they received under the present system, without any burden of note preferences upon common assets. As $62,000 is
but 31 per cent of their total claims of $200,000, upon which under the
present system they received $100,000 dividends, or 50 per cent, it follows that their loss, directly traceable to the preference, would amount
to 19 per cent of the face of their deposits.
Of necessity these tables, based as they are upon hypothesis, can be
considered only as approximately indicating the losses which depositors may expect; but that they furnish a conservative estimate of these
losses is believed.
They do not take into consideration the possibility of unusual losses in
general bank assets, through an inflation of the currency and resultant
speculation brought about by an abnormal increase in the number of
national banks.
This increase might be caused by private and State banks and trust
companies entering the system for the sake of the profits arising from
the currency privilege. These plans provide for a circulation secured
by the commercial assets of banks up to a limit of 100 per cent of the
capital of the bank, with an increasing tax as the limit is reached.
In this connection it is well to remember that an insolvent bank, as
a general rule, will have made every effort before closing its doors to
avail itself of the currency privilege to the full limit allowed by law
in the effort to avert suspension of payments.
Of the 195 national banks which have been finally liquidated these
tables show in reference to the rate of loss experienced in investments:
That 10 banks in the Xew England States with combined capital of
$2,571,300 have paid cash dividends of $9,626,055 on $11,508,426 of
claims proved, or 83.64 per cent. These banks had total nominal assets
of $17,195,440, of which $10,207,324 Avere collected in cash or by offsets
or otherwise, making the proportion of valuable assets to nominal assets,
upon final liquidation, 59.36 per cent.
That 50 banks in the Eastern States, with a combined capital of
$9,155,600, have paid cash dividends of $14,469,195 on $18,399 239 of
REPORT OF THE COMPTROLLER OF THE CURRENCY. XYII
claims proved, or 78.64 per cent. These banks had total nominal
assets of $31,135,897, of which $17,260,498 were collected in cash or by
offsets or otherwise, making the proportion of valuable assets to
nominal assets, upon final liquidation, 55.44 per cent.
That 33 banks in the Southern States, with a combined capital of
$4,775,000, have paid cash dividends of $6,611,266 on $10,111,715 of
claims proved, or 65.38 per cent. These banks had total nominal
assets of $15,263,365, of which $6,808,364 were collected in cash or by
offsets or otherwise, making the proportion of valuable assets to
nominal assets, upon final liquidation, 44.61 per cent.
That 44 banks in the Middle States, with a combined capital of
$9,122,000, have paid cash dividends of $7,996,983 on $11,167,256 of
claims proved, or 71.61 per cent. These banks had total nominal assets
of $24,153,212, of which $11,796,392 were collected in cash or by offsets
or otherwise, making the proportion of valuable assets to nominal
assets, upon final liquidation, 48.84 per cent.
That 44 banks in the Western States, with a combined capital of
$3,382,000, have paid cash dividends of $2,195,061 on $3,552,511 of
claims proved, or 61.79 per cent. These banks had total nominal assets
of $9,308,471, of which $3,083,292 were collected in cash or by offsets
or otherwise, making the proportion of valuable assets to nominal
assets, upon final liquidation, 33.12 per cent.
That 14 banks in the Pacific States, with a combined capital of
$1,725,000, have paid cash dividends of $1,644,705 on $2,628,811 of
claims proved, or 62.56 per cent. These banks had total nominal
assets of $5,687,777, of which $2,538,605 were collected in cash or by
offsets or otherwise, making the proportion of valuable assets to nominal assets upon final liauidation 44.63 per cent.
That the total of 195^banks, with a combined capital of $30,730,900,
have paid cash dividends of $42,543,265 on $57,367,958 of claims
proved, or 74.16 per cent. These banks had total nominal assets of
$102,744,162, of which $51,694,475 were collected in cash or by offsets
or otherwise, making the proportion of valuable assets to nominal
assets upon final liquidation 50.31 per cent.
Of the 195 national banks which have been finally liquidated, these
tables further show in reference to the rate of loss experienced in
investments.
That G(J banks of $50,000 capital each, and total capital of $3,280,000,*
have paid cash dividends of $2,859,618 on $4,424,178 of claims proved,
or 64.64 per cent. These banks had total nominal assets of $8,733,255,
of which $3,405,334 were collected in cash or by offsets or otherwise,
making the proportion of valuable assets to nominal assets, upon final
liquidation, 39.68 per cent.
That 61 banks of $ 100,000 capital each, and total capital of $5,634,000,
have paid cash dividends of $6,262,487 on $9,891,367 of claims proved,
or 63.31 per cent. These banks had total nominal assets of $18,034,198,
of which $7,584,130 were collected in cash or by offsets or otherwise,
making the proportion of valuable assets to nominal assets, upon final
liquidation, 42.05 per cent.
That a total of the above 127 banks, having a combined capital of
$8,914,000, have paid cash dividends of $9,122,105 on $14,315,545 of
claims proved, or 63.72 per cent. These banks had total nominal assets
of $26,767,453, of which $11,049,464 were collected in cash or by offsets
*One bank of $30,000 capital included which failed before the full $50,000 capital
required by law had been paid.
CUR 98
2
XVIII
REPORT OF THE COMPTROLLER OF THE CURRENCY.
or otherwise, making the proportion of valuable assets to nominal assets,
upon final liquidation, 41.28 per cent.
That 37 banks, of $200,000 capital each and total capital of $6,355,600,
have paid cash dividends of $7,321,036 on $9,211,748 of claims proved,
or 79.47 per cent. These banks had total nominal assets of $17,748,526,
of which $7,895,311 were collected in cash or by offsets or otherwise,
making the proportion of valuable assets to nominal assets upon final
liquidation, 44.48 per cent.
That 16 banks of $300,000 capital each and total capital of $4,350,000
have paid cash dividends of $6,866,897 on $9,042,532 of claims proved,
or 75.94 per cent. These banks had total nominal assets of $16,369,761,
of which $8,629,562 were collected in cash or by offsets or otherwise,
making the proportion of valuable assets to nominal assets, upon final
liquidation, 52.72 per cent.
That 9 banks of $500,000 capital each, and total capital of $4,300,000
have paid cash dividends of $12,441,201 on $16,558,203 of claims proved,
or 75.13 per cent. These banks had total nominal assets of $23,402,935,
of which $15,321,625 were collected in cash or by offsets or otherwise,
making the proportion of valuable assets to nominal assets, upon final
liquidation, 65.47 per cent.
That 6 banks of $500,000 capital or over each, and total capital of
$6,811,300, have paid cash dividends of $6,792,026 on $8,239,930 of
claims proved, or 82.43 per cent. These banks had total nominal assets
of $18,455,487, of which $8,798,513 were collected in cash or by offsets
or otherwise, making the proportion of valuable assets to nominal assets,
upon final liquidation, 47.67 per cent.
That the total of 68 banks with capital of $200,000 or over each, and
total capital of $21,816,900, have paid cash dividends of $33,421,160 on
$43,052,413 of claims proved, or 77.62 per cent. These banks had total
nominal assets of $75,976,709, of which $40,645,011 were collected in
cash or by offsets or otherwise, making the proportion of valuable assets
to nominal assets, upon final liquidation, 53.50 per cent.
These tables further show that the depositors of the 10 insolvent
national banks, having a combined capital of $2,571,300 and nominal
assets of $17,195,440, with cash dividends paid to depositors of $9,626,055,
or 83.64 per cent, situated in the New England States of Maine, New
Hampshire, Vermont, Massachusetts, Rhode Island, and Connecticut,
would have lost by preference of the note holders in case of an issue
of uncovered notes equal to 100 per cent of their capital, 8.62 per cent
of their deposits more than under the present system, or 10.30 per cent
of their dividends; in case of note issues of 80 per cent of their capital, 6.90 per cent more, or 8.25 per cent of their dividends; and in ease
of circulation of 60 per cent of their capital, 5.17 per, cent more, or 6.18
per cent of their dividends.
The depositors of 50 insolvent banks, having a combined capital of
$9,155,600, nominal assets of $31,135,897, with cash dividends paid
depositors of $14,469,195, or 78.64 per cent, situated in the Eastern
States of New York, New Jersey, Pennsylvania, Delaware, Maryland,
and District of Columbia, would have lost by preference of the note
holders with a 100 per cent note issue, 21.06 per cent more than under
the present system, or 26.78 per cent of their dividends; with an 80
per cent note issue, 16.85 per cent more, or 21.42 per cent of their dividends, and with a 60 per cent note issue, 12.64 per cent more, or 16.07
per cent of their dividends.
The depositors of 33 insolvent banks, having a combined capital of
$4,775,000, nominal assets of $15,253,365, and with cash dividends paid
REPORT OF THE COMPTROLLER OF THE CURRENCY.
XIX
depositors of $6,611,206, or 65.38 per cent, situated in tlie Southern
States of Virginia, West Virginia, North Carolina, South Carolina,
Georgia, Florida, Alabama, Mississippi, Louisiana, Texas, Arkansas,
Kentucky, and Tennessee, would have lost by preference of the note holders with 100 per cent note issue, 24.85 per cent more than under the x>resent
system, or 38 per cent of their dividends; with an 80 per cent note
issue, 19.88 per cent more, or 30.41 per cent of their dividends, and with
a 60 per cent issue, 14.91 per cent more, or 22.80 per cent of their
dividends.
The depositors of 44 insolvent banks, having a combined capital of
$9,122,000, nominal assets $24,153,212, and with cash dividends paid
depositors of $7,996,083, or 71.61 per cent, situated in the Middle States
of Ohio, Indiana, Illinois, Michigan, Wisconsin, Minnesota, Iowa, and
Missouri, would have lost by preference of the note holders, with 100
per cent issue, 39.70 per cent more than under the present system, or
55.44 per cent of their dividends; with an 80 per cent note issue 31.76
per cent more, or 44.35 per cent of their dividends; and with a 60 j>er
cent issue 23.82 per cent more, or 33.26 per cent of their dividends.
The depositors of 44 insolvent banks, having a combined capital of
$3,382,000, nominal assets of $9,308,471, and with cash dividends paid
depositors of $2,195,061, or 61.79 per cent, situated in the Western
States of ]N~orth Dakota, South Dakota, Nebraska, Kansas, Montana,
Wyoming, Colorado, New Mexico, Oklahoma, and Indian Territory,
would have lost by preference of note holders, with a 100 per cent issue
60.49 per cent more than under the present system, or 97.89 per cent of
their dividends (being their total dividends, except 1.30 per cent of par
of claim); with an 80 per cent issue 48.39 per cent more, or 78.31 per
cent of their dividends; and with a 60 per cent issue 36.29 per cent
more, or 58.73 per cent of their dividends.
The depositors of 14 insolvent banks, having a combined capital of
$1,725,000, nominal assets of $5,687,777, with cash dividends paid depositors of $1,644,705, or 62.56 per cent, situated in the Pacific States of
Washington, Oregon, California, Idaho, Utah, Nevada, and Arizona,
would have lost by preference of the note holders, with a 100 per cent
issue, 34.51 per cent more than under the present system, or 55,16 per
cent of their dividends; with an 80 per cent issue 27.61 per cent more,
or 44.13 per cent of their dividends; with a 60 per cent issue 20.71
per cent more, or 33.10 per cent of their dividends.
Thus it will be seen that, as compared with the rate of loss to the
New England depositor, through the preference of the note holders in
cases of insolvency, the issues of uncovered notes being either 100 per
cent, 80 per cent, or 60 per cent of the capital, the depositor in the
Eastern States will lose at a rate of nearly two and one-half times as
great; the depositor in the Southern States at a rate nearly three
times as great; the depositor in the Pacific States at a rate four times
as great; the depositor in the Middle States at a rate over four and
one-half times as great, and the almost obliterated depositor in the
Western States at a rate over seven times as great.
These tables also show that the depositors of the 66 insolvent banks
of $50,000 capital, having a combined capital of $3,280,000,# nominal
assets of $8,733,255, with cash dividends paid to depositors of $2,859,618,
or 64.64 per cent, would have lost by preference of the note holders, in
case of an issue of uncovered notes equal to 100 per cent of the capital,
42.49 per cent more than under the present system, or 65.73 per cent of
* One'bank of $30,000 capital included, which failed before the full $50,000 capital
required by law had been paid.
XX
REPORT OF THE COMPTROLLER OF THE CURRENCY.
their dividends; in case of a note issue of 80 per cent, 33.99 per cent
more, or 52.58 per cent of their dividends; and in case of 60 per cent
issues, 25.49 per cent more, or 39.43 per cent of their dividends,
The depositors of 61 insolvent banks, with a capital of over $50,000
and not exceeding $100,000, aggregating $5,634,000, nominal assets of
$18,034,198, with cash dividends of $6,262,487, or 63.31 per cent, would
have lost by preference of the note holders, in case of issue of uncovered notes equal to 100 per cent of the capital, 31.35 per cent more than
under the present system, or 49.52 per cent of their dividends; and in
case of note issue of 80 per cent, 25.08 per cent more, or 39.61 per cent
of their dividends; and in case of 60 per cent issues, 18.81 per cent more,
or 29.71 per cent of their dividends.
The depositors of 37 insolvent banks, with a capital over $100,000
and not exceeding $200,000, aggregating $6,355,600, nominal assets
$17,748,526, with cash dividends paid of $7,321,036, or 79.47 per cent,
would have lost by preference of note holders in case of an issue of
uncovered notes equal to 100 per cent of the capital, 36.39 per cent
more than under the present system, or 45.79 per cent of their dividends; and in case of note issues of 80 per cent, 29.11 per cent more,
or 36.63 per cent of their dividends; and in case of 60 per cent issues,
21.83 per cent more, or 27.47 per cent of their dividends.
The depositors of 16 insolvent banks, with a capital over $200,000
and not exceeding $300,000, aggregating $4,350,000, nominal assets of
$16,369,761, with cash dividends of $6,866,897, or 75.94 per cent, would
have lost by preference of the note holders in case of an issue of
uncovered notes equal to 100 per cent of the capital, 21.61 per cent more
than under the present system, or 28.46 per cent of their dividends; in
case of note issues of 80 per cent, 17,29 per cent more, or 22.77 per cent
of their dividends; and in case of 60 per cent issues, 12.96 per cent
more, or 17.06 per cent of their dividends.
The depositors of 9 insolvent banks, with a capital over $300,000 and
not exceeding $500,000, aggregating $4,300,000, nominal assets of
$23,402,935, with cash dividends of $12,441,201, or 75.13 per cent, would
have lost by preference of the note holders in case of an issue of
uncovered notes equal to 100 £>er cent of the capital, 8.51 per cent more
than under the present system, or 11.33 i>er cent of their dividends; in
case of note issues of 80 per cent 6.81 per cent more, or 9.06 per cent of
their dividends; and in case of 60 per cent issues 5.11 per cent more,
or 6.80 per cent of their dividends.
The depositors of 6 insolvent banks, with capital exceeding $500,000,
aggregating $6,811,300, nominal assets of $18,455/187, with cash dividends of $6,792,026, or 82.43 per cent, would have lost by preference
of the note holders in case of an issue of uncovered notes equal to 100
per cent of the capital 41.10 per cent more than under the present system, or 49.86 per cent of their dividends; in case of note issues of 80
per cent 32.88 per cent, or 39.89 per cent of their dividends; and in
case of 60 per cent issues 24.66 per cent more, or 29.92 per cent of their
dividends.
From the tables which we have given it is evident that from the
depositors in smaller national banks of from $50,000 to $100,000 capital,
and from the depositors of the newer sections of the country, the greater
amount of the cost of this radical experiment in currency must be collected. Thus upon those depositors least able to endure loss, must the
heaviest losses fall.
The assumption of the friends of these proposed plans, that the
uncovered currency privilege will be availed of in those communities
REPORT OF THE COMPTROLLER OF THE CURRENCY.
XXI
where there is now an alleged scarcity of the circulating medium, may
be correct.
But this is only another statement of the fact that those banks which
will most readily issue notes, are in those communities where statistics
show there now occurs the largest proportion of bank failures. In other
words, in those communities in which bank depositors have already
sustained the greatest percentage of losses, they are to be subjected to
still greater losses by having their claims against an insolvent bank
made subject to the prior lien of note holders,
In cases of insolvency the records of this office show that, as a rule,
those banks pay the smallest dividends to general depositors which at
the time of failure have their bills receivable largely collateraled to
bills payable, which they have issued for borrowed money.
In effect, a bank which would issue these notes, collaterals its entire
assets to its note issues.
Under the laws of competition, the large city banks would gradually
receive a larger proportion of deposits of the country, as the effects of
the increased percentage of loss to dej^ositors of smaller banks was
perceived by the general public. The tendency to hoard money in
smaller communities would also be stimulated. One of the purposes of
the proposed laws, which is to enlarge the circulation in those districts
where it is now scanty, would be thwarted by the ultimate effect of the
laws in decreasing in rural communities the deposits, which, while at
the command of the depositors, can still be loaned to borrowers and
circulated in the form of checks and drafts under the safe and prescribed limits of ordinary banking.
The statistics given in the table showing the record of insolvent
banks upon the final liquidation, indicate that the safety of the depositor from the prior lien of the note holder, generally would increase as
does the ratio of deposits to capital. This is due to the nature of the
assets held by the insolvent banks with large deposit lines, which have
yielded larger returns proportionately upon liquidation, than the assets
which have been held by the smaller insolvent banks.
The large banking institutions of the great cities have invariably the
largest average ratio of deposits to capital. Those locations where
deposits are smallest, and therefore where there would be the greatest
incentive to the taking out of increased circulation, are those where
the depositors would suffer the most severe losses, because of this
unjust prior lien of note holders upon the assets of insolvent banks.
The measure will stimulate in still greater degree the tendency of the
money of the country to flow to the great money centers, where to
fewer institutions, as time and competition progress, woiild pass the
management and control of the savings and capital of the country.
We can not agree to the wisdom of any measure which accelerates
the centralization of capital in the great cities, and which, by separating
in location those who lend money from the many who use it, will encourage the growth of commerce only in the form which has a tendency to
crush out general business individualism.
The temporary effect of such plans might be different, but this ultimate effect is inevitable.
The effect of the passage of such laws would at first be a great stimulus to the business of banking, especially in the West and South. It
would probably be followed by the change from the various State banking systems of a very large number of private and State banks, which
would be anxious to avail themselves of the currency privilege. The
right to issue such currency would give them an advantage over banks
organized under the national banking law as it is at present, and its
XXII
REPORT OF THE COMPTROLLER OF THE CURRENCY.
effect upon the plans of those interested in the organization of new
national banks would be to lessen the estimate of the amount of probable deposits to be received, which would be considered as sufficient to
justify the starting of the bank.
Whether a bank which could issue 60 per cent or more of its capital
in notes subject only to nominal tax, which notes it could loan at ordinary commercial rates, and not be compelled to invest in low-rate Government securities, as in effect under the present system, would or would
not take out its full quota of such notes under the law, would be determined somewhat by the status of its deposit line. If its deposit line
was so large as to tax the ability of its management to loan the amounts
currently intrusted to it, it might not be the policy of such a bank to
take out its authorized currency, although it would be profitable for a
smaller bank in the same community to do so. But throughout the
West and South, and in the smaller banks of the cities throughout all
the country, it may safely be assumed that the profits from the exercise
of the currency x>rivilege would at first be eagerly sought.
It is urged in behalf of these plans that they follow the bank-note
systems of other countries, which have proved successful; but these
arguments fail to lay hold of the fundamental differences in principle
and environment of the European system of note issues from those
under consideration. In the older sections of this country the note
issues of banks, as provided for by these plans, would perhaps be so
inconsiderable as compared with their general business and deposits as
not to interfere materially with the usefulness of the bank in its relation to depositors and borrowers, but, as we have endeavored to show,
in the newer sections of the country this would not be the case. The
United States covers a vast territory, embracing every variety of climate
and natural resources. These natural resources, however, are not
evenly distributed, nor is the acquired wealth and banking capital of
the country thus distributed.
As compared with England, Germany, France, Eussia, Austria, and
the older European nations, with their few great state banks and centralized business, which are the product of the evolution of centuries
of financial experience and competition, there are in this country more
than 3,600 national banks, scattered throughout its vast domain, surrounded by the most differentiated business and natural environments,
and dealing with most dissimilar classes of customers and collaterals.
The advantages of our distributed system of banks over the central
governmental banks of Europe are such that we can well afford to recognize its disadvantages in connection with proposed currency issues.
In the bank note issues of the older European nations, in case of
insolvency, the note holders would enjoy no preference over the deposit
holders. They would share ratably in the assets. To give the credit
which enables the notes of these great banks to circulate, restricted by
stringent laws as they are, no injustice to depositors such as is proposed in these plans for the United States, is necessary. In one country
only, Canada, are the note holders preferred over the depositors in case
of insolvency. The note-issuing banks of Canada are but 38 in number,
with a combined circulation of about $38,000,000.
We can not accept as safe any deductions drawn from the bank-note
system of these few central institutions of eastern Canada, which
would tend to justify the application of the laws governing that system
to the 3,600 national banks of this country.
The Comptroller desires to call attention, as a summary of his views
upon the proposed plans, to these propositions:
First. As a fundamental proposition, any bank-note system depend
REPORT OF THE COMPTROLLER OF THE CURRENCY. XXIII
ing for security upon the commercial assets of banks, and sanctioned by
government, should be inherently fair in its relation to the depositholding creditors and the note-holding creditors of an insolvent bank.
Second. No system is inherently fair which creates a preference of
the note holder over the deposit holder, in the distribution of the assets
of an insolvent bank.
Third. In none of the older countries, to the success of whose uncovered note systems we are referred as tending to justify the experiment
in this country, is the note holder by the law preferred over the deposit
holder, in case of insolvency of banks of issue. Canada, with its 38
central banks of issue, as compared with 3,600 scattered national banks
in this country, furnishes the only exception to this rule.
Fourth. The necessity of the preference under any such system in
this country, to give security and credit to the notes, demonstrates that
it is the depositors of the country, and not the banks, upon whom the
great weight of the guarantee of the note issues must fall.
Fifth, A fairer system would provide that, when a receiver took
charge of an insolvent bank, he should not first pay into the general
redemption fund held by the Government, an amount derived from the
assets of the bank sufficient to pay the note holders in full before paying anything to depositors, but he should pay into the fund that pro
rata share of the proceeds derived from the assets, which should go to
the note holders, not as preferred creditors, but as creditors in the same
•class as depositors.
The tax upon the solvent banks for the currency privilege should not
then be limited to not exceeding 1 per cent per annum of their annual
note issue, or in any other amount, but should be made sufficiently
large to j>rovide for the deficit whatever it should prove to be.
Sixth. If under such a system, owing to causes to which we have
referred, the tax upon the solvent banks would be so large as to render
the issue of such currency unprofitable and unattractive to the banks,
it would be a demonstration of the radical difference in the environment and condition of our banking system as compared with the more
centralized and older systems of Europe. It would be a demonstration
of the fact that, under the proposed legislation, while the banks would
take the profits upon the circulation, the depositors would take the
bulk of the losses.
It would be a conclusive demonstration of what we believe to be the
fact that, under our banking system as at present organized, the absolute safety of notes secured only by commercial assets and issued to
the extent proposed in these plans, can be secured only by resort to a
grave injustice upon depositors, which can not be justified upon any
grounds of public policy.
Seventh. Such a system of uncovered notes as this proposed, providing for a preference of the note holders over other creditors, would
interfere radically with the more important functions of national banks,
to which the note-issuing function is secondary and subordinate.
This would be against public policy, and would operate against banking in the smaller communities, and in the western, southern, and
central portions of our country.
Eighth. The Government of the United States is not in such straits,
in connection with its present currency system, as to compel it to enter
into a plan of currency changes, by Avhich it in effect sells extended and
valuable currency privileges to the national banks of the country, in
exchange for assistance from them in meeting its present governmental
currency obligations payable in gold.
XXIV
REPORT OF THE COMPTROLLER OF THE CURRENCY.
.Ninth. If the present conditions of governmental currency demand
reforms, to secure which will entail cost, it is better for the Government, as the representative of all the people, and under all the circumstances connected with our banking system, to pay an ascertained and
exact cost direct, than to endeavor to evade it by granting extensive
currency privileges to banks, which of necessity must reimburse themselves from the community and the depositor class for any cost which
they incur in assuming the burden of gold redemption, or maintaining
the credit of their notes.
The most serious objection which is urged against our present system
of bank-note currency, is its inelasticity and inability to respond to the
pressing demands and necessity for an increase of circulation in times
of enforced liquidation due to a commercial and banking panic.
Under normal business conditions and in normal times, the inelasticity of the present note issues of banks causes but small inconvenience, though at certain seasons of the year, when crops are to be
moved, banks in certain sections of the country are compelled to rediscount their paper somewhat to supply the needed currency. The
demand, however, is usually readily supplied by the banks of the East,
and the growing wealth of the West and South is rapidly bringing
about a more even distribution of capital and consequently of currency.
We have at present in this country an enormous volume of what
may be called bank-credit currency, based upon the assets of our banks,
and consisting of checks, drafts, and bills of exchange. This volume
of bank-credit currency expands and contracts in accordance with the
demands of trade and business under normal conditions, and is the
medium through which the great bulk of the business of our country
is transacted.
It is extremely elastic, and varies in amount at different seasons of
the year. It is generally amply adequate to the business needs of the
country, except in times of disturbed confidence and financial panic.
In France and Germany and other countries, where the check and
draft system is not developed as it is here, there exists the greater need
for large and elastic bank-note issues. In England, where the check
and draft system is so well developed, we find more strict provisions
regarding uncovered note issues. The Bank of England issues no
notes unsecured either by the deposit of gold bullion or a Government
debt. Since the law of 1844, the other banks of issue of England,
Scotland, and Ireland can emit no more uncovered notes than the
amount in existence at that time. The right to issue uncovered notes
is thus limited, and the combined issues of uncovered notes of the
banks of England, Scotland, and Ireland is comparatively small.*
* Fixed issues of the Bank of England and of the other hanks of issue in the United Kingdom
in December, 1897.
[London Bankers' Magazine, January, 1898, page 119.]
Xumber. Circulation.
England, Bank of
England, private banks
England, joint-stock banks.
Scotland, joint-stock banks.
Ireland, joint-stock banks..
Total .
1
38
31
30
6
£16, 800, 000
374, 376
1, 762, 961
2, 676, 350
6, 354, 494
86
28 968,181
The average issues for the four weeks ended on December 4, 3 897, of the joint-stock and the private
banks of England and of Wales were £1,470,898, or £1,666,439 below the fixed amount.
The average issues of the joint-stock banks of Scotland and Ireland for the four weeks ended on
November 27, 1897, were £14,862,261, or £5,831,417 above tho fixed issues. These banks held in specie
during the same period £9,703,888, leaving uncovered £5,158,373 of their issues.
REPORT OF THE COMPTROLLER OF THE CURRENCY.
XXV
The enormous growth of the business of England since the enactment
of the law of 1844, has developed no such need of uncovered notes as to
have brought about a reversal of that restrictive legislation. While in
this country, with its extended system of banks and its great development of the check and draft system, some degree of elasticity in banknote issues is desirable, it is not essential that it should be an amount
so large as to make necessary for its security an injustice upon the
depositor, and thus, by interfering with the check and draft system,
defeat one of its own prime objects.
The general principles and regulations under which such elasticity
might be obtained, are not in any way inconsistent with the principles
and arguments we have endeavored to set forth. As covering these
general principles, and as a conclusion from the views hereinbefore
expressed, the Comptroller would make the following recommendations
in regard to the present laws governing the issue of national-bank notes:
First. The existing bank-note system, based upon deposit of Government bonds as security, should not now be abandoned.
Second. For the purpose of allowing elasticity to bank-note issues to
protect the banks and the community in time of panic, a small amount
of uncovered notes, in addition to the secured notes, should be authorized by law under the following limitations: They should be subjected
to so heavy a tax that they could not be issued in normal times for the
purpose of profit, but would be available in times of emergency. The
tax should be so large upon the solvent issuing banks as to provide a
fund which, in connection with the pro rata share of the assets of an
insolvent bank, would be sufficient to redeem the notes in full, without
necessitating any preference of note holders over depositors of any
insolvent issuing bank. The tax should be so large as to force this
currency into retirement as soon as the emergency passes.
Such a currency could be used only to lessen the evil effects of the
too rapid liquidation of credits which are collapsing under a financial
panic, but could not be profitably used as a basis of business speculation and inflation. It should be to the business community what the
clearing-house certificates are to our cities in times of panic—a remedy
for an emergency, not an instrument of current business.
The tables hereinbefore referred to are as follows:
XXVI
REPORT OF THE COMPTROLLER
OF THE CURRENCY.
TABLE I.—CAPITAL, ASSETS, CLAIMS PROVED, DIVIDENDS P A I D ; THE TOTAL REAL
UPON FINAL LIQUIDATION OF INSOLVENT NATIONAL BANKS, THE AFFAIRS OF
GEOGRAPHICAL DIVISIONS.
Dividends paid.
Geographical divisions.
Number of
banks.
New England
Eastern.
Southern
Middle
Western
Pacific
Total ..
Capital.
Total assets.
Claims
proved.
$2, 571, 300 $17,195, 440 $11, 508,426
31,135, 897 18, 399, 239
9,155, 600
4, 775, 000 15, 263, 365 10, 111, 715
24,153, 212 11,167, 256
9,122, 000
9. 308, 471 3, 552, 511
3, 382, 000
5, 687, 777 2, 628, 811
1,725,000
195 30, 730, 900
102, 744,162
57, 367, 958
Amount.
Per cent.
$9, 626, 055
14, 469,195
6, 611, 266
7, 996,983
2,195, 061
1, 644, 705
83.64
78.64
65.38
71.61
61.79
62.56
42, 543, 265
74.16
TABLE II.—CAPITAL, ASSETS, CLAIMS PROVED, DIVIDENDS PAID; THE TOTAL REAL
FINAL LIQUIDATION OF INSOLVENT NATIONAL BANKS, ARRANGED BY CLASSES,
Dividends paid.
Class.
$50,000
$100,000
Total
$200.000
$300i000
$500,000
(5ver $500,000
Total
Grand total
Number.
Capital.
Total assets.
Claims
proved.
Amount.
$3, 280, 000
5, 634, 000
$8, 733, 255
18, 034,198
$4, 424,178 $2, 859, 618
9, 891, 367 6, 262,487
127 | 8,914,000
26, 7(57, 453
14, 315, 545 9,122,105
61
37
16
9
6
6, 355 600
4,350 000
4, 300 000
6,811, 300
68
21,816,900
195 | 30,730,900
17,
16,
23,
18,
748,
369,
402,
455,
526 9, 211, 748
761 9, 042, 532
935 16, 558, 203
487 8, 239, 930
321,
866,
441,
792,
64.64
63. 31
63.72
036
897
201
026
79.47
75.94
75.13
82.43
75, 976, 709 43, 052, 413 33, 421,160
77. 62
57, 367, 958 42, 543, 265
747l6
102, 744,162
7,
6,
12,
6,
Per cent.
STATES EMBRACED WITHIN THE GEOGRAPHICAL
So
Wiseo
Oregon, California, Idaho, Utah, Nevada, Arizona.
Classification by capital stock is as follows: First division includes banks of $50,000; second, over
and not exceeding $300,000; fifth, over $300,000 and not exceeding $500,000, and sixth, over $500,000.
EEPORT OF THE COMPTROLLER OF THE CURRENCY.
XXVII
IZED FROM ASSETS, AND THE RATIO OF VALUABLE ASSETS TO NOMINAL ASSETS
WHICH HAVE BEEN FINALLY CLOSED, 1865 TO MAY, 1898—CLASSIFICATION BY
Offsets, div idends, etc.
Geographical divisions.
New England • • • • ». •
Eastern
Southern
... . .
Middle
T^estern
.
....
Pacific
Total
Offsets
allowed.
Dividends
paid from
assets.
Ratio of
valuable assets to nominal assets
upon final
liquidation.
Loans paid
and other disbursements.
$1, 361,106
2, 980,153
705,499
2, 878, 784
578, 852
594, 573
$8, 459, 272
11, 881, 870
5, 625, 641
6, 875, 456
1, 470, 922
1, 452, 295
$386, 946
2, 398, 475
477,224
2, 042,152
1, 033, 518
491, 737
$10, 207, 324
17,260,498
6, 808, 364
11, 796, 392
3, 083, 292
2, 538, 605
Per cent.
59.36
55. 44
44.61
48.84
33.12
44.63
9, 098, 967
35, 765, 456
6, 830, 052
51, 694, 475
50. 31
IZED FROM ASSETS, AND THE RATIO OF VALUABLE ASSETS TO NOMINAL ASSETS UPON
THE AFFAIRS OF WHICH HAVE BEEN FINALLY CLOSED, 1865 TO MAY, 1898.
Ratio of
valuable assets (represented by
offsets, diviLoans paid Total realized dends, etc.),
to nominal
and other disj bursements. from assets. assets upon
final liquidation.
Offsets, dividends, etc.
Class.
$100,000 . . . .
Total.
$500,000
Over $500,000.
Total
Grand total .
Offsets
allowed.
Dividends
paid from
assets.
Per cent
$551, 975
1, 231, 329
$2, 268, 559
5, 259, 575
$644, 800
1, 093, 226
465 334
584 130
39. 68
42. 05
1, 783, 304
7, 528,134
1, 738, 026
11, 049 464
1, 342, 693
1, 367, 693
3, 550, 958
1, 054,319
5, 858, 655
5,716,873
11,506,301
5,155, 493
693, 963
1, 544, 996
264, 366
2, 588, 701
7,895,311 |
8,629,562 I
15, 321, 625
8, 798, 513
41. 28
—=
44.48
52.72
65.47
47.67
7,315,663
28, 237, 322
5, 092, 026
40, 645, 011
53. 50
9,098,967 I
35,765,456
6, 830, 052 ;
51, 694, 475 j
50. 31
DIVISIONS REFERRED TO IN TABLES.
Eastern: New York, New Jersey, Pennsylvania, Delaware, Maryland, District of Columbia,
sissippi, Louisiana, Texas, Arkansas, Kentucky, Tennessee. Middle: Ohio, Indiana, Illinois, Michigan,
Montana, Wyoming, Colorado, New Mexico, Oklahoma, Indian Territory. Pacific: Washington,
$50,000 and not exceeding $100,000; third, over $100,000 and not exceeding $200,000; fourth, over $200,000
XXVIII
REPORT OF THE COMPTROLLER OF THE CURRENCY.
TABLE III.—ESTIMATED LOSS TO DEPOSITORS OF INSOLVENT NATIONAL BANKS,
WITH CIRCULATION A PREFERRED CLAIM—ISSUES EQUALING 100, 80, AND 60 P E R
CENT OF CAPITAL—CLASSIFICATION BY GEOGRAPHICAL DIVISIONS.
Geographical division, by States.a
New England
Eastern
Southern
Middle
"Western
Pacific
Total
New England
Eastern
Southern
Middle
Western
Pacific
Total
New England
Eastern
Southern
Middle
Western
Pacific
Total,
.
Dividends
actually
paid depositors on
claims, as
Per
shown by
cent of
preceding
divitables, indends
creased by
actualreceipts
ly paid
which
Num- deposiwould be
ber of tors on Circulation. received
banks. claims
from circuproved,
lation, less
as
5 per cent
shown
fund, in the
by presame ratio
ceding
as t h a t of
tables.
valuable assets to nominal assets
shown in
preceding
tables.
100 per cent
of capital.
$2,571, 300 $11, 076, 062
9,155, 600 19,291,266
4, 775, 000
8, 634, 887
9,122, 000 12, 229, 408
3, 382, 000
3, 259,173
1, 725, 000
2, 376, 079
10
50
33
4i
44
14
83.64
78.64
65.38
71. 61
61.79
62. 56
195
74.16
30, 730, 900
10
50
33
44
44
14
83.64
78.64
65.38
71.61
61.79
6'2. 56
80 per cent
of capital.
2, 057, 040
7, 324,480
3, 820, 000
7,297 600
2, 705, 600
1, 380, 000
195
74.16
24, 584, 720
51,137, 429
10
50
33
44
44
14
195
Dividends
• which
would remain after
deducting
circulation
(less 5 per
cent fund)
as a preferred claim
from dividends on
claims and
receipts
from circulation, as
shown by
previous
column.
$8,
10,
4,
3,
633, 327
593, 446
098, 637
563, 508
46, 273
737,329
75. 02
57.58
40. 53
31.91
1.30
28.05
8.62
21.06
24.85
39.70
60.49
34.51
10.30
26.78
38.00
55.44
97. 89
55.16
56, 866, 875
27, 672, 520
48.24
25.92
34.95
10, 786, 060
18, 326, 852
8, 230,162
11, 382, 923
3, 046, 350
2, 229, 804
8,
11,
4,
4,
76.74
61.79
45. 50
39.85
13.40
34.95
6.90
16. 85
19.88
31.76
48. 39
27. 61
8.25
21.42
30.41
44.35
78. 31
44.13
54, 002,151
30, 646, 667
53.42 |
20.74
27.97
83.64
78. 64
65.38
71.61
61.79
62.56
GO per cent
of capital.
1, 542, 780 10, 496, 059
5, 493, 360 17, 362, 437
7, 825, 438
2, 865, 000
5, 473, 200 10, 536, 438
2, 833, 528
2, 029, 200
2, 083, 529
1, (K!5, 000
9. 030, 418
12j 143, 745
5,103, 688
5, 336, 898
905, 788
1,100,279
78. 47
66.00
50.47
47.79
25.50
41.85
5.17
12. 64
14. 91
23.82
36.29
20.71
6.18
16.07
22. 80
33. 26
58. 73
33.10
74.16
18, 438, 540
33, 620, 816
58.61
15. 55
20.97
831, 872
368, 596
601,162
450, 203
476, 030
918, 804
i
Per cent of
Perloss on
claims by centage
preference of loss
ofproposed upon
the
Per cent circulation,
being the amount
of diviactudifference
dends
between the ally rewhich
percentage ceived
would be
by deof divipaid on
dends
actu- positclaims
ors,
ally
paid
proved,
depositors which
after dewould
on
claims
ducting
proved, and result
circulathe percent- from
tion, less
age which prefer5percent
would be ence of
fund.
propaid on
claims after posed
deducting circulaproposed tion.
circulation.
a See foot note, Table I.
REPORT OF THE COMPTROLLER OF THE CURRENCY. XXIX
TABLF. IV.—ESTIMATED LOSS TO DEPOSITORS OF INSOLVENT NATIONAL BANKS,
WITH CIRCULATION A PREFERRED CLAIM—ISSUES EQUALLING 100, 80, AND 60
PER CENT OF THE CAPITAL STOCK—CLASSIFICATION OF BANKS BY CAPITAL STOCK.
I
j Dividends
Per cent of I PerJ actnally
loss on ' centage
'paid deposiclaims by
| tors on Dividends
preference of loss
j claims, as
which
j shown by would re- Per cent of proposed upon
Per
the
I preceding main after of divi- circulation, amount
cent of
being the
I tables, in- deducting dends
diviactudifference
|
creased
by
circulation
dends
which between the ally rereceipts (less 5 per would
actualwhich
cent fund) paid onbe percentage I ceived
ly paid
by deof diviwould be as a pre- claims
Num- deposidends actu- positreceived ferred claim
Class of banks. b e r OV*" tors on Circulation. from
ors,
proved,
ally paid
circu- from divibanks. claims
which
lation, less dends on after de- depositors would
proved,
ducting
on claims
5 per cent claims and
as
b
fund, in the receipts circula- proved, and resul
I shown
from
same ratio j from circu- tion, less the percent-) preferby pre5
percent
age
which
as
that
of
lation, as
I ceding
fund.
would be ence of
valuable as- shown by
tables.
| paid on | prosets to nomi- previous
I claims after posed
nal assets column.
j deducting circulashown in
I proposed tion.
the precedI circulation.
ing tables.
$50,000..
$100; 000.
66 i €4.64
61 | 63.31
Total .
127 I 63. 72
$200,000
$300,000
$500,000
Over $500,000
79. 47
75.94
75.13
82. 43
Total
100per cent
of cavital.
$3, 280, 000 $4,006,040
5, 634 j 000 8, 513,129
22.15
31.96
42.49
31.35
8, 914, 000 { 12, 609, 175 4,140, 875
34.79 |
54.59
d, 355, 600 10, 006, 658
4, 350. 000 9,045,551
4, 300, 000 15,115, 650
6,811,300
9, 876, 625 I
54.33
66.62
41. 33
36.39
21.61 !
8.51 j
41.10 i
45. 79
28. 46
11.33
49.86
|
Grand total.!
SO per cent
of capital.
2, 624, 000
4, 507, 200
$50,000..
$100,000.
Total .
$200,000
$800,000
$500,000
Over $500,000
Total
|
Grand total.
$50,000..
$100,000.
Total
$200,000
$300.000
$500.000
Over $500,000
Total
Grand total.
GO per cent
of capital.
1, 968, 000
3, 880, 400
$980,046
3,160, 829
3, 968, 838
4, 913, 051
11, 030, 650
3,405,
65.73
49. 52
XXX
REPORT OF THE COMPTROLLER OF THE CURRENCY.
NATIONAL-BANK EXAMINERS.
The character of the work performed by the national-bank examiners,
is most important in its relation to all sections of our country, and to
all classes of our people.
For the proper conduct of the work of supervision of our national
banks, examiners must be men of the highest personal character, and
extended business experience. They should be men who possess some
skill in accounting, and at the same time the business judgment to
enable them to intelligently pass upon the lines of credit extended by
banks under their supervision.
The appointment by the Comptroller to these important positions, of
competent and able men, is one of the most sacred duties of his office.
To protect by every possible safeguard their independence and disinterestedness, is equally important. With this latter object in view, the
Comptroller has forbidden the practice which he found in existence in
some of the larger cities, of the employment of the examiners by banks
of their district in special examination work for the benefit of the bank,
and not for the Comptroller's office. This practice had a tendency to
interfere with the rigid impartiality which should characterize the work
of a Government official.
During the year the Comptroller has extended over the cities of New
York, Boston, Philadelphia, and Baltimore the system of semiannual
visitations by examiners, in force in all other sections of the country.
He has utilized, with some benefit, the examiners in investigations into
the credit of heavy debtors of banks, where such indebtedness constituted a menace to the safety of the banks, and where, despite the criticisms of the Comptroller and the efforts of the bank officials, no material reductions in the amount of the indebtedness could be had.
The necessity for such investigation sometimes arises, and whenever
they have been made, the result has been most beneficial.
The verification, by more extended investigation than is possible in
the ordinary examination of a bank, of the ex parte statements of
interested officials, as to the safety of large, permanent, and unreducible
loans, sometimes becomes of vital importance in determining the course
of the Comptroller in closing a bank or allowing it to remain open.
For the purposes of this work he recommends an increase in the
annual fund provided for examinations of bank-note plates, and for
compensation of examiners engaged in special examinations, of $2,000,
making the fund $3,000 instead of $1,000, as at present.
LIMITATION OF LOANS.
One of the most important reforms needed in the present national
banking law, is a proper provision limiting the amount which can be
loaned to any one individual or corporation, in order to insure a general
distribution of loans, and to prevent an improper concentration of a
bank's funds in the hands of a few borrowers. The provision of the
present national banking law designed to carry into effect this important
principle is as follows:
SEC. 5200. The total liabilities to any association of any person, or of any company, corporation, or firm, for money borrowed, including in the liabilities of a company or firm the liabilities of the several members thereof, shall at no time exceed
one-tenth part of the amount of the capital stock of such association actually paid
REPORT OF THE COMPTROLLER OF THE CURRENCY. XXXI
in. But the discount of bills of exchange drawn in good faith against actually
existing values, and the discount of commercial or business paper actually owned by
the person negotiating the same, shall not be considered as money borrowed.
Almost as if in admission of the fact that this provision is unscientific, and ill adapted to carry into practical effect the great principles of
protection to depositors an.d shareholders, subserved by generally distributed and safe loans, the present law provides no specific penalty
against individuals which the Comptroller can apply for violations of
this section in the making of excessive loans, where such violations do
not affect the solvency of the bank, nor justify the appointment of a
receiver.
A United States court, under the general provision of the law providing for the forfeiture of the franchises of a bank for any violations
of the banking act, might adjudicate the question of fact as to such
violations, but could apply no other remedy than forfeiture of franchise.
Since the institution of the national banking system the violation
of this provision has been common; and the Comptroller, though allowing no known violation to escape his written protest, finds great practical difficulty in his endeavors to enforce this requirement.
On September 20, 1898, the date of the last call by the Comptroller
for statements of condition of national banks, 1,124 banks, constituting nearly one-third of the entire number of banks in the system,
reported loans in excess of the limit allowed by section 5200, Eevised
Statutes of the United States.
The principles underlying the present provision of the law, are as
valuable to depositors and shareholders in their application to the
banks of the larger communities, as to the banks of the smaller communities; but the observance of this provision, while not interfering
with the current requirements of either the banks or the X3ublic in
smaller communities, proves an almost insurmountable obstruction to
the business of our larger cities.
The present need is for an amendment to this provision, which, while
compelling, under penalties, the safe and proper distribution of loans
of larger banks, will enable them to loan more nearly the same per cent
of their total assets which the present provision allows to small banks.
In this way the officers of larger banks can supply the proper needs of
the larger communities without disregarding the law, and the Comptroller can hold them under personal penalty to strict observance of the
amended law, which when disregarded would indicate improper distribution of loans, something which infractions of the present provisions
in the case of many banks do not necessarily indicate.
The greater ratio borne by banking resources to banking capital in
the larger communities, as compared with the like ratio in smaller
communities, is responsible for the defective and unequal working of
the present provision.
The average ratio of resources to the average capital of the 47 national
banks in the city of New York is as 18 is to 1; of the 17 national banks
in Chicago as 10.2 is to 1; of the 6 national banks in St. Louis as 7.3
is to 1; of the 257 national banks in other reserve cities as 6.6 is to 1;
while in 3,255 country banks the ratio is but as 4.7 is to 1.
The law limiting loans to 10 per cent of the capital, when applied to
the 3,255 banks of the smaller communities of the country, as a whole
would allow the loaning of 2.14 per cent of their total assets to one individual. As compared with this, the banks of the city of New York, on
the average, could not loan over fifty-six one-hundredths of 1 per cent
XXXTT REPORT OF THE COMPTROLLER OF THE CURRENCY.
of their total assets to any one individual; the banks of Chicago not
over ninety-eight one hundredths per cent of their total assets; the
banks of St. Louis not over 1.4 percent of their total assets; the banks
of other reserve cities not over 1.51 per cent of their total assets.
In other words, the proportion of their assets which the country
banks of the United States can loan, in strict compliance with section
5200, to one individual, is sixty three one-hundredths of 1 per cent
greater than in 257 reserve cities, seventy-four one hundredths of 1 per
cent greater than in St. Louis, over twice as great as in Chicago, and
nearly four times as great as in the city of New York.
This provision as it stands at present constitutes an incentive to the
making of loans the larger in proportion to the total assets of banks in
smaller communities, where, as a rule, large loans which are safe, are
the most difficult to secure; while in the larger business centers of the
country, where commercial conditions create a certain demand both
from banks and borrowers for large and safe loans, its effect is the
reverse to such an extent as to be injurious.
A bank with smaller loans, is not necessarily a bank with the more
distributed and safe loans. A bank with $100,000 capital and $100,000
deposits, the latter being loaned in the maximum amounts allowed by
the present provision (to wit, to 10 individuals at $10,000 each) has
not as well-distributed loans as a bank of $1,000,000 capital and
$5,000,000 deposits, the latter loaned to 50 people at the maximum of
$100,000 each. In the former case the loans are distributed among
only 10 people and in the latter case among 50 people, and yet in each
case there is strict compliance with the 10 per cent restriction.
One of the objects evidently designed to be subserved by the present
provision of the law, was the protection of the capital of a bank, as
distinguished from other assets of the bank.
The framers of the section undoubtedly considered the capital of a
bank as a greater safeguard for the depositors against loss, when not
over one-tenth part of it was loaned to a single individual or corporation without security. They recognized the fact, however, that when
outside security was had for loans, the capital did not need for its
protection the 10 per cent restriction; and they provided accordingly
for the exemption from the restriction of a certain class of secured
loans, as follows:
But the discount of bills of exchange drawn in good faith agaicst actually existing values, and the discount of commercial or business paper actually owned by the
person negotiating the same, shall not be considered as money borrowed.
In the modification of section 5200, which we will recommend, we
invoke the same principle of outside security for the protection of the
capital against loss upon loans exceeding the 10 per cent limit.
The size of a loan is of itself, no indication either of its strength or
weakness. If the size of a loan is not such as to be an undue concentration of the assets of a banking institution in the hands of one individual or corporation, thus depriving its creditors and shareholders of
the safety of the law of average, it is not wise, either upon economic
grounds or upon grounds of public policy, to forbid it by law.
If, however, the size of a loan is such as to cause such undue concentration, its prevention is justifiable on both grounds.
Recognizing these truths, it is the easier to understand why in many
instances a strict compliance with this provision of the law (sec. 5200,
R. S. U. S.) is consistent with all the needs of the current business
of a small community and a proper protection to both banks and the
REPORT OF THE COMPTROLLER OF THE CURRENCY.
XXXIII
public, yet in some larger communities it seriously interferes with the
business requirements-of both the banks and the public, and adds in
no way to the safety of the depositor.
The limit of the amount of single loans to an arbitrary percentage
of either the capital, or the sum of the capital and surplus of a bank,
does not insure a general or proper distribution of loans in all cases.
Since, as stated before, the size of a loan is not, per se? related to its
safety, the more important proportion to consider, when endeavoring
to regulate the distribution of loans by law, is that of the amount of
the loan to the total assets, rather than that of the loan to the amount
of the capital.
Grounds of public policy suggest as advisable the largest liberty in
loans, not inconsistent with the absolute safety of the depositor.
The habitual disregard of the present provision by the officers of so
many banks, interferes with the proper supervision of the banks by the
Comptroller, and tends to create indifference to the other restrictions of
the national banking law.
The failure of the present law to provide the power to apply a personal penalty for the making of excessive loans, sometimes embarrasses
the Comptroller in endeavoring to check tendencies toward recklessness
in loaning, which point to the ultimate ruin of a banking institution.
As before stated the present provision, when properly altered, should
allow the banks of larger communities to have more nearly the privilege of loaning a given per cent of their total assets to one individual,
which now belongs, under a strict compliance with the present provision, to the banks of the smaller communities. From this privilege
they are now debarred by law.
The desired results can be obtained, in our judgment, by adding,
after the words, in section 5200, "shall at no time exceed one-tenth part
of the amount of the capital stock of such association actually paid in"
the following words:
Provided, That the restriction of this section as to the amount of total liabilities
to any association, of any person, or of any company, corporation, or firm for money
borrowed, shall not apply where a loan in excess of one-tenth part of the capital
stock shall be less than two per cent of the total assets of said bank at the time of
making said loan. Said loan shall be at all times protected by collateral security
equal to or greater in value than the excess in the amount of said loan over one-tenth
of the capital stock.
A strict and personal penalty enforceable by the Comptroller, should
then be provided for infractions of the amended section by the officers
of banks, to enable the Comptroller to successfully enforce general
and strict compliance with its terms.
The suggested amendment will make section 5200 just and equitable
in its relation to all national banks, and to all communities of our country, large and small, which it is not at present.
It would not lessen the amount which the smaller banks can now
loan in compliance with the section as it stands at present. At the
same time it would not allow the larger banks to loan to any one individual or corporation more than 10 per cent of their capital, unless
such loan, in addition to being secured for the excess, would still
amount to a less per cent of their total assets, than the per cent of total
assets which the smaller banks can now loan under the section as it
stands at present.
Section 5200 thus amended will not interfere, as at present, with the
right of the banks in the larger communities to meet the legitimate
requirements of business in these commercial centers. It will enable
CUB 98
3
XXXIV
REPORT OF THE COMPTROLLER OF THE CURRENCY.
tlie Comptroller, by its enforcement, to prevent an undue concentration
of loans and conserve their general distribution.
Under the section thus amended, the capital of a bank will be protected, inasmuch as no loan in excess of the 10 per cent limit can then
be made, except upon proper collateral security.
The penalty clause will enable the Comptroller not only to limit the
size, but to enforce the securing of excessive loans.
The following table shows the inequality of the present law in its
practical effects upon the banks of larger and smaller communities, so
far as the possible distribution of loans is concerned:
Banks in—
Number
of banks
J u l y 14,
1898.
New York City
Maximum
Average
resources.
tsasr
Ratio of
Average maximum
average reloan to average
resources now alsources to
lowed b y s e c .
cent of cap- average
5200.
ital.
capital.
47 $18, 598, 379
17 11,632,219
6 10, 257, 586
$1, 036,170
1,144,118
1, 400, 000
$103,617
114,411
140, 000
All central reserve
cities
Other reserve cities..
Country banks
70
257
3,255
16,191, 676
3, 909, 561
565,130
1, 093, 571
591, 343
120, 888
109,357
59,134
12, 088
United S t a t e s . .
3,582
1,110, 462
173,650
17, 365
18
tol
10. 2 to 1
7. 3 to 1
56
T (j o
8
of 1 per cent.
fa jj of 1 per cento
1. 4 per cent.
14. 8 to 1 T6o8ij of 1 per cent,
6. 6 to 1 1. 51 per cent.
4. 7 to 1 2.14 per cent.
6.4 to 1
1.56 per cent.
For the purpose of ascertaining the general result of the suggested
amendment to section 5200, U. S. E. S., an examination has been made
of the reports 7of condition of the national banks of date July 14, 1898,
and examiners reports for approximate dates nearest thereto. In the
following table is set forth the number of banks in reserved cities
named, total loans outstanding November 1, loans in excess of the
legal limit, loans which would be excessive if allowed to the limit of 2
per cent of the total resources, and number of banks in which loans
equaling 10 per cent of their capital would be greater than 2 per cent
of total assets, the loaning power of which the proposed limit would
not increase. The table also shows similar information relative to one
hundred banks selected at random from various sections of the country.
REPORT OF THE COMPTROLLER OF THE CURRENCY.
Total numof loans
Number ber
outstandof banks. ing
Nov. 1,
^1898.
Cities.
New York
Chicago
St. Louis
47
17
6
-
Number of
banks in which
loans equaling
Number of 10 per cent ot
their capital
Number of loans in
excessive excess of
greater than
loans under the pro2 per cent of
section
posed 2
total assets,
5200.
per cent
the loaning
limit
power of which
the pro|)osed
limit would
not increase.
29 919
17, 652
7,791
504
53
24
30
12
10
Total
70
55, 302
581
52
Boston
.
.Albany
Brooklyn
Philadelphia
Pittsbnrf
Baltimore
Washington
Sa \ciii nali
New Orleans
Louisville
Houston .
Cincinnati
Cleveland
Detroit
Milwaukee
.
Des Moines
St Paul
Minneapolis
Kansas City
!St JOSPDH
Lincoln
Omaha
San Francisco
52
6
5
9
52
32
145
48
35
21
1
17
4
38
14
11
3
8
4
43,123
4 326
2,510
25,134
20, 570
15 533
9,471
1, 230
4,605
5,216
1,421
14 542
10, 211
5,600
6,353
2 969
2,788
2,951
3,911
1 447
1,190
4,288
2,130
257
327
100
427
..
30
11
9
7
6
5
13
13
6
5
4
5
6
5o
Total
Total all reserve cities
Country
Total
„...
XXXV
52
0
2
9
24
14
27
10
6
2
4
14
31
1
12
2
1
o
2
9
2
2
0
28
o
o1
10
16
4
2
2
4
4
0
5
1
1
1
3
5
0
21
3
8
6
4
0
1
2
191, 519
573
135
96
246, 881
51, 550
1.154
250
187
88
100
54
298, 431
1,404
275
154
o
3
4
2
INSOLVENT BANKS.
The Comptroller of the Currency is charged with general responsibility for the proper liquidation and distribution of the assets of the
insolvent banks of the country, in the hands of receivers appointed by
him.
At present the assets of insolvent national banks of the country under
his direction, are of the nominal value of $48,000,000.
The decision of questions which are daily submitted by different
receivers as to the proper disposition of these assets, scattered as they
are throughout every section of the country, and consisting of the most
diversified kinds of property, constitute a most exacting and often perplexing part of the general duties of the office.
During the past year efforts have been made to cut down the expenses
of receiverships, and hasten the final liquidation of the trusts. An
annual saving approximating $100,000 has been effected by the reduction of the salaries of receivers and attorneys, to correspond with the
gradually lessening assets consequent upon the progress of liquidation,
and by the consolidation of various receiverships in the hands of fewer
receivers.
XXXVI
REPORT OF THE COMPTROLLER OF THE CURRENCY.
Including the receivers appointed to take charge of banks which
have failed during the year, the total number of receivers now at work
is 113, a reduction of 14 since the last report of this office was issued.
The books and remaining personal assets of eleven receiverships have
been removed to Washington, and are managed by one receiver and two
assistants, thus dispensing with, ten receivers and five clerks, and resulting in other economies. These latter receiverships were of banks in the
last stages of liquidation, with slow assets, of a nature which would
involve serious loss at forced sale, or which were involved in unfinished
litigation. Eight other receiverships are in process of removal to this
office, which will result in dispensing with nineteen receivers in all.
With some marked exceptions, the experience of the office shows that
the indifference of local receivers to the demands of the business of
their trusts, has a tendency to grow, as the assets of the trust and their
compensation diminish; and the results of the policy of consolidations
of trusts has thus far amply justified the steps taken.
RULING AS TO SECOND ASSESSMENTS UPON STOCKHOLDERS AND
REBATE TO STOCKHOLDERS IN CASE OF INCORRECT ASSESSMENTS.
The practice of this office heretofore has been when an assessment
upon stockholders is once decided upon as the proper one to cover a
deficiency in the assets of an insolvent bank and to reimburse depositors, to regard such levy as irrevocable and unchangeable, notwithstanding further developments in the administration of a trust may
demonstrate error in the assessment.
This practice the Comptroller has found in many cases, to be inconsistent with the exact fulfillment of the law.
If an ordinary trustee, representing two parties to a settlement, is
charged with the collection of a debt for one from the other, and after
collecting the amount which he believed to be due, discovers afterwards
that he has only collected half the amount really due, it is his unquestionable duty to proceed once more to collect the unpaid balance. In
like manner, if such a trustee collects what he considers the amount of
the debt, and discovers afterwards that he has collected twice the
amount actually due, it is his unquestionable duty to return the half of
the amount unjustly collected, to the wronged party. No trustee, upon
the discovery of his mistake in either instance, would be justified in
claiming that his first action was final, and that he owed no further
duty to the parties involved.
The Comptroller, therefore, acting as trustee for the proper protection
of the interests involved, can not rightfully refrain from making second
assessments against stockholders, where the first assessment was too
small, or refuse to return to stockholders a portion of their paid assessments, when they were made in the first instance, through error, in an
amount larger than that allowed by law.
An assessment is made against the stockholders of an insolvent bank
to cover the difference between the claims against it, and the value of
its assets.
When the assessment is made after all the assets have been disposed
of, there is little likelihood of mistake by the Comptroller and the
receiver in the fixing of the amount; but when the assessment is made
prior to the final liquidation of the assets, as is generally the case, it is
based upon the difference between the claims, and the amount which the
Comptroller and the receiver estimate as the cash value of the assets,
after deducting allowances for contingencies and expenses.
The diversified nature, location, and condition of the assets of insolbanks is such, that some errors in the appraisement of the ConipDigitized forvent
FRASER
REPORT OF THE COMPTROLLER OF THE CURRENCY.
XXXVII
troller and receiver are inevitable and unavoidable. These errors if
they exist are of course developed by the final liquidation of the trust.
If the final liquidation develops that the total deficiency is so large
that it would not have been covered by a fully paid assessment of 100
per cent upon the stockholders, and a 100 per cent assessment had
already been declared, a former error in the estimate of the value of
the assets would of course be immaterial; but, if the former assessment had been for a less amount than the 100 per cent, it is the Comptroller's plain duty as trustee in the interest of the creditors, for the
collection of the legal liabilities of the stockholders, to make a second
assessment for an amount which, with the former assessment, would
equal the full stockholders' liability, to wit, 100 per cent.
And thus, with any other error in deficient assessments, a second
assessment should be made to cover the difference between the deficiency as estimated, and the deficiency as developed by final liquidation.
In like manner, when the estimate of the deficiency upon which the
assessment was based proves to be too large, it is evident that the
Comptroller has collected from the stockholders a greater sum than
that which the law gives him authority to collect, and it is his duty to
return the excess to the contributing stockholders.
There can be no reasonable dissent from these propositions. In their
practical application it will sometimes happen that a return of an illegally collected excess will be made to stockholders, and at the same time.
the creditors of the same bank will not have been paid in full.
This arises from the fact that the Comptroller can assess against each
stockholder under the law, only that proportion of the total deficit which
his stock bears to the total stock, irrespective of whether or not, through
the insolvency of some of the stockholders, a portion of the total deficit
for which the assessment is made is uncollectible.
There are at present in the Comptroller's hands eight insolvent banks
where a revision of the former assessment is necessary. In three of these
a second assessment against stockholders, in the interest of depositors,
has been made, and in five cases a rebate in assessments collected will
be returned to stockholders.
The Comptroller reproduces here a portion of holding of the United
States Supreme Court and the original ruling made by the Comptroller
thereunder, May 5, 1898, as more fully explaining the principles and
methods involved:
In the case of the United States r. Knox (102 U. S., 425), the court uses the following language in outlining the process to be pursued in fixing the separate liability
of the shareholders:
" In the process to be pursued to fix the amount of the separate liability of each
of the shareholders, it is necessary to ascertain (1) the whole amount of the par
value of all the stock held by all the shareholders; (2) the amount of the deficit to
be paid after exhausting all the assets of the bank; (3) then to apply the rule that
each shareholder shall contribute such sum as will bear the same proportion to the
whole amount of the deficit as his stock bears to the whole amount of the capital
stock of the bank at its par value. There is a limitation of this liability. It can
not in the aggregate exceed the entire amount of the par value of all the stock.
"The insolvency of one stockholder, or his beiug beyond the jurisdiction of the
court, does not in any wise affect the liability of another; and if the bank itself, in
such case, holds any of its stock, it is regarded in all respects as if such stock were
in the hands of a natural person, and the extent of the several liability of the other
stockholders is computed accordingly." (Crease v. Babcock, 10 Mete. (Mass.), 525.)
The court further says : "Although assessments made by the Comptroller under
the circumstances of the first assessment in this case, and all other assessments, successive or otherwise, not exceeding the par value of all the stock of the bank, are conclusive upon the stockholders, yet if he were to attempt to enforce one made clearly
XXXVIII REPORT OF THE COMPTROLLER OF THE CURRENCY.
and palpably contrary to the views we have expressed, it can not be doubted that a
court of equity, if its aid were invoked, would probably restrain him by injunction/'
The Supreme Court of the United States having thus determined the basis upon
which, under the law, the Comptroller fixes the amount of the assessment to be levied
against the shareholders of an insolvent bank, no other course is proper than a reconsideration of the question of the amount of the deficiency when the matter is brought
before him upon complaint of either depositors or stockholders, or where an error
becomes manifest to him in the course of the further administration of the trust.
The position of the Comptroller in his relations to the stockholders, is that of a
trustee for the collection, in the interest of the creditors, of all the legal liabilities
of the stockholders under the statute, and as further defined by the courts.
In pursuance of this duty as trustee, when upon further administration of the trust
an error in a former assessment is demonstrated, in estimating the deficiency in the
assets of the trust at too small an amount, it will become the duty of the Comptroller
to review the former action, and, if necessary, to levy an additional assessment upon
the stockholders of the insolvent bank, for the purpose of collecting from each stockholder that proportion of the difference between the estimated and the actual
deficiency which the stock of the individual stockholder bears to the total stock of
the bank.
If, in the endeavor to enforce such liability through an error as to the exact deficiency, there is collected a greater amount from the shareholders than that for which
they are legally liable, the Comptroller then becomes trustee for the stockholders
who have paid suc*h excess, charged with the return of said excess to the contributing stockholders in the proportion in which they have paid their original assessment
to him. The determination of the amount to he returned to such stockholders must
necessarily be deferred until the final closing of the trust, an amount being reserved
at all times in the hands of the Comptroller sufficient to afford full protection to said
contributing shareholders against any contingency7 of change in the amount collected
from the assets, over the estimated value of assets at the time of the assessment.
The following Illustrations taken from the records of the office show
the application of the ruling:
In the case of the El Paso National Bank, El Paso, Tex.? an assessment of 35 per cent on the $150,000 of capital stock was levied December 26,1894. After all the assets had been liquidated it appeared that
if the whole amount of the assessment, $52,500, had been collected, a
deficiency of $28,500 still existed, for which the shareholders were liable,
and on May 6, 1898, an accounting having been made by the receiver,
the individual liability of the shareholders was further enforced by an
assessment of 19 per cent on the capital stock.
The process of ascertaining the deficiency is exemplified in the following statement of the liabilities and resources of the bank:
LIABILITIES.
Claims at date of suspension
Claims established since suspension
Total claims
Expenses:
Amount paid for betterment of assets
Receiver's salary
Legal expenses
General expenses
$263, 088. 00
21, 568. 57
284, 658. 57
$9,134. 35
12, 749. 75
3, 444. 97
6, 547.55
31, 876. 62
Interest at 6 per cent from date of suspension to I)e<:eniber 31,
1898:
On $161,947.45 claims proved
34, 600.19
On $2,914. 46 liabilities not proved
881. 62
Estimated expenses to date of final closing, December 31, 1898
Total liabilities
35,481.81
2, 000. 00
354, 015. 00
REPORT OF THE COMPTROLLER OF THE CURRENCY. XXXIX
RESOURCES.
Collections from all sources, exclusive of $13,650 collected from assessment of 35 per cent upon shareholders
$229,094. 70
Offsets allowed against liabilities
43, 808. 28
Assessmen t of 35 per cent upon shareholders
52,500. 00
Total resources
325. 402. 98
Remaining deficiency of assets
28, 612. 02
Or by the following statement of the liabilities and resources, the
same result is obtained:
LIABILITIES.
Claims proved
$161,947.45
Liabilities not proved
2, 914. 46
Interest at legal rate from date of suspension to December 31, 1898, on
proved claims
34, 600.19
On liabilities not proved
881. 62
Estimated expenses of receivership to date of final closing
2, 000. 00
Total liabilities
202,343.72
RESOURCES.
Cash on deposit in United States Treasury
95. 02
Collections from assets, representing dividends paid to creditors on
$161,947.45 proved claims
121,136. 68
Assessment, 35 per cent, upon shareholders
52, 500. 00
Total resources
173, 731. 70
Remaining deficiency of assets
-
28, 612. 02
In the case of one national bank, in which an assessment of 70 per
cent had been levied upon its capital stock of $60,000, it has been ascertained that an assessment of 32 per cent, if paid in full, would have
been sufficient in connection with the collections from the assets, to pay
its liabilities, and that $0,850 of the amount collected from the shareholders in excess of the amount that would have been payable on the
basis of an assessment at the latter rate, is returnable to them in the
following proportions, numbers being used to indicate the shareholders
who have paid the assessment of 70 per cent in whole or in part.
Xumber of claim.
i
I Assessm o u n t of
;
j Assess- I Amount jment 32 per Aoverpay•v- I
Amount
of
|
ment
of
70
j
collected
in
cent, rep- I ment on
of shiresk I c a P i t a l I percent | cash on 70 resenting basis
of 32
'I stock. ! on capital I percent | actual den-• per cent
\
\ stock, 'assessment.: eiency of assessment.
j
|
I assets, j
10
7
5
io
i
!
;•
:
l
6.
7.
8.
9.
10.
11.
5
Total .
200
200
140
140
6,000
4,200
14,840
13, 640
$700
700
500
500
490
350
700
70
700
350
10, 000
7,000
1,000
100
10 j
100
2
2
60
$700
490
350
700
70
700
350
7,000
140
140
3,000
$1 000
i
'
;
!
212 '•
1,000
21,200 |
$320
224
160
320
32
320
160
3,200
64
64
1,920
$380
266
190
380
38
380
190
3,800
76
76
1, 080
6, 78i
6,856
XL
REPORT OF THE COMPTROLLER OF THE CURRENCY.
All assets of the bank having been liquidated, the amount for which
the shareholders should have been assessed to meet the deficiency was
$19,200, instead of $42,000, as will appear from the following statement
of its liabilities and assets:
LIABILITIES.
Claims proved, upon which 60 per cent in dividends have been paid
Claims not proved, as shown by the books
Interest on above claims to date
Total liabilities
$28, 695.18
565. 58
6^ 793.51
36, 054.27
ASSETS.
Cash on deposit in United States Treasury
$5, 376.20
Collections from assets representing dividends 60 per cent on $28,695.18
claims proved
11, 478.07
Total assets
16,854.27
Deficiency of assets
19, 200. 00
Assessment, 32 per cent, on $60,000 capifcal stock
$19, 200
Assessment, 70 per cent, on $60,000 capital stock
42, 000
Excess over amount of actual deficiency
22, 800
Amount collected on 70 per cent assessment
13, 640.00
Proportionate amount that would have been collected on 32 per cent
assessment
6, 784. 00
Amount collected on 212 shares of stock in excess of 32 per cent
assessment
6, 856.00
DOMESTIC BRANCH BANKING.
The Comptroller recommends, in accordance with former recommendations of his predecessor, that domestic branch banking should be
legalized in communities of less than 2,000 inhabitants, many of which
are now unable to support independent banks. This would afford
some smaller communities banking privileges which are now without
them, but would not materially interfere with the scope of the work
now so well performed by the existing banks of the smaller communities.
The main arguments which are advanced in favor of the granting of
more liberal privileges of branch banking than this, are based largely
upon the theory that with branch banking allowed in all communities,
irrespective of size, more uniform interest rates would prevail throughout the country, and the flow of capital to points of scarcity would be
facilitated.
Such privileges would place the larger banks of the great cities in
competition with the banks of smaller communities, and would probably result in a rapid centralization of the banking business of the
country in the hands of a constantly lessening number of institutions.
Theoretical advantages are claimed for such results, but in our judgment they would be injurious to the best interests of our country.
Such a system would increase the difficulties in the way of the small
borrower, though lessening them for the large borrower. It would tend
to separate the borrower from the lender, as it would of necessity
remove the central lending power from the small borrowers of small
communities.
REPORT OF THE COMPTROLLER OF THE CURRENCY.
XLI
It may be claimed that the agents in charge of the branch banks
would possess the same powers of loaning' as the officers of the smaller
banks now possess; but such arguments ignore the prevailing tendencies
of modern corj)orate management which magnify of necessity central
responsibility, and constantly tend to subordinate to rigid systems, the
activities and responsibilities of agents upon detached duty.
The opportunities for individual attention and accommodations to
bank customers of limited business, are now well subserved by competing smaller banks. Interest rates are not alone dependent upon local
money supply; they also depend upon the risk of loss assumed in loaning. Branch banks in newer communities would not assume unusual
risks, without unusual rates. The facilities now afforded by the 3,600
national banks of the country for the movement of capital toward
points of scarcity are such that any new system would probably not
result in great changes in the general rates of interest. But when the
economic tendencies adverse to business individualism involved in
unlimited domestic branch banking are considered, the question of
interest rates becomes secondary.
FOREIGN AND COLONIAL BRANCH BANKING.
In the matter of foreign and colonial branch banking, however,
different considerations, arising from different conditions, present
themselves.
The subject of the legislation which should be provided by Congress
for the regulation of the domestic banking of the new colonies of the
United States, and for the denning and regulation of the banking
relations between these colonies and the United States, is one of greatest importance at this juncture of our national and commercial career.
This legislation is not only most essential to the welfare of the people
of the new territories, but to the people of the United States as well.
The foundation for the greater growth of trade between the United
States and her colonies must be speedily and firmly laid in proper
banking laws, which will result in enabling her merchants to do business with the people of the colonies without the disadvantages existing
at present.
The lamentable lack of proper international banking facilities, under
which the merchants of the United States have so long labored, has
now become a serious hindrance to the speedy adjustment of our trade
relations to the new advantages afforded by territorial expansion. For
years before the outbreak of the war with Spain the necessity of providing proper banking facilities for our trade with South American
countries, had been recognized and widely proclaimed by the business
interests of the country.
These facilities are now not only more important than formerly to our
business interests, but at present governmental, as well as trade necessities, demand legislation.
In April, 1890, the International American Congress, held at Washington, discussed the needs of better banking facilities between the
American
republics, and made recommendations in connection therewith w7hich received the indorsement of President Harrison and Mr.
Blaine, the Secretary of State.
In furtherance of this object several bills have been favorably
reported from the Committee on Banking and Currency of the House.
As yet, however, these efforts, made in the interest of trade stimulation,
have not resulted in the enactment of law.
XLII
REPORT OF THE COMPTROLLER OF THE CURRENCY.
Our present national banking laws do not authorize the establishment of American international or American intercolonial banks, nor
could any national bank establish a branch in a territory or colony such
as Porto Eico or Hawaii, even if our present laws unchanged were
extended over it.
While it is questionable whether Congress should legalize the establishing of foreign or colonial brandies by national banks transacting
business under the present law, that it should at least pass laws authorizing, under proper restrictions, the general incorporation of banks
organized to carry on international and intercolonial banking, as distinguished from domestic banking, admits of no reasonable doubt.
Unless some such legislation is provided, the American exporter and
importer, in his trade with America's own colonies, will be compelled
to endure all the disadvantages under which, in all South American
markets, and in many other markets of the world, he now labors in his
competition with foreigners enjoying superior banking facilities.
When, by means of international banks and their branches, the
proper banking facilities are afforded those engaged in foreign trade,
they transact their business with these banks in much the same manner
as the domestic shij)pers of the United States transact business with
our present banks.
The American, in his South American trade, as compared with the
foreigner in the same line of business, is subjected to the same relative
disadvantages as are experienced by a domestic shipper without banking facilities, as compared with another who possesses them.
Domestic dealers in supplies, in good credit, may make contracts with
domestic wholesale purchasers in good credit, for the sale and shipment
of goods, for which the consignee gives his acceptance, payable at different intervals, sometimes months after the delivery to him of the
shipment.
The consignor discounts this accepted draft given him for the goods,
with his bank, thus receiving his capital at once for reinvestment, and
enabling him to transact a larger business than if the capital invested
in the goods was locked up until the maturity of the acceptance. On
the other hand, the consignee has the difference between the time of
the arrival of the shipment, and the maturity of the draft, to sell the
goods, and to collect from the purchaser all or a portion of the amount
necessary to pay the draft.
The situation of the shipper without banking facilities is in sharp
contrast. He must ordinarily sell for cash, instead of on credit, to the
consignee, as he needs his capital in most cases for immediate reinvestment. As a result, in his competition with his more favored rivals, he
is not only compelled to accept lower prices, involving smaller margins
of profit, but he must do a smaller business on the same capital invested.
Thus, as compared with the English exporter, who, when his goods
are shipped, can receive advances from an English international bank
upon the credit of his bills of lading and of the foreign consignee, concerning whose credit the home bank, through its foreign branch, is well
advised, the American shipper, in the majority of instances, is denied
such privileges, and must await entire, instead of partial, reimbursement until the arrival of the goods at the foreign market, and the collection of the draft for the purchase price made at the time of shipment.
In addition to this disadvantage, the American exporter and importer
in his trade with South American countries, transacts all his business of
consequence through English banks in terms of English money, paying
the rates of exchange fixed by these foreign institutions.
REPORT OF THE COMPTROLLER OF THE CURRENCY. XLIII
The foreign branches of American international and intercolonial
banks would obviate many of these difficulties, and would become themselves valuable mediums of introduction of American enterprise into
colonial and foreign fields.
The present situation of trade and finance in Porto Eico, is deplorable.
Credit in business is sparingly used, and under most primitive and
exacting conditions. While some lines of credit through foreign connections are extended to those engaged in the import and export business, no credits of consequence are extended to this class of trade by
Porto Eican banks. The primitive conditions and disadvantages under
which business has heretofore been transacted in Porto Eico, have prevented the establishment of Porto Eican branches by foreign banks,
and under the new era the American banker in entering this field, will
not have the competition of a long established branch bank business,
such as exists in most South American countries. That this will prove
to be an advantage to American interests from one standpoint, admits
of little doubt, provided that new banking laws are framed by Congress
authorizing the establishment of international and intercolonial banks,
which can perform those numerous and indispensable offices in the facilitation and extension of business between the States and colonies, which
domestic banks now perform in the interest of business between the
citizens of the States themselves.
The present banking business in connection with American trade in
Porto Eico, is done mainly through, one house with a $"ew York branch.
This firm of bankers has as agents various commercial houses in different parts of Porto Eieo.
Commission merchants are now transacting almost the entire business of this country with Porto Eico. They represent the merchants
of the island, and secure or furnish them credit, receiving commissions
for their services.
Thus the credits granted in connection with the export and import
business of the island, are almost wholly by commission men.
With proper banking facilities, and after the final establishment of a
fixed rate of exchange between the present Porto Eican coin and our
own money, this country should control almost the entire trade of all
kinds in the island.
The determination of the relation of any new banking system, to the
existing banks and domestic credits of Porto Eico, differing as they do
from those of this country, involves many difficult questions 5 and legal
provision for the appointment of a commission, especially charged with
the examination of the conditions of domestic banking and finance on
the islands, and with the recommendation of the proper form of laws
in connection therewith, is respectfully urged upon Congress.
In Hawaii business conditions are far different. The four commercial banks of Honolulu have adopted largely American methods; and
the customs of general business are now American to such an extent
that the present national banking act might well be extended over the
island, so far as its domestic banking is concerned.
While the present banks, with their correspondents in the United
States, now provide reasonably well the exchange and other credits
necessary to accommodate the business between the island and the
United States, the establishment of intercolonial banks under new laws
of Congress, would probably be found of advantage to existing trade
relations.
In view of the conditions and necessities of our trade with our new
Territories of Porto Eico and Hawaii, and with other South American
XLIV
REPOET OF THE COMPTROLLER OF THE CURRENCY.
countries, as well as with those other territories over which our country
must exercise a more or less extended measure of control, the Comptroller earnestly recommends the passage of laws authorizing the incorporation of banks, organized for the purpose of carrying on international
and intercolonial branch banking.
ORGANIZATION OF NATIONAL BANKS.
From the date of the granting of the first certificate of authority,
June 20,1863, to the end of the year covered by this report, there have
been 5,151 national banking associations organized—an average for
each year of 147. On October 31, 1898, there were in active operation 3,598 banks, having an aggregate authorized capital stock
of $624,552,195. The total outstanding circulation amounted to
$239,546,281, of which $210,045,456 was secured by United States
bonds, and the remainder, $29,500,825, by lawful money deposited with
the Treasurer of the United States for account of liquidating and
insolvent national banking associations and those reducing circulation.
The increase during the year in the amount of circulation secured by
bonds was $6,119,776, and the increase in total circulation, including
the notes of liquidating and insolvent national banking associations
and those reducing circulation, $9,582,771.
The following table shows the amount and kind of bonds on deposit
as security for circulating notes on October 31, 1897, and October 31,
1898:
Change.
Class.
Pacific sixes
I^ives
.. •
Fours (1907^
Fours (1895)
Twos
Threes
Total
.
1898.
1897.
$2, 906, 000
16. 231, 900
139| 436, 050
23, 990, 650
22, 047, 750
31, 006,120
$9, 030, 000
15,910,650
150, 288,100
30, 474,150
22, 039, 650
2IJ5, 618, 470
227, 742, 550
Increase.
$321, 250
8,100
31, 006,120
*31,335, 470
Decrease.
$6,124, 000
10, 852, 050
6, 483, 500
23, 459, 550
* Net increase. $7,875,920.
The number and capital of the 3,598 banks in operation on October
31, 1898, in each geographical division are as follows: Five hundred
and eighty-two banks, with capital stock of $155,231,620, in the New
England States; 961 banks, with capital stock of $193,887,122, in the
Eastern States; 539 banks, with capital stock of $64,788,200, in the
Southern States; 1,045 banks, with capital stock of $158,653,100, in
the Middle States; 348 banks, with capital stock of $31,699,100, in the
Western States, and 123 banks, with capital stock of $20,065,000, in
the Pacific States.
In point of number of banks in active operation, Pennsylvania, New
York, Massachusetts, Ohio, Illinois, and Texas lead with 428, 327, 262,
254, 219, and 197, respectively. According to capital stock, Massachusetts is first, with $91,627,500, New York second, with $82,944,940, Pennsylvania third, with $73,359,390, followed by Ohio, with $45,535,967,
Illinois, with $36,746,000, and Texas, with $19,515,000.
During the report year there were organized 56 banks located in 20
States and 2 Territories, with aggregate cai>ital stock of $9,665,000. Of
this number, 8 were in Pennsylvania, 7 in Ohio, 6 in Iowa, 5 in Illinois,
4 each in New York and Texas, 3 in Indian Territory, 2 each in Oali
REPORT OF THE COMPTROLLER OF THE CURRENCY-
XLV
forma, Kansas, Missouri, and I^ew Jersey, and 1 each in Alaska, Delaware, Indiana, Kentucky, Maryland, E*ew Hampshire, ^orth Carolina,
South Carolina, Virginia, Wisconsin, and Oklahoma Territory.
In geographical divisions the number of banks organized during the
year was as follows: ISTew England States, 1, with capital stock $50,000;
Eastern States, 10, with aggregate capital, $ 1,185,000; Southern States,
8, combined capital, $620,000; Middle States, 22, total capital, $3,960,000;
Western States, 6, capital aggregating $300,000, and Pacific States, 3,
capital, $3,550,000, California is first in amount of capital stock of
banks organized
during the year, having $3,500,000; Illinois has
$2,250,000; ]STew York, $525,000, and Indiana, $500,000, the total
capital of banks in each of the other States ranging from $460,000
down to $50,000.
The corporate existence of 20 national banking associations having
capital stock of $2,145,000, total circulation $844,875, and located in
twelve States, has been extended during the year as follows: New York
5, Pennsylvania 3, Illinois and Massachusetts 2 each, and the following
leach: Delaware, District of Columbia, Indiana, Kentucky, North
Dakota, South Dakota, Vermont, and Washington. Of the total capital, New York aggregates $585,000, Massachusetts $350,000, Pennsylvania $210,000, Illinois and North Dakota $150,000 each, and Delaware, District of Columbia, Indiana, Kentucky, South Dakota, Vermont,
and Washington $100,000 each. Under the act of Congress approved
July 12, 1882, providing for the extension of national banking associations, the corporate existence of 1,670 banks, having an aggregate
capital stock of $407,531,115., has been extended. Of these, N£w York
has 244, Massachusetts 231, Pennsylvania 208, Ohio 114. The number
of banks in each of the other States ranges from 75 down.
By reason of the expiration of corporate existence, three banks,
having an aggregate capital stock of $534,000 and total circulation of
$165,000, left the system during the year. They were located in Illinois, Kentucky, and Pennsylvania. Those in the last two States were
succeeded by new associations with capital stock of $250,000 and circulation amounting to $67,500.
During the coming report year, viz, that closing October 31,1899, the
corporate existence of 22 associations, with capital stock aggregating
$3,155,000 and circulation $1,397,250, will expire. These banks are
distributed among the States as follows: Massachusetts, New York,
and Pennsylvania, 3 each; and 1 each in California, Connecticut, Illinois, Indiana, Iowa, Kentucky, Maryland, Missouri, l^ew Mexico, North
Carolina, North Dakota, Ohio, and Vermont. In the ten years from
1899 to 1908, inclusive, the corporate existence of 1,134 banking associations, with capital stock amounting to $162,418,150 and circulation
$44,293,753, will expire by limitation.
The number of banks leaving the system during the past year by voluntary liquidation was 69, one of which subsequently passed into the
hands of a receiver. The 68 banks which liquidated had a total capital
stock of $12,509,000, and circulation amounting to $2,184,958.
LIQUIDATIONS, DIVIDENDS, ETC.
In the Midsummer of 1893 the capital stock of national banks reached
the maximum, $699,034,665. Since that date 223 banks have been
organized with an aggregate capital of $27,505,000, and 100 have
increased their stock in the sum of $8,612,000. In the same period,
by failures, reductions of capital stock, and voluntary liquidations,
XLVI REPORT OF THE COMPTROLLER OF THE CURRENCY.
$110,599,490 has been eliminated, leaving $624,553,195 on October 31,
1898. While 316 banks, with capital of $43,991,100, liquidated voluntarily, 25 per cent of the number, as shown by the records of this office,
were consolidated with other associations. These liquidations and
reductions of stock were the inevitable results of constantly decreasing*
dividends. During the year ended March 1, 1893, the average rate of
dividends paid to the shareholders of national banks was 7.5 per cent;'
in the following year, 6.8 per cent; in 1897, 6.7 per cent; and in 1898,
6.96 per cent. The competition for deposits has developed the very
general custom of paying high rates of interest thereon. The prevailing
low rates of interest on loans and discounts have also lessened the
returns to stockholders.
For the year ended June 30, 1898, the tax on national-bank circulation was $ 1,901,8 L7, and the total amount paid to the Government as
tax on the circulating notes, $83,313,202.25.
DURATION OF NATIONAL-BANK CIRCULATION.
In 1886 the Comptroller, in his annual report to Congress, presented
a series of tables indicating the average length of time national-bank
notes of the various denominations remain in circulation. On the date
in question the office records were not in condition to show accurate
data, estimates being necessary for the six years antedating October
31, 1869. In 1889 a very careful examination of the records was made,
and as a result the table appearing in the appendix shows correctly the
circulation account annually from the date of first issues to October
31, 1898.
From this table was obtained the basis for the following calculations
of the average lifetime of the issues of each denomination.
NUMBER OF EACH DENOMINATION OF NATIONAL BANK NOTES ISSUED FROM THE
BEGINNING OF THE SYSTEM TO OCTOBER 1, 1898; THE CALCULATED AGGREGATE
NUMBER OF LIFE YEARS EXPERIENCED WHEN REDEEMED, AND THE RESULTING
AVERAGE LIFETIME OF THE NOTES OF EACH DENOMINATION.
Resulting
average lifetime of
each note
when redeemed. in years.
Calculated
Denominations.
One dollar
Two dollars
Five dollars
Ten dollars
Twenty dollars
Fifty dollars
One hundred dollars. Five hundred dollars.
One thousand dollars.
Total
23,169, 677
7, 747, 519
148, 400,164
62, 520, 341
19, 840, 907
2, 404, 320
1, 919, 771
23, 894
7, 379
97, 991, 508
33, 862,860
625, 113, 289
301, 032, 014
100, 732, 420
11, 657, 443
705,304
122, 827
24, 423
266, 033, 072 1,179, 242, 088
4.229
4.371
4.212
4.815
5.077
4.848
4.534
5.140
3. 309
4.433
Theoretically the lifetime of a note of each denomination is as shown
above, but practically it can not be stated with exactness, owing to the
fact that complete redemptions are not x>ossible. This is evidenced in
the following table pertaining to the issues of ones and twos, which
ceased in 1879, and the five hundreds and the one thousands, the last
issues having been made in 1885 and 1884, respectively. As shown,
the average lifetime of these notes, calculated from the data at date of
final issues, was: Ones, 3.808; twos, 4,023; live hundreds, 4.979; one
thousands, 3.215 years. As indicative of the protracted continuity of
REPORT OF THE COMPTROLLER OF THE CURRENCY. XLVII
redemptions, there is also shown in this table the number of each
denomination of notes outstanding at the close of the years of final
issue, the number and j^er cent still unredeemed on October 1, 1898,
and the percentage of redemptions since last issue.
The following is the table referred to:
Calculated Resulting) Number of;
Percentaggregate
j notes out- dumber and per age of reDate of Total num- number of average
demplifetime
i
standing
cent
of
notes
outDenominations. last ber of notes life years
of each at close of j standing on Oct. tion s
experienced note
issue.
issued.
since
last
in
year
of
last
\
1,1898.
when reissue.
years.
issue.
deemed.
Ones
Twos
Five hundreds.
One thousands.
Total
1879
1879
1885
1884
23,169, 677
7, 747, 519
23, 894
7,379
| 30, 948,469 |
88, 227, 998
31,171, 435
118, 977
23, 727
119, 542,137
I
349, 633
84, 253
217
28
1 51
1 09
91
38
90.20
93. 24
81.40
87.44
3.863 I 4,816,839 ! 434,131
1 40
90. 99
3.808
4.023
4.979
3.215
3, 569, 200
1,246,249 |
1,167 !
223 i
The volume of circulation issued and redeemed annually and the
amount outstanding at the close of the years indicated appear in the
following table:
NATIONAL-BANK CIRCULATION ISSUED AND REDEEMED ANNUALLY AND THE AMOUNT
OUTSTANDING AT THE CLOSE OF EACH YEAR FROM DATE OF FIRST ISSUE ON
DECEMBER 21, 1863, TO OCTOBER 31, 1897, AND TO OCTOBER 1, 1898.
Tear.
1864 .
1865 ..
1866 .
1867.
1868 .
1869 .
1870 .
1871 1872 1873 .
1874 .
1875 .
1876.
1877 .
1878.
1879.
1880 .
1881 .
1S82 .
1883 .
1884 .
1885 .
1886 .
1887 .
1888 .
1889 .
1890.
1891.
1892 .
1893 .
1894 .
1895 .
1896.
1897 .
1898 .
Total.
Issued.
813, 980
146, 285,475
89, 485, 759
9] 616,927
6, 165,135
8. 376, 450
16. 667; 875
48, 660, 710
50. 888, 475
46 i 235, 375
51. 766, 644
136, 025,195
78, 480, 410
75, 611,240
63, 825, 205
58, 376,360
43, 787,770
73. 221,180
80! 076, 450
78, 681,070
81, 046, 310
83, 040,440
62. 028, 940
3S,756,100
4,9,668, 460
30,611,860
886, 720
465, 820
951,350
184,670
586, 360
181, 040
098, 580
526, 890
128,960
Redeemed,
$464, 250
1, 034,005
3, 609,062
5,143, 001
8, 768,617
14, 533,391
26, 044,778
34, 372,857
38, 878,526
61, 328,412
141, 635,083
101, 789,358
79, 607,120
60, 055,835
42, 896,002
36, 860,366
56, 344,600
78,018, 639
88, 904,108
99, 353,041
100, 620,456
75, 909,362
66, 095,019
82, 275,225
67,912, 593
55,180, 851
53, 937,105
49, 893,102
49, 520,402
68,147, 445
50, 829,997
57,152, 155
86, 948,237
64,816, 991
j Outstanding.
I
j
I
|
,134,206,185! 1, 898, 879,091 |
$58, 813, 980
204, 635, 205
293, 086, 959
299, 094, 824
300,116, 958
299, 724, 791
301, 859, 275
324, 475, 207
340, 990, 825
348, 347, 674
348, 785,906
343, 176, 018
319, 867, 070
315,871,190
319, 640, 560
335,120, 918
342,048,322
358, 924, 902
360,982,713
350, 759, 675
332, 452, 944
314, 872, 928
300, 990, 506
271, 651, 587
239. 044, 822
201, 744, 089
179, 449, 958
171, 978, 673
172, 036, 921
208, 70li 189
207,140,104
213,491, 147
234, 437, 572
230,016.225
235, 328, 194
9,679,657,831
From the foregoing statement it is seen that on October 1,1898, there
was $235,326,194: national-bank circulation outstanding, The aggregate number of life years already experienced by the $2,134,206,185
issued is 9,M4,331,637 (that is, 9,679,657,831 less 235,326,194), and
XLVIII
REPORT OF THE COMPTROLLER OF THE CURRENCY.
the average number of years 4.425—the division of 9,444,331,637 by
2,134,206,185. The average lifetime is necessarily greater than shown
in view of the amount outstanding to be redeemed. On the reasonable
assumption that the redemption of this amount will be effected in 4.425
equal annual installments—that is, at the rate of $53,181,061 per
annum—the aggregate full lifetime of the total issues ($2?134,206,185)
will be 9,853,825,803 and the average lifetime 4.617 years.
STATE BANKS AND BANKING INSTITUTIONS.
Incorporated in the national-bank act is the provision that the
Comptroller of the Currency shall include in his annual report to Congress information relative to the condition of banks and banking institutions chartered and operated under State authority, the necessary
data to be procured from reports made by such institutions to the legislatures or State officials, and the deficiency to be supplied from other
reliable sources. With the exception of Delaware, official returns are
obtainable relative to the condition of State banks from all of the New
England and Eastern States. Eeturns of an official nature from the
Southern States are confined to Virginia, North Carolina, Georgia,
Florida, Mississippi, and Kentucky. In all of the Middle States banking departments exist, managed by boards or elective officers from
whom returns are obtainable. The same can be said of the Western
States, with the exception of Montana and Oklahoma. California
appears to be the only Pacific State which has such a department.
With a very few exceptions, it is not possible to obtain data relative
to the condition of these institutions for a recent date corresponding
as to time with returns received from national banks, a fact which
causes an impairment of the value of the combined statistics. Efforts
were made by my predecessor to induce State officers to urge the enactment of laws which would be remediable in this respect, and it is the
intention to continue like efforts in that direction until the desired end
is attained. The custom of this office, begun in 1887, to supplement
official returns with reports of banks made directly to this office upon
request, has been continued. Through both sources it is possible to
present statistics relative to practically all of the mutual savings
banks and about 90 per cent of the banks of discount and deposit,
classed as "State banks." The returns from private banks and loan
and trust companies are not so satisfactory, nor will they be until such
institutions are subjected by State laws to the same surveillance and
requirements with respect to publicity as State and savings banks.
An abstract of returns for the current year shows that reports have
been received from 3,965 State banks, 934 savings banks, 246 loan and
trust companies, and 758 private banks. In the appendix of this report
are given in detail the resources and liabilities of each class by States.
For the purpose of comparison the aggregates of the principal
resources and liabilities for the years 1894 to 1898 are set forth in the
following table:
Items.
1895.
1896.
1897.
$2, 231, 013, 262
Loans
$2,133, 628, 978 $2, 417, 468,494 '$2, 279, 515, 283
Bonds
1,010,248,230 1, 375, 026, 025 1, 210, 827, 389 1, 248,150,146
193,094, 029
Cash
227, 743, 303
169,198, 601
229,373,004
Capital
398,735,390
422, 052, 618 400, 831, 399 380, 090, 778
Surplus and undivided
352, 424, 784 370, 397, 003
362, 602, 702 382, 436, 990
profits
2, 973, 414, 101 3,185, 245, 810 3, 276, 710, 916 3, 324, 254, 807
Deposits
Resources
3, 868, 474, 997 4,138, 990, 529 4, 200,124, 955 4, 258, 677, 065
1898.
$2,480,874, 360
1, 304, 890, 322
194, 913, 450
370, 073, 788
399, 766, 407
3, 664, 797, 296
4, 631, 328, 357
REPORT OF THE COMPTROLLER OF THE CURRENCY.
XLIX
With each year a steady and substantial increase is shown in the
total assets. Deposits also have steadily increased. Capital exhibits
great fluctuations. The maximum amount was reported in 1895. There
was a decrease of nearly $22,000,000 in the following year, about
$22,000,000 in 1897, and, approximately, $10,000,000 in 1898.
lie/ports from State banks to the number of 3,965 have been received.
The capital of these institutions is $233,587,353,* surplus and other
profits, $109,554,519; deposits, $912,365,406. Loans and discounts
aggregate $813,749,803; United States bonds, $4,185,304; other bonds,
stocks and securities, $127,500,484; cash in bank and amounts due
from other banks and bankers, $327,773,826, and total assets, $1,356,084,800. Compared with 1897, there is shown an increase of 108 in
number of banks reporting and $217,899,398 in aggregate assets,
It is impossible to state exactly the average rateiper cent of dividends
paid by these banks, owing to the fact that information on the point is
confined to 1,163 banks. It is seen, however, that on stock aggregating
$69,209,285 dividends to the amount of $4,903,240, or 7.17 per cent, werepaid.
SAVINGS BANKS.
Reports have been received relative to the condition of 979 savings
banks, including 45 commercial banks (in one State) having savings
departments. This is but one less than reported in 1897. The principal
investments, loans and securities—corporate and other—amount to
$1,070,755,293 and $74,700,217, respectively. In all States the character of loans is not shown, but real estate appears as collateral to accommodations amounting to $864,968,285. Government bonds are held to
the amount of $140,029,726; State, county and municipal bonds. $497,416,292, and other bonds, stocks and securities, $337,254,199. The total
assets are $2,241,344,991, the liabilities to depositors are $2,066,601,864,
and these banks have $187,475,971 in surplus and undivided profits*
The latter amount is equivalent to nearly 8.4 of the total liabilities.
The depositors who are the exclusive participators in the profits
of the mutual savings banks, but who, in stock savings institutions,
are paid specific rates of interest, number 5,385,746, and their average deposit is $383.54, Compared with 1897 there is an increase of
$83,188,300 in deposits and 184,614 in number of depositors. Mutual
savings banks are confined almost exclusively to the New England and
Eastern States. Outside of the two sections named, but 11 banks of
that character have made reports, as follows: 1 in West Virginia, 4in Ohio, 5 in Indiana, and 1 in Wisconsin. The aggregate assets of
the mutual savings banks, which, amount to about 90 per cent of the
assets of all savings institutions, axe $2,005,950,6465 loans aggregate
$920,477,133, over 81 per cent of which are secured by real estate;
United States bonds, $139,561,601; State, county and municipal bonds,
$495,726,680; other bonds, stock and securities, $294,706,936. Deposits amount to $1,824,963,410; number of depositors, 4,835,138, and the
average deposit, $377.44. This indicates an increase during the year of
$87,864,010 in deposits, $7.32 in the average deposit, and 143,694 in
number of depositors. The average rate of interest paid on savings
accounts is practically 4 per cent in all of the States except Maine, New
Hampshire, New York, New Jersey, and Maryland, in which the rate
ranges from 3 to 3f per cent.
CUB 9 8 — 4
L
REPORT OF THE COMPTROLLER OF THE CURRENCY.
Information with respect to the classification of deposits is confined
to savings banks in Maine and Connecticut, and is as follows:
Classification oi" deposits.
\
Depositors.
Deposits.
I Xumber.! Per cent. J Amount.
MAINE.
$500 or loss
Over $500 and less than $2,000
Over $2,000
i 129, 865
j 33, 558
!
4, 450
'total
20.00 /
2.70 i
167, 879
CONNECTICUT.
Percent.
80.9
W"1*.0"
11,384,272
19.1
59, 598, 349 |
j
$1,000 or less
Over $1,000 and less than $2,000
Over $2,000 and less than $10,000
$10,000 or over
• 320,149 j
! 32, 313
' 13, 964
!
235 !
Total .
iJ6G, 661
87.31 : 63,195,480
8.81 j 42,505,536
3.81
46,869,038
.07 ' 3,399,744
:
i 155,
40.52
27. 25
30.05
2.18
9,798 !
The capital of the 275 reporting stock savings banks is $18,536,130;
deposits, $203,244,909; number of savings depositors, 403,743, and the
average savings deposit, $501; the total assets are $235,394,345, of
whieh $150,574,286 represent loans, and $44,704,994 bonds, stocks and
other securities.
LOAN AND TRUST COMPANIES.
Returns relative to the condition of 246 loan and trust companies
have been received. These corporations are capitalized for $101,228,555,
and have $97,643,666 surplus and profits, and $662,138,397 deposits.
Loans aggregate $539,317,059; United States bonds, $34,186,440; other
bonds, stocks and securities, $159,791,312; cash on hand and due from
other •corporations, etc., $118,028,856. The average rate of dividends
paid by all these companies during the past year, as shown by reports
relative to that point, was 11.23 per cent.
PRIVATE BANKS.
The laws of but few of the States provide for reports from unincorporated, banks and private bankers, and, in view of the disinclination
of the representatives of most of such concerns to submit statements
of condition to this office as requested, statistics relative thereto are
meager. The abstract of returns from 758 banks show total resources
of $91,436,387; capital, $16,721,750; deposits, $62,085,084, and other
liabilities, $12,629,553. Loans and discounts aggregate $58,174,248;
bonds, stocks and other securities, $4,526,565, and credits with other
banks and cash on hand, $16,161,020 and $5,857,132 respectively.
Tbe principal items of resources and liabilities of each class of banks
hereinbefore referred to are shown herewith:
Items.
Loans
United States l>onds
Other bonds
Cash
Capitol
Surplus and profits
Deposits
Total resources
State banks.
$813, 749, 803
4,185, 304
127, 500, 484
133,877,133
233, 587, 353
109, 554, 519
912, 365. 406
1,356.084,800
Loan and I
trust com- , Savings banks,
panies.
j
$539.162, 445 $1, 070, 755, 293
140, 029, 726
34,186, 440
834, 670,491
159, 791, 312
32, 928, 323
22, 250, 862
18, 536,130
101, 228, 555
187, 475, 971
97, 64'5, 666
2, 028, 208, 409
662,138, 31
942,462,179 ! 2,245,344,991
Private
banks.
$57, 206, 819
927, 473
3, 599, 092
5,857,132
16, 721, 750
5, 092, 341
62, 085. 084
91,436,387 i
Total.
$2, 480, 874, 360
179, 328, 943
1,125,561,379
194,913, 450
370,073, 788
399, 766, 497
3, 664, 797, 296
4, 631, 328, 357
REPORT
OF THE
COMPTROLLER
OF THE.CURRENCY.
LI
111 the following1 table is exhibited in the most concise form the main
items of assets and liabilities of national banks on. July 14, 1898, and of
other banks? banking institutions, and private banks above referred to:
3,582 Tintionjil
banks.
Items.
Loans
Unitedbond
States bonds
Other
Cash
Capital
Surplus and proiits
Deposits
Total resources
5,903 oilimbanks.
'• 9,.{8;") total
banks.
$2,151,757,055 $2,480,874,300
285,350,900: , 1 7 9 . 3 2 8 , 9 4 3 .
-
250,089,375
1,125,501,371)5
492,882,724 j
194,913,450 i
622.016, 745
370, 073, 788 ;
332,971,643 j
399,706,497 I
2, 076. 220, 578 3, 604, 797, 290
3^977,075,445
4.631,328,357
$4,032,032,015
464,685,843
1,370,250,754
087,790,174
992,090,533
732.738,140
5, 741, 023, 872
8,009.003,802
The total banking funds—that is, capital, surplus, profits, and individual deposits—of all banks'reporting amount to $7,410,355,568, and,
by comparison with returns in 1897, an increase of $594,028,698 is
shown. The per capita distribution by States and classes of banks is
set forth in the Appendix. The national bank average is $39.93; State
bank, $10.82; loan and trust company, $11.54; savings bank, $29.93;
private bank, $1.12; and total, $1)9.31.
The specie and other currency held by national banks on July 14 and
by other banks on the date of the latest reports aggregate $687,796,173,
an increase since 1897 of $59,595,044, Classified, the holdings are as
follows: Gold, $341,108,985; silver, $58,947,221; specie not shown in
detail, $2,131,917; legal tenders and other paper currency, $199,915,802;
fractional currency, $1,093,901; "cash," $81,598,284. The latter amount
undoubtedly includes a quantity of specie, but how much can not even
be estimated. The reports from a number of States show merely "cash
on hand." It is interesting to note the changes which have occurred
since 1897 in the amount of each kind of currency. Gold has increased
$98,755,983; silver, $5,255,491; fractional currency, $112,123; specie
not classified, $434,845; "cash,7' $2,069,835. Legal tenders and other
paper currency decreased $47,032,633.
In July, 1898, 3.590 national banks and, approximately, 9,500 other
banks, banking institutions, and private banks were in operation in the
United States. During the year ended October 31, 1898, 7 national
banks were found to be insolvent and placed in charge of receivers.
From reports made to the Bradstreet Company and furnished to this
Bureau, covering the year closed August 31, 1898, it is seen that the
failures of banks other than national number 53, the assets and liabilities at date of failure being $4,493,577 and $7,080,190, respectively,
There were 33 private bank failures, 14 State, 4 savings bank, and 2
trust company, The number, assets, and liabilities of failed banks of
each class, by States, will be seen by reference to the Appendix.
The abstract of the reports of condition of the 38 chartered banks
of the Dominion of Canada made on September 30, 1898, has been
received, from which it is noted that capital stock aggregates
$62,900,034; circulation outstanding, $40,071,143; deposits, $242,128,762 ;•
total liabilities, $382,331,503. The banks held, in specie, Dominion
notes, bank notes, and checks, 15.5 per cent of deposits. The average
rate of dividends paid during the past year was 7.6 per cent.
POSTAL AND OTHER FOREIG-N SAVING-S BANKS.
In the following table is shown the number of depositors, amount due
depositors, and average deposit in postal savings banks in all of the
countries named, except Kussia, on December 31, 1390. The returns
LII
REPORT OF THE COMPTROLLER OF THE CURRENCY.
from Eussia are of date January 1, 1898. This information appeared
in the July edition of the Bulletin de Statistique de Paris and the
Busse de Statistique de St. Petersburg.
Number of
I depositors.
Country.
.174,902
30,837
968, 48G
130,503
Austria . .
Belgium..
Canada...
France . . .
Hungary .
a $23, 592, 961. 58
&30, 459, 509. 94
67, 216. 981. 40
30, 495; 941.19
151, 495, 389. 95
a 5, 555, 480.49
6 4, 477, 588. 81
89, 789, 354. 68
21, 425, 571. 53
520, 165, 811.11
13, 342. 089. 00
902,682.00
;, G82, 908
295. 597
4,517
!, 997, 562
56i;989
I, 862, 035
451, 872
530, 840
Italy
Netherlands...
Great Britain
Sweden
Russia
1 Savings.
& Subject to check.
j Average
I deposit.
Deposits.
cJanuary
$20.08
987. 76
69. 20
239.52
56.47
18.79
991.27
29.95
38.12
73. 74
29.53
01.98
1, I
Information of a like character to the foregoing with respect to savings institutions other than postal savings banks in France, Russia,
United Kingdom, and the United States is given herewith:
Country.
France
Russia
United Kingdom
United States
Date.
j Dec. 31,1896
j Jan. 1,1898
j Dec. 31,1896
j 1897-1898
Xumber Number of
of
Deposits.
banks, i depositors. I
545
861
a 239
979
6,633, 447
1.870, 637
1.527, 217
5,385, 746
Average
deposit.
$652, 794, 618
198, 423, 532
235, 853, 935
2, 065, 631, 298
$98.40
106. 07
154. 43
383.54
a November 20, 1896.
FOREIGN BANKS OF ISSUE.
The principal items of resources and liabilities of leading banks of
issue in Europe on the dates indicated, reported in the London Economist, October 15,1898, are set forth in the following table, the amounts
being expressed in millions of pounds:
Bank of
England.
Oct. 13,1898.
Circulation
Deposits, etc
Specie and bullion
Securities
£27. 7
43.0
31. 2
41.1
Bank of
France,
Oct. 13,1898.
£147. 8
28.6
123.2
61.6
Circulation . .
Deposits, etc.
Specie
Securities
Discounts, etc
£19. 6
3.4
4.3
17.2
Bank of
Spain,
Oct. 8,1808.
£57.4
35.4
16.2
"45." 7
1
Circulation
Deposits, etc
Specie and bullion .
Discounts, etc
National
bank of
Belgium,
Oct. 6,1898.
B a n k of Ger- j A u s t r o - H u n m a n y , Oct. 7, | g a r i a n B a n k ,
1898.
j Oct. 7,1898.
£64.7
21.8
36.3
53.5
£59. 5
39.7
20.6
REPORT OF THE COMPTROLLER OF THE CURRENCY.
;
Circulation.
Deposits .
Specie and bullion .
Discounts, etc .
Securities
,,,
|
LIII
Netherlands Bank ol Eus>
Bank, Oct. 8, sia, Sept. 28,
1898.
i
1898.
£17.9 i
.3
11 !
7.8 i
j
£77.9
18.8
106.6
20.9
3.5
[
Swiss Banks
'of Issue, Sept.
Circulation
Deposits, etc
Specie and bullion
Discounts, etc
I
j
j
I
£30. 6 ;
9. 5
14. 4 j
7. 3
£8, 3
4. 2
a Direct official statement.
MONETARY SYSTEMS AND APPROXIMATE STOCKS OF MONEY IN THE
PRINCIPAL COUNTRIES OF THE WORLD.
Through the courtesy of the Director of the Mint the Comptroller
is enabled to present data relative to the monetary standards, ratios
of gold to full legal-tender and limited-tender silver, the stocks of
gold, silver, and uncovered paper, and the per capita of gold, silver,
and paper in the principal countries of the world in 1808. Statistics
are shown relative to thirty-seven countries having an aggregate
population of 1,311,400,000. The gold held in these countries aggregates $4,019,000,000; silver, $3,977,500,000, and uncovered paper,
$2,322,800,000. Compared with the returns in 1807 there is an increase
in gold of $259,400,000. The amount held by the United States is
$925,100,000, an increase since 1897 of $228,800,000; Eussia has
increased her supply $109,700,000; Austria-Hungary, $79,300,000;
France, $38,600,000; Germany. $14,000,000, and, the South American
republics, $12,500,000. The amount of gold held in the United Kingdom decreased from $584,000,000 in 1897 to $138,000,000, a reduction
of $146,000,000. Egypt apparently has $99,300,000 less' than a year
ago, Roil mania $24,100,000 less, and Belgium $5,000,G00 less.
The changes in the amount of silver are not material, in the aggregate, as compared with 1897. Apparently there has been a falling off,
but the decrease shown is mainly due to the revised estimate of the
quantity of this metal in India, which is now stated, to be $592,100,000.
In 1897 the estimate submitted by a different authority was $950,000,000.
There is noticed a reduction of $33,600,000 in the amount of silver in
Japan, $24,100,000 in France, and $12,000,000 in Belgium. The stock
in the United States has increased $3,700,000, in Eussia $54,200,000,
and in Austria-Hungary $81,800,000.
The stock of uncovered paper has apparently been reduced
$243,000,000. In 1897 the amount of uncovered paper in Eussia was
$467,200,000, and none in 1898; in Austria-Hungary the reduction has
been $91,400,000, in the United States $70,900,000, and in Portugal
$10,800,000. The principal increase in uncovered currency is as follows: The South American Eepublics, $200,600,000; India, $"80,300,000;
Spain. $34,500,000; Roumania, $21,900,000; Sweden, $8,700,000; Italy,
$8,500,000; Germany, $8,400,000, and the Netherlands, '$7,600,000.
By reference to the table it will be noticed that the average per capita
of gold is $3.52, silver $3,03, and uncovered paper $1.77. Hawaii has
the largest amount of gold per capita, namely, $40; the South African
Republic is second, with $32.44; Australasia, $26.42; France, $21.06;
Cape Colony, $20.83; Germany, $12.78; United States. $12.42; United
LIT
REPORT OF THE COMPTROLLER OF THE CURRENCY.
Kingdom, $11.01. The maximum j)er capita of silver, $82.05, is in the
Straits Settlements; the next largest per capita is $38.68, in Siam;
$11.45 in the Netherlands, $10.90 in France, $10 in Hawaii, and $8.56
in the United States.
The largest per capita of uncovered paper is $20.01, in the South
American States; Greece and Belgium follow with $12.75 and $12.17,
respectively. The la£t column of the table shows the per capita of
gold, silver, and uncovered paper combined in each of the countries
named. The range is from a maximum of $02.05 in the Straits Settlements to a. minimum of $1.94 in Cuba.
MOXETAIIY SYSTEMS AND APPROXIMATE STOCKS OF MONEY IX THE AGGREGATE
AND PER CAPITA IX THE PRINCIPAL COUNTRIES OF THE WORLD IN 1898.
Countrie
Ratio Itatio;
be- j be- j
t ween t ween j
;old ; g
gold !
Mono- : and and Popu- Stock
tary sys-j full limit lation.
of
tern.'* I legal ed
| ten- tenj der der
j ailsilI ver. ver.
Per capita.
Stock of silver.
•Uneov-j
! ered i
Total.
Mil- I Mil- Mil- i Mil- i Mil- i Mil- i
|
' I t o — l t o - lions.' lions. lions. • lions. \ lions. I lions. \
!
United States a G andS 15.98.14.95
74.5| $925.1 $561. 5 $70. 7 $638. 2 $326. I f 12.42 $8.56 $4. 38 $25.36
United Xing- I
!
I
i cl21.7 6112.011.01 3. 06 2.81 16.88
dom
a.
. 14. 28 39.8' 6 438.0;
C121.7
France
j G and S
114.38
38. 5 6 810.61 6373.5! 6 4 0 . 3 6419.8 6124.6 21.0610. 90j 3. 23 35.19
G
i
Germany
. 113.9571 52.3 e608. 5
12.78 4. 07 2. 53j 19. 38
dUl.ii rf2l2.8i6132.2
Belgium
; G and S
! 14.38 I 0. 5 e30. 0 dQo.2
679. I 4.62 6. 92 12.17! 23. 71
l
fi\).O eo.O 6e45.0l
do ,
Italy
14.38 ! 31. 3 6 96. 5 610
42.
5!
61G9.
5
3.08 1.36 5.4l| 9.85
0 6 26. 5 /10.7I 614.3 8.00
Switzerland ..' ..do . . .
56 4. 77J16.33
'14.38 i 3
/24. 0
i / 1 0 . 7 <?1.5 6 30.6 .21!3.. 62 12.75! 13. 58
Greece
; ...do . . .
c. 5
114.38 | 2.4
e.o.
el.O
Spain
.' do .
gi9. 8; £,'137. 5 2.53 2. 76 7, 6ll 12.93
114. 38 I .18
Portugal
'G
6 6.1 6 6.11 6)59.0 1.02 1, 20 7.64! 9.86
! 14. 08
5.1
Roumania
' G and S
6 10. 6 610.61 6 33.7 2.61) 1. 96 6. 24j 10.89
5.4 611. 5 .
...do . . .
Servia
6 2. 7, 6 2.7
6 2.7^ .52 1. 17 1.17 2,86
2.3 6 1 . 2 .
Austria- .Huii;
G
10.65
gary
.13.09
45.4 6 251.8 6 48. 5 6 07. 0 6145. 5 6 86.2 5, 55 3.
1.
25.20
Netherlands .. G and S ;
i.15
4.9. 6 21.91 6 52.7; 6 3. 4 6 56.1 6 45.5 4.47 11.
9.28
G
1.901 6.95
Norway
,.114.88
6 7. 8 .
6 2.3
6 2.31 6 3.8 3.90 1.
5.54 8.40
Sweden
...do...!
,. 114.88
6 8. 6 .
6 5.7 6 5. 7| 6 27. 7i 1.72 1.
3.04(12.04
Denmark
...do ...!.
. !l4. 88
615.3 .
6 5.4 6 5.4| 6 7.0 6.65 2.
6.85
Russia
...do ...!
! 5.86' .
12.90 129. 2 6756.6 6 8;:. 4 6 45. 0 6128.4!
3.73
G andS ;
Turkey
! 2.07 1. 66
15. 875' 24.1 e 50. 0 <?30.0 d 10. 0 e40. 0i
!
6132. 1 .
Australasia .. G
6 7. 0
6 7.0; 6 22. 5 26.42 1. 40 4. 50! 32. 32
.. 14.28
Egypt
! 3. 75
9.7 e30. 0
6 0.4
6fi.4|
! 3.09, . 66
15.68
Mexico
13
s."'.!.!!!' 16*
6 106.0i 6 4.0 .67 8, 15 3. 07i 11. 89
> 6 10630 .
Central American States.. ...do . . J
61.
619.0
619.01 6 8,4 .39 5,76 2.-54, 8.69
South American States ..
37. 5 6 77.5! <?25. 0 e 10.0 0 35. 0!; 6 750. 6 2.07 .93 20.01:23.01
;
1 1,771.34
i 3.11
Japan
4 5 . I 6 79.9: 6 41.9 6 18. 5| 6 60.4
G and S '
! 6 592.1 6117.3
! 1.99 .401 2.39
India
296.!
6 592.1
...do ...!
;
:
China
383.
3
e
750.
0
\e
750.
0
|
1.
96
| 1. 96
S
'.
Straits Settle;
ments i
62.05:
62.05
...do ...j
3.9
! d 240.0 (12. 0 <Z242. 0
Canada
6 5.0! 6 5.0^ 6 35.0 3.01^ .95! 6.60 10.56
5.3 6 16. Oj
G.
G and S 154
Cuba
^1.5 el.5^
1.11 .83
1 1.94
1.8 e2.0|
. . . d o . . . 15*
6 4.5! 6 4 . 1 4 . 0 0 4.50 4.10 12.60
1. i 6 4.01 63.0 el.b
Haiti
. . . d o . . . 15* 14.38
! .30 2.06
| 2.36
3.3 e 1. 0 e 3. 4| ed. 41 c6. 8i
Bulgaria
S
Siam
6 20.0 6 193.4 41
\b 193. 4!
i 4. 00 38. 68
42. 68
6 1. 0|
40. 00 10. 00;
! 50. 00
i. o|
Hawaii
G and S 15.9814.95 i
6 4.0
Cape Colony.. G
14.28
c 37. 5
cl.O cl.O
20. S3; . 55:.
121. 38
South African i
Republic . . . ' ...do . . .
14.28 i
.9 c29.2
cl.2
cl.2
32.44 1.33
33.77
...do . . .
Finland
15. 50 ; 2. 6 g 4. 3
<7.4; gr.4j g9.4 1. 65| . 15j 3.62 5.42
Total.
.1,311.4 4,619.0 3,276.1i 701.4 ! 3,977.5| 2,322.8 3.52 3.03j 1.77! 8.32
*G (gold), S (silver).
a Nov. 1,1898; all other countries Jan. 1,1898.
6 Information furnished through United States
representatives.
c Money and Prices, State Department, United
States.
e Estimate, Bureau of the Mint.
/ C. Cramer Frey.
(I Bulletin de St'atistique, Paris, January, 1898.
h Except Venezuela, Chile, and Peru.
i Includes Aden, Perim, Ceylon, Hongkong, Lahuan, and Straits Settlements'.
REPORT OF THE COMPTROLLER OF THE CURRENCY.
LV
In conclusion, tlie Comptroller desires to commend the associates of
his office for their faithful, able, and efficient services, much of it rendered to the Government during extra hours of labor without compensation.
To Mr. Lawrence O. Murray, Deputy Comptroller; Messrs, A. I).
Lynch and George T. May, in charge of work connected with insolvent
banks; George 8. Anthony, W. J. Fowler, W. W. Eldridge, E. E.
Schreiner, in charge of divisions; T. O. Ebaugh; W. D. Swan; J. Y.
Paige, chief clerk, and to Mr. T. P. Kane, secretary, the Comptroller
desires to publicly express his appreciation of their fidelity to the best
interests of the governmental work in which they are engaged.
Comptroller of the Currency*
The SPEAKER OF THE HOUSE OF EEPRESENTATIVES.
LVI
REPORT OF THE COMPTROLLER OF THE CURRENCY.
EUROPEAN BANKINGS LAWS AND REGULATIONS.
In 1890 this Bureau obtained, through the diplomatic and consular
officers, information with respect to the banking laws and regulations
of the countries to which those officers were accredited. From the correspondence resulting was obtained the following relative to the procedure in cases of insolvency:
AUSTRIA.—There are no special laws governing the closing up of the business of
insolvent banks. The procedure is the same as in case of other bankrupt and insolvent corporations.—BARTLETT TRIPP, United States Minister.
BELGIUM.—The law of 1873 provides for the closing up of the business of insolvent
banks.
"ARTICLE 117. The receivers, without-prejudice to the rights of preferred creditors
(creatwiers privilegies), will pay all the debts of the company in proportion and without distinction between notes on demand or otherwise (dettes exigiblei et non exigibles),
discount for the latter being deducted. They can, however, upon their personal
guaranty, pay first the notes on demand, if the assets clearly exceed the liabilities,
or if the notes payable at a certain date {creances a terme) have a sufficient guaranty, the right of creditors to have recourse to courts of justice being reserved."—
JAS. H. EWING, United States Minister.
DENMARK.—The proceedings are the same as in the case of any other business— that
is, by action in the courts by any person.—JOHN E. EISLEY, United States Minister.
FRANCE.—It seems that there is no special provision of law applicable to such
cases—that is, the insolvency of a bank.—J. B. EUSTIS, United States Ambassador.
GERMANY.—In the case of the insolvency of a bank the general bankruptcy proceeding is applicable as regulated by the imperial bankruptcy regulation of February 10, 1877.—THEODORE KUNYON, United States Ambassador."
GREAT BRITAIN".—There are no special regulations as to procedure in winding up
insolvent banks. Joint-stock banks are subject in this repect to the provisions of
the companies' acts as regards the winding*up of any case registered under those
acts.
The law provides that in ease of the winding up of the limited banking companies, which are also banks of issue, if the general assets are insufficient to satisfy the
claims both of note holders and of general creditors, then the members of the company, after satisfying the remaining demands of the note holders, shall be liable to
contribute toward the payment of the debts of the general creditors a sum equal to
the amount received by the noto holders out of the general assets of the company.
No obligation rests upon private banks of issue in England to provide specially for
the redemption of their notes, but the liability of the members of these banks is
unlimited.—T. F. BAYARD, United States Ambassador.
(Mr. L. Carroll Root, author of No. 9, Volume 111, Sound Currency, in connection with the reference to the provisions of the act of 1841, placing in the issue
department of the Bank of England, to be held as security for its issues, £14,000,000
of Government bonds and requiring the deposit in coin in full for all notes issued
above this amount, says: "No occasion has ever arisen for testing the legal import
of this provision, which is not very definitely expressed. The consensus of opinion,
however, seems to be that the securities thus deposited are pledged toward the
redemption of notes, and that in case of the insolvency of the institution the other
creditors of the bank holding claims against the banking department could have no
resort to the coin or bonds deposited in the issue department until the note holders
were paid in full/')
GREECE.—The closing up of its affairs, when insolvent, is determined by the regulations of each bank. In general, it may be said that when a bank has lost one-half
or two-thirds of its capital stock a meeting of its shareholders is held. Three examiners appointed at this meeting examine the books of the bank and make a detailed
report to the shareholders, who then decide whether the bank shall close up or continue its business. In other cases the court of first instance is called upon to decide
in matters relating to insolvent banks which may be brought before it.—E. ALEXANDER, United States Minister.
ITALY.—The Italian banking legislation contains no special provision relating to
the affairs of insolvent banks of emission; hence they would be subject to commonlaw proceedings.—Italian Foreign Office, per Secretary of the United States Embassy.
REPORT OF THE COMPTROLLER OF THE CURRENCY.
LVII
PORTUGAL.—Wh en a bank fails to fulfill entirely or in part the obligations incurred
in the course of its operations, the Government appoints a commissioner of its own
whose duty it is to act with the directors until settlement of the crisis is reached—
either by restoring the normal state of affairs or by a declaration of bankruptcy.—
GEORGE WILLIAM CARUTH, United States Mi7iister.
RUSSIA.—Insolvent banks are closed up under the general insolvency law like
other insolvents.—C. R. BRECKINRIDGE, United States Minister.
ROUMANIA.—So far as I can find out, there is no special law for the closing up of
the business of insolvent banks, but I presume that the ordinary commercial law
would be applied to such cases. Up to the present, cases of banks becoming insolvent have not been known in Roumania.—E. ALEXANDER, United States Minister.
SWITZERLAND.—ARTICLE 30 (law on the issue and retirement of bank notes in case
of forced liquidation). The holders of notes, who are collectively represented by a
commissioner appointed by the court, have the right to be satisfied, first, out of the
stock on hand and the proceeds of the liquidation of the negotiable paper, then from
the securities. When a canton has guaranteed the issue of notes by a bank, it is
held responsible for 60 per cent of the issue of the outstanding notes of the amount
not covered by the stock on hand for the payment of the creditors. For the balance
of their claims the holders of notes directly acquire an equitable interest in the
mortgages.
CUR 98
5
THE NATIONAL-BANK ACT
AS AMENDED,
WITH OTHER LAWS RELATING TO
NATIONAL BANKS.
OUR 98
1
THE NATIONAL-BANK ACT, AS AMENDED, WITH OTHER LAWS
RELATING TO NATIONAL BANKS.
(Index to sections of Revised Statutes, p. 83.)
CHAPTER ONE.
THE CURRENCY BUREAU.
1.
2.
3.
4.
5.
6.
The national-bank act.
Comptroller of the Currency.
His appointment; term, and salary.
His qualification.
Deputy Comptroller.
Interest in national banks prohibited.
7.
8.
9.
10.
11.
12.
Office clerks.
Seal of office.
Offices, vaults, etc.
Annual report.
When report is printed.
Number of copies to be printed.
1. THE NATIONAL-BANK ACT.—Sec. 1 of the act of June 20, 1874,
provides that the act entitled "An act to provide a national currency
secured by a pledge of United States bonds, and to provide for the
circulation and redemption thereof," approved June third, eighteen
hundred and sixty-four, shall hereafter be known as the " National-Bank
Act."
2. COMPTROLLER OF THE CURRENCY. (SEC. 324.) There shall be in
the Department of the Treasury a Bureau charged with the execution
of all laws passed by Congress relating to the issue and regulation of
a national currency secured by United States bonds, the chief officer
of which Bureau shall be called the Comptroller of the Currency, and
shall perform his duties under the general direction of the Secretary
of the Treasury.
3. His APPOINTMENT, TERM, AND SALARY. (SEC. 325.) The Comptroller of the Currency shall be appointed by the President, on the
recommendation of the Secretary of the Treasury, by and with the
advice and consent of the Senate, and shall hold his office for the term
of five years, unless sooner removed by the President, upon reasons to
be communicated by him to the Senate; and he shall be entitled to a
salary of five thousand dollars a year.
4. His QUALIFICATION. (SEC. 326.) The Comptroller of the Currency shall, within fifteen days from the time of notice of his appointment, take and subscribe the oath of office; and he shall give to the
United States a bond in the penalty of one hundred thousand dollars,
with not less than two responsible sureties, to be approved by the Secretary of the Treasury, conditioned for the faithful discharge of the
duties of his office.
5. DEPUTY COMPTROLLER. (SEC. 327.) There shall be in the Bureau
of the Comptroller of the Currency a Deputy Comptroller of the Currency, to be appointed by the Secretary, who shall be entitled to a
salary of two thousand eight hundred dollars a year, and who shall
possess the power and perform the duties attached by law to the office
of Comptroller during a vacancy in the office or during the absence or
inability of the Comptroller. The Deputy Comptroller shall also take
4
REPORT OF THE COMPTROLLER OF THE CURRENCY.
the oath of office prescribed by the Constitution and laws of the United
States, and shall give a like bond in the penalty of fifty thousand
dollars.
6. INTEREST IN NATIONAL BANKS PROHIBITED. (SEC. 329.)
It
shall not be lawful for the Comptroller or the Deputy Comptroller of
the Currency, either directly or indirectly, to be interested in any association issuing national currency under the laws of the United States.
7. OFFICE CLERKS. (SEC. 328.) The Comptroller of the Currency
shall employ, from time to time, the necessary clerks, to be appointed
and classified by the Secretary of the Treasury, to discharge such duties
as the Comptroller shall direct.
8. SEAL OF OFFICE. (SEC. 330.) The seal devised by the Comptroller
of the Currency for his office, and approved by the Secretary of the
Treasury, shall continue to be the seal of office of the Comptroller,
and may be renewed when necessary. A description of the seal, with
an impression thereof, and a certificate of approval of the Secretary of
the Treasury, shall be filed in the office of the Secretary of State.
9. OFFICES, VAULTS, ETC. (SEC. 331.) There shall be assigned, from
time to time, to the Comptroller of the Currency, by the Secretary of
the Treasury, suitable rooms in the Treasury building for conducting
the business of the Currency Bureau, containing safe and secure fireproof vaults, in which the Comptroller shall deposit and safely keep all
the plates not necessarily in the possession of engravers or printers,
and other valuable things belonging to his department; and the Comptroller shall from time to time furnish the necessary furniture, stationery, fuel, lights, and other proper conveniences for the transaction of
the business of his office.
10. ANNUAL EEPORT. (SEC. 333.) The Comptroller of the Currency
shall make an annual report to Congress, at the commencement of its
session, exhibiting—
First. Condition of national banks.—A summary of the state and condition of every association from which reports have been received the
preceding year, at the several dates to which such reports refer, with
an abstract of the whole amount of banking capital returned by them,
of the whole amount of their debts and liabilities, the amount of circulating notes outstanding, and the total amount of means and resources,
specifying the amount of lawful money held by them at the times of
their several returns, and such other information in relation to such
associations as in his judgment may be useful.
Second. Closed hanks.—A statement of the associations whose business has been closed during the year, with the amount of their circulation redeemed and the amount outstanding.
Third. Amendments proposed.—Any amendment to the laws relative
to banking by which the system may be improved and the security of
the holders of its notes and other creditors may be increased.
Fourth. Condition of other banks.—A statement exhibiting under
appropriate heads the resources and liabilities and condition of the
banks, banking companies, and savings banks organized under the laws
of the several States and Territories, such information to be obtained
by the Comptroller from the reports made by such banks, banking companies, and savings banks to the legislatures or officers of the different
States and Territories, and, where such reports can not be obtained,
the deficiency to be supplied from such other authentic sources as may
be available.
Fifth, Employes and expenses.—The names and compensation of the
clerks employed by him, and the whole amount of the expenses of the
Digitized forbanking
FRASER department during the year.
REPORT OF THE COMPTROLLER OF THE CURRENCY.
5
11. WHEN ANNUAL EEPORT IS PRINTED. (SEC. 3811.) When the
Annual Eeport of the Comptroller of the Currency upon the national
banks and banks under State and Territorial laws is completed, or
while it is in process of completion, if thereby the business may be
sooner dispatched, the work of printing shall be commenced, under the
superintendence of the Secretary, and the whole shall be printed and
ready for delivery on or before the first day of December next after the
close of the year to which the report relates.
12. NUMBER OF COPIES TO BE PRINTED.—The act of January 12,
1895, provides that there shall be printed of the Annual Report of the
Comptroller of the Currency ten thousand copies; one thousand for the
Senate, two thousand for the House, and seven thousand for distribution by the Comptroller of the Currency.
CHAPTER, TWO.
ORGANIZATION AND POWERS OF NATIONAL BANKSo
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
Articles of association.
Organization certificate.
Execution of organization certificate.
Corporate powers.
Amount of capital stock required.
Shares of stock.
Payment of capital stock.
Enforcing payment of capital.
Restoration of capital.
Examination of organization proceedings.
Certificate of officers and directors.
Deposit of United States bonds.
Comptroller's certificate of authority.
Publication of certificate of authority.
Number and election of directors.
Qualifications of directors.
Qualifications of directors in Oklahoma.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
Qualifications of voters at elections.
Oaths of directors.
Failure to hold annual election.
Vacancies in board of directors.
President shall be a director.
Organization of gold banks.
Conversion of gold banks.
Conversion of State banks.
Capital of State banks.
Converted banks may retain branches.
Personal liability of shareholders.
Exception for trustees, etc.
Amendment of articles restricted.
Increase of capital stock.
When increase becomes valid.
Reduction of capital stock.
Change of title and location.
Status of national banks organized
under the act of February 25; 1863.
13. ARTICLES OF ASSOCIATION. (SEC. 5133.) Associations for carrying on the business of banking under this Title may be formed by any
number of natural persons, not less in any case than five. They shall
enter into articles of association, which shall specify in general terms
the object for which the association is formed, and may contain any
other provisions, not inconsistent with law, which the association may
see fit to adopt for the regulation of its business and the conduct of its
affairs. These articles shall be signed by the persons uniting to form
the association, and a copy of them shall be forwarded to the Comptroller of the Currency, to be filed and preserved in his office.
14. ORGANIZATION CERTIFICATE. (SEC. 5134.) The persons uniting
to form such an association shall, under their hands, make an organization certificate, which shall specifically state—
First. Title.—The name assumed by such association; which name
shall be subject to the approval of7 the Comptroller of the Currency.
Second. Location.—The place w here its operations of discount and
deposit are to be carried on, designating the State, Territory, or District, and the particular county and city, town, or village.
Third. Capital stock.—The amount of capital stock and the number
of shares into which the same is to be divided.
6
REPORT OF THE COMPTROLLER OF THE CURRENCY.
Fourth. Shareholders.—The names and places of residence of the
shareholders and the number of shares held by each of them.
Fifth. Object of certificate.—The fact that the certificate is made to
enable such persons to avail themselves of the advantages of this
Title.
15. EXECUTION OF ORGANIZATION CERTIFICATE. (SEC. 5135.) The
organization certificate shall be acknowledged before a judge of some
court of record or notary public, and shall be, together with the
acknowledgment thereof, authenticated by the seal of such court or
notary, transmitted to the Comptroller of the Currency, who shall
record and carefully preserve the same in his office.
16. CORPORATE POWERS. (SEC. 5136.) Upon dulymaidng and filing
articles of association and an organization certificate, the association
shall become, as from the date of the execution of its organization certificate, a body corporate, and as such, and in the name designated in
the organization certificate, it shall have power—
First. Seal.—To adopt and use a corporate seal.
Second. Term of existence.—To have succession for the period of
twenty years from its organization, unless it is sooner dissolved according to the provisions of its articles of association, or by the act of its
shareholders owning two-thirds of its stock, or unless its franchise
becomes forfeited by some violation of law.
Third. Contracts.—To make contracts.
Fourth. Suits.—To sue and be sued, complain and defend, in any
court of law and [or] equity, as fully as natural persons.
Fifth. Officers.—To elect or appoint directors, and by its board of
directors to appoint a president, vice-president, cashier, and other officers, define their duties, require bonds of them and fix the penalty
thereof, dismiss such officers or any of them at pleasure, and appoint
others to fill their places.
Sixth. By laws.—To prescribe, by its board of directors, by-laws not
inconsistent with law, regulating the manner in which its stock shall
be transferred, its directors elected or appointed, its officers appointed,
its property transferred, its general business conducted, and the privileges granted to it by law exercised and enjoyed.
Seventh. Incidental powers.—To exercise by its board of directors, or
duly authorized officers or agents, subject to law, all such incidental
powers as shall be necessary to carry on the business of banking; by
discounting and negotiating promissory notes, drafts, bills of exchange,
and other evidences of debt; by receiving deposits; by buying and selling exchange, coin, and bullion; by loaning money on personal security; and by obtaining, issuing, and circulating notes according to the
provisions of this Title; but no association shall transact any business
except such as is incidental and necessarily preliminary to its organization until it has been authorized by the Comptroller of the Currency
to commence the business of banking.
17. AMOUNT OF CAPITAL STOCK KEQUIRED. (SEC. 5138.) ISTo association shall be organized under this Title with a less capital than one
hundred thousand dollars, except that banks with a capital of not less
than fifty thousand dollars may, with the approval of the Secretary of
the Treasury, be organized in any place the population of which does
not exceed six thousand inhabitants. No association shall be organized in a city the population of which exceeds fifty thousand persons
with a less capital than two hundred thousand dollars.
18. SHARES OF STOCK. (SEC. 5139.) The capital stock of each association shall be divided into shares of one hundred dollars each, and
REPORT OF THE COMPTROLLER OF THE CURRENCY.
7
be deemed personal property, and transferable on the books of the
association in such manner as may be prescribed in the by-laws or
articles of association. Every person becoming a shareholder by such
transfer shall, in proportion to his shares, succeed to all the rights and
liabilities of the prior holder of such shares.
19. PAYMENT OF CAPITAL STOCK. (SEC. 5140.) At least fifty per
centum of the capital stock of every association shall be paid in before
it shall be authorized to commence business; and the remainder of the
capital stock of such association shall be paid in installments of at least
ten per centum each, on the whole amount of the capital, as frequently
as one installment at the end of each succeeding month from the time
it shall be authorized by the Comptroller of the Currency to commence
business; and the payment of each installment shall be certified to the
Comptroller, under oath, by the president or cashier of the association.
20. ENFORCING PAYMENT OF CAPITAL. (SEC. 5141.) Whenever any
shareholder, or his assignee, fails to pay any installment on the stock
when the same is required by the preceding section to be paid, the
directors of such association may sell the stock of such delinquent shareholder at public auction, having given three weeks7 previous notice
thereof in a newspaper published and of general circulation in the city
or county where the association is located, or if no newspaper is published in said city or county, then in a newspaper x>nblished nearest
thereto, to any person who will pay the highest price therefor, to be not
less than the amount then due thereon, with the expenses of advertisement and sale; and the excess, if any, shall be paid to the delinquent
shareholder. If no bidder can be found who will pay for such stock the
amount due thereon to the association, and the cost of advertisement
and sale, the amount previously paid shall be forfeited to the association, and such stock shall be sold as the directors may order, within
six months from the time of such forfeiture, and if not sold it shall be
canceled and deducted from the capital stock of the association.
21. EESTORATION OF CAPITAL. (SEC. 5141.) If any such cancellation
and reduction shall reduce the capital of the association below the minimum of capital required by law, the capital stock shall, within thirty
days from the date of such cancellation, be increased to the required
amount; in default of which a receiver may be appointed, according to
the provisions of section fifty-two hundred and thirty-four, to close up
the business of the association.
22. EXAMINATION OF ORGANIZATION PROCEEDINGS. (SEC. 5168.)
Whenever a certificate is transmitted to the Comptroller of the Currency, as provided in this Title, and the association transmitting the
same notifies the Comptroller that at least fifty per centum of its capital stock has been duly paid in, and that such association has complied
with all the provisions of this Title required to be complied with before
an association shall be authorized to commence the business of banking, the Comptroller shall examine into the condition of such association, ascertain especially the amount of money paid in on account of
its capital, the name and place of residence of each of its directors, and
the amount of the capital stock of which each is the owner in good faith,
and generally whether such association has complied with all the provisions of this Title required to entitle it to engage in the business of
banking.
23. CERTIFICATE OF OFFICERS AND DIRECTORS. (SEC. 5168.) And
shall cause to be made and attested by the oaths of a majority of the
directors, and by the president or cashier of the association, a statement of all the facts necessary to enable the Comptroller to determine
8
REPORT OF THE COMPTROLLER OF THE CURRENCY.
whether the association is lawfully entitled to commence the business
of banking.
24. DEPOSIT OF UNITED STATES BONDS. (SEC. 5159.) Every association, after having complied with the provisions of this Title, preliminary to the commencement of the banking business, and before it shall
be authorized to commence banking business under this Title, shall
transfer and deliver to the Treasurer of the United States, as security
for its circulating notes, any United States registered bonds bearing
interest, to an amount where the capital is one hundred and fifty thousand dollars or less, of not less than one-fourth of the capital, and fifty
thousand dollars where the capital is in excess of one hundred and fifty
thousand dollars. (NOTE.—As amended by sec. 8 of the act of July
12, 1882.)
25. COMPTROLLER'S CERTIFICATE OF AUTHORITY. (SEC. 5169.)
If, upon a careful examination of the facts so reported, and of any
other facts which may come to the knowledge of the Comptroller,
whether by means of a special commission appointed by him for the
purpose of inquiring into the condition of such association, or otherwise, it appears that such association is lawfully entitled to commence
the business of banking, the Comptroller shall give to such association
a certificate, under his hand and official seal, that such association has
complied with all the provisions required to be complied with before
commencing the business of banking, and that such association is
authorized to commence such business. But the Comptroller may
withhold from an association his certificate authorizing the commencement of business whenever he has reason to suppose that the shareholders have formed the same for any other than the legitimate objects
contemplated by this title.
26. PUBLICATION OF CERTIFICATE OF AUTHORITY. (SEC. 5170.)
The association shall cause the certificate issued under the preceding
section to be published in some newspaper printed in the city or county
where the association is located, for at least sixty days next after the
issuing thereof; or, if no newspaper is published in such city or county,
then in the newspaper published nearest thereto.
27. NUMBER AND ELECTION OF DIRECTORS. (SEC. 5145.) The affairs
of each association shall be managed by not less than five directors,
who shall be elected by the shareholders at a meeting to be held at any
time before the association is authorized by the Comptroller of the Currency to commence the business of banking, and afterward at meetings
to be held on such day in January of each year as is specified therefor
in the articles of association. The directors shall hold office for one
year, and until their successors are elected and have qualified.
28. QUALIFICATIONS OF DIRECTORS. (SEC. 5146.) Every director
must, during his whole term of service, be a citizen of the United
States, and at least three-fourths of the directors must have resided in
the State, Territory, or District in which the association is located for
at least one year immediately preceding their election, and must be
residents therein during their continuance in office. Every director
must own, in his own right, at least ten shares of the capital stock of
the association of which he is a director. Any director who ceases to
be the owner of ten shares of the stock, or who becomes in any other
manner disqualified, shall thereby vacate his place.
29. QUALIFICATIONS OF DIRECTORS IN OKLAHOMA.—-Sec. 17 of the
act of May 2, 1890, provides "that the provisions of Title sixty-two of
the Revised Statutes of the United States relating to national banks,
and all amendments thereto, shall have the same force and effect in
Territory of Oklahoma as elsewhere in the United States:
Digitized forthe
FRASER
REPORT OF THE COMPTROLLER OF THE CURRENCY.
9
"Provided, That persons otherwise qualified to act as directors shall
not be required to have resided in said Territory for more than three
months immediately preceding their election as such."
30. QUALIFICATIONS OF VOTERS AT ELECTIONS. (SEC. 5144.) In
all elections of directors, and in deciding all questions at meetings of
shareholders, each shareholder shall be entitled to one vote on each
share of stock held by him. Shareholders may vote by proxies duly
authorized in writing • but no officer, clerk, teller, or bookkeeper of such
association shall act as proxy; and no shareholder whose liability is
past due and unpaid shall be allowed to vote.
31. OATHS OF DIRECTORS. (SEC. 5147,) Each director, when appointed or elected, shall take an oath that he will, so far as the duty
devolves on him, diligently and honestly administer the affairs of such
association, and will not knowingly violate, or willingly permit to be
violated, any of the provisions of this Title, and that he is the owner
in good faith, and in his own right, of the number of shares of stock
required by this Title, subscribed by him, or standing in his name on
the books of the association, and that the same is not hypothecated
or in any way pledged as security for any loan or debt. Such oath, subscribed by the director making it, and certified by the officer before
whom it is taken, shall be immediately transmitted to the Comptroller
of the Currency, and shall be filed and preserved in his office.
32. FAILURE" TO HOLD ANNUAL ELECTION. (SEC. 5149.) If, from
any cause, an election of directors is not made at the time appointed,
the association shall not for that cause be dissolved, but an election
may be held on any subsequent day, thirty days' notice thereof in all
cases having been given in a newspaper published in the city, town, or
county in which the association is located; and if no newspaper is
published in such city, town, or county such notice shall be published
in a newspaper published nearest thereto. If the articles of association do not iix the day on which the election shall be held, or if no election is held on the day fixed, the day for the election shall be designated
by tlie board of directors in their by-laws, or otherwise; or if the directors fail to fix the day, shareholders representing two-thirds of the
shares may do so.
33. VACANCIES IN BOARD OF DIRECTORS. (SEC. 5148.) Any vacancy
in the board shall be filled by appointment by the remaining directors^
and any director so appointed shall liold his place until the next election.
34. PRESIDENT SHALL BE A DIRECTOR. (SEC. 5150.) One of the
directors, to be chosen by the board, shall be the president of the board.
35. ORGANIZATION OF GOLD BANKS. (SEC. 5185.) Associations may
be organized in the manner prescribed by this Title for the purpose
of issuing notes payable in gold.
36. CONVERSION OF GOLD BANKS.—The act of February 14,1880,
provides that any national gold bank organized under the provisions
of the laws of the United States may, in the manner and subject to the
provisions prescribed by section fifty-one hundred andfifty-fourof the
Revised Statutes of the United States, for the conversion of banks
incorporated under the laws of any State, cease to be a gold bank and
become such an association as is authorized by section fifty-one hundred
and thirty-three, for carrying on the business of banking, and shall have
the same powers and privileges, and shall be subject to the same duties,
responsibilities, and rules, in all respects, as are by law prescribed for
such associations: Provided, That all certificates of organization which
shall be issued under this act shall bear the date of the original organization of each bank respectively as a gold bank.
10
REPORT OF THE COMPTROLLER OF THE CURRENCY
37. CONVERSION OF STATE BANKS. (SEC. 5154.) Any bank incorporated by special law, or any banking institution organized under a
general law of any State, may become a national association under this
Title by the name prescribed in its organization certificate; and in such
case the articles of association and the organization certificate may be
executed by a majority of the directors of the bank or banking institution; and the certificate shall declare that the owners of two-thirds of
the capital stock have authorized the directors to make such certificate,
and to change and convert the bankor banking institution into a national
association. A majority of the directors, after executing the articles
of association and organization certificate, shall have power to execute
all other papers, and to do whatever may be required to make its organ
ization perfect and complete as a national association. The shares of
any such bank may continue to be for the same amount each as they
were before the conversion, and the directors may continue to be the
directors of the association until others are elected or appointed in
accordance with the provisions of this chapter; and any State bank
which is a stockholder in any other bank, by authority of State laws,
may continue to hold its stock, although either bank, or both, may be
organized under and have accepted the provisions of this Title. When
the Comptroller of the Currency has given to such association a certificate, under his hand and official seal, that the provisions of this Title
have been complied with, and that it is authorized to commence the
business of banking, the association shall have the same powers and
privileges, and shall be subject to the same duties, responsibilities, and
rules, in all respects, as are prescribed for other associations, originally
organized as national banking associations, and shall be held and
regarded as such an association. But no such association shall have a
less capital than the amount prescribed for associations organized under
this Title.
38. CAPITAL OE STATE BANKS. (SEC. 3410.) The capital of any State
bank or banking association which has ceased or shall cease to exist,
or which has been or shall be converted into a national bank, shall be
assumed to be the capital as it existed immediately before such bank
ceased to exist or was converted as aforesaid.
39. CONVERTED BANKS MAY RETAIN BRANCHES. (SEC. 5155.) It
shall be lawful for any bank or banking association, organized under
State laws and having branches, the capital being joint and assigned
to and used by the mother bank and branches in definite proportions, to
become a national banking association in conformity with existing laws
and to retain and keep in operation its branches, or such one or more
of them as it may elect to retain, the amount of the circulation redeemable at the mother bank and each branch to be regulated by the
amount of capital assigned to and used by each.
40. PERSONAL LIABILITY OF SHAREHOLDERS. (SEC. 5151.) The
shareholders of every national banking association shall be held individually responsible, equally and ratably, and not one for another, for
all contracts, debts, and engagements of such association to the extent
of the amount of their stock therein, at the par value thereof, in addition to the amount invested in such shares, except that shareholders
of any banking association now existing under State laws having not
less than five millions of dollars of capital actually paid in and a surplus of twenty per centum on hand, both to be determined by the
Comptroller of the Currency, shall be liable only to the amount invested
in their shares; and such surplus of twenty per centum shall be kept
undiminished, and be in addition to the surplus provided for in this
REPORT OF THE COMPTROLLER OF THE CURRENCY.
11
Title; and if at any time there is a deficiency in such surplus of twenty
per centum such association shall not pay any dividends to its shareholders until the deficiency is made good; and in case of such deficiency the Comptroller of the Currency may compel the association to
close its business and wind up its affairs under the provisions of chapter
four of this Title.
41. EXCEPTION FOR TRUSTEES, ETC. (SEC. 5152.) Persons holding stock as executors, administrators, guardians, or trustees shall not
be personally subject to any liabilities as stockholders; but the estates
and funds in their hands shall be liable in like manner and to the same
extent as the testator,intestate, ward, or person interested in such trust
funds would be if living and competent to act and hold the stock in his
own name.
42. AMENDMENT OF ARTICLES BESTRICTED.—Sec. 5139 provides
that no change shall be made in the articles of association of a national
bank by which the rights, remedies, or security of the existing creditors
of the association shall be impaired.
43. INCREASE OF CAPITAL STOCK. (SEC. 5142.) Any association
formed under this Title may, by its articles of association, provide for
an increase of its capital from time to time, as may be deemed expedient, subject to the limitations of this Title. But the maximum of such
increase to be provided in the articles of association shall be determined by the Comptroller of the Currency. Sec. 1 of the act of May 1,
1886, provides that any national banking association may, with the
approval of the Comptroller of the Currency, by the vote of shareholders owning two-thirds of the stock of such association, increase
its capital stock, in accordance with existing laws, to any sum approved
by the said Comptroller, notwithstanding the limit fixed in its original
articles of association and determined by said Comptroller; and no
increase of the capital stock of any national banking association either
within or beyond the limit fixed in its original articles of association
shall be made except in the manner herein provided.
44. WHEN INCREASE BECOMES VALID. (SEC. 5142.) And no increase
of capital shall be valid until the whole amount of such increase is
paid in, and notice thereof has been transmitted to the Conrptroller
of the Currency, and his certificate obtained specifying the amount
of such increase of capital stock, with his approval thereof, and that it
has been duly paid in as part of the capital of such association.
45. REDUCTION OF CAPITAL STOCK. (SEC. 5143.) Any association
formed under this Title may, by the vote of shareholders owning twothirds of its capital stock, reduce its capital to any sum not below the
amount required by this Title to authorize the formation of associations,
but no such reduction shall be allowable which will reduce the capialof the association below the amount required for its outstanding circut
lation, nor shall any such reduction be made until the amount of the
proposed reduction has been reported to the Comptroller of the Currency and his approval thereof obtained.
46. CHANGE OF TITLE AND LOCATION.—Sees. 2,3, and 4 of the act
of May 1,1886, provide:
SEC. 2. That any national banking association may change its name
or the place where its operations of discount and deposit are to be carried on to any other place within the same State, not more than thirty
miles distant, with the approval of the Comptroller of the Currency,
by the vote of shareholders owning two-thirds of the stock of such
association. A duly authenticated notice of the vote and of the new
name or location selected shall be sent to the office of the Comptroller
12
REPORT OF THE COMPTROLLER OF THE CURRENCY.
of the Currency, but no change of name or location shall be valid until
the Comptroller shall have issued his certificate of approval of the
same.
SEC. 3. That all debts, liabilities, rights, provisions, and powers of
the association under its old name shall devolve upon and inure to the
association under its new name.
SEC. 4. That nothing in this act contained shall be so construed as
in any manner to release any national banking association under its
old name or at its old location from any liability, or affect any action
or proceeding in law in which said association may be or become a
party or interested.
47. STATUS OF NATIONAL BANKS ORGANIZED UNDER THE ACT OF
FEBRUARY 25,1863. (SEC. 5156.) That nothing in this Title shall affect
any appointments made, acts done, or proceedings had or commenced
prior to the third day of June, eighteen hundred and sixty-four, in or
toward the organization of any national banking association under the
act of February twenty-five, eighteen hundred and sixty-three; but all
associations which on the third day of June, eighteen hundred and
sixty-four, were organized or commenced to be organized under that
act shall enjoy all the rights and privileges granted, and be subject to
all the duties, liabilities, and restrictions imposed by this Title, notwithstanding all the steps prescribed by this Title for the organization of
associations were not pursued, if such associations were duly organized
under that act.
CHAPTER THREE.
BANK CIRCULATION.
48.
49.
50.
51.
52.
53.
54.
55.
56.
57.
58.
59.
60.
61.
62.
63.
64.
United States bonds defined.
| 65. Worn-out or mutilated circulation.
Security for circulation.
I 66. Provisions for redeeming circulation.
Relation of bond deposit to capital.
67. Withdrawing circulation.
Exchange of bonds.
68. General provisions for withdrawing
Bonds held by Treasurer.
circulation.
Record of bond transfers.
69. Circulation of extended banks.
Notice of transfer.
70. Circulation of liquidating banks.
Examination of bonds and records.
71. Circulation of closed banks.
Annual examination of bonds.
72. Regulations for redemption records.
General provisions respecting bonds. 73. Redeemed notes to be canceled.
Amount of circulation obtainable.
74. Redemption in United States notes.
Preparation of bank circulation.
75. Disposition of redemption account.
Circulation shallbear charter number. 76. Redemption of incomplete circulaControl of plates and dies.
tion.
Examination of plates and dies.
77. Banks take circulation at par.
Circulation, for what receivable.
78. Issue of other notes prohibited.
Circulation of gold banks.
79. Fraudulent notes to be marked.
48. UNITED STATES BONDS DEFINED. (SEC. 5158.) The term "United
States bonds/' as used throughout this chapter, shall be construed to
mean registered bonds of the United States.
49. SECURITY FOR CIRCULATION. (SEC. 5159.) Every association,
after having complied with the provisions of this Title, preliminary to
the commencement of the banking business, and before it shall be
authorized to commence banking business under this Title, shall transfer and deliver to the Treasurer of the United States, as security for
its circulating notes, any United States registered bonds, bearing interest, to an amount, where the capital is one hundred and fifty thousand
dollars or less, not less than one-fourth of the capital, and fifty thou
REPORT OF THE COMPTROLLER OF THE CURRENCY.
13
sand dollars where the capital is in excess of one hundred and fifty
thousand dollars. Such bonds shall be received by the Treasurer upon
deposit, and shall be by him safely kept in his office until they shall be
otherwise disposed of in pursuance of the provisions of this Title, and
such of those banks having on deposit bonds in excess of that amount
are authorized to reduce their circulation by the deposit of lawful money
as provided by law: Provided, That the amount of such circulating
notes shall not exceed in any case ninety per centum of the par value
of the bonds deposited as herein provided. (NOTE.—-As amended by
sec. 4 of the act of June 20,1874, and sec 8 of the act of July 12,1882.)
50. RELATION OF BOND DEPOSIT TO CAPITAL. (SEC. 5160.) The
deposit of bonds made by each association shall be increased as its capital may be paid up or increased, so that every association shall at all
times have on deposit with the Treasurer registered United States bonds
to the amount required by law. And any association that may desire to
reduce its capital or close up its business and dissolve its organization
may take up its bonds upon returning to the Comptroller its circulating
notes in the proportion hereinafter required, or may take up any excess
of bonds beyond the amount required by law, and upon which no circulating notes have been delivered.
51. EXCHANGE OF BONDS. (SEC. 5161.) To facilitate a compliance
with the two preceding sections, the Secretary of the Treasury is authorized to receive from any association, and cancel, any United States coupon bonds, and to issue in lieu thereof registered bonds of like amount,
bearing a like rate of interest, and having the same time to run.
52. BONDS HELD BY TREASURER. (SEC. 5162.) All transfers of
United States bonds made by any association under the provisions of
this Title shall be made to the Treasurer of the United States in trust
for the association, with a memorandum written or printed on each
bond, and signed by the cashier, or some other officer of the association making the deposit. A receipt shall be given to the association,
by the Comptroller of the Currency, or by a clerk appointed by him
for that purpose, stating that the bond is held in trust for the association on whose behalf the transfer is made, and as security for the
redemption and payment of any circulating notes that have been or
may be delivered to such association. No assignment or transfer of
any such bond by the Treasurer shall be deemed valid unless countersigned by the Comptroller of the Currency.
53. RECORD OF BOND TRANSFERS. (SEC. 5163.) The Comptroller of
the Currency shall keep in his office a book in which he shall cause to
be entered, immediately upon countersigning it, every transfer or
assignment by the Treasurer, of any bonds belonging to a national
banking association, presented for his signature. He shall state in
such entry the name of the association from whose account the transfer
is made, the name of the party to whom it is made, and the par value
of the bonds transferred.
54. NOTICE OF TRANSFER. (SEC. 5164.) The Comptroller of the Currency shall, immediately upon countersigning and entering any transfer or assignment by the Treasurer of any bonds belonging to a national
banking association, advise by mail the association from whose accounts
the transfer is made of the kind and numerical designation of the bonds
and the amount thereof so transferred.
55. EXAMINATION OF BONDS AND EECORDS. (SEC. 5165.) The Comptroller of the Currency shall have at all times, during office hours, access
to the books of .the Treasurer of the United States for the purpose of
ascertaining the correctness of any transfer or assignment of the bonds
14
REPORT OF THE COMPTROLLER OF THE CURRENCY.
deposited by an association, presented to the Comptroller to counter
sign; and the Treasurer shall have the like access to the book mentioned
in sectionfifty-onehundred and sixty-three, during office hours, to ascertain the correctness of the entries in the same; and the Comptroller
shall also at all times have access to the bonds on deposit with the
Treasurer to ascertain their amount and condition.
56. ANNUAL EXAMINATION OF BONDS. (SEC. 5166.) Every association having bonds deposited in the office of the Treasurer of the United
States shall, once or oftener in each fiscal year, examine and compare
the bonds pledged by the association with the books of the Comptroller
of the Currency and with the accounts of the association, and, if they
are found correct, to execute to the Treasurer a certificate setting forth
the different kinds and the amounts thereof, and that the same are in
the possession and custody of the Treasurer at the date of the certificate.
Such examination shall be made at such time or times during the ordinary business hours as the Treasurer and the Comptroller, respectively,
may select, and may be made by an officer or agent of such association,
duly appointed in writing for that purpose; and his certificate before
mentioned shall be of like force and validity as if executed by the president or cashier. A duplicate of such certificate, signed bv the Treasurer, shall be retained by the association.
57. GENERAL PROVISIONS BESPECTING BONDS. (SEC. 5167.) The
bonds transferred to and deposited with the Treasurer of the United
States by any association for the security of its circulating notes shall
be held exclusively for that purpose until such notes are redeemed,
except as provided in this Title. The Comptroller of the Currency shall
give to any such association powers of attorney to receive and appropriate to its own use the interest on the bonds which it has so transferred to the Treasurer; but such powers shall become inoperative
whenever such association fails to redeem its circulating notes. Whenever the market or cash value of any bonds thus deposited with the
Treasurer is reduced below the amount of the circulation issued for the
same the Comptroller may demand and receive the amount of such
depreciation in other United States bonds at cash value, or in money,
from the association, to be deposited with the Treasurer as long as such
depreciation continues. And the Comptroller, upon the terms prescribed by the Secretary of the Treasury, may permit an exchange to
be made of any of the bonds deposited with the Treasurer by any association for other bonds of the United States authorized to be received
as security for circulating notes if he is of opinion that such an
exchange can be made without prejudice to the United States; and he
may direct the return of any bonds to the association which transferred
the same, in sums of not less than one thousand dollars, upon the surrender to him and the cancellation of a proportionate amount of such
circulating notes: Provided, That the remaining bonds which shall
have been transferred by the association offering to surrender circulating notes are equal to the amount required for the circulating notes not
surrendered by such association, and that the amount of bonds in the
hands of the Treasurer is not diminished below the amount required to
be kept on deposit with him, and that there has been no failure by the
association to redeem its circulating notes, nor any other violation by
it of the provisions of this Title, and that the market or cash value of
the remaining bonds is not below the amount required for the circulation issued for the same.
58. AMOUNT OF CIRCULATION OBTAINABLE.—Sec. 10 of the act of
July 12, 1882? provides that upon a deposit of bonds as described by
REPORT OF THE COMPTROLLER OF THE CURRENCY.
15
sections fifty-one hundred and fifty-nine and fifty one hundred and
sixty, the association making the same shall be entitled to receive from
the Comptroller of the Currency circulating notes of different denominations, in blank, registered and countersigned as provided by law,
equal in amount to ninety per centum of the current market value, not
exceeding par, of the United States bonds so transferred and delivered,
and at no time shall the total amount of such notes issued to any such
association exceed ninety per centum of the amount at such time
actually paid in of its capital stock.
59. PREPARATION OF BANK CIRCULATION. (SEC. 5172.) In order to
furnish suitable notes for circulation, the Comptroller of the Currency
shall, under the direction of the Secretary of the Treasury, cause plates
and dies to be engraved, in the best manner to guard against counterfeiting and fraudulent alterations, and shall have printed therefrom,
and numbered, such quantity of circulating notes, in blank, of the
denominations of five dollars, ten dollars, twenty dollars, fifty dollars,
one hundred dollars, fiye hundred dollars, and one thousand dollars, as
may be required to supply the associations entitled to receive the same.
Such notes shall express upon their face that they are secured by United
States bonds, deposited with the Treasurer of the United States, by the
written or engraved signatures of the Treasurer and Eegister, and by
the imprint of the seal of the Treasury; and shall also express upon
their face the promise of the association receiving the same to pay on
demand, attested by the signatures of the president or vice-president
and cashier; and shall bear such devices and such other statements,
and shall be in such form, as the Secretary of the Treasury shall, by
regulation, direct.
60. CIRCULATION SHALL BEAR CHARTER NUMBER.—Sec. 5 of
the
act of June 20,1874, provides that the Comptroller of the Currency
shall, under such rules and regulations as the Secretary of the Treasury
may prescribe, cause the charter numbers of the associations to be
printed upon all national-bank notes which may be hereafter issued
by him.
61. CONTROL OF PLATES AND DIES. (SEC. 5173.) The plates and
special dies to be procured by the Comptroller of the Currency for the
printing of such circulating notes shall remain under his control and
direction.
62. EXAMINATION OF PLATES AND DIES. (SEC. 5174.) The Comptroller of the Currency shall cause to be examined, each year, the
plates, dies, but pieces [bed pieces], and other material from which the
national-bank circulation is printed, in whole or in part, and file in his
office annually a correct list of the same. Such material as shall have
been used in the printing of the notes of associations which are in
liquidation, or have closed business, shall be destroyed, under such
regulations as shall be prescribed by the Comptroller of the Currency
and approved by the Secretary of the Treasury. The expenses of any
such examination or destruction shall be paid out of any appropriation
made by Congress for the special examination of national banks and
bank note plates.
63. CIRCULATION, FOR WHAT RECEIVABLE. (SEC. 5182.) After any
association receiving circulating notes under this Title has caused its
promise to pay such notes on demand to be signed by the president or
vice-president and cashier thereof, in such manner as to make them
obligatory promissory notes, payable on demand at its place of business, such association may issue and circulate the same as money.
And the same shall be received at par in all parts of the United States
16
REPORT OF THE COMPTROLLER OF THE CURRENCY.
in payment of taxes, excises, public lands, and all other dues to the
United States, except duties on imports; and also for all salaries and
other debts and demands owing by the United States to individuals,
corporations, and associations within the United States, except interest
on the public debt, and in redemption of the national currency.
64. CIRCULATION OF GOLD BANKS. (SEC. 5185.) Associations may
be organized in the manner prescribed by this Title for the purpose of
issuing notes payable in gold; and upon the deposit of any United
States bonds bearing interest payable in gold with the Treasurer of the
United States, in the manner prescribed for other associations, it shall
be lawful for the Comptroller of the Currency to issue to the association
making the deposit circulating notes of different denominations, but
none of them of less than five dollars, and not exceeding in amount
eighty per centum of the par value of the bonds deposited, which shall
express the promise of the association to pay them, upon presentation
at the office at which they are issued, in gold coin of the United States,
and shall be so redeemable.
65. WORN-OUT OR MUTILATED CIRCULATION. (SEC. 5184.) It shall
be the duty of the Comptroller of the Currency to receive worn-out or
mutilated circulating notes issued by any banking association, and
also, on due proof of the destruction of any such circulating notes, to
deliver in place thereof to the association other blank circulating notes
to an equal amount. Such worn-out or mutilated notes, after a memorandum has been entered in the proper books, in accordance with
such regulations as may be established by the Comptroller, as well as
all circulating notes which shall have been paid or surrendered to be
canceled, shall be macerated in presence of four persons, one to be
appointed by the Secretary of the Treasury, one by the Comptroller of
the Currency, one by the Treasurer of the United States, and one by
the association, under such regulations as the Secretary of the Treasury may prescribe. A certificate of such maceration, signed by the
parties so appointed, shall be made in the books of the Comptroller,
and a duplicate thereof forwarded to the association whose notes are
thus canceled.
66. PROVISIONS FOR REDEEMING CIRCULATION.—Sec. 3 of the
act
of June 20, 1874, provides that every association organized, or to be
organized, under the provisions of the said act, and of the several acts
amendatory thereof, shall at all times keep and have on deposit in the
Treasury of the United States, in lawful money of the United States,
a sum equal to five per centum of its circulation, to be held and used
for the redemption of such circulation; which sum shall be counted as
a part of its lawful reserve, as provided in section two of this act; and
when the circulating notes of any such associations, assorted or unassorted, shall be presented for redemption, in sums of one thousand
dollars or any multiple thereof, to the Treasurer of the United States,
the same shall be redeemed in United States notes. All notes so
redeemed shall be charged by the Treasurer of the United States to the
respective associations issuing the same, and he shall notify them
severally, on the first day of each month, or oftener, at his discretion,
of the amount of such redemptions; and whenever such redemptions
for any association shall amount to the sum of five hundred dollars,
such association so notified shall forthwith deposit with the Treasurer
of the United States a sum in United States notes equal to the amount
of its circulating notes so redeemed. And all notes of national banks,
worn, defaced, mutilated, or otherwise unfit for circulation, shall, when
received by any assistant treasurer, or at any designated depositary of
REPORT OF THE COMPTROLLER OF THE CURRENCY.
17
the United States, be forwarded to the Treasurer of the United States
for redemption as provided herein. And when such redemptions have
been so reimbursed, the circulating notes so redeemed shall be forwarded to the respective associations by which they were issued; but
if any of such notes are worn, mutilated, defaced, or rendered otherwise unfit for use, they shall be forwarded to the Comptroller of the
Currency and destroyed, and replaced as now provided bylaw: Provided, That each of said associations shall reimburse to the Treasury
the charges for transportation and the costs for assorting such notes;
and the associations hereafter organized shall also severally reimburse
to the Treasury the cost of engraving such plates as shall be ordered
by each association respectively; and the amount assessed upon each
association shall be in proportion to the circulation redeemed, and be
charged to the fund on deposit with the Treasurer.
67. WITHDRAWING CIRCULATION.—Sec. 4 of the act of June 20,
1874, provides that any association organized under this act, or any of
the acts of which this is an amendment, desiring to withdraw its circulating notes, in whole or in part, may, upon the deposit of lawful money
with the Treasurer of the United States in sums of not less than nine
thousand dollars, take up the bonds which said association has on
deposit with the Treasurer for the security of such circulating notes,
which bonds shall be assigned to the bank in the manner specified in
the nineteenth section of the national-bank act; and the outstanding
notes of said association, to an amount equal to the legal-tender notes
deposited, shall be redeemed at the Treasury of the United States, and
destroyed as now provided by law: Provided, That the amount of the
bonds on deposit for circulation shall not be reduced below fifty thousand dollars.
68. GENERAL PROVISIONS FOR WITHDRAWING CIRCULATION.—
Sees. 8 and 9 of the act of July 12, 1882, provide: (SEC. 8.) That the
national banks which shall hereafter make deposits of lawful money
for the retirement in full of their circulation shall, at the time of their
deposit, be assessed for the cost of transporting and redeeming their
notes then outstanding, a sum equal to the average cost of the redemption of national-bank notes during the preceding year, and shall thereupon pay such assessment; and all national banks which have heretofore made or shall hereafter make deposits of lawful money for the
reduction of their circulation shall be assessed, and shall pay an assessment in the manner specified in section three of the act approved June
twentieth, eighteen hundred and seventy-four, for the cost of transporting and redeeming their notes redeemed from such deposits subsequently to June thirtieth, eighteen hundred and eighty-one.
SEC. 9. That any national banking association now organized, or
hereafter organized, desiring to withdraw its circulating notes, upon a
deposit of lawful money with the Treasurer of the United States, as
provided in section four of the act of June twentieth, eighteen hundred
and seventy-four, or as provided in this act, is authorized to deposit
lawful money and withdraw a proportionate amount of the bonds held
as security for its circulating notes in the order of such deposits; and
no national bank which makes any deposit of lawful money in order to
withdraw its circulating notes shall be entitled to receive any increase
of its circulation for the period of six months from the time it made
such deposit of lawful money for the purpose aforesaid: Provided,
That not more than three millions of dollars of lawful money shall be
deposited during any calendar month for this purpose: And provided
further, That the provisions of this section shall not apply to bonds
CUR 98
-2
18
REPORT OF THE COMPTROLLER OF THE CURRENCY.
called for redemption b$ the Secretary of the Treasury, nor to the with
drawal of circulating notes in consequence thereof.
69. CIRCULATION OF EXTENDED BANKS.—Sec. 6 of the act of July
12, 1882, provides that the circulating notes of any association so extending the period of its succession which shall have been issued to it prior
to such extension shall be redeemed at the Treasury of the United
States, as provided in section three of the act of June twentieth, eighteen hundred and seventy-four, entitled "An act fixing the amount of
United States notes, providing for redistribution of national bank currency, and for other purposes/7 and such notes when redeemed shall be
forwarded to the Comptroller of the Currency, and destroyed, as now
provided by law; and at the end of three years from the date of the
extension of the corporate existence of each bank the association so
extended shall deposit lawful money with the Treasury of the United
States sufficient to redeem the remainder of the circulation which was
outstanding at the date of its extension, as provided in sections fifty-two
hundred and twenty-two, fifty-two hundred and twenty-four, and fiftytwo hundred and twenty-five of the Revised Statues; and aiiy gain that
may arise from the failure to present such circulating notes for redemption shall inure to the benefit of the United States; and from time to time,
as such notes are redeemed or lawful money deposited therefor as provided herein, new circulating notes shall be issued as provided for by
this act, bearing such devices, to be approved by the Secretary of the
Treasury, as shall make them readily distinguishable from the circulating notes heretofore issued: Provided, lioivever, That each banking association which shall obtain the benefit of this act shall reimburse to the
Treasury the cost of preparing the plate or plates for such new circulating notes as shall be issued to it.
70. CIRCULATION OF LIQUIDATING BANKS. (SEC. 5225.) Whenever
the Treasurer has redeemed any of the notes of an association which
has commenced to close its affairs, he shall cause the notes to be mutilated and charged to the redemption account of the association; and
all notes so redeemed by the Treasurer shall, every three months, be
certified to and destroyed in the manner prescribed in section fifty-one
hundred and eighty-four.
71. CIRCULATION OF CLOSED BANKS.—Sec. 8 of the act of June 20,
1874, provides: And it shall be the duty of the Treasurer, assistant
treasurers, designated depositaries, and national bank depositaries of
the United States to assort and return to the Treasury for redemption
the notes of such national banks as have failed, or gone into voluntary
liquidation for the purpose of winding up their affairs, and of such as
shall hereafter so fail or go into liquidation.
72. REGULATIONS FOR EEDEMPTION EECORDS. (SEC. 5232.) The
Secretary of the Treasury may, from time to time, make such regulations
respecting the disposition to be made of circulating notes after presentation at the Treasury of the United States for payment, and respecting
the perpetuation of the evidence of the payment thereof, as may seem
to him proper.
73. REDEEMED NOTES TO BE CANCELED. (SEC. 5233.) All notes of
national banking associations presented at the Treasury of the United
States for payment shall, on being paid, be canceled.
74. REDEMPTION IN UNITED STATES NOTES.—Sec. 3 of the
act
approved June 20, 1874, provides that when the circulating notes of
any such associations, assorted or unassorted, shall be presented for
redemption, in sums of one thousand dollars or any multiple thereof, to
the Treasurer of the United States, the same shall be redeemed in
Digitized forUnited
FRASERStates notes.
REPORT OP THE COMPTROLLER OF THE CURRENCY.
19
75. DISPOSITION OF EEDEMPTION ACCOUNT.—Sec. 6 of the act of
July 14, 1890, provides that upon the passage of this act the balances
standing with the Treasurer of the United States to the respective
credits of national banks for deposits made to redeem the circulating
notes of such banks, and all deposits thereafter received for like purpose, shall be covered into the Treasury as a miscellaneous receipt^ and
the Treasury of the United States shall redeem from the general cash
in the Treasury the circulating notes of said banks which may come
into his possession subject to redemption- and upon the certificate of
the Comptroller of the Currency that such notes have been received by
him and that they have been destroyed and that no new notes will be
issued in their place, reimbursement of their amount shall be made to
the Treasurer, under such regulations as the Secretary of the Treasury
may prescribe, from an appropriation hereby created, to be known as
" national-bank notes, redemption account." But the provisions of
this act shall not apply to the deposits received under section three of
the act of June twentieth, eighteen hundred and seventy-four, requiring
every national bank to keep in lawful money with the Treasurer of the
United States a sum equal to five per centum of its circulation, to be
held and used for the redemption of its circulating notes; and the balance remaining of the deposits so covered shall, at the close of each
month, be reported on the monthly public debt statement as debt of
the United States bearing no interest.
76. EEDEMPTION OF INCOMPLETE CIRCULATION.-—The act of July
28, 1892, provides that the provisions of the Revised Statutes of the
United States, providing for the redemption of national-bank notes,
shall apply to all national bank notes that have been or maybe issued
to, or received by, any national bank, notwithstanding such notes may
have been lost by or stolen from the bank and put in circulation without the signature or upon the forged signature of the president or vicepresident and cashier.
77. BANKS TAKE CIRCULATION AT PAR. (SEC. 5196.) Every national banking association formed or existing under this Title shall
take and receive at par, for any debt or liability to it, any and all notes
or bills issued by any lawfully organized national banking association.
But this provision shall not apply to any association organized for the
purpose of issuing notes payable in gold.
78. ISSUE OF OTHER NOTES PROHIBITED. (SEC. 5183.) No national
banking association shall issue post notes or any other notes to circulate as money than such as are authorized by the provisions of this
Title.
79. FRAUDULENT NOTES TO BE MARKED.—Sec. 5 of the act of June
30,1876, provides that all United States officers charged with the receipt
or disbursement of public moneys, and all officers
of national banks,
shall stamp or write in plain letters the word u counterfeit,'7 " altered,"
or "worthless" upon all fraudulent notes issued in the form of and
intended to circulate as money which shall be presented at their places
of business; and if such officer shall wrongfully stamp any genuine
note of the United States, or of the national banks, they shall, upon
presentation, redeem such notes at the face value thereof.
20
REPORT OF THE COMPTROLLER OF THE CURRENCY.
CHAPTEE FOUK.
TAX ON CIRCULATION.
80.
81.
82.
83.
84.
85.
86.
Tax on circulation.
Semiannual return of circulation.
Proceedings on default.
Enforcing tax on circulation.
Refunding excess tax.
Circulation, when exempt from tax.
Tax on unauthorized circulation.
87. Semiannual return of taxable circulation.
88. Failure to make such return.
89. Tax on converted bank circulation.
90. Tax provisions restricted.
91. Taxation of notes, etc.
80. TAX ON CIRCULATION. (SEC. 5214.) In lieu of all existing taxes,
every association shall pay to the Treasurer of the United States, in the
months of January and July, a duty of one-half of one per centum each
half year upon the average amount of its notes in circulation.
81. SEMIANNUAL KETURN OF CIRCULATION. (SEC. 5215.) In order
to enable the Treasurer to assess the duties imposed by the preceding
section, each association shall, within ten days from the first days of
January and July of each year, make a return, under the oath of its
president or cashier, to the Treasurer of the United States, in such
form as the Treasurer may prescribe, of the average amount of its notes
in circulation for the six months next preceding the most recent first
day of January or July. Every association which fails so to make such
return shall be liable to a penalty of two hundred dollars, to be collected
either out of the interest as it may become due such association on the
bonds deposited with the Treasurer, or, at his option, in the manner in
which penalties are to be collected of other corporations under the laws
of the United States.
82. PROCEEDINGS ON DEFAULT. (SEC. 5216.) Whenever any association fails to make the half-yearly return required by the preceding
section, the duties to be paid by such association shall be assessed upon
the amount of notes delivered to such association by the Comptroller
of the Currency.
83. ENFORCING- TAX ON CIRCULATION. (SEC. 5217.) Whenever an
association fails.to pay the duties imposed by the three preceding sections, the sums due maybe collected in the manner provided for the collection of United States taxes from other corporations; or the Treasurer
may reserve the amount out of the interest, as it may become due, on
the bonds deposited with him by such defaulting association.
84. KEFUNDING EXCESS TAX. (SEC. 5218.) In all cases where an
association has paid or may pay in excess of what may be or has been
found due from it, on account of the duty required to be paid to the
Treasurer of the United States, the association may state an account
therefor, which, on being certified by the Treasurer of the United
States, and found correct by the Comptroller of the Treasury, shall be
refunded in the ordinary manner by warrant on the Treasury.
85. CIRCULATION, WHEN EXEMPT FROM TAX. (SEC. 3411.) Whenever the outstanding circulation of any bank, association, corporation,
company, or person is reduced to an amount not exceedingfiveper centum
of the chartered or declared capital existing at the time the same was
issued, said circulation shall be free from taxation; and whenever any
bank which has ceased to issue notes for circulation deposits in the
Treasury of the United States, in lawful money, the amount of its outstanding circulation, to be redeemed at par, under such regulations as
the Secretary of the Treasury shall prescribe, it shall be exempt from
any tax upon such circulation.
REPORT OF THE COMPTROLLER OF THE CURRENCY.
21
86. TAX ON UNAUTHORIZED CIRCULATION.—Sees. 19, 20, and 21 of
the act of February 8,1875, provide:
SEC. 19. That every person, firm, association, other than nationalbank associations, and every corporation, State bank, or State banking
association shall pay a tax of ten per centnm on the amount of their
own notes used for circulation and paid out by them.
SEC. 20. That every such person, firm, association, corporation, State
bank, or State banking association, and also every national banking
association, shall pay a like tax of ten per centum on the amount of
notes of any person, firm, association, other than a national banking
association, or of any corporation, State bank, or State banking association, or of any town, city, or municipal corporation, used for circulation and paid out by them.
SEC. 21. That the amount of such circulating notes, and of the tax
due thereon, shall be returned, and the tax paid at the same time, and
in the same manner, and with like penalties for failure to return and
pay the same, as provided by law for the return and payment of taxes
on deposits, capital, and circulation imposed by the existing provisions
of internal-revenue law.
87. SEMIANNUAL RETURN OF TAXABLE CIRCULATION. (SEC. 3414.)
A true and complete return of the monthly amount of circulation, as
aforesaid, and of the monthly amount of notes of persons, town, city,
or municipal corporation, State banks, or State banking associations
paid out as aforesaid for the previous si^: months, shall be made and
rendered in duplicate on the first day of December and the first day of
June by each of such banks, associations, corporations, companies, or
persons, with a declaration annexed thereto, under the oath of such
person, or of the president or cashier of such bank, association, corporation, or company, in such form and manner as may be prescribed by the
Commissioner of Internal Revenue, that the same contains a true and
faithful statement of the amounts subject to tax, as aforesaid; and one
copy shall be transmitted to the collector of the district in which any
such bank, association, corporation, or company is situated, or in which
such person has his place of business, and one copy to the Commissioner
of Internal Revenue.
88. FAILURE TO MAKE SUCH RETURN. (SEC. 3415.) In default of the
returns provided in the preceding section the amount of circulation,
and notes of persons, town, city, and municipal corporations, State
banks, and State banking associations paid out, as aforesaid, shall be
estimated by the Commissioner of Internal Revenue, upon the best
information he can obtain. And for any refusal or neglect to make
return and payment any such bank, association, corporation, company,
or person so in default shall pay a penalty of two hundred dollars,
besides the additional penalty and forfeitures provided in other cases.
89. TAX ON CONVERTED BANK CIRCULATION. (SEC. 3416.) Whenever any State bank or banking association has been converted into a
national banking association, and such national banking association
has assumed the liabilities of such State bank or banking association,
including the redemption of its bills, by any agreement or understanding whatever with the representatives of such State bank or banking
association, such national banking association shall be held to make
the required return and payment on the circulation outstanding, so long
as such circulation shall exceed five per centum of the capital before
such conversion of such State bank or banking association.
90. TAX PROVISIONS RESTRICTED. (SEC. 3417.) The provisions #of
this chapter relating to the tax on the circulation of banks and to
22
REPORT OF THE COMPTROLLER OF THE CURRENCY.
their returns, except as contained in sections thirty-four hundred and
eleven, thirty-four hundred and twelve, thirty-four hundred and thirteen, and thirty-four hundred and sixteen, and such parts of sections
thirty-four hundred and fourteen and thirty-four hundred and fifteen
as relate to the tax of ten per centum on certain notes, shall not apply
to associations which are taxed under and by virtue of Title "NATIONAL
BANKS."
91. TAXATION OF NOTES, ETC. (SEC.
3701.) All stocks, bonds,
Treasury notes, and other obligations of the United States shall be
exempt from taxation by or under State or municipal or local authority.
The act of August 13,1894, provides: (SEC. 1.) That circulating notes of
national banking associations and United States legal-tender notes and
other notes and certificates of the United States, payable on demand
and circulating or intended to circulate as currency, and gold, silver,
or other coin shall be subject to taxation as money on hand or on
deposit under the laws of any State or Territory: Provided, That any
such taxation shall be exercised in the same manner and at the same
rate that any such State or Territory shall tax money or currency circulating as money within its jurisdiction.
SEC. 2. That the provisions of this act shall not be deemed or held
to change existing laws in respect of the taxation of national banking
associations.
OHAPTEE FIVE.
REGULATION OF THE BANKING BUSINESS.
92. Laws governing certain associations. 110. Restriction on loans.
111. Associations must not hold their own
93. Place of business.
stock.
94. Reserve cities and reserve require112. Restriction on bank's liability.
ments.
113. Improper use of bank circulation.
95. Reserve not maintained.
96. Reserve agents' balances counted as 114. Unearned dividends prohibited.
reserve.
115. Assessment for impairment of capital.
97. Clearing-house certificates counted 116. Provision for enforcement of assessas reserve.
ment.
98. Redemption fund counted as reserve. 117. Prohibition against uncurrent notes.
99. United States note certificates 118. List of shareholders.
counted as reserve.
119. Reports of condition.
100. Redemption of such certificates.
120. Verification of such reports.
101. United States gold certificates 121. Reports of dividends and earnings.
counted as reserve.
122. Penalty for failure to report.
102. Reserve requirements for gold banks. 123. Reports of other banks.
103. Reserve deposit in central reserve 124. State taxation of national banks.
city.
125. National-bank examiners.
104. Additional reserve cities.
126. Qualification for examiner.
105. Additional central reserve cities.
127. Compensation of examiners.
106. Real estate.
128. Examinations in District of Co107. Interest.
lumbia.
108. Penalty for unlawful interest.
129. Limitation of visitorial powers.
109. Surplus and dividends.
130. Use of "National" in titles.
92. LAWS GOVERNING CERTAIN ASSOCIATIONS. (SEC. 5157.) The
provisions of chapters two, three, and four [three,five,and seven of this
edition] of this Title, which are expressed without restrictive words, as
applying to " national banking association," or to " associations," apply
to all associations organized to carry on the business of banking under
any act of Congress.
93. PLACE OF BUSINESS. (SEC. 5190.) The usual business of each
national banking association shall be transacted at an office or banking
located in the place specified in its organization certificate.
Digitized forhouse
FRASER
REPORT OF THE COMPTROLLER OF THE CURRENCY.
23
94. EESERYE CITIES AND EESERYE EEQUIREMENTS. (SEC. 5191.)
Every national banking association in either of the following cities:
Albany, Baltimore, Boston, Cincinnati, Chicago, Cleveland, Detroit,
Louisville, Milwaukee, New Orleans, New York, Philadelphia, Pittsburgh, Saint Louis, San Francisco, and Washington, shall at all times
have on hand, in lawful money of the United States, an amount equal
to at least twenty five per centum of the aggregate amount of its depos
its; and every other association shall at all times have on hand, in lawful money of the United States, an amount equal to at least fifteen per
centum of the aggregate amount of its deposits.
95. EESERVE NOT MAINTAINED. (SEC. 5191.) Whenever the lawful
money of any association in any of the cities named shall be below the
amount of twenty-five per centum of its deposits, and whenever the
lawful money of any other association shall be below fifteen per centum
of its deposits, such association shall not increase its liabilities by making any new loans or discounts otherwise than by discounting or purchasing bills of exchange payable at sight, nor make any dividend of
its profits until the required proportion between the aggregate amount
of its deposits and its lawful money of the United States has been
restored. And the Comptroller of the Currency may notify any association, whose lawful-money reserve shall be below the amount above
required to be kept on hand, to make good such reserve; and if such
association shall fail for thirty days thereafter so to make good its
reserve of lawful money, the Comptroller may, with the concurrence of
the Secretary of the Treasury, appoint a receiver to wind up the business of the association, as provided in section fifty-two hundred and
thirty-four.
96. EESERVE AGENTS 7 BALANCES COUNTED AS EESERVE. (SEC.
5192.) Three-fifths of the reserve of fifteen per centum required by the
preceding section to be kept may consist of balances due to an association from associations approved by the Comptroller of the Currency,
organized under the act of June three, eighteen hundred and sixty-four,
or under this Title, and doing business in the cities of Albany, Baltimore, Boston, Charleston, Chicago, Cincinnati, Cleveland, Detroit,
Louisville, Milwaukee, New Orleans, New York, Philadelphia, Pittsburg, Eichmond, Saint Louis, San Francisco, and Washington.
97. CLEARING-HOUSE CERTIFICATES COUNTED AS EESERVE.—
Clearing-house certificates, representing specie or lawful money specially deposited for the purpose, of any clearing-house association shall
also be deemed to be lawful money in the possession of any association
belonging to such clearing house, holding and owning such certificate,
within the preceding section.
98. EEDEMPTION FUND COUNTED AS EESERVE.—Sec. 3 of the act
of June 20,1874, provides that the five per cent redemption fund, which
shall at all times be kept on deposit with the Treasurer of the United
States, shall be counted as a part of the lawful reserve.
99. UNITED STATES NOTE CERTIFICATES COUNTED AS EESERVE.
(SEC. 5193.) The Secretary of the Treasury may receive United States
notes on deposit, without interest, from any national banking associations, in sums of not less than ten thousand dollars, and issue certificates therefor in such form as he may prescribe, in denominations of
not less than five thousand dollars, and payable on demand in United
States notes at the place where the deposits were made. The notes so
deposited shall not be counted as part of the lawful-money reserve of
the association; but the certificates issued therefor may be counted as
part of its lawful-money reserve, and may be accepted in the settlement
24
REPORT OF THE COMPTROLLER OF THE CURRENCY,
of clearing-house balances at the places where the deposits therefor
were made.
100. EEDEMPTION OF SUCH CERTIFICATES. (SEC. 5194.) The power
conferred on the Secretary of the Treasury, by the preceding section
shall not be exercised so as to create any expansion or contraction of
the currency; and United States notes for which certificates are issued
under that section, or other United States notes of like amount, shall
be held as special deposits in the Treasury and used only for redemption of such certificates.
101. UNITED STATES GOLD CERTIFICATES COUNTED AS EESERVE.—
Sec. 12 of the act of July 12, 1882, provides that the Secretary of the
Treasury is authorized and directed to receive deposits of gold coin
with the Treasurer or assistant treasurers of the United States, in sums
not less than twenty dollars, and to issue certificates therefor in denominations of not less than twenty dollars each, corresponding with the
denominations of United States notes. The coin deposited for or representing the certificates of deposit shall be retained in the Treasury
for the payment of the same on demand. Said certificates shall be
receivable for customs, taxes, and all public dues, and when so received
may be reissued; and such certificates, as also silver certificates, when
held by any national banking association, shall be counted as part of
its lawful reserve; and no national banking association shall be a member of any clearing house in which such certificates shall not be receivable in the settlement of clearing-house balances: Provided, That the
Secretary of the Treasury shall suspend the issue of such gold certificates whenever the amount of gold coin and gold bullion in the Treasury
reserved for the redemption of United States notes falls below one
hundred millions of dollars; and the provisions of section fifty-two
hundred and seven of the Eevised Statutes shall be applicable to the
certificates herein authorized and directed to be issued.
102. EESERVE EEQUIREMENTS FOR GOLD BANKS. (SEC. 5186.)
Every association organized for the purpose of issuing notes payable
in gold shall at all times keep on hand not less than twenty-five per
centum of its outstanding circulation, in gold or silver coin of the
United States; and shall receive at par in the payment of debts the
gold notes of every other such association which at the time of such
payment is redeeming its circulating notes in gold coin of the United
States, and shall be subject to all the provisions of this Title: Provided, That, in applying the same to associations organized for issuing
gold notes, the terms ''lawful money" and "lawful money of the
United States" shall be construed to mean gold or silver coin of the
United States; and the circulation of such association shall not be
within the limitation of circulation mentioned in this Title.
103. EESERVE DEPOSIT IN CENTRAL EESERVE CITY. (SEC. 5195.)
Each association organized in any of the cities named in section fiftyone hundred and ninety-one may keep one-half of its lawful-money
reserve in cash deposits in the city of New York. But the foregoing
provision shall not apply to associations organized and located in the
city of San Francisco for the purpose of issuing notes payable in gold.
This section shall not relieve any association from its liability to redeem
its circulating notes at its own counter at par in lawful money on
demand.
104. ADDITIONAL EESERVE CITIES.—Sec. 1 of the act of March 3,
1887, provides that whenever three-fourths in number of the national
banks located in any city of the United States having a population of
fifty thousand people shall make application to the Comptroller of the
REPORT OF THE COMPTROLLER OP THE CURRENCY.
25
Currency, in writing, asking that the name of the city in which such
banks are located shall be added to the cities named in sections fiftyone hundred and ninety-one and fifty-one hundred and ninety-two of
the Eevised Statutes, the Comptroller shall have authority to grant
such request, and every bank located in such city shall at all times
thereafter have on hand, in lawful money of the United States, an
amount equal to at least twenty-five per centum of its deposits, as provided in sectionsfifty-onehundred and ninety-one andfifty-onehundred
and ninety-five of the Eevised Statutes.
105. ADDITIONAL CENTRAL EESERVE CITIES.—Sec. 2 of the act of
March 3, 1887, provides that whenever three-fourths in number of the
national banks located in any city of the United States having a population of two hundred thousand people shall make application to the Comptroller of the Currency, in writing, asking that such city may be a central
reserve city, like the city of New York, in which one-half of the lawfulmoney reserve of the national banks located in other reserve cities may
be deposited, as provided in sectionfifty-onehundred and ninety-five of
the Eevised Statutes, the Comptroller shall have authority, with the
approval of the Secretary of the Treasury, to grant such request, and
every bank located in such city shall at all times thereafter have on
hand, in lawful money of the United States, twenty-five per centum of
its deposits, as provided in section fifty-one hundred and ninety-one ol
the Eevised Statutes.
106. EEAL ESTATE. (SEC. 5137.) A national banking association may
purchase, hold, and convey real estate for the following purposes, and
for no others:
First. Such as shall be necessary for its immediate accommodation
in the transaction of its business.
Second. Such as shall be mortgaged to it in good faith by way of
security for debts previously contracted.
Third. Such as shall be conveyed to it in satisfaction of debts previously contracted in the course of its dealings.
Fourth. Such as it shall purchase at sales under judgments, decrees,
or mortgages held by the association, or shall purchase to secure debts
due to it.
But no such association shall hold the possession of any real estate
under mortgage, or the title and possession of any real estate purchased
to secure any debts due to it, for a longer period than Hye years.
107. INTEREST. (SEC. 5197.) Any association may take, receive,
reserve, and charge on any loan or discount made, or upon any note,
bill of exchange, or other evidences of debt, interest at the rate allowed
by the laws of the State, Territory, or District where the bank is
located, and no more, except that where by the laws of any State a
different rate is limited for banks of issue organized under State laws,
the rate so limited shall be allowed for associations organized or existing in any such State under this Title. When no rate is fixed by the
laws of the State, or Territory, or District, the bank may take, receive,
reserve, or charge a rate not exceeding seven per centum, and such
interest may be taken in advance, reckoning the days from which the
note, bill, or other evidence of debt has to run. And the purchase, discount, or sale of a bona fide bill of exchange, payable at another place
than the place of such purchase, discount, or sale, at not more than the
current rate of exchange for sight drafts in addition to the interest,
shall not be considered as taking or receiving a greater rate of interest.
108. PENALTY FOR UNLAWFUL INTEREST. (SEC. 5198.) The taking,
receiving, reserving, or charging a rate of interest greater than is
26
REPORT OF THE COMPTROLLER OF THE CURRENCY.
allowed by the preceding section, when knowingly done, shall be deemed
a forfeiture of the entire interest which the note, bill, or other evidence
of debt carries with it, or which has been agreed to be paid thereon.
In case the greater rate of interest has been paid, the person by whom
it has been paid, or his legal representatives, may recover back, in an
action in the nature of an action of debt, twice the amount of the interest thus paid from the association taking or receiving the same, provided such action is commenced within two years from the time the
usurious transaction occurred.
109. SURPLUS AND DIVIDENDS. (SEC. 5199.) The directors of any
aSvSOciation may semiannually declare a dividend of so much of the net
profits of the association as they shall judge expedient; but each association shall, before the declaration of a dividend, carry one-tenth part
of its net profits of the preceding half year to its surplus fund until
the same shall amount to twenty per centum of its capital stock.
110. EESTRICTION ON LOANS. (SEC. 5200.) The total liabilities to
any association, of any person, or of any company, corporation, or firm
for money borrowed, including in the liabilities of a company or firm
the liabilities of the several members thereof, shall at no time exceed
one-tenth part of the amount of the capital stock of such association
actually paid in. But the discount of bills of exchange drawn in good
faith against actually existing values, and the discount of commercial
or business paper actually owned by the person negotiating the same
shall not be considered as money borrowed.
111. ASSOCIATIONS MUST NOT HOLD THEIR OWN STOCK. (SEC.
5201.) No association shall make any loan or discount on the security
of the shares of its own capital stock, nor be the purchaser or holder of
any such shares, unless such security or purchase shall be necessary
to prevent loss upon a debt previously contracted in good faith; and
stock so purchased or acquired shall, within six months from the time
of its purchase, be sold or disposed of at public or private sale; or, in
default thereof, a receiver may be appointed to close up the business of
the association, according to section fifty two hundred and thirty-four.
112. RESTRICTION ON BANK'S LIABILITY. (SEC. 5202.) No association
shall at any time be indebted, or in any way liable, to an amount
exceeding the amount of its capital stock at such time actually paid in
and remaining undiminished by losses or otherwise, exeej)t on account
of demands of the nature following:
First. Notes of circulation.
Second. Moneys deposited with or collected by the association.
Third. Bills of exchange or drafts drawn against money actually on
deposit to the credit of the association, or due thereto.
Fourth. Liabilities to the stockholders of the association for dividends and reserve profits.
113. IMPROPER USE OF BANK CIRCULATION. (SEC. 5203.) No association shall, either directly or indirectly, pledge or hypothecate any of
its notes of circulation for the purpose of procuring money to be paid
in on its capital stock, or to be used in its banking operations, or otherwise; nor shall any association use its circulating notes, or any part
thereof, in any manner or form, to create or increase its capital stock.
114. UNEARNED DIVIDENDS PROHIBITED. (SEC. 5204.) No association, or any member thereof, shall, during the time it shall continue its
banking operations, withdraw, or permit to be withdrawn, either in the
form of dividends or otherwise,, any portion of its capital. If losses
have at any time been sustained by any such association equal to or
exceeding its undivided profits then on hand, no dividend shall be
REPORT OF THE COMPTROLLER OF THE CURRENCY.
27
made; and no dividend shall ever be made by any association, while it
continues its banking operations, to an amount greater than its net
profits then on hand, deducting therefrom its losses and bad debts.
All debts due to any associations, on which interest is past due and
unpaid for a period of six months, unless the same are well secured,
and in process of collection, shall be considered bad debts within the
meaning of this section. But nothing in this section shall prevent
the reduction of the capital stock of the association under section
fifty-one hundred and forty-three.
115. ASSESSMENT FOR IMPAIRMENT OF CAPITAL. (SEC. 5205.)
Every association which shall have failed to pay up its capital stock, as
required by law, and every association whose capital stock shall have
become impaired by losses or otherwise, shall, within three months after
receiving notice thereof from the Comptroller of the Currency, pay the
deficiency in the capital stock, by assessment upon the shareholders
pro rata for the amount of capital stock held by each; and the Treasurer of the United States shall withhold the interest upon all bonds
held by him in trust for any such association, upon notification from
the Comptroller of the Currency, until otherwise notified by him. If
any such association shall fail to pay up its capital stock, and shall
refuse to go into liquidation, as provided by law, for three months after
receiving notice from the Comptroller, a receiver may be appointed to
close up the business of the association, according to the provisions of
section fifty-two hundred and thirty-four.
116. PROVISION FOR ENFORCEMENT OF ASSESSMENT.—Sec. 4 of the
act of June 30, 1876, provides that if any shareholder or shareholders
of a bank shall neglect or refuse, after three months' notice, to pay the
assessment, as provided in this section, it sball be the duty of the board
of directors to cause a sufficient amount of the capital stock of such
shareholder or shareholders to be sold at public auction (after thirty
days' notice shall be given by posting such notice of sale in the office
of the bank and by publishing such notice in a newspaper of the city
or town in which the bank is located, or in a newspaper published
nearest thereto) to make good the deficiency; and the balance, if any,
shall be returned to such delinquent shareholder or shareholders.
117. PROHIBITION AGAINST UNCURRENT NOTES. (SEC. 5206.) No
association shall at any time pay out on loans or discounts, or in purchasing drafts or bills of exchange, or in payment of deposits, or m any
other mode pay or put in circulation the notes of any bank or banking
association which are not, at any such time, receivable, at par, on
deposit, and in payment of debts by the association so paying out or
circulating such notes; nor shall any association knowingly pay out or
put in circulation any notes issued by any bank or banking association
which at the time of such paying out or putting in circulation is not
redeeming its circulating notes in lawful money of the United States.
118. LIST OF SHAREHOLDERS. (SEC. 5210.) The president and
cashier of every national banking association shall cause to be kept at
all times a full and correct list of the names and residences of all the
shareholders in the association, and the number of shares held by each,
in the office where its business is transacted. Such list shall be subject
to the inspection of all the shareholders and creditors of the association,
and the officers authorized to assess taxes under State authority, during business hours of each day in which business may be legally transacted. A copy of such list, on the first Monday of July of each year,
verified by the oath of such president or cashier, shall be transmitted
to the Comptroller of the Currency,
28
REPORT OF THE COMPTROLLER OF THE CURRENCY.
119. EEPORTS OF CONDITION. (SEC. 5211.) Every association shall
make to the Comptroller of the Currency not less than five reports during each year, according to the form which maybe prescribed by him,
verified by the oath or affirmation of the president or cashier of such
association, and attested by the signature of at least three of the
directors. Each such report shall exhibit, in detail and under appropriate heads, the resources and liabilities of the associations at the
close of business on any past day by him specified, and shall be transmitted to the Comptroller within five days after the receipt of a request
or requisition therefor from him, and in the same form in which it is
made to the Comptroller shall be published in a newspaper published
in the place where such association is established, or if there is no
newspaper in the place, then in one published nearest thereto in the
same county, at the expense of the association j and such proof of
publication shall be furnished as may be required by the Comptroller.
The Comptroller shall also have power to call for special reports from
any particular association whenever in his judgment the same are
necessary in order to a full and complete knowledge of its condition.
120. VERIFICATION OF SUCH EEPORTS.—The act of February 26,
1881, provides that the oath or affirmation required by section fifty-two
hundred and eleven of the Revised Statutes, verifying the returns made
by national banks to the Comptroller of the Currency, when taken
before a notary public properly authorized and commissioned by the
State in which such notary resides and the bank is located, or any other
officer having an official seal, authorized in such State to administer
oaths, shall be a sufficient verification as contemplated by said section
fifty-two hundred and eleven: Provided, That the officer administering
the oath is not an officer of the* bank.
121. EEPORTS OF DIVIDENDS AND EARNINGS. (SEC. 5212.) In addition to the reports required by the preceding section, each association
shall report to the Comptroller of the Currency, within ten days after
declaring any dividend, the amount of such dividend and the amount
of net earnings in excess of such dividend. Such reports shall be
attested by the oath of the president or cashier of the association.
122. PENALTY FOR FAILURE TO EEPORT. (SEC. 5213.) Every association which fails to make and transmit any report required under
either of the two preceding sections shall be subject to a penalty of
one hundred dollars for each day after the periods, respectively, therein
mentioned, that it delays to make and transmit its report. Whenever
any association delays or refuses to pay the penalty herein imposed,
after it has been assessed by the Comptroller of the Currency, the
amount thereof may be retained by the Treasurer of the United States,
upon the order of the Comptroller of the Currency, out of the interest,
as it may become due to the association, on the bonds deposited with
him to secure circulation. All sums of money collected for penalties
under this section shall be paid into the Treasury of the United States.
123. EEPORTS OF OTHER BANKS.—Sec. 6 of the act of June 30,1876,
provides that all savings banks or savings and trust companies organized under authority of any act of Congress shall be, and are hereby,
required to make, to the Comptroller of the Currency, and publish, all
the reports which national banking associations are required to make
and publish under the provisions of sectionsfifty-twohundred and eleven,
fifty-two hundred and twelve, andfifty-twohundred and thirteen of the
Eevised Statutes, and shall be subject to the same penalties for failure
to make or publish such reports as are therein provided 5 which penalties may be collected by suit before any court of the United States in
REPORT OF THE COMPTROLLER OF THE CURRENCY.
29
the district in which, said savings banks or savings and trust companies may be located. And all savings or other banks now organized, or
which shall hereafter be organized in the District of Columbia, under
any act of Congress, which shall have capital stock paid up in whole
or in part, shall be subject to all the provisions of the Eevised Statutes,
and of all acts of CoDgress applicable to national banking associations,
so far as the same may be applicable to such savings or other banks:
Provided, That such savings banks now established shall not be required
to have a paid-in capital exceeding one hundred thousand dollars.
324. STATE TAXATION OF NATIONAL BANKS. (SEC. 5219.) Nothing
herein shall prevent all the shares in any association from being
included in the valuation of the personal property of the owner or
holder of such shares, in assessing taxes imposed by authority of the
State within which the association is located; but the legislature of
each State may determine and direct the manner and place of taxing
all the shares of national banking associations located within the State,
subject only to the two restrictions, that the taxation shall not be at a
greater rate than is assessed upon other moneyed capital in the hands
of individual citizens of such State, and that the shares of any national
banking association owned by nonresidents of any State shall be taxed
in the city or town where the bank is located, and not elsewhere.
Nothing herein shall be construed to exempt the real property of associations from either State, county, or municipal taxes, to the same
extent, according to its value, as other real property is taxed.
125. NATIONAL-BANK EXAMINERS. (SEC. 5240.) The Comptroller of
the Currency, with the approval of the Secretary of the Treasury,
shall, as often as shall be deemed necessary or proper, appoint a suitable person or persons to make an examination of the affairs of every
banking association, who shall have power to make a thorough examination into all the affairs of the association, and in doing so to examine
any of the officers and agents thereof on oath; and shall make a fall
and detailed report of the condition of the association to the Comptroller.
126. QUALIFICATION FOR EXAMINER. (SEC. 5240.) But no person
shall be appointed to examine the affairs of any banking association
of which he is a director or other officer.
127. COMPENSATION OF EXAMINERS. (SEC. 5240.) All persons appointed to be examiners of national banks not located in the redemption cities specified in section five thousand one hundred and ninety-two
of the Revised Statutes of the United States, or in any one of the States
of Oregon, California, and Nevada, or in the Territories, shall receive
compensation for such examination as follows: For examining national
banks having a capital less than one hundred thousand dollars, twenty
dollars; those having a capital of one hundred thousand dollars and less
than three hundred thousand dollars, twenty-five dollars; those having
a capital of three hundred thousand dollars and less than four hundred
thousand dollars, thirty-five dollars; those having a capital of four hundred thousand dollars and less than five hundred thousand dollars,
forty dollars; those having a capital of five hundred thousand dollars
and less than six hundred thousand dollars, fifty dollars; those having
a capital of six hundred thousand dollars and over, seventy-five dollars;
which amounts shall be assessed by the Comptroller of the Currency
upon, and paid by, the respective association so examined, and shall
be in lieu of the compensation and mileage heretofore allowed for making said examinations; and persons appointed to make examinations of
national banks in the cities named in section five thousand one hundred
and ninety-two of the Revised Statutes of the United States, or in any
30
REPORT OF THE COMPTROLLER OF THE CURRENCY.
one of the States of Oregon, California, and Nevada, or in the Territories, shall receive such compensation as may be fixed b.y the Secretary of the Treasury upon the recommendation of the Comptroller of
the Currency; and the same shall be assessed and paid in the manner
hereinbefore provided.
128. EXAMINATIONS IN DISTRICT OF COLUMBIA. (SEC. 332.)
The
Comptroller of the Currency, in addition to the powers conferred upon
him by law for the examination of national banks, is further authorized,
whenever he may deem it useful, to cause examination to be made into
the condition of any bank in the District of Columbia organized under
act of Congress. The Comptroller, at his discretion, may report to
Congress the results of such examination. The expense necessarily
incurred in any such examination shall be paid out of any appropriation made by Congress for special bank examinations.
129. LIMITATION OF YISITORIAL POWERS. (SEC. 5241.) No association shall be subject to any visitor]al powers other than such as are
authorized by this Title, or are vested in the courts of justice.
130. USE OF "NATIONAL" IN TITLES. (SEC. 5243.) All banks not
organized and transacting business under the national currency laws,
or under this Title, and all persons or corporations doing the business
of bankers, brokers, or savings institutions, except
savings banks
authorized by Congress to use the word " nationalw as a part of their
corporate name, "are prohibited from using the word "national" as a
portion of the name or title of such bank, corporation, firm, or partnership; and any violation of this prohibition committed after the third
day of September, eighteen hundred and seventy-three, shall subject
the party chargeable therewith to a penalty of fifty dollars for each day
during which it is permitted or repeated.
CHAPTER SIX.
EXTENSION OF CORPORATE EXISTENCE.
131. Corporate existence may be extended.
132. Consent of two-thirds necessary.
133. Special examination of bank.
134. Status not changed by extension.
135. Dissenting shareholders may withdraw.
131. CORPORATE EXISTENCE MAY BE EXTENDED.—The act of July
12, 1882, provides: (SEC. 1) That any national banking association
organized under the acts of February twenty-fifth, eighteen hundred
and sixty-three, June third, eighteen hundred and sixty-four, and
February fourteenth, eighteen hundred and eighty, or under sections
fifty-one hundred and thirty-three, fifty-one hundred and thirty-four,
fifty-one hundred and thirty-five, fifty-one hundred and thirty-six, and
fifty-one hundred andfifty-fourof the Eevised Statutes of the United
States, may, at any time within the two years next previous to the
date of the expiration of its corporate existence under present law, and
with the approval of the Comptroller of the Currency, to be granted
as hereinafter provided, extend its period of succession by amending
its articles of association for a term of not more than twenty years
from the expiration of the period of succession named in said, articles
of association, and shall have succession for such extended period,
unless sooner dissolved by the act of shareholders owning two-thirds of
its stock, or unless its franchise becomes forfeited by some violation of
law, or unless hereafter modified or repealed.
REPORT OF THE COMPTROLLER OF THE CURRENCY.
31
132. CONSENT OF TWO-THIRDS NECESSARY. (SEC. 2.) That such
amendment of said articles of association shall be authorized by the
consent in writing of shareholders owning not less than two-thirds of
the capital stock of the association; and the board of directors shall
cause such consent to be certified under the seal of the association, by
its president or cashier, to the Comptroller of the Currency, accompanied by an application made by the president or cashier for the
approval of the amended articles of association by the Comptroller;
and such amended articles of association shall not be valid until the
Comptroller shall give to such association a certificate under his hand
and Seal that the association has complied with all the provisions
required to be complied with and is authorized to have succession for
the extended period named in the amended articles of association.
133. SPECIAL EXAMINATION OF BANK. (SEC. 3.) That upon the
receipt of the application and certificate of the association provided for
in the preceding section, the Comptroller of the Currency shall cause a
special examination to be made, at the expense of the association, to
determine its condition; and if after, such examination or otherwise it
appears to him that said association is in a satisfactory condition, he
shall grant his certificate of approval provided for in the preceding section, or if it appears that the condition of said association is not satisfactory, he shall withhold such certificate of approval.
134. STATUS NOT CHANGED BY EXTENSION. (SEC. 4.) That any association so extending the period of its succession shall continue to enjoy
all the rights and privileges and immunities granted and shall continue
to be subject to all the duties, liabilities, and restrictions imposed by
the Eevised Statutes of the United States and other acts having reference to national banking associations, and it shall continue to be in all
respects the identical association it was before the extension of its
period of succession.
135. DISSENTING SHAREHOLDERS MAY WITHDRAW. (SEC. 5.) That
when any national banking association has amended its articles of
association as provided in this act, and the Comptroller has granted his
certificate of approval, any shareholder not assenting to such amendment may give notice in writing to the directors, within thirty days
from the date of the certificate of approval, of his desire to withdraw
from said association, in which case he shall be entitled to receive from
said banking association the value of the shares so held by him, to be
ascertained by an appraisal made by a committee of three persons, one
to be selected by such shareholder, one by the directors, and the third
by the first two; and in case the value so fixed shall not be satisfactory to any such shareholder, he may appeal to the Comptroller of the
Currency, who shall cause a reappraisal to be made, which shall be
final and binding; and if said reappraisal shall exceed the value fixed
by said committee, the bank shall pay the expenses of said reappraisal,
and otherwise the appellant shall pay said expenses; and the value
so ascertained and determined shall be deemed to be a debt due, and
he forthwith paid, to said shareholder, from said bank; and the snares
so surrendered and appraised shall, after due notice, be sold at public
sale, within thirty days after the final appraisal provided in this section:
Provided, That in the organization of any banking association intended
to replace any existing banking association, and retaining the name
thereof, the holders of stock in the expiring association shall be entitled
to preference in the allotment of the shares of the new association in
proportion to the number of shares held by them respectively in the
expiring association.
32
REPORT OF THE COMPTROLLER OF THE CURRENCY.
CHAPTEE SEVEN.
LIQUIDATION AND RECEIVERSHIP.
136. Two-thirds vote required for liquidation.
137. Notice of voluntary liquidation.
138. Deposit of lawful money.
139. No deposit required for consolidation.
140. Bonds of liquidating banks.
141. Banks whose existence has expired.
142. Protest of bank circulation.
143. Bonds forfeited if circulation is dishonored.
144. Bank may enjoin further proceedings.
145. Where proceedings must be brought.
146. Suspension of business after default.
147. Notice to present circulation for redemption.
148. Bonds sold at public auction.
149. First lien for redeeming circulation.
150.
151.
152.
153.
154.
155.
156.
157.
158.
159.
160.
161.
162.
163.
Bonds sold at private sale.
Appointment and duties of receiver,
When receiver may be appointed.
Notice to creditors of insolvent
banks.
Distribution of assets of insolvent
banks.
Expenses of receivership—how paid.
Forfeiture of charter.
Individual liability of directors.
Receiver may purchase property to
protect his trust.
Taxes on insolvent national banks
remitted.
Appointment and qualification of
shareholders' agent.
Duties of shareholders' agent.
Illegal preference of creditors.
Creditor's bill against shareholders.
136. TWO-THIRDS VOTE BEQUIRED FOR LIQUIDATION. (SEC. 5220.)
Any association may go into liquidation and be closed by the vote of
its shareholders owning two-thirds of its stock.
137. NOTICE OF VOLUNTARY LIQUIDATION. (SEC. 5221.) Whenever a vote is taken to go into liquidation it shall be the duty of the
board of directors to cause notice of this fact to be certified, under the
seal of the association, by its president or cashier, to the Comptroller
of the Currency, and the publication thereof to be made for a period of
two months in a newspaper published in the city of New York, and also
in a newspaper published in the city or town in which the association
is located, or if no newspaper is there published, then in the newspaper
published nearest thereto, that the association is closing up its affairs,
and notifying the holders of its notes and other creditors to present the
notes and other claims against the association for payment.
138. DEPOSIT OF LAWFUL MONEY. (SEC. 5222.) Within six months
from the date of the vote to go into liquidation the association shall
deposit with the Treasurer of the United States lawful money of the
United States sufficient to redeem all its outstanding circulation.
The Treasurer shall execute duplicate receipts for money thus deposited,
and deliver one to the association and the other to the Comptroller of
the Currency, stating the amount received by him, and the purpose for
which it has been received; and the money snail be paid into the Treasury of the United States, and placed to the credit of such association
upon redemption account.
139. No DEPOSIT EEQUIRED FOR CONSOLIDATION. (SEC. 5223.) An
association which is in good faith winding up its business for the purpose of consolidating with another association shall not be required
to deposit lawful money for its outstanding circulation; but its assets
and liabilities shall be reported by the association with which it is in
process of consolidation.
140. BONDS OF LIQUIDATING BANKS. (SEC. 5224.) W n e n e . v e r a efficient deposit of lawful money to redeem the outstanding circulation
of an association proposing to close its business has been made, the
bonds deposited by the association to secure payment of its notes shall
be reassigned to it, in the manner prescribed by section fifty-one hun
REPORT OF THE COMPTROLLER OF THE CURRENCY.
33
dred and sixty-two. And thereafter the association and its shareholders shall stand discharged from all liabilities upon the circulating notes,
and those notes shall be redeemed at the Treasury of the United States.
And if any such bank shall fail to make the deposit and take up its
bonds for thirty days after the expiration of the time specified, the
Comptroller of the Currency shall have power to sell the bonds pledged
for the circulation of said bank at public auction in New York City,
and, after providing for the redemption and cancellation of said circulation, and the necessary expenses of the sale, to pay over any balance
remaining to the bank or its legal representatives.
141. BANKS WHOSE EXISTENCE HAS EXPIRED.—Sec. 7 of the
act
of July 12, 1882, provides that national banking associations whose
corporate existence has expired or shall hereafter expire, and which do
not avail themselves of the provisions of this act, shall be required to
comply with the provisions of sections fifty-two hundred and twentyone and fifty-two hundred and twenty-two of the Eevised Statutes
in the same manner as if the shareholders had voted to go into liquidation, as provided in section fifty-two hundred and twenty of the
Eevised Statutes; and the provisions of sections fifty-two hundred
and twenty-four and fifty-two hundred and twenty-five of the Revised
Statutes shall also be applicable to such associations, except as modified by this act; and the franchise of such associations is hereby
extended for the sole purpose of liquidating their affairs until such
affairs are finally closed.
142. PROTEST OF BANK CIRCULATION. (SEC. 5226.) Whenever any
national banking association fails to redeem in the lawful money of the
United States any of its circulating notes, upon demand of payment
duly made during the usual hours of business, at the office of such
association, the holder may cause the same to be protested, in one package by a notary public, unless the president or cashier of the association whose notes are presented for payment offers to waive demand
and notice of the protest, and, in pursuance of such offer, makes, signs,
and delivers to the party making such demand an admission in writing,
stating the time of the demand, the amount demanded, and the fact of
the nonpayment thereof. The notary public, on making such protest,
or upon receiving such admission, shall forthwith forward such admission or notice of protest to the Comptroller of the Currency, retaining a
copy thereof. If, however, satisfactory proof is produced to the notary
public that the payment of the notes demanded is restrained by order
of any court of competent jurisdiction, he shall not protest the same.
When the holder of any notes causes more than one note or package
to be protested on the same day, he shall not receive pay for more than
one protest.
143. BONDS FORFEITED IF CIRCULATION IS DISHONORED. (SEC.
5227.) On receiving notice that any national banking association has
failed to redeem any of its circulating notes, as specified in the preceding section, the Comptroller of the Currency, with the concurrence of
the Secretary of the Treasury, may appoint a special agent, of whose
appointment immediate notice shall be given to such association, who
shall immediately proceed to ascertain whether it has refused to pay
its circulating notes in the lawful money of the United States, when
demanded, and shall report to the Comptroller the fact so ascertained.
If from such protest, and the report so made, the Comptroller is satisfied
that such association has refused to pay its circulating notes and is in
default, he shall, within thirty days after he has received notice of such
failure, declare the bonds deposited by such association forfeited to the
Digitized forUnited
FRASERStates, and they shall thereupon be so forfeited.
http://fraser.stlouisfed.org/CUR 98
3
Federal Reserve Bank of St. Louis
34
REPORT OF THE COMPTROLLER OF THE CURRENCY.
144. BANK MAY ENJOIN FURTHER PROCEEDINGS. (SEC. 5237.)
Whenever an association against which proceedings have been instituted, on account of any alleged refusal to redeem its circulating notes
as aforesaid, denies having failed to do so, it may, at any time within
ten days after it has been notified of the appointment of an agent, as
provided in section fifty-two hundred and twenty-seven, apply to the
nearest circuit, or district, or Territorial court of the United States to
enjoin further proceedings in the premises; and such court, after citing
the Comptroller of the Currency to show cause why further proceedings should not be enjoined, and after the decision of the court or finding of the jury that such association has not refused to redeem its
circulating notes, when legally presented, in the lawful money of the
United States, shall make an order enjoining the Comptroller, and any
receiver acting under his direction, from all further proceedings on
account of such alleged refusal.
145. WHERE PROCEEDINGS MUST BE BROUGHT. (SEC. 736.)
All
proceedings by any national banking association to enjoin the Comptroller of the Currency, under the provisions of any law relating to
national banking associations, shall be had in the district where such
association is located.
146. SUSPENSION OF BUSINESS AFTER DEFAULT. (SEC. 5228.) After
a default on the part of an association to pay any of its circulating notes
has been ascertained by the Comptroller, and notice thereof has been
given by him to the association, it shall not be lawful for the association suffering the same to pay out any of its notes, discount any notes
or bills, or otherwise prosecute the business of banking, except to
receive and safely keep money belonging to it, and to deliver special
deposits.
147. NOTICE TO PRESENT CIRCULATION FOR BEDEMPTION. (SEC.
5229.) Immediately upon declaring the bonds of an association forfeited for nonpayment of its notes, the Comptroller shall give notice,
in such manner as the Secretary of the Treasury shall, by general rules
or otherwise direct, to the holders of the circulating notes of such association, to present them for payment at the Treasury of the United
States; and the same shall be paid as presented in lawful money of the
United States; whereupon the Comptroller may, in his discretion, cancel an amount of bonds pledged by such association equal at current
market rates, not exceeding par, to the notes paid.
148. BONDS SOLD AT PUBLIC AUCTION. (SEC. 5230.) Whenever
the Comptroller has become satisfied, by the protest or the waiver and
admission specified in section fifty-two hundred and twenty-six, or by
the report provided for in section fifty-two hundred and twenty-seven,
that any association has refused to pay its circulating notes, he may,
instead of canceling its bonds, cause so much of them as may be
necessary to redeem its outstanding notes to be sold at public auction
in the city of New York, after giving thirty days' notice of such sale
to the association.
149. FIRST LIEN FOR BEDEEMING CIRCULATION. (SEC. 5230.) For
any deficiency in the proceeds of all the bonds of an association, when
thus sold, to reimburse to the United States the amount expended in
paying the circulating notes of the association, the United States shall
have a paramount lien upon all its assets; and such deficiency shall
be made good out of such assets in preference to any and all other
claims whatsoever, except the necessary costs and expenses of administering the same.
150. BONDS SOLD AT PRIVATE SALE. (SEC. 5231.) The Comptroller
if he deems it for the interest of the United States, sell at private
Digitized formay,
FRASER
REPORT OF THE COMPTROLLER OF THE CURRENCY.
35
sale any of the bonds of an association shown to have made default in
paying its notes, and receive therefor either money or the circulating
notes of the association. But no such bonds shall be sold by private
sale for less than par, nor for less than the market value thereof at the
time of sale; and no sales of any such bonds, either public or private,
shall be complete until the transfer of the bonds shall have been made
with the formalities prescribed by sectionsfifty-onehundred and sixtytwo, fifty-one hundred and sixty-three, andfifty-onehundred and sixtyfour.
151. APPOINTMENT AND DUTIES OF EECEIVER. (SEC. 5234.) On
becoming satisfied, as specified in sections fifty-two hundred and
twenty-six andfifty-twohundred and twenty-seven, that any association
has refused to pay its circulating notes as therein mentioned, and is in
default, the Comptroller of the Currency may forthwith appoint a
receiver, and require of him such bond and security as he deems proper.
Such receiver, under the direction of the Comptroller, shall take possession of the books, records, and assets of every description of such
association, collect all debts, dues, and claims belonging to it, and,
upon the order of a court of record of competent jurisdiction, may sell
or compound all bad or doubtful debts, and, on a like order, may sell
all the real and personal property of such association, on such terms as
the court shall direct; and may, if necessary to pay the debts of such
association, enforce the individual liability of the stockholders. Such
receiver shall pay over all money so made to the Treasurer of the United
States, subject to the order of the Comptroller, and also make report
to the Comptroller of all his acts and proceedings.
152. WHEN EECEIVER MAY BE APPOINTED.—Sec. 1 of the act of
June 30,1876, provides that whenever any national banking association
shall be dissolved, and its rights, privileges, and franchises declared
forfeited, as prescribed in section fifty-two hundred and thirty-nine of
the Eevised Statutes of the United States, or whenever any creditor of
any national banking association shall have obtained a judgment against
it in any court of record, and made application, accompanied by a certificate from the clerk of the court stating that such judgment has been
rendered and has remained unpaid for the space of thirty days, or whenever the Comptroller shall become satisfied of the insolvency of the
national banking association, he may, after due examination of its
affairs, in either case, appoint a receiver, who shall proceed to close up
such association, and enforce the personal liability of the shareholders,
as provided in sectionfifty-twohundred and thirty-four of said statutes.
A receiver may also be appointed, under the provisions of section fiftytwo hundred and thirty-four of the Eevised Statutes of the United
States, for the following violations of law:
Where the capital stock of a national bank has not been fully paid in
and it is thus reduced below the legal minimum and remains so for
thirty days. (Sec. 5141, E. S.)
For failure to make good the lawful-money reserve within thirty days
after notice. (Sec. 5191, E. S.)
Where a bank purchases or acquires its own stock, other than to prevent loss upon a debt previously contracted in good faith, and the same
is not sold or disposed of within six months from the time of its purchase.
(Sec. 5201, E. S.)
Where an association fails to make good any impairment in its capital
stock and refuses to go into liquidation within three months after receiving notice. (Sec. 5205, E. S.)
The act of any officer, clerk, or agent of any association in violation
the provisions relating to the false certification of checks shall subDigitized forof
FRASER
ject such bank to the appointment of a receiver. (Sec. 5208, E. S.)
36
REPORT OF THE COMPTROLLER OF THE CURRENCY.
153. NOTICE TO CREDITORS OF INSOLVENT BANKS. (SEC. 5235.) The
Comptroller shall, upon appointing a receiver, cause notice to be given,
by advertisement in such newspapers as he may direct, for three consecutive months, calling on all persons who may have claims against
such association to present the same and to make legal proof thereof.
154. DISTRIBUTION OF ASSETS OF INSOLVENT BANKS. (SEC. 5236.)
From time to time, after full provision has been first made for refunding to the United States any deficiency in redeeming the notes of such
association, the Comptroller shall make a ratable dividend of the money
so paid over to him by such receiver on all such claims as may have
been proved to his satisfaction or adjudicated in a court of competent
jurisdiction, and, as the proceeds of the assets of such association are
paid over to him, shall make further dividends on all claims previously
proved or adjudicated 5 and the remainder of the proceeds, if any, shall
be paid over to the shareholders of such association, or their legal representatives, in proportion to the stock by them respectively held.
155. EXPENSES OF BECEIVERSHIP—How PAID. (SEC. 5238.) All fees
for protesting the notes issued by any national banking association
shall be paid by the person procuring the protest to be made, and such
association shall be liable therefor; but no part of the bonds deposited
by such association shall be applied to the payment of such fees. All
expenses of any preliminary or other examinations into the condition
of any association shall be paid by such association. All expenses of
any receivership shall be paid out of the assets of such association
before distribution of the proceeds thereof.
156. FORFEITURE OF CHARTER. (SEC. 5239.) If the directors of
any national banking association shall knowingly violate, or knowingly
permit any of the officers, agents, or servants of the association to violate, any of the provisions of this Title, all the rights, privileges, and
franchises of the association shall be thereby forfeited. Such violation
shall, however, be determined and adjudged by a proper circuit, district, or Territorial court of the United States, in a suit brought for
that purpose by the Comptroller of the Currency, in his own name,
before the association shall be declared dissolved.
157. INDIVIDUAL LIABILITY OF DIRECTORS. (SEC. 5239.) And in
cases of such violation every director who participated in or assented
to the same shall be held liable in his personal and individual capacity
for all damages which the association, its shareholders, or any other
person shall have sustained in consequence of such violation.
158. RECEIVER MAY PURCHASE PROPERTY TO PROTECT H I S
TRUST.—The act of March 29,1886, provides: (SEC. 1.) That whenever
the receiver of any national bank duly appointed by the Comptroller of
the Currency, and who shall have duly qualified and entered upon the
discharge of his trust, shall find it in his opinion necessary, in order to
fully protect and benefit his said trust, to the extent of any and all
equities that such trust may have in any property, real or personal, by
reason of any bond, mortgage, assignment, or other proper legal claim
attaching thereto, and which said property is to be sold under any
execution, decree of foreclosure, or proper order of any court of jurisdiction, he may certify the facts in the case, together with his opinion as
to the value of the property to be sold and the value of the equity his
said trust may have in the same, to the Comptroller of the Currency,
together with a request for the right and authority to use and employ
so much of the money of said trust as may be necessary to purchase
such property at such sale.
SEC. 2. That such request, if approved by the Comptroller of the
Digitized forCurrency,
FRASER shall be, together with the certificate of facts in the case and
REPORT OF THE COMPTROLLER OF THE CURRENCY.
37
his recommendation as to the amount of money which in his judgment
should be so used and employed, submitted to the Secretary of the
Treasury, and if the same shall likewise be approved by him the request shall be by the Comptroller of the Currency allowed, and notice
thereof, with copies of the request, certificate of facts, and indorsement of approvals, shall be filed with the Treasurer of the United
States.
SEC. 3. That whenever any such request shall be allowed as hereinbefore provided, the said Comptroller of the Currency shall be, and is,
empowered to draw upon and from such funds of any such trust as
may be deposited with the Treasurer of the United States for the benefit of the bank in interest to the amount as may be recommended and
allowed and for the purpose for which such allowance was made: Provided, however, That all payments to be made for or on account of the
purchase of any such property and under any such allowance shall be
made by the Comptroller of the Currency direct, with the approval of
the Secretary of the Treasury, for such purpose only and in such manner as he may determine and order.
159. TAXES ON INSOLVENT NATIONAL BANKS BEMITTED.—The act
of March 1,1879, provides that whenever and after any bank has ceased
to do business by reason of insolvency or bankruptcy no tax shall be
assessed or collected, or paid into the Treasury of the United States, on
account of such bank, which shall diminish the assets thereof necessary
Tor the full payment of all its depositors; and such tax shall be abated
from such national banks as are found by the Comptroller of the Currency to be insolvent; and the Commissioner of Internal Eevenue, when
the facts shall so appear to him, is authorized to remit so much of said
tax against insolvent State and savings banks as shall be found to
affect the claims of their depositors.
160. APPOINTMENT
AND
QUALIFICATION OF SHAREHOLDERS'
AGENT.—Sec. 3 of the act of June 30,1876, as amended by acts of August 3,1892, and March 2,1897, provides that whenever any association
shall have been or shall be placed in the hands of a receiver, as provided
in section fifty-two hundred and thirty-four and other sections of the
Kevised Statutes of the United States, and when, as provided in section
fifty-two hundred and thirty six thereof, the Comptroller of the Currency
shall have paid to each and every creditor of such association, not including shareholders who are creditors of such association, whose claim
or claims as such creditor shall have been proved or allowed as therein
prescribed, the full amount of such claims, and all expenses of the receivership and the redemption of the circulating notes of such association
shall have been provided for by depositing lawful money of the United
States with the Treasurer of the United States, the Comptroller of the
Currency shall call a meeting of the shareholders of such association by
giving notice thereof for thirty days in a newspaper published in the
town, city, or county where the business of such association was carried
on, or if no newspaper is there published, in the newspaper published
nearest thereto. At such meeeting the shareholders shall determine
whether the receiver shall be continued and shall wind up the affairs of
such association, or whether an agent shall be elected for that purpose,
and in so determining the said shareholders shall vote by ballot, in
person or by proxy, each share of stock entitling the holder to one vote,
and the majority of the stock in value and number of shares shall be
necessary to determine whether the said receiver shall be continued, or
whether an agent shall be elected. In case such majority shall determine that the suid receiver shall be continued, the said receiver shall
38
REPORT OF THE COMPTROLLER OF THE CURRENCY.
thereupon proceed with the execution of his trust, and shall sell, dispose of, or otherwise collect the assets of the said association, and shall
possess all the powers and authority, and be subject to all the duties
and liabilities originally conferred or imposed upon him by his appointment as such receiver, so far as the same remain applicable. In case
the said meeting shall, by the vote of a majority of the stock in value
and number of shares, determine that an agent shall be elected, the
said meeting shall thereupon proceed to elect an agent, voting by ballot,
in person or by proxy, each share of stock entitling the holder to one
vote, and the person who shall receive votes representing at least a
majority of stock in value and number shall be declared the agent for
the purposes hereinafter provided; and whenever any of the shareholders of the association shall, after the election of such agent, have
executed and filed a bond to the satisfaction of the Comptroller of the
Currency, conditioned for the payment and discharge in full of each
and every claim that may thereafter be proved and allowed by and
before a competent court, and for the faithful performance of all and singular the duties of such trust, the Comptroller and the receiver shall
thereupon transfer and deliver to such agent all the undivided or uncol
lected or other assets of such association then remaining in the hands or
subject to the order and control of said Comptroller and said receiver, or
either of them; and for this purpose said Comptroller and said receiver
are hereby severally empowered and directed to execute any deed,
assignment, transfer, or other instrument in writing that may be necessary and proper; and upon the execution and delivery of such instrument to the said agent the said Comptroller and the said receiver shall
by virtue of this act be discharged from any and all liabilities to such
association and to each and all the creditors and shareholders thereof.
161. DUTIES OF SHAREHOLDERS? AGENT.—Sec. 3 of the act of June
30,1876, as amended by acts of August 3, 1892, and March 2,1897, provides : XJpon receiving such deed, assignment, transfer, or other instrument, the person elected such agent shall hold, control, and dispose of
the assets and property of such association which he may receive under
the terms hereof for the benefit of the shareholders of such association,
and he may in his own name, or in the name of such association, sue and
be sued and do all other lawful acts and things necessary to finally settle and distribute the assets and property in his hands, and may sell,
compromise, or compound the debts due to such association, with the
consent and approval of the circuit or district court of the United States
for the district where the business of such association was carried on.
and shall at the conclusion of his trust render to such district or circuit
court a full account of all his proceedings, receipts, and expenditures as
such agent, which court shall, upon due notice, settle and adjust such
accounts and discharge said agent and the sureties upon said bond.
And in case any such agent so elected shall refuse to serve, or die,
resign, or be removed, any shareholder may call a meeting of the shareholders of such association in the town, city, or village where the business of the said association was carried on, by giving notice thereof
for thirty days in a newspaper published in said town, city, or village,
or if no newspaper is there published, in the newspaper published nearest
thereto, at which meeting the shareholders shall elect an agent, voting
by ballot, in person or by proxy, each share of stock entitling the holder
to one vote, and when such agent shall have received votes representing at least a majority of the stock in value and number of shares, and
shallhave executed a bond to the shareholders conditioned for the faithful performance of his duties, in the penalty fixed by the shareholders
REPORT OF THE COMPTROLLER OF THE CURRENCY.
39
at said meeting, with two sureties, to be approved by a judge of a court
of record, and file said bond in the office of the clerk of a court of
record in the county where the business of said association was carried on? he shall have all the rights, powers, and duties of the agent
first elected as hereinbefore provided At any meeting held as hereinbefore provided administrators or executors of deceased shareholders
may act and sign as the decedent might have done if living, and guardians of minors and trustees of other persons may so act and sign for
their ward or wards or cestui que trust. The proceeds of the assets or
property of any such association which may be undistributed at the
time of such meeting or may be subsequently received shall be distributed
as follows:
u
First. To pay the expenses of the execution of the trust to the date
of usuch payment.
Second. To repay any amount or amounts which have been paid in
by any shareholder or shareholders of such association upon and by
reason of any and all assessments made upon the stock of such association by the order of the Comptroller of the Currency in accordance
with the pro visions of the statutes of the United States; and
" Third. The balance ratably among such stockholders, in proportion
to the number of shares held and owned by each. Such distribution
shall be made from time to time as the proceeds shall be received and
as shall be deemed advisable by the said Comptroller or said agent."
162. ILLEGAL PREFERENCE OF CREDITORS. (SEC. 5242.) All transfers of the notes, bonds, bills of exchange, or other evidences of debt
owing to any national banking association, or of deposits to its credit;
all assignments of mortgages, sureties on real estate, or of judgments
or decrees in its favor; all deposits of money, bullion, or other valuable
thing for its use, or for the use of any of its shareholders or creditors;
and all payments of money to either, made after the commission of an
act of insolvency, or in contemplation thereof, made with a view to
prevent the application of its assets in the manner prescribed by this
chapter, or with a view to the preference of one creditor to another,
except in payment of its circulating notes, shall be utterly null and
void. No attachment, injunction, or execution shall be issued against
such association or its property before final judgment in any suit,
action, or proceeding in any State, county, or municipal court.
163. CREDITOR'S BILL AGAINST SHAREHOLDERS.—Sec. 2 of the
act
of June 30,1876, provides that when any national banking association
shall have gone into liquidation under the provisions of section five
thousand two hundred and twenty of said statutes, the individual liability of the shareholders provided for by section fifty-one hundred and
fifty-one of said statutes may be enforced by any creditor of such association, by bill in equity in the nature of a creditor's bill, brought by
such creditor on behalf of himself and of all other creditors of the
association, against the shareholders thereof, in any court of the United
States having original jurisdiction in equity for the district in which
such association may have been located or established.
40
REPORT OF THE COMPTROLLER OF THE CURRENCY,
CHAPTER EIGHT.
CRIMES, JURISDICTION, ETC.
164. Penalty for improper countersigning I 175. Penalty for issuing circulation of
or delivering circulation.
expired associations.
165. Penalty for pledging United States 176. False certification of checks.
177. Penalty for false certification of
notes or bank circulation.
checks.
166. Penalty for imitating bank circulation for advertising purposes.
I 178. Penalty for official malfeasance.
179. Jurisdiction of circuit courts to en167. Penalty for mutilating circulation.
join Comptroller.
168. Penalty for counterfeiting circula180. General jurisdiction of nationaltion.
bank cases.
169. What are obligations of the United
181. Sealed certificates of Comptroller
States.
ar§ competent evidence.
170. Penalty for illegal possession or use
182. Certified copy of organization cerof material for circulation.
tificate
as evidence.
171. Penalty for passing counterfeit cir183. Suits against United States officers
culation.
or agents.
172. Penalty for taking unauthorized
184. Indian Territory.
impressions of tools.
173. Penalty for having such impressions.
174. Penalty for dealing in counterfeit
circulation.
164. PENALTY FOR IMPROPER COUNTERSIGNING OR DELIVERING
CIRCULATION. (SEC. 5187.) No officer acting under the provisions of
this Title shall countersign or deliver to any association, or to any other
company or person, any circulating notes contemplated by this Title,
except in accordance with the true intent and meaning of its provisions.
Every officer who violates this section shall be deemed guilty of a high
misdemeanor, and shall be fined not more than double the amount so
countersigned and delivered, and imprisoned not less than one year
and not more than fifteen years.
165. PENALTY FOR PLEDGING UNITED STATES NOTES OR BANK
CIRCULATION. (SEC. 5207.) No association shall hereafter offer or receive
United States notes or national-bank notes as security or as collateral
security for any loan of money, or for a consideration agree to withhold
the same from use, or offer or receive the custody or promise of custody
of such notes as security, or as collateral security, or consideration for
any loan of money. Any association offending against the provisions
of this section shall be deemed guilty of a misdemeanor, and shall be
fined not more than one thousand dollars and a further sum equal to
one-third of the money so loaned. The officer or officers of any association who shall make any such loan shall be liable for a further sum
equal to one-quarter of the money loaned; and any fine or penalty
incurred by a violation of this section shall be recoverable for the benefit
of the party bringing such suit. Sec. 12 of the act of July 12,1882,
provides that the provisions of this section shall apply to the United
States certificates of gold and silver coin.
166. PENALTY FOR IMITATING BANK CIRCULATION FOR ADVERTISING PURPOSES. (SEC. 5188.) It shall not be lawful to design,
engrave, print, or in any manner make or execute, or to utter, issue,
distribute, circulate, or use any business or professional card, notice,
placard, circular, handbill, or advertisement in the likeness or similitude of any circulating note or other obligation or security of any banking association organized or acting under the laws of the United States
which has been or may be issued under this Title, or any act of Congress,
or to write, print, or otherwise impress upon any such note, obligation,
or security any business or professional card, notice, or advertisement, or any notice or advertisement of any matter or thing whatever.
Every person who violates this section shall be liable to a penalty of
Digitized forone
FRASER
hundred dollars, recoverable one-half to the use of the informer.
REPORT OF THE COMPTROLLER OF THE CURRENCY.
41
167. PENALTY FOR MUTILATING- CIRCULATION. (SEC. 5189.) Every
person who mutilates, cuts, defaces, disfigures, or perforates with holes,
or unites or cements together, or does any other thing to any bank bill,
draft, note, or other evidence of debt, issued by any national banking
association, or who causes or procures the same to be done, with intent
to render such bank bill, draft, note, or other evidence of debt unfit to
be reissued by said association, shall be liable to a penalty of fifty dollars, recoverable by the association.
168. PENALTY FOR COUNTERFEITING CIRCULATION. (SEC. 5415.)
Every person who falsely makes, forges, or counterfeits, or causes or procures to be made, forged, or counterfeited, or willingly aids or assists in
falsely making, forging, or counterfeiting, any note in imitation of, or purporting to be in imitation of, the circulating notes issued by any banking
association now or hereafter authorized and acting under the laws of the
United States; or who passes, utters, or publishes, or attempts to pass,
utter, or publish, any false, forged, or counterfeited note purporting to
be issued by any such association doing a banking business, knowing the
same to be falsely made, forged, or counterfeited, or who falsely alters,
or causes or procures to be falsely altered, or willingly aids or assists in
falsely altering any such circulating notes, or passes, utters, or publishes, or attempts to pass, utter, or publish as true, any falsely altered
or spurious circulating note issue, or purporting to have been issued, by
any such banking association, knowing the same to be falsely altered or
spurious, shall be imprisoned at hard labor not less than five years nor
more than fifteen years, and fined not more than one thousand dollars.
169. WHAT ARE OBLIGATIONS OF THE UNITED STATES. (SEC.
5413.) The words uobligation or other security of the United States"
shall be held to mean all bonds, certificates of indebtedness, nationalbank currency, coupons, United States notes, Treasury notes, fractional
notes, certificates of deposit, bills, checks, or drafts for money drawn
by or upon authorized officers of the United States, stamps and other
representatives of value, of whatever denomination, which have been
or may [be] issued under any act of Congress.
170. PENALTY FOR ILLEGAL POSSESSION OR USE OF MATERIAL
FOR CIRCULATION. (SEC. 5430.) Every person having control, cus-
tody, or possession of any plate, or any part thereof, from which has
been printed, or which may be prepared by direction of the Secretary
of the Treasury for the purpose of printing, any obligation or other
security of the United States, who uses such plate, or knowingly
suffers the same to be used for the purpose of printing any such or
similar obligation, or other security, or toy part thereof, except as
may be printed for the use of the United States by order of the proper
officer thereof; and every person who engraves, or causes or procures
to be engraved, or assists in engraving, any plate in the likeness of
any plate designed for the printing of such obligation or other security,
or who sells any such plate, or who brings into the United States from
any foreign place any such plate, except under the direction of the Secretary of the Treasury or other proper officer, or with any other intent,
in either case, than that such plate be used for the printing of the obligations or other securities of the United States; or who has in his
control, custody, or possession any metallic plate engraved after the
similitude of any plate from which any such obligation or other security
has been printed, with intent to use such plate, or suffer the same to be
used in forging or counterfeiting any such obligation or other security,
or any part thereof; or who has in his possession or custody, except
under authority from the Secretary of the Treasury or other proper
Digitized forofficer,
FRASERany obligation or other security, engraved and printed after
42
REPORT OF THE COMPTROLLER OF THE CURRENCY.
the similitude of any obligation or other security issued under the
authority of the United States, with intent to sell or otherwise use the
same; and every person who prints, photographs, or in any other manner makes or executes, or causes to be printed, photographed, made, or
executed, or aids in printing, photographing, making, or executing any
engraving, photograph, print, or inrpression in the likeness of any such
obligation or other security, or any part thereof, or who sells any such
engraving, photograph, print, or impression, except to the United
States, or who brings into the United States from any foreign place
any such engraving, photograph, print, or impression, except by direction of some proper officer of the United States, or who has or retains
in his control or possession, after a distinctive paper has been adopted
by the Secretary of the Treasury for the obligations and other securities of the United States, any similar paper adapted to the making of
any such obligation or other security, except under the authority of the
Secretary of the Treasury or some other proper officer of the United
States, shall be punished by a fine of not more thanfivethousand dollars,
or by imprisonment at hard labor not more than fifteen years, or by both.
171. PENALTY FOR PASSING COUNTERFEIT CIRCULATION. (SEC.
5431.) Every person who, with intent to defraud, passes, utters, publishes, or sells, or attempts to pass, utter, publish, or sell, or brings into
the United States with intent to pass, publish, utter, or sell, or keeps
in possession or conceals, with like intent, any falsely made, forged,
counterfeited, or altered obligation, or other security of the United
States, shall be punished by a fine of not more than five thousand dollars and by imprisonment at hard labor not more than fifteen years.
172. PENALTY FOR TAKING UNAUTHORIZED IMPRESSION OF TOOLS.
(SEC. 5432.) Every person who, without authority from the United
States, takes, procures, or makes, upon lead, foil, wax, plaster, paper,
or any other substance or material, an impression, stamp, or imprint of,
from, or by the use of, any bedplate, bedpiece, die, roll, plate, seal, type,
or other tool, implement, instrument, or thing used or fitted, or intended
to be used, in printing, stamping, or impressing, or in making other
tools, implements, instruments, or things, to be used, or fitted or
intended to be used, in printing, stamping, or impressing any kind or
description of obligation or other security of the United States, now
authorized or hereafter to be authorized by the United States, or circulating note or evidence of debt of any banking association under the
laws thereof, shall be punished by imprisonment at hard labor not more
than ten years, or by a fine of not more thanfivethousand dollars, or both.
173. PENALTY FOR HAVING SUCH IMPRESSIONS. (SEC. 5433.) Every
person who, with intent to defraud, has in his possession, keeping,
custody, or control, without authority from the United States, any
imprint, stamp, or impression, taken or made upon any substance or
material whatsoever, of any tool, implement, instrument, or thing used,
or fitted, or intended to be used for any of the purposes mentioned in
the preceding section 5 or who, with intent to defraud, sells, gives, or
delivers any such imprint, stamp, or impression to any other person,
shall be punished by imprisonment at hard labor not more than ten
years, or by a fine of not more than five thousand dollars.
174. PENALTY FOR DEALING IN COUNTERFEIT CIRCULATION. (SEC.
5434.) Every person who buys, sells, exchanges, transfers, receives, or
delivers any false, forged, counterfeited, or altered obligation or other
security of the United States, or circulating note of any banking association organized or acting under the laws thereof, which has been or
may hereafter be issued by virtue of any act of Congress, with the intent
the same be passed, published, or used as true and genuine, shall
Digitized forthat
FRASER
REPORT OF THE COMPTROLLER OF THE CURRENCY.
43
be imprisoned at hard labor not more than ten years, or lined not more
than five thousand dollars, or both.
175. PENALTY FOR ISSUING CIRCULATION OF EXPIRED ASSOCIATIONS. (SEC. 5437.) In all cases where the charter of any corporation
which has been or may be created by act of Congress has expired or
may hereafter expire, if any director, officer, or agent of the corporation, or any trustee thereof or any agent of such trustee, or any person
having in his possession or under his control the property of the corporation for the purpose of paying or redeeming its notes and obligations,
knowingly issues, reissues, or utters as money, or in any other way knowingly puts in circulation any bill, note, check, draft, or other security
purporting to have been made by any such corporation whose charter
has expired, or by any officer thereof, or purporting to have been made
under authority derived therefrom, or if any person knowingly aids in
any such act, he shall be punished by a fine of not more than ten
thousand dollars, or by imprisonment not less than one year nor more
than five years, or by both such fine and imprisonment. But nothing
herein shall be construed to make it unlawful for any person, not being
such director, officer, or agent of the corporation, or any trustee thereof,
or any agent of such trustee, or any person having in his possession or
under his control the property of the corporation for the purpose hereinbefore set forth, who has received or may hereafter receive such bill,
note, check, draft, or other security, bona fide and in the ordinary transactions of business, to utter as money and otherwise circulate the same.
176. FALSE CERTIFICATION OF CHECKS. (SEC. 5208.) It shall be
unlawful for any officer, clerk, or agent of any national banking association to certify any check drawn upon the association unless the person
or company drawing the check has on deposit with the association, at
the time such check is certified, an amount of money equal to the
amount specified in such check. Any check so certified by duly
authorized officers shall be a good and valid obligation against the
association; but the act of any officer, clerk, or agent of any association, in violation of this section, shall subject such bank to the liabilities and proceedings on the part of the Comptroller as provided for in
section fifty-two hundred and thirty-four.
177. PENALTY FOR FALSE CERTIFICATION OF CHECKS.—Sec. 13
of the act of July 12, 1882, provides that any officer, clerk, or agent of
any national banking association who shall willfully violate the provisions of section fifty-two hundred and eight of the Eevised Statutes of
the United States, or who shall resort to any device, or receive any fictitious obligation, direct or collateral, in order to evade the provisions
thereof, or who shall certify checks before the amount thereof shall have
been regularly entered to the credit of the dealer upon the books of the
banking association, shall be deemed guilty of a misdemeanor and
shall, on conviction thereof in any circuit or district court of the United
States, be fined not more than five thousand dollars, or shall be imprisoned not more than ^.\e years, or both, in the discretion of the court.
178. PENALTY FOR OFFICIAL MALFEASANCE. (SEC. 5209.) Every
president, director, cashier, teller, clerk, or agent of any association who
embezzles, abstracts, or willfully misapplies any of the moneys, funds, or
credits of the association, or who, without authority from the directors,
issues or puts in circulation any of the notes of the association; or who,
without such authority, issues or puts forth any certificate of deposit,
draws any order or bill of exchange, makes any acceptance, assigns
any note, bond, draft, bill of exchange, mortgage, judgment, or decree5
or who makes any false entry in any book, report, or statement of the
with intent, in either case, to injure or defraud the associaDigitized forassociation,
FRASER
44
REPORT OF THE COMPTROLLER OF THE CURRENCY.
tion or any other company, body politic or corporate, or any individual
person, or to deceive* any officer of the association or any agent
appointed to examine the affairs of any such association; and every
person who with like intent aids or abets any officer, clerk, or agent in
any violation of this section, shall be deemed guilty of a misdemeanor,
and shall be imprisoned not less than five years nor more than ten.
179. JURISDICTION OF CIRCUIT COURTS TO ENJOIN COMPTROL-
LER. (SEC. 629.) The circuit courts shall have original jurisdiction of
all suits brought by any banking association established in the district for which the court is held, under the provisions of Title u THE
NATIONAL BANKS,77 to enjoin the Comptroller of the Currency, or any
receiver acting under his direction, as provided by said Title.
180. GENERAL JURISDICTION OF NATIONAL-BANK CASES.—Sec.
4 of the act of July 12, 1882, j>rovides that the jurisdiction for suits
hereafter brought by or against any association established under any
law j)roviding for national banking associations, except suits between
them and the United States or its officers and agents, shall be the
same as, and not other than, the jurisdiction for suits by or against
banks not organized under any law of the United States which do or
might do banking business where such national banking associations
may be doing business when such suits may be begun. And all laws
and parts of laws of the United States inconsistent with this proviso
be, and the same are hereby, repealed. Sec. 4 of the act of March 3,
1887, provides that all national banking associations established under
the laws of the United States shall, for the purposes of all actions by
or against them, real, personal, or mixed, and all suits in equity, be
deemed citizens of the States in which they are respectively located;
and in such cases the circuit and district courts shall not have jurisdiction other than such as they would have in cases between individual
citizens of the same State. The provisions of this section shall not be
held to affect the jurisdiction of the courts of the United States in
cases commenced by the United States or by direction of any officer
thereof, or cases for winding up the affairs of any such bank.
181. SEALED CERTIFICATES OF COMPTROLLER ARE COMPETENT
EVIDENCE. (SEC. 884.) Every certificate, assignment, and conveyance
executed by the Comptroller of the Currency, in pursuance of law, and
sealed with his seal of office, shall be received in evidence in all places
and courts; and all copies of papers in his office, certified by him and
authenticated by the said seal, shall in all cases be evidence equally
with the originals. An impression of such seal directly on the paper
shall be as valid as if made on wax or wafer.
182. CERTIFIED COPY OF ORGANIZATION CERTIFICATE AS EVIDENCE. (SEC. 885.) Copies of the organization certificate of any national
banking association, duly certified by the Comptoller of the Currency
and authenticated by his seal of office, shall be evidence in all courts
and places within the jurisdiction of the United States of the existence
of the association and of every matter which could be proved by the
production of the original certificate.
183. SUITS AGAINST UNITED STATES OFFICERS OR AGENTS. (SEC.
380.) All suits and proceedings arising out of the provisions of law
governing national banking associations, in which the United States or
any of its officers or agents shall be parties, shall be conducted by the
district attorneys of the several districts under the direction and supervision of the Solicitor of the Treasury.
184. INDIAN TERRITORY.—Sec. 31 of the Act of May 2,1890, provides
that all laws relating to national banking associations shall have the same
and effect in Indian Territory as elsewhere in the United States.
Digitized forforce
FRASER
KEPORT OF THE COMPTROLLER OF THE CURRENCY.
45
CHAPTER
TRUST COMPANIES, ETC., DISTRICT OF COLUMBIA.
185. Provision for organization.
186. Organization certificate of company.
187. Charter obtained from District Commissioners.
188. Notice of intention to apply for
charter.
189. Charter filed with recorder of
deeds for the District.*
190. Trust companies under Comptroller's
supervision.
191. Powers of these companies.
192. Competent to act as trustee, etc.
193. Qualifications of such trustee, etc.
194. Security for faithful performance of
trust.
195. Privileges extended to existing corporations.
196. Real estate.
197. Period of corporation's existence.
198. Provisions relating to capital stock.
199. Enforcement of subscriptions to
stock.
200. Annual report to Comptroller.
201. Tax on gross earnings.
202. Liability for failure to report.
203.
204.
205.
206.
207.
208.
209.
210.
211.
212.
213.
214.
215.
216.
217.
218.
219.
Perjury and ]arceny.
Transfer of stock.
Liability of stockholders.
Money payment of capital stock
required.
Number and election of directors.
Appointment of officers.
By-laws.
Directors liable for payment of unearned dividends.
Directors' liability may be avoided.
Responsibility of directors for excess
liabilities.
Trustee, etc., not liable on stock
assessment.'
Increase of capital.
Certified copy of incorporation certificate competent evidence.
No bond or other security required
of trust companies.
District supreme court has jurisdiction of trust companies.
All similar District corporations
subject to this act.
Provisions for amendment.
185. PROVISION FOR ORGANIZATION.—The act of October 1,1890,
sec. 1, provides that corporations may be formed within the District of
Columbia for the purposes hereinafter mentioned in the following manner: Any time hereafter any number of natural persons, citizens of
the United States, not less than twenty-five, may associate themselves
together to form a company for the purpose of carrying on in the District of Columbia any one of the three classes of business herein specified, to wit:
First. A safe deposit, trust, loan, and mortgage business.
Second. A title insurance, loan, and mortgage business.
Third. A security, guaranty, indemnity, loan, and mortgage business: Provided, That the capital stock of any of said companies shall
not be less than one million of dollars: Provided further, That any of
said companies may also do a storage business when their capital stock
amounts to the sum of not less than one million two hundred thousand
dollars.
186. ORGANIZATION CERTIFICATE OF COMPANY. (SEC. 2.) That
such persons shall, under their hands and seals, execute, before some
officer in said District competent to take the acknowledgment of deeds,
an organization certificate, which shall specifically state—
First. Title.—The name of the corporation.
Second. Purposes.—The purposes for which it is formed.
Third. Period of existence.—The term for which it is to exist, which
shall not exceed the term of fifty years, and be subject to alteration,
amendment, or repeal by Congress at any time.
Fourth. Officers.—The number of its directors, and the names and
residences of the officers who for the first year are to manage the affairs
of the company.
Fifth. Capital stock.—The amount of the capital stock and its subdivision into shares.
46
REPORT OF THE COMPTROLLER OF THE CURRENCY.
187. CHARTER OBTAINED FROM DISTRICT COMMISSIONERS. (SEC 0
3.) That this certificate shall be presented to the Commissioners of the
District, who shall have power and discretion to grant or to refuse to
said persons a charter of incorporation upon the terms set forth in the
said certificate and the provisions of this act.
188. NOTICE OF INTENTION TO APPLY FOR CHARTER. (SEC.
4.)
That previous to the presentation of the said certificate to the said Commissioners notice of the intention to apply for such charter shall be
inserted in two newspapers of general circulation printed in the District
of Columbia at least four times a week for three weeks, setting forth
briefly the name of the proposed company, its character and object, the
names of the proposed corporators, and the intention to make application for a charter on a specified day, and the proof of such publication
shall be presented with said certificate when presentation thereof is
made to said Commissioners.
189. CHARTER FILED WITH EECORDER OF DEEDS FOR THE DISTRICT. (SEC. 5.) That if the charter be granted as aforesaid it, together
with the certificate of the Commissioners granting the same indorsed
thereon, shall be filed for record in the office of the recorder of deeds
for the District of Columbia, and shall be recorded by him. On the
filing of the said certificate with the said recorder of deeds as herein
provided, approved as aforesaid by the said Commissioners, the persons named therein and their successors shall thereupon and thereby be
and become a body corporate and politic, and as such shall be vested
with all the powers and charged with all the liabilities conferred upon
and imposed by this act upon companies organized under the provisions
hereof: Provided, however, That no corporation created and organized
under the provisions hereof, or availing itself of the provisions hereof
as provided in section eleven, shall be authorized to transact the business
of a trust company, or any business of a fiduciary character, until it
shall have filed with the Comptroller of the Currency a copy of its certificate of organization and charter and shall have obtained from him
and filed the same for record with the said recorder of deeds a certificate
that the capital stock of said company has been paid in and the deposit
of securities made with said Comptroller in the manner and to the extent
required by this act.
190.
TRUST COMPANIES UNDER COMPTROLLER'S
SUPERVISION.
(SEC. 6.) That all companies organized hereunder, or which shall under
the provisions hereof become entitled to transact the business of a trust
company, shall report to the Comptroller of the Currency in the manner
prescribed by sections fifty-two hundred and eleven, fifty-two hundred
and twelve, and fifty-two hundred and thirteen, Eevised Statutes of the
United States, in the case of national banks, and all acts amendatory
thereof or supplementary thereto, and with similar provisions for compensating examiners, and shall be subject to like penalties for failure
to do so. The Comptroller shall have and exercise the same visitorial
powers over the affairs of the said corporation as is conferred upon him
by section fifty-two hundred and forty of the Eevised Statutes of the
United States in the case of national banks. He shall also have power,
when in his opinion it is necessary, to take possession of any such company for the reasons and in the manner and to the same extent as are provided in the laws of the United States with respect to national banks.
191. POWERS OF THESE COMPANIES. (SEC. 7.) That all companies
organized under this act are hereby declared to be corporations possessed of the powers and functions of corporations generally, and shall
have power—
REPORT OF THE COMPTROLLER OF THE CURRENCY.
47
First. Contracts.—To make contracts.
Second. Suits.—To sue and be sued, iinplead and be impleaded, in
any court as fully as natural persons.
Third. Seal.—To make and use a common seal and alter the same at
pleasure.
Fourth. Loans.—To loan money.
Fifth. Special poivers.—When organized under subdivision one of the
first section of this act to accept and execute trusts of any and every
description which may be committed or transferred to them, and to
accept the office and perform the duties of a receiver, assignee, executor, administrator, guardian of the estates of minors, with the consent
of the guardian of the person of such minor, and committee of the
estates of lunatics and idiots whenever any trusteeship or any such
office or appointment is committed or transferred to them, with their
consent, by any person, body politic or corporate, or by any court in the
District of Columbia, and all such companies organized under the first
subdivision of section one of this act are further authorized to accept
deposits of money for the purposes designated herein upon such terms
as may be agreed upon from time to time with depositors, and to act as
agent for the purpose of issuing or countersigning the bonds or obligations of any corporation, association, municipality, or State, or other
public authority, and to receive and manage any sinking fund on any
such terms as may be agreed upon, and shall have power to issue its
debenture bonds upon deeds of trust or mortgages of real estate to a
sum not exceeding the face value of said deeds of trust or mortgages,
and which shall not exceed fifty per centum of the fair cash value of
the real estate covered by said deeds or mortgages, to be ascertained
by the Comptroller of the Currency. But no debenture bonds shall be
issued until the securities on which the same are based have been
placed in the actual possession of the trustee named in the debenture
bonds, who shall hold said securities until all of said bonds are paid;
and when organized under the second subdivision of the first section
of this act said company is authorized to insure titles to real estate and
to transact generally the business mentioned in said subdivision; and
when organized under the third subdivision of section one of this act
said company is hereby authorized, in addition to the loan and mortgage business therein mentioned, to secure, guaranty, and insure individuals, bodies politic, associations, and corporations against loss by or
through trustees, agents, servants, or employees, and to guaranty the
faithful performance of contracts and of obligations of whatever kind
entered into by or on the part of any person or persons, association,
corporation or corporations, and against loss of every kind: Provided,
That any corporation formed under the# provisions of this act when
acting as trustee shall be liable to account for the amounts actually
earned by the moneys held by it in trust in addition to the principal so
held; but such corporation may be allowed a reasonable compensation
for services performed in the care of the trust estate.
192. COMPETENT TO ACT AS TRUSTEE, ETC. (SEC. 8.) That in all
cases in which application shall be made to any court in the District of
Columbia, or wherever it becomes necessary or proper for said court to
appoint a trustee, receiver, administrator, guardian of the estate of a
minor, or committee of the estate of a lunatic, it shall and may be
lawful for said court (but without prejudice to any preference in the
order of any such appointments required by existing law) to appoint
any such company organized under the first subdivision of section
one of this act, with its assent, such trustee, receiver, administrator,
48
REPORT OF THE COMPTROLLER OF THE CURRENCY.
committee, or guardian, with the consent of the guardian of the person
of such minor: Provided, however, That no court or judge who is an
owner of or in any manner financially interested in the stock or business of such corporation shall commit by order or decree to any such
corporation any trust or fiduciary duty.
193. QUALIFICATIONS OF SUCH TRUSTEE, ETC. (SEC. 9.) That
whenever any corporation operating under this act shall be appointed
such trustee, executor, administrator, receiver, assignee, guardian, or
committee as aforesaid, the president, vice-president, secretary, or treas
urer of said company shall take the oath or affirmation now required by
law to be made by any trustee, executor, receiver, assignee, guardian,
or committee.
194. SECURITY FOR FAITHFUL PERFORMANCE OF TRUST. (SEC. 10.)
That when any court shall appoint the said company a trustee, receiver,
administrator, or such guardian, or committee, or shall order the deposit
of money or other valuables with said company, or where any individual
or corporation shall appoint any of said companies a trustee, executor,
assignee, or such guardian, the capital stock of said company subscribed
for or taken, and all property owned by said company, together with
the liability of the stockholders and officers as herein provided, shall
be taken and considered as the security required by law for the faithful performance of its duties, and shall be absolutely liable in case of
any default whatever.
195. PRIVILEGES EXTENDED TO EXISTING CORPORATIONS. (SEC.
11.) That any safe deposit company, trust company, surety or guaranty
company, or title-insurance company now incorporated and operating
under the laws of the United States or of the District of Columbia, or
any of the States, and now doing business in said District, may avail
itself of the provisions of this act on filing in the office of the recorder
of deeds of the District of Columbia, or with the Comptroller of the
Currency, a certificate of its intention to do so, which certificate shall
specify which one of the three classes of business set out in section one
it will carry on, and shall be verified by the oath of its president to the
effect that it has in every respect complied with the requirements of
existing law, especially with the provisions of this act; that its capital
stock is paid in as provided in section twenty-one of this act and is not
impaired, and thereafter such company may exercise all powers and
perform all duties authorized by any one of the subdivisions of section
one of this act in addition to the powers now lawfully exercised by such
company.
196. EEAL ESTATE. (SEC. 12.) That any company operating under
this act may lease, purchase, hold, and convey real estate, not exceeding
in value five hundred thousand dollars, and such in addition as it may
acquire in satisfaction of d6bts due the corporation, under sales,
decrees, judgments, and mortgages. But no such association shall
hold the possession of any real estate under foreclosure of mortgage,
or the title and possession of any real estate purchased to secure any
debts due to it, for a longer period than five years.
197. PERIOD OF CORPORATIONS' EXISTENCE. (SEC. 13.) That the
charters for incorporations named in this act may be made perpetual,
or may be limited in time by their provisions, subject to the approval of
Congress.
198. PROVISIONS BELATING TO CAPITAL STOCK. (SEC. 14.) That
the capital stock of every such company shall be at least one million
dollars, and at least fifty per centum thereof must have been paid in,
in cash or by the transfer of assets as hereinafter provided in section
KEPOKT OF THE COMPTROLLER OF THE CURRENCY.
49
twenty-one of this act, before any such company shall be entitled to
transact business as a corporation, except with its own members, and
before any company organized hereunder shall be entitled to transact
the business of a trust company, or to become and act as an administrator, executor, guardian of the estate of a minor, or undertake any
other kindred fiduciary duty, it shall deposit, either in money or in
bonds, mortgages, deed of trust, or other securities equal in actual
value to one-fourth of the capital stock paid in, with the Comptroller
of the Currency, to be kept by him upon the trust and for the purposes
hereinafter provided; and the said Comptroller may from time to time
require an additional deposit from any such company, to be held upon
and for the same trust and purposes, not exceeding, however, in value
one-half the paid-in capital stock; and the said Comptroller shall not
issue to any corporation the certificate heretofore provided for until
said deposit with him of securities required by this section. Within
one year after the organization of any corporation under the provisions
of this act, or after any corporation heretofore existing shall have
availed itself of the powers and rights given by this act in the manner
herein provided for, its entire capital stock shall have been paid in.
199.
ENFORCEMENT
OF SUBSCRIPTIONS
TO STOCK. (SEC.
15.)
That the capital stock of every such company shall be divided into
shares of one hundred dollars each. It shall be lawful for such company to call for and demand from the stockholders, respectively, all
sums of money by them subscribed, at such time and in such proportions as its board of directors shall deem proper, within the time specified in section fourteen, and it may enforce payment by all remedies
provided by law; and if any stockholder shall refuse or neglect to pay
any installment as required by a resolution of the board of directors,
after thirty days' notice of the same, the said board of directors may
sell at public auction, to the highest bidder, so many shares of said
stock as shall pay said installment, under such general regulations as
may be adopted in the by-laws of said company, and the highest bidder
shall be taken to be the person who offers to purchase the least number
of shares for the assessment due.
200. ANNUAL EEPORT TO COMPTROLLER. (SEC. 16.) That every
such company shall annually, within twenty days after the first of
January of each year, make a report to the Comptroller of the Currency, which shall be published in a newspaper in the District, which
shall state the amount of capital and of the proportion actually paid,
the amount of debts, and the gross earnings for the year ending December thirty-first then next previous, together with their expenses, which
report shall be signed by the president and a majority of the directors
or trustees, and shall be verified by the oath of the president, secretary,
and at least three of the directors or trustees.
201. TAX ON GROSS EARNINGS. (SEC. 16). And said company shall
pay to the District of Columbia, in lieu of personal taxes for each next
ensuing year, one and a half per centum of its gross earnings for the
preceding year, shown by said verified statement, which amount shall
be payable to the collector of taxes at the times and in the manner that
other taxes are payable.
202. LIABILITY FOR FAILURE TO REPORT. (SEC. 17.) That if any
company fails to comply with the x^rovisions of the preceding section,
all the directors or trustees of such company shall be jointly and severally liable for the debts of the company then existing, and for all that
shall be contracted before such report shall be made: Provided, That
in case of failure of the company in any year to comply with the pro CUR 98
4
50
REPORT OF THE COMPTROLLER OF THE CURRENCY.
visions of section sixteen of this act, and any of the directors shall, on
or before January fifteenth of such year, file his written request for
such compliance with the secretary of the company, the Comptroller of
the Currency, and the recorder of deeds of the District of Columbia, such
director shall be exempt from the liability prescribed in this section.
203. PERJURY AND LARCENY. (SEC. 18.) That any willful false
swearing in regard to any certificate or report or public notice required
by the provisions of this act shall be perjury, and shall be punished as
such according to the laws of the District of Columbia. And any misappropriation of any of the money of any corporation or company formed
under this act, or any money, funds, or property intrusted to it, shall
be held to be larceny, and shall be punished as such under the laws of
said District.
204. TRANSFER OF STOCK. (SEC. 19.) That the stock of such company shall be deemed personal estate, and shall be transferable only on
the books of such company in such manner as shall be prescribed by
the by-laws of the company; but no shares shall be transferable until
all previous calls thereon shall have been fully paid, and the said stock
shall not be taxable, in the hands of individual owners, the tax on the
capital stock, gross earnings of the company hereinbefore provided
being in lieu of other personal tax. All certificates of the stock of any
company organized under this act shall show upon their face the par
value of each share and the amount paid thereon.
205. LIABILITY OF STOCKHOLDERS. (SEC. 20.) That all stockholders
of every company incorporated under this act, or availing itself of its
provisions under section eleven, shall be severally and individually liable to the creditors of such company to an amount equal to and in
addition to the amount of stock held by them, respectively, for all debts
and contracts made by such company.
206. MONEY PAYMENT OF CAPITAL STOCK REQUIRED. (SEC. 21.)
That nothing but money shall be considered as payment of any part of
the capital stock, except that in the case of any company now doing
business in the District of Columbia in any of the classes herein provided for, or under any act of Congress or by virtue of the laws of any
of the States, and which company has actually received full payment in
money of at least fifty per centum of the capital stock required by this
act and which company desires to obtain a charter under this act, all
the assets or property may be received and considered as money, at a
value to be appraised and fixed by the Comptroller of the Currency :
Provided, That all such assets and property are also transferred to and
are thereafter owned by the company organized under this act.
207. NUMBER AND ELECTION OF DIRECTORS. (SEC. 22.) That the
stock, property, and concerns of such company shall be managed by not
less than nine nor more than thirty directors or trustees, who shall,
respectively, be stockholders and at least one-half residents and citizens
of the District of Columbia, and shall, except the first year, be annually
elected by the stockholders at such time and place and after such published notice as shall be determined by the by-laws of the company, and
said directors or trustees shall hold until their successors are elected
and qualified.
208. APPOINTMENT OF OFFICERS. (SEC. 23.) That there shall be a
president of the company, who shall be a director, also a secretary and
a treasurer, all of whom shall be chosen by the directors or trustees:
Provided, That only one of the above-named offices shall be held by
the same person at the same time. Subordinate officers may be
appointed by the directors or trustees, and all such officers may be
REPORT OF THE COMPTROLLER OF THE CURRENCY.
51
required to give such security for the faithful performance of the duties
of their office as the directors or trustees may require.
209. BY-LAWS. (SEC. 24.) That the directors or trustees shall have
power to make such by-laws as they deem proper for the management
or disposal of the stock and business affairs of such company, not
inconsistent with the provisions of this act, and prescribing the duties
of officers and servants that may be employed, for the appointment of
all officers, and for carrying on all kinds of business within the objects
and purposes of such company.
210. DIRECTORS LIABLE FOR PAYMENT OF UNEARNED DIVIDENDS. (SEC. 25.) That if the directors or trustees of any company
shall declare or pay any dividend, the payment of which would render
it insolvent, or which would create a debt against such company, they
shall be jointly and severally liable as guarantors for all of the debts
of the company then existing, and for all that shall be thereafter contracted, while they shall, respectively, remain in office.
211. DIRECTORS' LIABILITY MAY BE AVOIDED. (SEC. 26.) That if
any of the directors or trustees shall object to declaring of such dividend or the payment of the same, and shall at any time before the time
fixed for the payment thereof file a certificate of their objection in writing with the secretary of the company and with the recorder of deeds
of the District they shall be exempt from liability prescribed in the preceding section.
212.
BESPONSIBILITY OF DIRECTORS FOR EXCESS LIABILITIES.
(SEC. 27.) That if the liabilities of any company shall at any time exceed
the amount of the fair cash value of the assets, the directors or trustees
of such company assenting thereto shall be personally and individually
liable for such excess to the creditors of the company after the additional liability of the stockholders has been enforced.
213. TRUSTEE, ETC., NOT LIABLE ON STOCK ASSESSMENT. (SEC. 28.)
That no person holding stock in such company as executor, administrator, guardian, or trustee shall be personally subject to any liability
as stockholder of such company, but the estate and 'funds in the hands
of such executor, administrator, guardian, or trustee shall be liable in
like manner and to the same extent as the testator or intestate or the
ward or the person interested in such trust fund would have been if
he had been living and competent to act and hold the stock in his own
name.
214. INCREASE OF CAPITAL. (SEC. 29.) That any corporation which
may be formed under this chapter may increase its capital stock by
complying with the provisions of this chapter to any amount which
may be deemed sufficient and proper for the purposes of the corporation.
215. CERTIFIED COPY OF INCORPORATION CERTIFICATE COMPETENT EVIDENCE. (SEC. 30.) That a copy of any certificate of incor-
poration filed in pursuance of this chapter, certified by the recorder of
deeds to be a true copy and the whole of such certificate, shall be
received in all courts and places as presumptive legal evidence of the
facts therein stated.
216. No BOND OR OTHER SECURITY EEQUIRED OF TRUST COMPANIES. (SEC. 31.) That no bond or other collateral security, except
as hereinafter stated, shall be required from any trust company incorporated under this act for or in respect to any trust, nor when appointed
trustee, guardian, receiver, executor, or administrator, with or without
the will annexed, committee of the estate of a lunatic or idiot, or other
fiduciary appointment) but the capital stock subscribed for or taken.
52
REPORT OF THE COMPTROLLER OF THE CURRENCY.
and all property owned by said company and the amount for which said
stockholders shall be liable in excess of their stock, shall be taken and
considered as the security required by law for the faithful performance
of its duties and shall be absolutely liable in case of any default whatever; and in case of the insolvency or dissolution of said company the
debts due from the said company as trustee, guardian, receiver, executor, or administrator, committee of the estate of lunatics, idiots, or any
other fiduciary appointment, shall have a preference.
217. DISTRICT SUPREME COURT HAS JURISDICTION OF TRUST COM
PANIES. (SEC. 32.) That the supreme court of the District of Columbia,
or any justice thereof, shall have power to make orders respecting such
company whenever it shall have been appointed trustee, guardian,
receiver, executor, or administrator, with or without the will annexed,
committee of the estate of a lunatic, idiot, or any other fiduciary, and
require the said company to render all accounts which might lawfully
be made or required by any court or aoy justice thereof if such trustee,
guardian, receiver, executor, administrator, with or without the will
annexed, committee of the estate of a lunatic or idiot, or fiduciary
were a natural person. And said court, or any justice thereof, at any
time, on application of any person interested, may appoint some suitable person to examine into the affairs and standing of such companies,
who shall make a full report thereof to the court, and said court, or
any justice thereof, may at any time, in its discretion, require of said
company a bond with sureties or other securities for the faithful performance of its obligations, and such sureties or other security shall be
liable to the same extent and in the same manner as if given or pledged
by a natural person.
218.
A L L SIMILAR DISTRICT CORPORATIONS SUBJECT TO THIS
ACT. (SEC. 33.) That no corporation or company organized by virtue
of the laws of any of the States of this Union and having its principal
place of business within the District of Columbia, shall carry on, in the
District of Columbia, any of the kinds of business named in this act
without strict compliance in all particulars with the provisions of this
act for the government of such corporations formed under it, and each
one of the officers of the corporation or company so offending shall be
punished by fine not exceeding one thousand dollars, or imprisonment
in some State's prison not exceeding one year, or by both fine and
imprisonment, in the discretion of the court. This section shall not
take effect till six months after the approval of this act.
219. PROVISIONS FOR AMENDMENT. (SEC. 34.) That Congress may
at any time alter, amend, or repeal this act, but- any such amendment
or repeal shall not, nor shall the dissolution of any company formed
under this act, take away or impair any remedy given against such
corporation, its stockholders or officers, for any liability or penalty
which shall have been previously incurred: Provided, That the courts
of the District of Columbia shall not have power to appoint any trustee,
trustees, guardians, receivers, or other trustee of a fund or property
located outside of the District of Columbia, or belonging to a corporation or person having a legal residence or location outside of said
District.
REPORT OF THE COMPTROLLER OF THE CURRENCY.
53
CHAPTER TEN.
GOVERNMENT DEPOSITARIES.
220. Designation and duties of public | 223. Penalty for misapplication of moneydepositaries.
|
order funds.
221. Deposit and withdrawal of public I 224. Penalty for unauthorized deposit of
moneys.
public money.
222. Provisions for deposits by certain | 225. Penalty for unauthorized receipt or
postmasters.
j
use of public money.
220. DESIGNATION AND DUTIES OF PUBLIC DEPOSITARIES. (SEC.
5153.) All national banking associations, designated for that purpose
by tlie Secretary of the Treasury, shall be depositaries of public money,
except receipts from customs, under such regulations as may be prescribed by the Secretary; and they may also be employed as financial
agents of the Government; and they shall perform all such reasonable duties, as depositaries of public moneys and financial agents of
the Government, as may be required of them. The Secretary of the
Treasury shall require the associations thus designated to give satisfactory security, by the deposit of United States bonds and otherwise,
for the safe-keeping and prompt payment of the public money deposited
with them, and for the faithful performance of their duties as financial
agents of the Government. And every association so designated as
receiver or depositary of the public money shall take and receive at
par all of the national currency bills, by whatever association issued,
which have been paid into the Government for internal revenue, or for
loans or stocks.
221. DEPOSIT AND WITHDRAWAL OF PUBLIC MONEYS. (SEC. 3620.)
It shall be the duty of every disbursing officer having any public
money intrusted to him for disbursement to deposit the same with the
Treasurer or some one of the assistant treasurers of the United States,
and to draw for the same only as it may be required for payments to
be made by him in pursuance of law; and draw from the same only in
favor of the persons to whom payment is made, and all transfers from
the Treasurer of the United States to a disbursing officer shall be
by draft or warrant on the Treasurer or an assistant treasurer of the
United States. In places, however, where there is no Treasurer or
assistant treasurer, the Secretary of the Treasury may, when he deems
it essential to the public interest, specially authorize in writing the
deposit of such public money in any other public depository, or, in
writing, authorize the same to be kept in any other manner and under
such rules and regulations as he may deem most safe and effectual to
facilitate the payments to public creditors.
222. PROVISIONS FOR DEPOSITS BY CERTAIN POSTMASTERS. (SEC.
3847.) Any postmaster, having public money belonging to the Government, at an office within a county where there are no designated depositaries, treasurers of mints, or Treasurer or assistant treasurers of the
United States, may deposit the same, at his own risk and in his official capacity, in any national bank in the town, city, or county where
the said postmaster resides; but no authority or permission is or shall
be given for the demand or receipt by the postmaster, or any other
person, of interest, directly or indirectly, on any deposit made as herein
described; and every postmaster who makes any such deposit shall
report quarterly to the Postmaster-General the name of the bank where
such deposits have been made, and also state the amount which may
stand at the time to his credit.
54
REPORT OF THE COMPTROLLER OF THE CURRENCY.
223. PENALTY FOR MISAPPLICATION OF MONEY-ORDER FUNDS.
(SEC. 4046.) Every postmaster, assistant, clerk, or other person employed in or connected with the business or operations of any moneyorder office who converts to his own use, in any way whatever, or loans,
or deposits in any bank, except as authorized by this Title, or exchanges
for other funds, any portion of the money-order funds, shall be deemed
guilty of embezzlement, and any such persou, as well as every other
person advising or participating therein, shall, for every such offense,
be imprisoned for not less than six months nor more than ten years,
and be fined in a sum equal to the amount embezzled; and any failure
to pay over or produce any money-order funds intrusted to such person
shall be taken to be prima facie evidence of embezzlement; and upon
the trial of any indictment against any person for such embezzlement
it shall be prima facie evidence of a balance against him to produce a
transcript from the money-order account books of the Sixth Auditor.
But nothing herein contained shall be construed to prohibit any postmaster depositing, under the direction of the Postmaster-General, in a
national bank designated by the Secretary of the Treasury for that
purpose, to his own credit as postmaster, any money-order or other
funds in his charge, nor prevent his negotiating drafts or other evidences of debt through such bank, or through United States disbursing
officer, or otherwise, when instructed or required to do so by the Postmaster-General for the purpose of remitting surplus money-order funds
from one post-office to another, to be used in payment of money orders.
Disbursing officers of the United States shall issue, under regulations
to be prescribed by the Secretary of the Treasury, duplicates of lost
checks drawn by them in favor of any postmaster on account of moneyorder or other public funds received by them from some other postmaster.
224. PENALTY FOR UNAUTHORIZED DEPOSIT OF PUBLIC MONEY.
(SEC. 5488.) Every disbursing officer of the United States who deposits
any public money intrusted to him in any place or in any manner,
except as authorized by law, or converts to his own use in any way
whatever, or loans with or without interest, or for any purpose not
prescribed by law withdraws from the Treasurer or any assistant
treasurer, or any authorized depository, or for any purpose not prescribed by law transfers or applies any portion of the public money
intrusted to him, is, in every such act, deemed guilty of an embezzlement of the money so deposited, converted, loaned, withdrawn, transferred, or applied; and shall be punished by imprisonment with hard
labor for a term not less than one year nor more than ten years, or by
a fine of not more than the amount embezzled or less than one thousand
dollars, or by both such fine and imprisonment.
225. PENALTY FOR UNAUTHORIZED EECEIPT OR USE OF PUBLIC
MONEY. (SEC. 5497.) Every banker, broker, or other person not an
authorized depositary of public moneys, who knowingly receives from
any disbursing officer, or collector of internal revenue, or other agent
of the United States, any public money on deposit, or by way of
loan or accommodation, with or without interest, or otherwise than in
payment of a debt against the United States, or who uses, transfers,
converts, appropriates, or applies any portion of the public money for
any purpose not prescribed by law, and every president, cashier, teller,
director, or other officer of any bank or banking association, who violates any of the provisions of this section, is guilty of an act of embezzlement of the i)ublic money so deposited, loaned, transferred, used,
converted, appropriated, or applied, and shall be punished as prescribed
in section fifty-four hundred and eighty-eight.
REPORT OF THE COMPTROLLER OF THE CURRENCY.
55
CHAPTER ELEYEN.
MISCELLANEOUS.
226. LEGAL TENDER AND LAWFUL MONEY.—The following state-
ment concerning tlie legal-tender properties of money of the United
States is based upon United States Revised Statutes, sections 3585,
3586, 3587, 3588, 3589, and 3590, and the acts amendatory thereof and
additional thereto:
Gold coin, standard silver dollars, subsidiary silver, minor coins,
United States notes, and Treasury notes of 1890 have the legal-tender
quality as follows: Gold coin is legal tender for its nominal value when
not below the limit of tolerance in weight; when below that limit it is
legal tender in proportion to its weight; standard silver dollars and
Treasury notes of 1890 are legal tender for all debts, public and private,
except where otherwise expressly stipulated in the contract; subsidiary
silver is legal tender to the extent of $10, minor coins to the extent of 25
cents, and United States notes for all debts, public and private, except
duties on imports and interest on the public debt. Gold certificates,
silver certificates, and national-bank notes are nonlegal-tender money.
Both kinds of certificates, however, are receivable for all public dues,
and national-bank notes are receivable for all public dues except duties
on imports, and may be paid out for all public dues, except interest on
the public debt.
The term ulawful money" is understood to apply to every form of
money which is endowed by law with the legal-tender quality. (See
Opinions of Attorneys-General, vol. 17, p. 123.)
227. MISCELLANEOUS ACTS.—Be it enacted by the Senate and House
of Representatives of the United States of America in Congress assembled,
That The First National Bank of Annapolis, now located in the city of
Annapolis and State of Maryland, is hereby authorized to change its
location to the city of Baltimore, in said State. Whenever the stockholders representing three-fourths of the capital of said bank, at a
meeting called for that purpose, determine to make such change, the
president and cashier shall execute a certificate, under the corporate
seal of the bank, specifying such determination, and shall cause the
same to be recorded in the office of the Comptroller of the Currency,
and thereupon such change of location shall be effected, and the operations of discount and deposit of said bank shall be carried on in the
city of Baltimore.
SEC. 2. That nothing in this act contained shall be so construed as in
any manner to release the said bank from any liability or affect any
action or proceeding in law in which the said bank may be a party or
interested. And when such change shall have been determined upon,
as aforesaid, notice thereof, and of such change, shall be published in
two Weekly papers in the city of Annapolis not less than four weeks.
SEC. 3. That whenever the location of said bank shall have been
changed from the city of Annapolis to the city of Baltimore, in accordance with the first section of this act, its name shall be changed to The
Traders' National Bank of Baltimore, if the board of directors of said
bank shall accept the new name by resolution of the board, and cause
a copy of such resolution, duly authenticated, to be filed with the
Comptroller of the Currency.
SEC. 4. That all the debts, demands, liabilities, rights, privileges, and
powers of The First National Bank of Annapolis shall devolve upon
56
REPORT OF THE COMPTROLLER OF THE CURRENCY.
The Traders7 National Bank of Baltimore whenever such change of
name is effected.
SEC. 5. That this act shall take effect and be in force from and after
its passage.
Approved, June 7,1872.
Acts of a similar nature to the one preceding have been enacted by
Congress for the following purposes:
Authorizing The Manufacturers' National Bank of New York to
change its location from the city of New York to the city of Brooklyn.
(Approved July 27,1868.)
Authorizing The City National Bank of New Orleans, Louisiana, to
change its name to The Gerinania National Bank of New Orleans.
(Approved March 1, 1869.)
Authorizing The Second National Bank of Plattsburgh, New York,
to change its name to The Yilas National Bank of Plattsburgh. (Approved March 1, 1869.)
Authorizing The First National Bank of Delhi, New York, to change
its location and name to The First National Bank of Port Jervis, New
York. (Approved May 5, 1870.)
Authorizing The First National Bank of Fort Smith, Arkansas, to
change its location and name to The First National Bank of Camden,
Arkansas. (Approved July 1, 1870.)
Authorizing the Jersey Shore National Bank, Pennsylvania, to
change its location and name to The Williamsport National Bank, Pennsylvania. (Approved December 22,1870.)
Authorizing the Worcester County National Bank of Blackstone,
Massachusetts, to change its location and name to The Franklin
National Bank, Massachusetts. (Approved February 9, 1871.)
Authorizing The Farmers' National Bank of Fort Edward, New York,
to change its location and name to The North Granville National Bank,
New York. (Approved February 18, 1871.)
Authorizing The Worthington National Bank of Cooperstown, New
York, to change its location and name to The First National Bank of
Oneonta, New York. (Approved February 27, 1871.)
Authorizing The Warren National Bank of South Danvers, Massachusetts, to change its name to The Warren National Bank of Peabody,
Massachusetts. (Approved March 12, 1872.)
Authorizing The First National Bank of Seneca, Illinois, to change
its location and name to The First National Bank of Morris, Illinois.
(Two acts, approved April 5, 1872, and June 18, 1874.)
Authorizing The Railroad National Bank of Lowell, Massachusetts,
to change its location and name to The Eailroad National Bank of
Boston, Massachusetts. (Approved May 31, 1872.)
Authorizing The National Bank of Lyons, Michigan, to change its
location and name to The Second National Bank of Ionia, Michigan.
(Approved December 24, 1872.)
Authorizing The East Chester National Bank of Mount Yernon, New
York, to change its location and name to The German National Bank of
Evansville, Indiana. (Approved January 11,1873.)
Authorizing The First National Bank of Newnan, Georgia, to change
its location and name to The National Bank of Commerce, Atlanta,
Georgia. (Approved January 23, 1873.)
Authorizing The First National Bank of Watkins, New York, to
change its location and name to The First National Bank of Penn Yan,
New York. (Approved February 19, 1873.)
REPORT OF THE COMPTROLLER OF THE CURRENCY.
57
Authorizing The National Bank of Springfield, Missouri, to change its
name to The First National Bank of Springfield, Missouri. (Approved
March 3, 1873.)
Authorizing The Kansas Yalley National Bank of Topeka, Kansas, to
change its name to The First National Bank of Topeka, Kansas. (Approved March 3, 1873.)
Authorizing The First National Bank of Saint Anthony, Minnesota,
to change its location and name to The Merchants' National Bank of
Minneapolis, Minnesota. (Approved January 8, 1874.)
Authorizing The Second National Bank of Havana, New York, to
change its name to The Havana National Bank of Havana, New York.
(Approved January 9, 1874.)
Authorizing The Passaic County National Bank of Paterson, New
Jersey, to change its name to The Second National Bank of Paterson,
New Jersey. (Approved April
15,1874.)
Authorizing The Citizens7 National Bank of Hagerstown, Maryland,
to change its location and name to The Citizens' National Bank of
Washington City, District of Columbia. (Approved May 1,1874.)
Authorizing The Irasburg National Bank of Orleans, at Irasburg,
Vermont, to change its location and name to The Barton National
Bank, Vermont. (Approved June 3, 1874.)
Authorizing The Farmers' National Bank of Greensburg, Pennsylvania, to change its location and name to the Fifth National Bank of
Pittsburg, Pennsylvania. (Approved June 23, 1874.)
Authorizing The Citizens' National Bank of Sanbornton, New Hampshire, to change its name to The Citizens' National Bank of Tilton,
New Hampshire. (Approved February 19, 1875.)
Authorizing The Second National Bank of Jamestown, New York, to
change its name to The City National Bank of Jamestown, New York.
(Approved March 3, 1875.)
Authorizing The Second National Bank of Watkins, New York, to
change its name to The Watkins National Bank, New York. (Approved
March 3, 1875.)
Authorizing The Slater National Bank of North Providence, Rhode
Island, to change its name to The Slater National Bank of Pawtucket,
Rhode Island. (Approved March 3, 1875.)
Authorizing The Auburn City National Bank of Auburn, New York,
to be consolidated with The First National Bank of Auburn, New York.
(Approved March 3, 1875.)
Authorizing The Miners' National Bank of Braidwood, Illinois, to
change its location and name to The Commercial National Bank of
Wilmington, Illinois. (Approved January 31, 1878.)
Authorizing The Windham National Bank, Windham, Connecticut,
to change its location to the village of Willimantic, Connecticut. (Approved February 10,1879.)
Authorizing The National Bank of Commerce of Cincinnati, Ohio,
to change its name to The National Lafayette and Bank of Commerce.
(Approved April 29,1879.)
Authorizing The City National Bank of Manchester, New Hampshire,
to change its name to The Merchants' National Bank of Manchester.
(Approved June 11,1880.)
Authorizing The Blue Hill National Bank of Dorchester, Massachusetts, to change its location and name to The Blue Hill National Bank
of Milton, Massachusetts. (Approved January 13, 1881.)
Authorizing The First National Bank of Meriden, West Meriden,
Connecticut, to change its name to The First National Bank of Meriden,
Connecticut. (Approved March 1, 1881.)
58
REPORT OF THE COMPTROLLER OF THE CURRENCY.
Authorizing The National Mechanics' Banking Association of New
York, New York, to change its name to Wall Street National Bank,
(Approved February 14, 1882.)
Authorizing The Lancaster National Bank of Lancaster, Massachusetts, to change its location and name to The Lancaster National Bank
of Clinton, Massachusetts. (Approved February 25, 1882.)
Authorizing The National Bank of Kutztown, Pennsylvania, to change
its location and name to The Keystone National Bank of Beading, Pennsylvania. (Approved June 27, 1882.)
Joint resolution authorizing The National Bank of Winterset, Iowa,
to change its name to The First National Bank of Winterset, Iowa.
(Approved January 18, 1883.)
Authorizing The Second National Bank of Xenia, Ohio, to increase
its capital stock. (Approved February 17, 1883.)
Authorizing The First National Bank of West Greenville, Pennsylvania, to change its name to The First National Bank of Greenville,
Pennsylvania. (Approved February 26, 1883.)
Authorizing The West Waterville National Bank of Oakland, Maine,
to change its title to The Messalonskee National Bank of Oakland,
Maine. (Approved April 15, 1884.)
Authorizing The Hillsborough National Bank, Ohio, to change its
name to The First National Bank of Hillsborough, Ohio. (Approved
December 18, 1884.)
Authorizing The Slater National Bank of North Providence, Ehode
Island, to change its name. (Approved January 8,1885.)
Authorizing The First National Bank of Omaha, Nebraska, to increase
its capital stock. (Approved January 10, 1885.)
Authorizing The National Bank of Bloomington, Illinois, to change
its name to The First National Bank of Bloomington, Illinois. (Approved
January 27,1885.)
Authorizing The Manufacturers7 National Bank of New York to
change its name to The Manufacturers' National Bank of Brooklyn,
New York. (Approved February 20, 1885.)
Authorizing The Commercial National Bank of Chicago, Illinois, to
increase its capital stock. (Approved February 28,1885.)
Authorizing The First National Bank of Larned, Kansas, to increase
its capital stock. (Approved March 3,1885.)
Authorizing The First National Bank of Fort Benton, Montana, to
change its location and name. (Approved December 18,1890.)
Authorizing a national bank at Chicago, Illinois, to establish a branch
office upon the grounds of the World's Columbian Exposition. (Approved May 12, 1892.)
Authorizing The First National Bank of Sprague, Washington, to
change its location and name. (Approved March 20,1896.)
Authorizing the Interstate National Bank of Kansas City, Kansas,
to change its location. (Approved March 2, 1897.)
INDEX TO NATIONAL-BANK ACT.
Paragraph .
A.
Acknowledgment. (See Oath.)
Acts, miscellaneous:
Synopsis of
i>....
Administrator. (See Trustee.)
Advertisements (see also Notice; Publication) :
Imitation of circulation in, penalty for
Agent:
Bonds, examination by
Central reserve
Central reserve, additional
Circulation, to witness destruction
National banking associations asfiscal,of Government
Reserve
Reserve, additional, provisions for...,
Reserve, central
Reserve, additional central, provisions for
Shareholders, appointment and qualification of
Shareholders, duties of
Allotment. (See Shares.)
Amendments:
Proposed to act in Comptroller's report
Restriction of, to articles of national banking associations
Appointment:
Committee to examine bonds
Committee to examine plates, etc
Committee to witness destruction of circulation
Comptroller
Deputy Comptroller
Directors of associations
Dissenting shareholders, committee of appraisal
Examiners of associations
Office clerks
Officers of associations
Receivers of associations
Special commission for preliminary examination oi associations.
Vacancies in board of directors
Appraisal. (See Shares.)
Articles of association:
Amendment of, for extension of corporate existence
Amendment of, restricted
Execution of, bv converted State banks
Increase of capital stock by amendment of
Provisions for elections when not provided for in
Reduction of capital stock
Specification of object of association in
Title and location, change of
Assessments:
Examinations
Impairment of capital
Plates, engraving of
Redemption of circulation
Repayment of
Reports, failure to make
Shareholders' personal liability
Assessors:
Shareholders' lists accessible to
Assets:
Comptroller's report to contain statement of national banks
Expenses of receiver paid from
Insolvent banks, distribution of
Receiver to collect, etc
Reports of condition to contain statement of
Shareholders' agent to distribute
Assignment. (See Treasurer United States; Bonds, United States.)
Assistant Treasurer United States:
Circulation, unfit, to be sent to Treasurer for redemption
Fraudulent notes to be marked by
Obligations of United States
Public moneys deposited with
Unauthorized withdrawal of public money from
Associations:
Defined
Attachment:
Not to issue prior tofinaljudgment
227
55
166
40
56
103
105
65
220
94
104
103
105
160
161
14
24
25
16
53
23
24
24
25
37
38
10
42
4
11
56
62
65
3
5
16
135
125
7
16
151,152
25
33
14
15
16
3
3
6
31
29
4
6
35
8
9
132
42
37
42
32
45
13
46
31
11
10
11
127
115,116
29
27
16,18
16,17,18
161
122
40, 151
38
28
10,35
118
27
10
155
154
151
119
161
36
36
35
28
38
79
169
222
221,
224
16
19
41
53
54
59
11
92
22
162
39
60
REPORT OF THE COMPTROLLER OF THE CURRENCY.
Index to national-bank act—Continued.
Paragraph. Page.
Auction:
Bonds of expiring associations
Bonds of liquidating associations
Enforcement of assessment
Purchase of property by receiver
Sale of delinquent stock
Sale of dissenting shareholder's stock
Authority. (See Certificate.)
141, 148
140, 148
116
158
20
135
33, 34
32 34
27
36
7
31
B.
Bad debts:
Denned
26
114
Ballot. (See Elections; Shareholders.)
Bank circulation. (See Circulation.)
Bills of exchange:
Illegal transfer of
162
39
Interest on
107
25
Penalty for official malfeasance, relative to
]78
43
Restriction on loans, not applicable to
110
26
112
26
Restriction on associations' liability, not applicable to
162
39
Transfer of, to create a preference, void
Bonds, official:
3
Comptroller
4
Deputy Comptroller
3
5
6
Officers of associations
16
53
220
Public depositaries
35
151
Receiver
37
160
Shareholders' agent
37
160
Sharehplders', on election of agent
Bonds, United States:
14
Annual examination of, provided for
56
13
Assignment or transfer of, to be countersigned by Comptroller
52
13
54
Association to be notified of transfer or assignment
17
68
Called for redemption
34
147
Cancellation of, forfeited, for circulation redeemed
34
49
Circulation issuable on
36
Circulation obtainable on
Comptroller to have access for examination to records and, deposited with
36
Treasurer
55 '
10
37 I
Converted State banks to comply with provisions of law relative to
51 | 13
Coupon, to be exchanged for registered
34
149
Deficiency in proceeds from sale of, what first lien
12
48
Defined
24,49 ! 8,12
Deposit of, required of associations prior to beginning business
14
57
Depreciation in value of, how made good
53
220 I
Depositaries required to deposit
14
57
Exchange of, permitted
143 ! 33
Forfeiture of, for failure to redeem circulation
,
,
57 [ 14
General provisions respecting
16
64
Gold banks to deposit
53
220
Government depositaries, deposit of, required
13
50
Increase of deposit of
20
81 |
Interest on, liable for penalty for failure to make tax returns and pay tax
122 ! 28
Interest on, liable for penalty for failure to make reports to Comptroller
67 ! 17
Lawful money, deposit of, to retire circulation and withdraw
14
58 i
Maximum amount which may be deposited to secure circulation
64 ! 16
Maximum circulation issuable on, to gold banks
8.12
24,49
Minimum amount to be deposited
41
169
Obligations of United States, including, defined
42
174
Penalty for illegal dealing in counterfeit
41
170
Penalty for illegal possession or use of material for printing
42
171
Penalty for passing counterfeit
Penalty for taking or possessing unauthorized impressions of tools, etc., used in
172,173
42
printing, etc
140
32
Reassignment of, to liquidating bank
53
13
Record of transfer or assignment of, to be kept in office of Comptroller
12
49
Registered, to be deposited with Treasurer United States
13
50
Relation of, on deposit to capital
'.
14
57
Return of, to association
34
148
Sale of, at auction for failure to redeem circulation
34
150
Sale of, privately, at not less than par, for failure to redeem circulation
22
91
Taxation, exempt from all
13
52
Transfer of, how effected
13
55
Treasurer United States to have access to records of Comptroller relative to
13
52
Treasurer United States to hold, in trust for association
17
67
Withdrawal of, and of circulation
50
Withdrawal of
Bookkeeper. (See Officers.)
Books. (See Comptroller; Treasurer United States.)
Borrowed money. (See Liability of Association; Loans.)
Branches:
10
39 |
Converted banks may retain
REPORT OF THE COMPTROLLER OF THE CURRENCY.
61
Index to national-bank act—Continued.
Page.
Business:
Authorization of association to begin, when
Suspension of. after default to pay circulation
Business paper. (See Commercial paper.)
By-laws:
Prescribed by directors of national banks
19
146
7
34
16
C.
Cancellation. (See Bonds, United States; Circulation.)
Capital stock:
Agent of shareholders to distribute assets ratably
Appointment and qualification of shareholder's agent
Approval of Secretary required, when
Association organized to begin business, when
Branches of converted State banks
Certificate of officers and directors required relative to payment of
Circulation outstanding not exceeding 5 per cent of, free from taxation
Compensation of examiners based on, except in certain cases
Conversion of State banks authorized, when
Creditor's bill against shareholders
Deposit of United vStates bonds based on
Directors, individual liability of
Directors, qualifications of
Dividends declared on, and net earnings in excess of dividends to be reported
Dividends on, and creation of surplus
Dividends on, when prohibited
Disposition of, delinquent shareholders
Division of, into shares and number and value of each
Duties of agent of shareholders
Enforcment of assessment, to make good impairment of
Enforcing individual liability of shareholders of, by receiver
Enforcing payment of
Failure to dispose of shares of, purchased or acquired by associations
Holders of shares of, in expiring associations to be extended or reorganized to
have preference in the allotment of shares
Holding of shares of, required by directors
Impairment of, assessment for
Impairment of, receiver may be appointed for failure to make good
Increase of, provisions for
Liabilities of an association not to exceed, except on account of certain demands..
Liquidation, shareholders owning two-thirds of, may vote to go into
List of shareholders of, to be transmitted to the Comptroller
Loan on security of shares or purchase of, prohibited
Loans restricted to 10 per cent of
Minimum amount required of national banks
Number of shares and amount of, stated in organization certificate
Payment of, provisions for
Penalty for failure to make good impairment of
Personal liability of shareholders
Receiver may be appointed when—impaired
Receiver may be appointed when, not fully paid in
Reduction of, provisions for
.
Relation of bond deposit to
Restoration of, when below the minimum required
Shareholders of, list to be kept and subject to inspection
Shareholders owning two-thirds of, may place an association in liquidation
Shareholders owning two-thirds of, may change title and location
Shareholders owning two-thirds of, may increase stock
Shareholders owning two-thirds of, may reduce stock
Shareholders owning two-thirds of, may extend corporate existence
Shareholders entitled to one vote on each share of, held by
Shareholders of converted State banks not liable when
Shareholders of, not consenting to an extension may withdraw
Shares of, acquired for debt to be disposed of when
Savings and other banks organized in the District of Columbia under act of Congress subject to provisions of this act
Savings banks now established not required to have, exceeding $100,000
State banks converted into national shall be assumed to have the same, a3 immediately prior to conversion
State taxation of shares of
Surplus fund to be created to the amount of 20 per cent of
United States registered bonds to be deposited as security for circulation to be
based on
When increase of, becomes valid
Withdrawal of bonds on reduction of, or closing of business
Withdrawal of bonds, limited
Cashier (see aho President; Officers):
Bond assignments by
Certificate of officers and directors
Certificate of stock payment
161
160
17
19
139
19, 23
85
127
37
163
24
157
28
121
109
114
20
18
161
116
152
20
152
38
37
G
7
10
7
20
29
10
39
8
36
8
28
26
26
7
6
38
27
35
7
35
135
31
115
152
43
112
136
118
111
110
17
14
19
115
40
115
152
45
50
21
118
136
46
43
45
132
30
40
135
111
29
9
27
35
11
26
32
27
26
26
6
5
7
27
10
27
35
11
13
7
27
32
11
11
11
31
9
10
31
26
123
123
28
28
38
124
109
10
29
26
49
44
50
57
12
11
13
14
52
'23
19
13
7
7
62
REPORT OF THE COMPTROLLER OF THE CURRENCY.
Index to national-lank act—Continued.
Cashier (see also President; Officers)—Continued.
Election or appointment of
Expiration of corporate existence, certification by
Extension of corporate existence, certification by
False certification of checks
Incomplete circulation, provisions relative to
,
Increase of stock, certification of
,
Penalty for—
Countersigning or delivering circulation improperly
False certification of checks
Issuing circulation of expired associations
Official malfeasance
Pledging, etc., circulation
Unauthorized receipt of public money
President or vice-president and, to sign circulation
,
Protest of circulation, waiving notice of
Proxy, not to act as
Reports of condition, verified by
Reports of earnings and dividends, verified by
Shareholders, lists of, by
Signature of, forged or wanting, not to invalidate circulation
Taxable circulation, returns by
Unauthorized circulation, returns by
Voluntary liquidation, certified by
Central reserve agents. (See Agent; Reserve; Reserve agents.)
Certificate:
Certified copy of organization, evidence
Comptroller's, of authority
Converted State banks
Execution of organization
Extension of corporate existence
Increase of stock valid, when
May be withheld, when
Officers and directors
Organization, to specify
Payment of installments of stock to be certified
Publication of Comptroller's, of authority
Reduction of stock valid, when
Sealed, of Comptroller, evidence
Voluntary liquidation
Certified copies. (See Evidence.)
Charter number:
Circulation, to be printed on
Checks:
False certification of, unlawful
Falsely certified, an obligation of association
Penalty for false certification of
Circulation:
Amount of, obtainable
Amount of, obtainable by gold banks
Association may issue
Association to receive interest on bonds as long as, honored
Associations consolidating, deposit of lawful money to retire, unnecessary
Associations to redeem, in lawful money on demand
Bonds in excess of amount required may be withdrawn
Bonds forfeited when, dishonored
Certificates of destruction, by whom executed
Charter number on
Collection of tax on
Cost of engraved plates to be paid by association
Counterfeiting, etc
Deposit of United States bonds to secure . „•
Deposit to be increased when capital is increased
Destroyed, to be replaced by an equal amount of new notes
Disposition of redemption account balances
Examination of bank upon protest of, by agent of Comptroller
Expense of plates for new notes of extended banks
Expenses of redeeming, withdrawn
Expenses of redemption, how paid
Extended bank, shall differ from prior issues
For what, is receivable
Fraudulent n'otes to be so stamped
Gold bank, to be redeemed in gold coin
Government depositaries to receive, at par
Inscription on
Increasing capital stock, use of, prohibited
Liquidating bank to deposit lawful money to redeem
Maximum deposit of bonds required
Minimum deposit of bonds required
Notice of redemption of, to be forwarded to bank
Other, prohibited for national bank
Page.
16
141
132
176
76
44
33
31
43
19
11
164
177
175
178
.165
225
59
142
30
119
121
118
76
81
86
137
40
43
43
43
40
54
15
33
9
28
28
27
19
20
21
32
182
25
37
15
132
44
25
23
14
19
26
45
181
137
44
8
10
6
31
11
8
7
5
7
8
11
44
32
60
15
176
176
177
43
43
43
49,58 12,14
64
16
16
6
57
14
32
139
103
24
50
13
33
143
65
16
15
59
83
20
66
16
164-175 40,43
24,49
8,12
50
13
16
66
75
19
143
33
69
18
18
69
66
16
18
69
63
15
79
19
64
16
53
220
59,64 15,16
113
26
140
32
12
49
49
12
(3G
16
78
19
REPORT OF THE COMPTROLLER OF THE CURRENCY.
63
Index to national-bank act—Continued.
Paragraph. Page.
Circulation—Continued.
Penalty for failure to make return of taxable
81
20
Preparation of
58
14
Pledging, as security prohibited
113
26
Profit on unredeemed, inures to the United States
69
18
Proceedings when return is not made
88
21
Prohibition against circulating uncurrent notes
117
27
Protest of
142
33
Receivable at par by all national banks
77
19
Refunding excess tax
84
20
Redeemed, to be canceled
73
18
Redemption fund of 5 per cent
6(j
16
Redemption of, in United States notes
16
Redemption of, extended bank
69
18
Redemption of, liquidating banks
70
18
Redemption of, closed banks
71
18
Redemption of, incomplete
76
19
Restriction of tax provisions
90
21
81,87 20,21
Semiannual return of, subject to tax
Statement concerning, of closed banks to appear in annual report of Comptroller.
10
4
91
22
Securities exempt frcm local taxation
80
20
Tax on
Tax on unauthorized
86
21
Tax on converted bank
89
21
Tax on, insolvent banks remitted
159
37
71
18
Treasurers and public depositaries to return all, of closed banks
When exempt from tax
85
20
When issuable as money
63
15
When withdrawn, new will not be issued for six months thereafter
68
17
Withdrawal of, by depositing lawful money
67
17
Worn out or mutilated, destroyed
65
16
Citizens:
National-banking associations, where
180
Claims. (See Insolvency; Receiver.)
Clearinghouse:
97
23
Certificates issued by, counted as reserve
101
24
Receipt in settlement of balances of gold and silver certificates by
Clearing-house certificates. (See Clearing house; Reserve.)
Clerks;
Appointment and qualification of, by the Secretary
Duties of, fixed by the Comptroller
Employment of, for the Bureau by the Comptroller
Names and compensation of, in annual report
10
Coin. (SeeGold; Silver.)
Commercial paper:
107,112 25,26
Discount of
.**...*..
Committee of appraisal. (See Dissenting shareholders.)
Comptroller of the Currency :
Agent, special, to be appointed for association failing to redeem circulation
143
33
Annual report to be made to Congress by
10
4
Appointment, term and salary of
3
3
Articles of association and organization certificate of national banks to be filed
13,14
5
with
Authorized to examine banks in the District of Columbia, organized under acts
128
30
of Congress
Bonds, sale of, privately or at public auction by
150
34
43,45
Capital stock, increase or reduction of, to be approved by
11
95,151 23,25
Circulation, worn, mutilated, destruction of
Distribution of Comptroller's reports
12
5
Duties of
2
3
Examiners, appointment of
125
29
Extension of corporate existence, approval of, by
131
30
181
44
Evidence sealed certificates
Forfeiture of charter, suit to be brought by
156
36
Gold banks, organization of
35
9
Interest in national banks, issuing currency, prohibited .
4
6
Jurisdiction of circuit courts
44
179
Liquidation of associations to be approved by
137
32
Notice to creditors of insolvent banks
36
153
Oath to be taken and bond to be given by
4
3
Printing report of
11
5
Plates and dies, examination of
62
15
Qualifications of
4
3
95,151 23,35
Receivers appointed by
123
28
Reports of banks other than national to be obtained and published by
119,121
Reports to be made to
28
104,105 24,25
Reserve cities, designation of, by
State banks converted, approval by
37
10
40
11
Title and location, change of, to be approved by
Title of national banks subject to approval of
14
5
Congress:
Comptroller's report to be made to
64
REPORT OF THE COMPTROLLER OF THE CURRENCY.
Index to national-bank act—Continued.
Paragraph.
Consolidation:
Provisions for liquidation on
139
Corjjorate powers. (See Powers.)
Corporation ($ee also Liability of association):
A ssociation becomes a, when
16
Cost. (See Expenses.)
Coupon bonds. (See Bonds, United States.)
Courts. (See Crimes, jurisdiction, etc.)
Creditors:
Bill in equity by, against shareholders
=
163
Checks falsely certified a valid obligation of associations
176
Directors' liability
157
Expiration of existence, notice to
141
Illegal preference of
162
Insolvency, notice of, to
153
Nonpayment of circulation, notice of, to
147
Shareholders' agent, following settlement with
160
Shareholders, list of, subject to inspection by
118
Shareholders, personal liability of, to
40
Voluntary liquidation, notice of, to
137
Creditor's bills:
163
A gainst shareholders
Crimes, jurisdiction, etc.:
Counterfeiting circulation
...
168
Dealing in counterfeit circulation
174
Evidence, certified copy of organization certificate
. 182
Evidence, sealed certificate of Comptroller competent
181
False certification of checks
176,177
Having or taking unauthorized impressions of tools, etc
172,173
Illegal jwssession or use of material for circulation
170
Imitating circulation for advertising purposes
166
Improper countersigning or delivering circulation
,
164
Indian Territory
184
Issuing circulation of expired associations
175
Jurisdiction, general, of national-bank cases
180
Jurisdiction to enjoin Comptroller or receiver
,
.179
Mutilating circulation
167
Obligations of the United States defined
169
Official malfeasance
178
Passing counterfeit circulation
171
Pledging United States notes or bank circulation
165
Suits against United States officers or agents
183
Taking unauthorized impression of tools, etc
172
Currency. (See Circulation: Gold; Gold certificates; Silver; Silver certificates;
Lawful money; United States note certificates.)
Currency bureau:
2
Designation of office of Comptroller of the Currency
Offices, vaults, etc., for
9
Deficiency. (See Bonds; Capital; Circulation; Receiver; Reserve.)
Denominations:
Circulation of gold banks
Circulation of national banks
Gold certificates
Shares of national-bank stock
United States note certificates
Deposit of United States bonds. (See Bonds, United States.)
Depositaries. (See Government depositaries.)
Depreciation. (See Bonds; Circulation.)
Deputy Conij>troller:
Appointment of
Bond of
Duties of
--Interest in bank issuing national currency prohibited by
Oath to be taken
Salary of
Destruction. (See Redemption.)
Dies. (See Plates and dies.)
Directors:
Assessment, provisions for enforcement of, by
Association to elect or appoint
Attestation of reports to Comptroller, by
Certificate of officers and
Certification of, to extension
Conversion of State bank, action by
Dividends, declaration of, by
Enforcing payment of capital
Failure to lioid annual election
Forfeiture of charier for violation, etc., by
Indian Territory, national-bank act relative to, in effect in
Page.
6
39
43
36
33
39
36
34
37
27
10
32
39
41
42
44
44
43
42
41
40
40
44
43
44
44
41
41
43
42
40
44
42
3
4
64
59
101
18,37
99
16
15
24
6,10
23
5
5
5
6
5
5
3
3
3
4
3
3
116
16
119
23
132
37
109
20
32
156
184
27
6
28
7
28
10
26
7
9
36
44
REPORT OF THE COMPTROLLER OF THE CURRENCY.
65
Index to national-hank act—Continued.
Directors—Continued.
Individual liability of
Names and residences of, to be ascertained by Comptroller
Number and election of
Oath of
Oklahoma, qualification of national bank, in
Penalty for issuing circulation of expired association
Penalty for official malfeasance
Penalty for unauthorized receipt of public money
President of board, to be a.
Powers of
Qualifications of
_
Qualifications of, in Oklahoma
Shareholders dissenting to extension to give no tice to, etc
Vacancies ic. board of
•Discount. (See Loans; Liability of association; Interest.)
Dissenting shareholders:
Withdrawal of, on extension
Dissolution. (See Expiration of corporate existence; Forfeiture; Insolvency; Liqui
dation.)
Distinctive paper:
Unauthorized possession or use of
District of Columbia:
Supervision of banks in, authorized by Congress, by Comptroller
Dividends (see also Surplus and dividends):
Comptroller to make ratable, of assets of insolvent banks
Directors may declare, when
Earnings and, to be reported
Penalty for failure to report earnings and
Restriction on association's liability
Unearned, prohibited
Drafts :
Obligations of United States including
Official malfeasance
Liability of association, relative to
Penalty for mutilating
Dues. (See Taxation; Duties.)
Duties:
Associations organized under act of February 2*, 1863
Circulation, converted State banks
Circulation, enforcing payment of, on
Circulation, exempt from
Circulation, not receivable for customs
Circulation, refunding excess on
Circulation, restrictions on
Circulation, semiannual on
Circulation, unauthorized
Comptroller's
Deputy Comptroller's
Directors'
Examiners'
Gold certificates receivable for
Notes, etc., other than national-bank circulation
Public depositaries, designation and
Receiver, appointment and
Shareholders' agent
,
E.
Earnings. (See Dividends.)
Elections:
Change of title or location
*
Corporate powers
Extension of corporate existence
,
Failure to hold annual
Increase of stock
Number of directors
Oaths of directors
Qualifications of directors
Qualifications of shareholders
Reduction of stock
Shareholders' agent
Voluntary liquidation
Embezzlement. (See Crimes.)
Embezzlement, misapplication of funds, etc.:
Penalty for
Employees and expenses. (See Clerks; Expenses.)
Enforcing payment of capital stock:
Provisions for
Engraving. (See Circulation; Plates and dies.)
Equity. (See Creditor's bill against shareholders.)
Examination of organization proceedings:
Preliminary to authorizing, to begin business
CUR 98
5
Paragraph.
Page.
157
22
27
31
29
175
178
225
34
16
28
29
135
33
36
7
8
9
8
43
43
54
9
6
8
8
31
9
135
170
41
128
30
154
109
121
122
112
114
36
26
28
28
26
26
169
178
112
167
41
43
26
41
47
89
83
85
63
84
90
80
86
2
5
12
21
20
20
15
20
21
20
21
3
3
8,9
29
24
22
53
35
38
27,31
125
101
91
220
151
161
46
16
131
32
43
27
31
28
30
45
160
136,137
178
20
22
11
6
30
9
11
8
9
8
9
11
37
32
66
REPORT OF THE COMPTROLLER OF THE CURRENCY.
Index to national-hank act—Continued.
Examinations:
Annual, of bonds
Ascertainment of value of stock of dissenring shareholders
Bonds and records, provisions for
Compensation of examiners
Comptroller may make, of all banks in the District of Columbia organized under
acts of Congress
Examiners to make
Limitation of ATisitorial powers
List of shareholders subject to
Plates and dies annually
Preliminary, to beginning business
Qualification of examiners
Special, of extended associations
Examiners:
Appointment of
Compensation of
Qualifications of
Special commission
Execution. (See Suits.)
Executor. (See Trustee.)
Existence:
Extension of
Term of corporate, of national banks
Expenses:
Bureau, to be stated in Comptroller's annual report
Circulation, redemption of
Circulation, tax on
Circulation, transportation and redemption of
,
Duties of shareholders' agent relative to
,
Examinations
.'
Examinations, dissenting shareholders
Examinations, in District of Columbia
Examinations, special
Examiners, fees of
Plates, cost of
Plates and dies, examination of
.Receiverships, how paid
Receiverships, paid prior to election of shareholders' agent
Sale of bonds
Sale of delinquent stock
F.
Failure. (See Insolvency.)
False entry:
Penalty for, official malfeasance
Fees. (See Examiners; Receivers.)
Fine. (See Penalty.)
Firm. (See Liability of association.)
Fiscal agent. (See Agent; Government depositaries.)
Forfeiture. (See Interest; Bonds; Charter; Suits.)
Forgery. (See Crimes; Penalty.)
Franchise. (See Corporate powers; Violations of national-bank act.)
Fraudulent notes:
United States and national bank officers to mark
Paragraph.
Page.
56
135
55
127
14
31
13
29
128
125
129
118
62
22
126
133
30
29
30
27
15
7
29
31
125
127
126
25
29
29
29
8
131
16
30
6
10
66
80
68
161
127
135
128
133
127
69
62
155
160
149
20
4
16
20
17
38
29
31
30
31
29
18
15
36
37
34
7
178
43
79
19
101
64
101
77
35
101
35
101
102
91
24
16
24
19
9
24
9
24
24
22
64
36
64
77
35
80
16
9
16
19
9
24
20
101
101
101
101
24
24
24
24
G.
Gold:
Certificates not to be issued when reserve of gold coin and bullion is depleted
Circulation of gold banks redeemable in
Deposit of, for certificates
Gold banks not required to take circulation of other banks at par
Gold banks, issue of circulation by, payable in
'.
Issue of certificates of deposit of.'.
Organization of gold banks
Reserve in Treasury
Reserve of gold banks to be silver and
Taxation of, by State, etc
Gold banks:
Circulation of, issuable
Conversion of
Deposit of bonds by
Exempted from provisions relative to other bank circulation
Organization of
Reserve required for
Tax on circulation
Gold bank notes. (See Gold banks; Circulation.)
Gold certificates:
Deposit of gold for
Issue of, prohibited, when
Minimum denomination
Receivable for
102,103
REPORT OF THE COMPTROLLER OF THE CURRENCY.
67
Index to national-hanlc act—Continued.
Gold reserve in Treasury:
Gold certificates not to be issued when, depleted
Government depositaries:
Deposit and withdrawal of public moneys
Deposits by certain postmasters
Designation and duties of
National banks as
National-bank circulation to be received by
National banks as financial agents of the Government
Penalty for misapplication of money-order funds
Penalty for unauthorized deposit of public moneys
Penalty for unauthorized receipt or use of public moneys
Secretary of the Treasury to designate
Securities to be deposited by
Guardian. (See Trustee.)
101
221
222
220
220
220
220
223
224
225
220
220
24
53
*3
SB
53
53
53
54
54
54
53
53
Ii.
House of Representatives:
Comptroller's reports to be sent to
Hypothecation. (See Pledging.)
12
I.
Imports, interest on public debt:
Circulation of national banks not receivable for duties and interest
Improper use of circulation:
Pledging, hypothecating, etc
TJncurrent circulation
Incomplete circulation (see also Circulation):
Redemption of
Indian Territory:
National-bank act in effect in
Injunction. (See Comptroller; Suits.)
Insolvency:
Assets, distribution of, by receiver
General j urisdiction of national-bank cases
Impairment of capital
Jurisdiction of courts
Notice to creditors of associations in..
Penalty for issuing circulation of associations in
Preference of creditors
Receiver, appointment of
Receiver, duties of
Receiver, when may be appointed
Redemption of
circulation of association in
Shareholders1 agent
Taxes on bank in, remitted
Interest in national banks prohibited:
By Comptroller
By Deputy Comptroller
Internal Revenue, Commissioner of:
Penalty for failure to make returns to, of taxable circulation
Remission of tax against insolvent State banks
Semiannual return to, of taxable circulation other than national
J.
Judgment (see also Suits):
Appointment of receiver
Illegal preference of creditors
Jurisdiction. (See Crimes, jurisdiction, etc.)
15
113
117
26
27
76
19
184
44
154
44
180
. 27
115
44
179|
36
153
43
175
39
162
35
151
35
151
35
152
18
71
37,38
161
37
159
4
4
159
87
21
37
21
152
162
35
39
226
102
85
141
69
55
24
20
33
18
66.75
16,19
143
138
139
147
142
152
75
94
33
32
32
34
33
35
19
23
17
L.
Larceny. (See Crimes, jurisdiction, etc.)
Lawful money:
Defined
,
Defined for gold banks
Exemption of circulation from taxation when, deposited
Expiring associations to deposit
Extended banks to deposit
Five per cent fund
Forfeiture of bonds, for failure to redeem circulation in
Liquidating associations to deposit
Liquidating association, consolidating, not to deposit
Payment of protested circulation in
Protest of circulation, for failure to redeem in
Receiver to be appointed for failure to maintain reserve of
Redemption account, disposition of
Reserve to be
Withdrawing circulation, deposit of
,
,
67,68
68
REPORT OF THE COMPTROLLER OF THE CURRENCY.
Index to national-bank act—Continued.
Lawful money reserve:
Balances with agents
Clearing-house certificates
Gold banks
Gold and silver certificates
Five per cent fund
Lawful money on hand
Maintenance of
Receiver for failure to maintain
Reserve agents, proportion with
United States note certificates
Legal tenders:
Defined
Liability:
Association's, for pledging, etc., United States notes, etc ...
Converted State bank for old notes
Creditor's bill against shareholders
Estates owning stock subject to
False certification of checks
Individual, of directors
Limited to amount of capital, except
Personal, of shareholders
Restriction on
Shareholders' agent
Shareholders, debars from voting
Shareholders exempt from, when
Trustees, exempt from, when
Liabilities:
Associations organized under act of February 25,1863
Change of title or location not to affect
Comptroller's report to contain statement of national banks.
Converted State banks
Deficiency in reserve, not to be increased
Deposit of lawful money relieves from, on circulation
Duties of receiver
Exceptions to limitation
Extended associations
'Liquidating associations, on consolidation
Loans, restrictions on
Reports of condition to show
Restriction on
Shareholders' agent
Lien:
Illegal preference of creditors
Interest on bonds
United States has paramount, on assets of association
Limitations :
Associations, corporate existence
Bonds, withdrawal of
Capital, converted State banks
Capital stock, increase of
Capital stock, reduction of
Capital stock, payment of
Capital stock, requirements
Circulation, denomination
Circulation, deposit of lawful money on withdrawing
Circulation, increase of, restricted
Circulation exempt from tax
Circulation obtainable
Circulation obtainable by gold banks
Circulation to be taken at par
Circulation, tax on
Circulation, unauthorized, tax on
Comptroller or receiver may be enjoined, when
Corporate existence of converted gold banks
Creditors of insolvent banks, notice to
Creditors of insolvent bank, illegal preference
Directors, number of
Dividends
Expiration of corporate existence
Extended association, deposit of lawful money by
Extension of corporate*existence
Gold certificates, denominations of
Impairment of capital
Inspection of list of shareholders
Interest rate
Jiarisdicton of courts
Jurisdiction, general, of national-bank cases
Lawful money deposited to retire circulation
Liability of national banks
Location of associations, change of
Loans
Paragraph.
Page.
96,103
23,24
97
102
101
98
94
95
95
94
99
23
24
24
23
23
23
23
23
23
226
55
165
89
163
41
176
157
112
40
112
40
21
39
11
43
36
26
160,161
37,38
30
40
41
9
10
11
47
46
10
89
95
140
151
112
134
139
110
119
112
160
12
11
4
21
23
32
35
26
31
30
26
28
26
37
ia
26
162
39
83,122
20,28
149
34
16
6
57,67
14,17
37
43
45
19
17
59
67
68
85
10
11
11
7
6
15
17
17
20
49,58
12,14
64
77
16
19
80,90
20,21
86
144
36
153
162
27
21
34
9
36
39
8
26
33
18
30
24
27
27
25
44
44
17
26
11
26
109,114
141
69
131
101
115
118
107
179
180
68
112
46
110
REPORT OF THE COMPTROLLER OF THE CURRENCY.
69
Index to national-bank act—Continued.
Limitations—Continued.
"National "in title of bank
Place of business
Public depositaries
Real estate holdings
Eeserve, gold banks
Receiver, appointment of
Receiver, purchase of property to protect trust
Reports of condition, transmitted
Reports of earnings and dividends, transmitted
Reserve requirements
Reserve with central reserve agents
Reserve with reserve agents
Savings banks in District of Columbia, capital of
Shareholders' agent, duties of
Shareholders, personal liability of
Shareholders, personal liability of certain com^erted banks
Shares of stock, par value
Shares of stock, directors to own
State taxation of money
State taxation of national banks
Stock, purchased or acquired
Suits, conduct of
United States bonds deposited
United States note certificates, denominations of
United States gold certificates, issue of
United States Treasurer to redeem circulation presented, when
Visitorial powers
Voluntary liquidation, vote
Voluntary liquidation, deposit of lawful money
Voters at elections
"Liquidation:
Bonds withdrawn -.
Creditor's bill against shareholders
Consolidation
Expiring associations to comply with provisions for
General jurisdiction of national-bank cases
Jurisdiction of courts
,
Lawful money to be deposited
Notice of, to be published
:
Penalty for issuing circulation of associations in
Redemption of circulation of associations in
Sale of bonds when
Vote required
Liquidation and receivership (see also Liquidation; Receiver):
Bonds, deficiency in, first lien on assets for redemption of circulation
Bonds, forfeiture of
Bonds, sale of, at auction
Bonds, sale of, privately
Bonds, withdrawal of
Charter, forfeiture of
Circulation, protest of
Consolidation, provisions for
Creditor's bill against shareholders
Deposit of lawful money on liquidating
Directors, individual liability of
Distribution of assets of insolvent associations
Enjoining proceedings
Enjoining proceedings, where brought
Expiring associations
Illegal preference of creditors
Jurisdiction, general, of national-bank cases
Jurisdiction of circuit courts
Notice of vote to liquidate
Notice to creditors of insolvent associations
Notice to present circulation for redemption
Penalty for issuing circulation of expired associations
Receiver, appointment of
Receiver, when may be appointed
Receiver, purchase of property to protect trust
Receivership, expenses of
Shareholders' agent, appointment of
Shareholders' agent, duties of
Suits, conduct of
:
Suspension of business for nonpayment of circulation
Taxes on insolven t associations remitted
Vote required for liquidation
Loans:
Associations' liability restricted
Circulation as collateral for, prohibited
Prohibited on security of own stock
Real estate, prohibited
Restrictions on
Paragraph. Page.
130
93
220
106
102
152
158
119
121
94
103
96
123
161
40
40
18
28
91
124
111
183
24
99
99
74
129
136
138
30
30
22
53
25
24
35
36
27
28
23
24
23
28
38
10
10
6
8
22
29
26
44
8
23
23
18
30
32
32
9
140
163
139
141
180
179
138
137
175
140
136
32
39
32
33
44
44
32
32
43
18
32
32
149
143
148
150
140
156
142
139
163
138
157
154
144
145
141
162
180
179
137
153
147
175
151
152
158
155
160
161
183
146
159
136
34
33
34
34
32
36
33
32
39
32
36
36
34
34
33
39
44
44
32
36
34
43
35
35
37
36
37
38
44
34
37
32
112
113
26
26
26
25
26
70,71
m
106
110
70
REPORT OF THE COMPTROLLER OF THE CURRENCY.
Index to national-hank act—Continued.
Page.
Location (gee also Title and location) :
Change of
Organization certificate to state
Losses:
Bad debts and, exceeding profits ..
M.
Maceration :
Redeemed circulation to be disposed of by
Maximum. (See Bonds; Capital; Circulation; Limitations.)
Minimum. (See Bonds; Capital; Circulation; Limitations.)
Misdemeanor. (See Crimes; Penalty; Official malfeasance.)
Moneys. (See Lawful money; Legal tender; Circulation; Public moneys.)
Mortgages:
Assignment of, when illegal
Ofiicial malfeasance
Purchase of, by receiver
Real estate, possession, etc., of, by association
Mutilated or worn circulation:
Redemption of
46
14
26
162
178
158
106
39
43
36
25
65
16
National:
Use of the word, in titles of associations other than national, prohibited
130
National-bank act:
Provides for a national currency, etc
1
Status of national banks organized under act of February 25, 1863
47
National banking associations:
Amendment of articles of association restricted
42
Articles of association entered into by
13
Branches may be retained by converted State banks
39
Capital required
17
38
Capital of converted State banks
"73
Cancellation of redeemed circulation
23
Certificate of officers and directors
58
Circulation obtainable by
Circulation of, tax on
80-87
Circulation of, to be redeemed in United States notes
I
74
77
Circulation to be taken at par
j
63
Circulation of, for what receivable
j
76
Circulation unsigned or with forged signatures to be reduced
71
Closed bank circulation
|
46
Change of title and location
156
Charter forfeiture
!
60
Charter number to be printed on circulation of
j
6
Comptroller and Deputy Comptroller not to be interested jn, issuing circulation.. J
Conversion of State banks to
37
Corporate and incidental powers of
!
16
Crimes, jurisdiction, etc
I 164-183
Deposit of bonds by
J
24
Directors individually liable when
|
157
Directors, number and election of
|
27
Directors, oath of
31
Directors, qualification of
Election, holding annual
32
Enjoining proceedings
144
Examination of, prior to being authorized to begin business
25
Expiration of corporate existence, provisions on
141
Extended bank circulation
69
Exchange of bonds
51
Extension of corporate existence of
132,133
General provisions respecting bonds
57
Gold bank circulation, provisions for issuing
64
Gold banks may be organized
35
Gold banks, conversion of
36
Incomplete circulation of
76
Increase of capital stock by
43,44
Liquidating bank circulation
70
Liquidation, provisions for
136,140
Lost or stolen notes of, to be redeemed
76
National-bank act relative to, in force in the Indian Territory
184
Oklahoma, qualification of directors in
29
Organization certificate to specifically state
14
Payment of stock prior to beginning'business
:
19
Post-notes, issue of, prohibited
78
Preparation of bank circulation
59
Publication of certificate of authority
26
34
President of, to be chosen by board
Receiver may be appointed for failure to restore capital
21
Reduction of capital stock
45
Receiver for, when may be appointed
152
11
5
30
3
12
11
5
10
6
10
18
7
14
20,21
18
19
15
19
18
11
36
15
4
10
6
40,44
8
36
8
9
8
9
34
8
33
18
13
31
14
16
9
9
19
11
18
32
19
44
8
5
7
19
15
8
9
7
11
35
REPORT OF THE COMPTROLLER OF THE CURRENCY.
71
Index to national-hank act—Continued.
Page.
National banking associations—Continued.
Redemption and destruction of circulation of
Redemption account, disposition of
Regulation of business of
Relation of bond deposit to capital of
Security for circulation
Shares of stock
Shareholders of, q ualifications of, at elections
Shareholders' agent
Shareholders of, personally liable
Shareholders of, when not personally liable
Status of, organized under act of February 25,1863
Subscribed stock not paid for, forfeited to
Suspension of business after default to pay circulation.
Taxation of circulation of, by States, etc
Tax provisions restricted
Taxes on insolvent,remitted
,
"Where proceedings to enjoin may be brought
Withdrawing circulation
New York City:
Associations in, reserve agents
65,6-6
75
92-130
50
49
18
30
160
40
40
47
20
148
91
90
159
145
67,68
Bonds, sale of forfeited, in
Notice of expiration of corporate existence in paper i n .
Notice of voluntary liquidation in paper in
N e t profits. (See Dividends.)
Nonresidents:
Directors
State, etc., taxation of stock of
Notary public:
•
Acknowledgment of organization certificates before
Acknowledgment of reports
Notice.
(See Publication; Printing.)
16
19
22, 30
13
12
6
9
37
10
10
12
7
34
22
21
37
34
17
94, 96,
103
148
141
137
23
24
34
33
32
28,29
124
8
29
15
119,120,
121
6
28
28
O.
Oath:
Certificate of officers and directors
Directors
Examiners may t a k e statements under
Execution of organization certificate
Official, by Comptroller
Official, by Deputy Comptroller
Payment of installments
Reports of condition, etc
I
,
*
Semiannual r e t u r n of circulation
Shareholders, list of
Obligations of t h e United States:
Defined
Penalty for dealing in counterfeit
P e n a l t y for illegal possession or use of material for
Penalty for passing counterfeit
Penalty for pledging
Penalty for t a k i n g or having u n a u.thorized impressions of tools, etc
Officers (see also President; Cashier):
Bonds assigned to be signed by cashier or other
Certificate of directors and
Certificate of payment of increase of stock
Certification of payment of stock by president or cashier
Circulation properly signed, issuable
Disqualified t o examine national b a n k i n g associations i n which interested as
Election or appointment of, by directors
Examination of, under oath
False certification of checks forbidden
Forfeiture of charter, provisions for
Forged signatures of, t o circulation n o t to invalidate
F r a u d u l e n t notes t o be marked by
Oath, administration of, to reports
Official malfeasance, penalty for
Penalty for false certification of checks
Penalty for improper countersigned, etc., circulation
Penalty for issuing circulation of expired, associations
Penalty for official malfeasance
Penalty for pledging, etc., circulation
Penalty for unauthorized receipt of public money
Preference of creditors
P r e s i d e n t of board a director
President or cashier, certification of extension
President or cashier, certification of expiration of existence
President or cashier, certification of liquidation
19,23
31
125
6,10
15,37
3
4
3
•
5
7
19 j
28
119-121, i
28
|
123 |
! 81-87 !20,21
27
\
118 |
i
169
174
170
171
165
172,173
41
42
41
42
40
42
52
23
44
19
63
126
16
125
176
156
76
13
7
12
7
15
29
6
29
43
36
19
19
28
43
43
40
43
43
40
54
120
178
177
164
175
178
165
225
162
34
132
141
137
31
33
32
72
REPORT OF THE COMPTROLLER OF THE CURRENCY.
Index to national-bank act—Continued.
Page.
Officers (see also President; Cashier)—Continued.
President or cashier waiving notice of protest
President or vice-president and cashier to sign circulation
Proxy, not to act as
Receiver, appointment of, for violation of national-bank act by
Redemption of unsigned circulation
Reports of condition, verification of, by president or cashier
Reports of earnings and dividends, attestation of, by president or cashier
Shareholders' list, verified by president or cashier
Taxation, circulation subject to, returns by president or cashier
Taxation unauthorized circulation, returns by president or cashier
Officers, United States:
Deposit and withdrawal of public money
Penalty for improper countersigning or delivering circulation
Penalty for unauthorized deposit of public money
Receiving or disbursing public money to mark fraudulent
Offices, vaults, etc.:
Assignment of, to the Comptroller by the Secretary
Oklahoma:
Qualification of directors of association in
Organization and powers of national banks:
Amendment of articles of association
Articles of association
Branches of converted State banks
Capitalstock
Capital stock requirements
Certificate of authority to begin business
Certificate of officers and directors
Change in title and location
^.
Conversion of gold banks
Conversion of State banks
Corporate powers
Deposit of bonds
Directors, election of
Directors, number and election of
Directors, oath of
Directors, qualification of
Directors, qualification of, in Oklahoma
Directors, to choose president
Directors, vacancy, how
filled
Enforcing payment of stock
Examination preliminary to beginning business
Execution of organization certificate
Extension of corporate existence
Failure to hold election
Gold banks, conversion of
Gold banks, organization of
Incidental powers
Increase of capital stock, provisions for
Increase of capital stock, when valid
Liquidation
Location and title, change of
Location
Organization certificate
Payment of stock
•
President, election of, by board
President, qualification of
Publication of certificate of authority to begin business
Reduction of capital stock, provision's for
Restoration of capital stock
Shareholders
Shareholders, personal liability of
Shareholders, qualification of, at election
Shareholders, when personally liable
Shares of stock
State banks, capital of converted
State banks, conversion of
State banks, conversion of, and capital
State banks, converted may retain branches
Status of associations organized under act of February 25,1863
Title
Title and location, change of
Vacancies in board, how
filled
Organization certificate:
Certified copy of, evidence
Comptroller to grant or withhold
Conversion of gold banks
Conversion of State banks
Execution of
Sealed certificate of Comptroller, evidence
Specifications in
{
!
j
i
i
|
j
I
142
59
30
152
76
119
121
118
81
87
221
164
224
79
29 j
\
42
13
39
14
17
25
23
46
36
37
16
24
32
27
31
28
29
34
33
20
22
15
131
32
36
35
16
43
44
136
46
14
14
19
34
34
26
45
21
14
40
30
40
18
38
37
47
14
46
33
182
25
36
37
15
181
14
REPORT OF THE COMPTROLLER OF THE CURRENCY.
73
Index to national-bank act—Continued.
Paragraph. Page.
P.
Payment of capital stock:
Provisions relative to
,
Penalty:
Appointment of receiver for violations of act
Bond of Comptroller
Bond of Deputy Comptroller
Counterfeiting circulation
Dealing in counterfeit circulation
False certification of checks
Failure to pay installment on stock
Failure to redeem circulation
Forfeiture of charter
Illegal possession or use of material for circulation..
Imitating bank circulation for advertising purposes.
Improper countersigning or delivering circulation
Interest, unlawful
Issuing circulation of expired associations
Jurisdiction of United States courts
Mutilating circulation
Misapplication of money-order funds
'' National,'' unlawful use of the word
Official malfeasance
Passing counterfeit circulation
Pledging United States notes or bank circulation
Reports to Comptroller, failure to make
Reserve, maintenance of
Semiannual return of circulation
Taking or having unauthorized impressions or tools, etc
Unauthorized deposit of public money
Unauthorized receipt or use of public money
Personal liability. (See Shareholders; Trustee; Liability.)
Plates:
Control of
Cost of engraving
Custody of
Engraving of
Examination annually
Expense of examination and destruction of
Extended banks
Liquidating bank, to be destroyed
Penalty for counterfeiting, or having possession of counterfeit
Penalty for taking unauthorized impressions of tools, etc
Penalty for having false impressions of tools, etc
Pledging or hypothecating circulation:
Prohibited
Population:
Relation of capital stock to
Postmasters:
Deposit of public funds by
Misapplication of money-order funds by
Postmaster-General:
Deposit of funds by authority of
Post-notes:
National banking associations prohibited from issuing
Powers (see also Comptroller):
Granted to national banks
Incidental, of national banks
Visitorial. limitation of
Preparation of circulation:
Provision s for
President (see also Officers):
Certificate of officers and directors
Countersigning or delivering circulation, improperly
Director to be
Election or appointment of, by directors
False certification of checks and penalty for
Official malfeasance, penalty for
Proxy, not to act as
,
Public money, unauthorized receipt of, by
Signature of, forged, not to invalidate circulation
Signature of, on circulation
Violations of act by, penalty for
President of the United States:
Appointment of Comptroller by
Printing (see also Publication):
Annual report of the Comptroller, number printed and distribution of.
Certificate of authority to begin business
Charter numbers on circulation
19
151,152
4
5
168
174
177
20
143
15G
170
166
164
108
175
180
167
223
130
178
171
165
122,123
95
81, 82,83,
86,88
172,173
224
225
35
3
3
41
42
43
7
33
36
41
40
40
25
43
44
41
54
30
43
42
40
28
23
20
21
42
54
54
61
66,69
9
59
62
62
69
62
170,172,
173
172
173
15
16,18
4
15
15
15
18
15
41,42
42
42
42
113
26
17
6
222
223
53
54
223
54
78
19
16
16
129
30
59
15
23
164
34
16
176,177
178
30
225
76
59, 63
152,156
7
40
9
6
43
43
9
54
19
15
35,36
5
8
15
74
REPORT OF THE COMPTROLLER OF THE CURRENCY.
Index to national-bank act—Continued.
Para- Page.
gragh.
Printing (see also Publication)—Continued.
Circulation of associations.
Circulation of extended banks
Creditors of insolvent associations, notice to
Notice of special annual election
Notice of sale of delinquent stock
Notice of sale of bonds at public auction
Notice of liquidation
Notice of expiration
Penalty for counterfeiting circulation
Penalty for illegal possession or use of material for circulation
Penalty for imitating circulation
Penalty for taking or having unauthorized impressions of tools, etc., for
Provisions for, Comptroller's annual report
Reports of condition
Shareholders' agent, notice of election of
Voluntary liquidation, notice of
Protest of circulation:
Bonds forfeited, when
Bonds, sale of, when
Failure to redeem circulation
Publication (see also Printing):
Annual election, notice of holding special
Certificate of authority to begin business
Change of title or location, notice of
Creditors of insolvent associations, notice to
Expiration of corporate existence, notice of
Nonpaj'ment of circulation, notice to present
Reports of condition of banks other than national iu District of Columbia.
Reports of condition of national banks
Sale of bonds, notice of..
Sale of delinquent stock, notice of.
Shareholders' agent, notice of election of..
Voluntary liquidation, notice of .
Public debt. (See Imports and interest on public debt)
QQualification:
Comptroller of the Currency
Deputy Comptroller
Directors of national banks
Directors of national banks in Oklahoma
Examiners of associations
Receivers of associations
Shareholders' agent
59
69
153
32
2*0,116
148
137
141
168
170
166
172,173
.11
119,123
160
137
15
18
36
9
7,27
34
32
33
41
41
40
42
5
28
37
32
143
148,150
142
33
34
33
32
26
46
153
141
147
123
119
148
20,116
160
137
11
36
33
34
28
28
34
7,27
37
32
4
5
28
29
126
160
3
3
8
8
29
35
37
106
124
25
29
151
152
21
152
151
152
152
152
i44
155
180
179
158
35
35
7
35
35
35
35
35
34
36
44
44
36
73
138
75
144
69
149
66
98
143
76
66
76
70,71
18
32
19
34
18
34
16
23
33
19
16
19
18
151,152
R.
Rate. (See Interest; Taxation.)
Ratio. (See Bonds; Capital; Circulation.)
Real estate:
Investments and holdings restricted
Subject to State, etc., taxation
Receiver :
Appointment and duties of
Appointment of, for failure to dispose of own stock
Appointment of, lor failure to restore diminished capital
Appointment of, for false certification of checks
Appointment of, for nonpayment of circulation
Appointment of, for impairment of capital
Appointment of, for insolvency
Appointment of, for nonmaintenance of reserve
Courts may enjoin
Expenses of, how paid
General jurisdiction of national-bank cases
Jurisdiction of circuit courts
Purchase of property by, to protect trust
Receiverships. (See Liquidation and receivership; Receiver.)
Redemption:
Cancellation of circulation sent for
Deposit of lawful money for, of associations in liquidation..
Disposition of, account
Enjoining Comptroller
Extended bank circulation
:
First lien on assets
Five per cent fund for, to be maintained
Five per cent fund for, part of lawful reserve
Forfeiture of bonds
Forged signatures not to prevent
General provisions respecting
Incomplete circulation
Liquidating bank circulation
75
REPORT OF THE COMPTROLLER OF THE CURRENCY.
Index to national-bank act—Continued.
Redemption—Continued.
Notice to present circulation for
Proceeds from sale of bonds for, of circulation
Profit on circulation not presented for
Protest of circulation, for failure to redeem
Provisions for, of circulation
Provisions for, of United States note certificates
Records of
Sale of bonds
State bank circulation, converted, provisions for
—
United States notes, of circulation in
Unsigned circulation to be redeemed
Withdrawn circulation
Worn or mutilated circulation
Redemption account:
Disposition of
Register of the Treasury:
Signature on circulation
Registered bonds. {See Bonds, United States.)
Regulation of banking business:
Assessment, enforcement of
Circulation, improper use of
Dividends
Dividends prohibited, when
Examiners, appointment of
Examiners, compensation of
Impairment of capital
Interest, limited
Interest, unlawful, penalty for
Laws governing certain associations
Liability of association restricted
Loans, restrictions on
—
Net profits
Place of business
Real estate, purchasing, etc
Reports of condition
Reports, failure to make
Reports, verification of
Reports of dividends and earnings
Reports, verification of
Reserve cities
Reserve cities, balances with agents
Reserve cities, central
Reserve cities, requirements
Reserve cities, requirements, gold banks
Shareholders, list of
State taxation of associations
Stock, holding, etc
:
Surplus and dividends
Uncurrent notes, use of, prohibited
Unearned dividends prohibited
Yisitorial powers, limitation of
Reimbursement. {See Circulation; Expenses; Plates and dies.)
Reports:
Amendments proposed in Comptroller's
Annual, to be made to Congress
—
Banks, other than national
Circulation, semiannual return of
Closed banks
Condition of banks other than national
Condition of national banks in
Distribution of
Dividends and earnings
List of shareholders
Payment of capital stock
Printed, when
Printed, number of copies
Statement of condition of national banks
Reserve:
Clearing-house certificates
Five per cent fund
:
Gold and silver, held by gold banks
Gold certificates
Lawful money
Maintenance of
Penalty for failure to maintain.
Proportion of, with agents
Requirements
Requirements for gold banks
Reserve agents, balance with
Silver certificates
United States note certificates
Paragraph.
Page.
•
65
34
32
18
33
16
24
18
34
21
18
19
17
16
75
19
59
15
116
113
109
114
125
127
115
107
108
92
112
110
109
93
27
26
26
26
29
29
27
25
25
22
26
26
26
22
25
28
28
28
28
28
23,24
23
24,25
23
24
27
29
26
26
27
26
30
147
140
69
142
65
100
72
148,150
89
74
76
67,68
-
106
119
122
120
121
121
94,104
96
103,105
94
102
118
124
111
109
117-
114
129
10
10
123
81
10
10
10
12
121,122
118
19
11
12
119,120
97
75,98
102
101
94
95
95
96,103
94
102
96,103
101
99
4
4
28
20
4
4
4
5
28
27
7
5
5
28
23
19,23
24
24
23
23
23
23,24
23
24
23,24
24
23
76
REPORT OF THE COMPTROLLER OF THE CURRENCY.
Index to national-bank act—Continued.
Page.
Reserve agents (see also Agents):
Balance with
Central
Central, additional
Cities, additional, in which may be located
Cities in which located
Reserve cities:
Additional, provisions for
Central, deposits in
Central, provisions for
Named
Requirements, not applicable to gold banks in San Francisco..
Requirements of associations in
Residence:
List of shareholders and reported annually
List of shareholders in organization certificate
National banks
Qualification of directors of associations
23
24
25
24
23
24
24
25
23
24
27
5
44
8
44
Resources. (See Assets.)
Restoration of capital stock:
Provisions for
Returns. (See Circulation; Reports; Taxation.)
Revised Statutes, United States:
Sections of this act, etc., index of
7,27
83
S.
Sale:
Assets of insolvent associations by receiver
Assets of insolvent associations by shareholders' agent
Bonds for failure to redeem circulation
Stock for delinquent payment of installment
Stock on impairment of capital
Stock taken for debt
Savings banks:
Limit of capital of existing, in the District of Columbia
Reports of, provided for in annual report
Trust companies and, in the District of Columbia
Seal of office of Comptroller:
Certified copy of organization certificate under, evidence
Certificates under, competent evidence
Description, impression of, and certificate of ax>proval by Secretary of the Treasury, to be filed with the Secretary of State
Devised by the Comptroller and approved by Secretary
Secretary of State:
Description, impression, and certificate of seal of Comptroller to be filed with
Secretary of Treasury:
Agent, special, to be appointed for associations failing to redeem circulation
Appointment of Comptroller on recommendation of
Appointment and classification of clerks by
J- ppointment of Deputy Comptroller by
Assignment of rooms, etc., for the Comptroller b y
Authorized to exchange registered for coupon bonds
Circulation, worn or mutilated, destruction of, by
Currency, expansion or contraction of, by issue of currency certificates, prohibited by
Duties of Comptroller under general direction of
Exchange of bonds, terms of, prescribed by
Organization of national banks with capital less than $100,000 to be approved by.
Plates and dies, examination of, by
Recommendation of appointment of Comptroller by
Receivers, appointment of, by Comptroller, concurrence in by, in certain cases...
Reserve cities, designation of, by Comptroller, to be approved by
Seal of office of Comptroller to be approved by
United States certificates may be issued by
Security for circulation. (See Bonds, United States.)
Security for loans:
Personal
Senate:
Comptroller's reports to be sent to
Shareholders:
Agent of, to return to, assets of insolvent association
Appointment and qualification of agent of
Assessment for impairment of capital
Assets of insolvent association to be returned to, ratably
Consent of, necessary to extension
Conversion of State banks, requirements
Creditor's bill against
Directors, election or appointment of, by
Dissenting to extension may withdraw
-.
151
161
140,143,
148,150
20
116
111
35
33
32,33
34
7
27
26
123
10
123
28
4
28
182
181
44
44
4
4
143
3
7
5
9
51
65
33
3
4
3
4
13
16
100
2
57
17
62
3
95
105
8
99
24
3
14
6
15
3
2:{
25
4
23
161
160
115
154
132
37
163
38
37
27
36
31
10
39
6,8
31
16,27
135
77
REPORT OF THE COMPTROLLER OF THE CURRENCY.
Index to national-hank act—Continued.
Paragraph. Page.
Shareholders—Continued.
D u t i e s of a g e n t of
Election by, annually
Election or a p p o i n t m e n t of directors b y
Enforcement of assessment for i m p a i r m e n t of capital stock
Enforcing p a y m e n t by, of installments
E s t a t e s and funds w i t h t r u s t e e liable for assessment
E x t e n s i o n of corporate existence
I n c r e a s e of c a p i t a l stock by
L i s t of, t o be k e p t a n d copy s e n t t o Comptroller
L i s t of, subject t o inspection
Location, change of, by
N a m e s , residences, and n u m b e r of shares held b y each in organization certificates.
Personal liability of
P e r s o n a l liability of, in certain converted S t a t e b a n k s
Provisions for election by, w h e n
Proxies, voting b y
Qualifications of directors
Reduction of capital stock b y
R i g h t s and liabilities of, on t r a n s f e r of shares
Title and location of association, c h a n g e of, b y .
Vote of, necessary t o place association i n liquidation
Voting
Voting n o t allowed, when
Shareholders' a g e n t . (See Agent.)
Shares:
Association not to own or hold its own except
Consent of owners of two-thirds, necessary t o extension
Converted State b a n k to be t h e same as prior t o conversion
Disposition of, t a k e n for debt
F i f t y per cent of a g g r e g a t e value of, to be paid in prior to beginning b u s i n e s s . . .
H o l d i n g of, in other b a n k s , b y converted b a n k s a u t h o r i z e d
I n s t a l l m e n t s , p a y m e n t a n d certification of
L i s t of owners of, to be k e p t a n d copy sent t o Comptroller
Loan on security of, prohibited
Oath of director r e l a t i v e to
*
Owners of two-thirds, m a y place association i n liquidation
Organization certificate to s t a t e capital a n d n u m b e r of
Personal property
Preference in allotment of, in succeeding association
Qualifications of directors
Receiver m a y b e appointed for failure t o dispose of, t a k e n
Sale or forfeiture of, for failure t o p a y installments due
Sale of, when necessary
State t a x a t i o n of
Transfer of
V a l u e of, of shareholders dissenting to extension, how ascertained
Value, par, of each
Voting
Signature on circulation:
P r e s i d e n t or vice-president and cashier
T r e a s u r e r and Register, United States
•.
Silver:
Construed to be lawful money, when
Reserve of gold b a n k s t o be gold and
Silver certificates:
Clearing-house balances payable in
Reserve of n a t i o n a l b a n k s m a y be
Solicitor of t h e T r e a s u r y :
Conduct of s u i t s u n d e r direction and supervision of
Special agent. (See Agent.)
Special reports. (See Reports.)
State b a n k s :
Branches of converted
Capital of
Conversion of
P e n a l t y for failure t o m a k e r e t u r n of t a x on circulation
P e n a l t y for u n a u t h o r i z e d receipt of public money
R e p o r t s of, provided for
R e t u r n of t a x a b l e circulation
Shareholders' personal liability, exceptions
Shares of converted
T a x on converted
T a x on unauthorized circulation
State courts. (See Comptroller; Suits.)
State, Territory, or D i s t r i c t :
Change of t i t l e or location of associations
Compensation of national-bank examiners
Conversion of b a n k organized under a u t h o r i t y of laws of
Evidence
161
27,32
16,27
116
20
41
131
43
118
118
46
14
40
40
32
30
28,29
45
18
46
136
30
30
8,9
6,8
27
7
11
30
11
27
27
11
5
10
10
11
6
n
32
111
132
37
111
19
37
19
118
111
31
136
14
18
135
28,29
152
20
20,111,
116,135
124
18
135
18,37
30
26
31
10
26
7
10
7
27
26
9
32
5
6
31
8
35
7
7,26
27,31
29
6
31
6,10
9
59
59
15
15
102, 226
102
24,55
24
101
101
24
24
183
44
39
38
37
88
225
10
87
40
37,38
89
86
10
10
10
21
54
4
21
10
10
21
21
46
127
27
181,182 1
11
29
8
44
78
REPORT OF THE COMPTROLLER OF THE CURRENCY.
Index to national-bank act—Continued.
Page.
State, Territory, or District—Continued.
Examinations in District of Columbia
Interest, legal rate in, national banks not to take, etc., in excess of
"National," use of the word in t i d e s
Qualification of directors
Proceedings to enjoin Comptroller or receiver, to be brought in d.strict in whicli
association is located
Taxation of circulation of State, etc., associations
Taxation of money bv
Taxation of national banks by
Succession:
Expired associations
Period of, national banks
Suits:
Against United States officers or agents
,
Certified copy of organization certificate evidence in
Circuit courts, jurisdiction of
Corporate powers of associations
Creditor's bill against shareholders
Crimes, jurisdiction, etc
District courts, jurisdiction of
Enjoining Comptroller or receiver
Forfeiture of charter
Illegal preference of creditors
Indian Territory, in
Jurisdiction of circuit courts
Jurisdiction, general, of national-bank cases
Proceedings to enjoin Comptroller to be brought, where
Sealed certificate of Comptroller, competent evidence
Shareholders' agent
Shareholders' liability, to enforce
Solicitor of the Treasury to direct and supervise certain
Surplus (see also Surplus and dividends):
Converted State bank with capital of $5,000,000
Creation of
Receiver may be appointed for deficiency
Surplus and dividends:
Provisions for surplus and payment of dividends
„
Surrender of Bonds. (See Bonds, United States.)
T.
Tax:
Bills of converted State bank
Circulation, enforcing payment of
Circulation, exempt from
Circulation, failure to make returns
Circulation, rate and time of payment
Circulation, refunding excess
Circulation, semiannual return of.
Money of all kinds subject to, by States, etc
Notes unauthorized
Notes unauthorized, failure to make return
Notes unauthorized, semiannual return
Provisions restricted
Remission of, on insolvent national banks
State taxation of national banks
Taxation. (See Tax.)
Teller. (See Oflicers.)
Territorial court. (See Comptroller; Redemption; State, etc.)
Title and location:
Change of, by national banks
Transfers. (See Treasurer United States; Bonds, United States.)
Treasurer, United States:
Circulation, withdrawal of, provisions for
Deposit of United States bonds with, to secure circulation
Disposition of redemption account
Enforcing t a x on circulation
Examination of bonds and records, provisions for
Interest on bonds to be retained by, when
Public moneys to be deposited with assistant treasurer, Government deposi
taries, or
Proceedings on default in making r e t u r n on circulation subject to duty
Redemption fund to be kept with
Redemption of circulation by
Redemption of circulation in United States notes by
Semiannual return to, of circulation subject to duty
Signature of, on circulation
Tax, excess, refunding
T a x on circulation to be paid to
Transfer of bonds in t r u s t for associations to be made to
128
107
130
28
30
25
30
145
80-89
91
124
34
21
22
29
135
16
31
6
183
182
179
16
163
164-184
180
144
156
162
184
179
180
145
181
161
151
183
44
44
44
6
39
40,44
44
34
36
39
44
44
44
34
44
38
35
44
40
109
40
109
10
89
83
85
82
80
84
81
91
86
88
87
90,91
159
124
21
20
20
20
20
20
20
22
21
21
21
21, 22
37
29
9f
10
26
4G
11
67
24,49
75
83
55-57
83,115,
122
17
8,12
19
20
13,14
20,27
28
221
53
20
16
16
18
20
15
20
20
13
REPORT OF THE COMPTROLLER OF THE CURRENCY.
79
Index to national-bank act—Continued.
Page.
Treasury, United States (see also Treasurer, United States):
Associations to reimburse, for cost of redemption of circulation and plates
Currency bureau in
Notice to present circulation at
Penalty for failure of associations to report to be paid into
Redemption account, disposition of
Redemption fund, 5 per cent, in
Redemption of circulation at
Trust:
Purchase of property by receiver to protect
Trustee:
Shareholders' liability, exemptions from
66
2
147
81, 122
75
66
67, 71,
72,73
16
3
34
20,28
19
16
17,18
18
158
36
41
11
TJ.
Uncurrent notes:
Issue of, prohibited
United States (see also Officers of the United States; Crimes,,jurisdiction, etc.)
Courts of, may enjoin proceedings
Forfeiture of charter
United States disbursing officers :
Fraudulent notes to be marked by
Penalty for unauthorized d eposit of public money
Withdrawal of public money
United States notes:
Circulation of banks to be redeemed in
Fraudulent, to be marked
Issue of note certificates on deposit of
Obligations of the United States defined
Penalty for dealing in counterfeit
Penalty for illegal use or possession of material for printing
-,
Penalty for passing counterfeit
Penalty for pledging, etc
Penalty for taking or having unauthorized impressions of tools, etc
Redemption of certificates issued for
Subject to taxation by States, etc
Usury:
Interest, when not
Penalty for
V.
Vacancies:
Board of directors, filling
Vice-president {see also Officers):
Bonds, United States, may sign transfer of
Circulation, may sign
'
Election or ax>pointment of
Proxy, not to act as
Violations of provisions of national-bank act:
Forfeiture of charter for
Visitorial powers:
Limitation of national banking associations, subject to
Voluntary liquidation. (See Liquidation.)
Voters:
Qualifications of shareholders at elections
W.
Withdrawal:
Bonds, general provisions respecting
Circulation, provisions for
Deposit and, of publie moneys
Dissenting shareholders
Expired associations, bonds of
Illegal preference of creditors
Liquidation associations, bonds of
Reduction of capital
Unearned dividends
117
144
156
34
36
79
224
221
19
54
53
74
79
90
169
174
170
171
165
172,173
100
91
18
19
23
41
42
41
42
40
42
24
22
107
108
25
25
52
59,63
16
30
13
15
6
9
156
36
129
30
57
67,68
221, 224
135
141
162
140
45
114
14
17
53,54
31
33
39
32
11
26
INDEX TO ACT FOR INCORPORATION OF TRUST COMPANIES, ETC.
TRUST COMPANIES, ETC., IN THE DISTRICT OF COLUMBIA.
A.
Amendment of act incorporating:
Provisions for
Annual report:
Liability for failure to make
Liability for failure to report for taxation
Required to be made to the Comptroller
Assets and capital:
Security when corporation is trustee, etc
219
202
202
200
216
B.
Bonds:
Debenture, issuance of
Deposit of other securities and, to secure debenture
Deposit of other securities and, with the Comptroller
District supreme court may require
Not required of trust companies, when
By-laws:
Directors or trustees to make
191
191
198
217
216
209
C.
Capital stock:
Enforcement of subscriptions to
Increase of
Liability of shareholders
Money payment of, required
Provisions relative to
Transfer of shares of
Trustee, etc., not liable on stock assessments
Charter:
Amendment, provisions for
Application for, notice of intention
Comptroller to certify to payment of .stock, etc
Copy of, etc., to befiledwith Comptroller
District Commissioners to issue
Recorder of deeds, to befiledwith
Comptroller of the Currency:
Annual reports to
Certificate of payment of capital stock and deposit of securities to be issued by.
Copy of organization certificate and charter to be filed with
Deposit of securities with
Existing corporations to file with, intention to organize under this act
Insolvency, corporation to be taken possession of, by
Trust companies under supervision of
Value of assets of existing corporations organizing under this act, to be ascer
tained by
Value of securities deposited for debenture bonds to be determined by
Corporate existence:
Limitation of, to be stated in organization certificate
Period of
Creditors:
Preferred
Stockholders' liability
D.
Directors:
Appointment of officer by
By-laws, adoption of, by
Enforcement of subscriptions to stock by
Liability of. for failure to report
Liability of, when may be avoided
Liable for payment of unearned dividends
Majority of, to sign annual report
Number and election of
Number of, to be stated in organization certificate
Qualifications of
Responsibility of, for excess liabilities
80
199
214
205
206
198
204
213
219
188
189
189
187
189
200
189
189
198
195
190
190
206
191
186
197
216
205
208
209
199
202
211
210
200
207
186
207
212
EEPORT OF THE COMPTROLLER OF THE CURRENCY.
81
Index to act for incorporation of ti'ust companies, etc,—Continued.
Paragraph. Page.
District Commissioners:
Charter to be obtained from
District supreme court:
Jurisdiction of trust companies
Dividends:
Declaration of, by directors
Directors' liability for, how avoided
Directors liable for payment of unearned
E.
Election:
Directors, number and
Evidence:
Certified copy of incorporation certificate competent
Gross earnings:
Liability for failure to report
Tax on
187
46
217
52
210
211
210
51
51
51
207
50
215
51
201
201
49
49
190
216
46
51
191
191
210
211
212
202
205
194
199
213
46
46
51
51
51
49
50
48
49
51
188
46
200, 201
208
203
49
50
50
195
185
186
187
186
48
45
190
210, 212
218
199
202
203
46
51
52
49
49
50
203
203
50
50
191
191
46
46
G.
I.
Insolvency:
Comptroller to administer affairs of corporation in
Preferred claims in case of
J.
Jurisdiction. (See District supreme court.)
Liability:
Corporations, as trustee.
Debenture bonds, issue of
Directors, for payment of unearned dividends
Directors', may be avoided
Directors', for excess
Failure to make reports
Stockholders'
Stockholders and officers', for performance of trust
Subscriptions to stock
Trustee, etc., on stock assessment
X.
Notice:
Intention to apply for a charter to be published, etc
O.
Officers:
Annual report to be signed by certain
Appointment of
Perjury and larceny, penalty for
Organization:
Existing corporations
Provisions for
Organization certificate:
Execution of
Presented to Commissioners
Specifications in
P.
Penalty:
Corporations subject to the same, as provided for national banks
Directors' liability
Failure to comply with the provisions of this act
Failure to pay subscriptions to stock
Failure to pay taxes
Perjury and larcency
Perjury and larceny:
Defined
'.
Penalty for
Powers:
General
Special
Preference:
Debts due as trustee, etc., shall have
President:
Annual report to be signed and verified by
Directors to choose
Privileges:
Extended to existing corporations, when
Purposes of corporations:
Safe deposit, trust, loan, and mortgage business
Security, guarantee, indemnity, loan and mortgage business
CUB 98
~6
45
46
45
216
51
200
208
49
50
195
48
185
185
45
45
82
REPORT OF THE COMPTROLLER OF THE CURRENCY.
Index to act for incorporation of trust companies, etc.—Continued.
Paragraph.
Page.
Purposes of corporations—Continued.
Storage business
Title insurance, loan, and mortgage business .
185
185
45
45
Qualifications:
Directors...
Officers
Trustees i..,
207
208
193
50
50
48
196
48
189
46
208
200
50
49
R.
Real e s t a t e :
Purchase, holding, etc., of, by corporations .
Recorder of deeds:
Charter of corporation to be filed with
S.
Secretary:
Appointment of
Verification of reports by
Securities. (See Bonds.)
Shares:
Directors' liability
Directors' liability, when may be avoided
Enforcement of subscriptions to
Liability of stockholders
P a r value of
Qualifications of directors
Trustees, etc., not liable on assessment
Transfer of
Similar district corporations:
Subject to this act
Stock. (See Capital stock.)
Stockholders:
Liability of
Subscriptions to stock:
Provisions for enforcement of
Supervision. (See Comptroller of t h e Currency.)
!
! 210,
212
211
199
205
199
207
213
204
51
51
49
50
49
50
51
50
52
50
199
T.
Tax:
On gross earnings
Title:
Organization certificate to contain
Transfer of stock. (See Capital stock.)
Treasurer:
Appointment of
49
Trust:
Security for the faithful performance of
Trustee, etc.:
Corporations competent to act as
Qualifications of corporations as
Security for performance of trust
186
45
208
50
192
193
194
47
48
48
190
46
48
Unearned, dividends. (See Dividends.)
Visitorial powers:
Limitation of...
V.
INDEX TO SECTIONS OF REVISED STATUTES.
Section.
324
325
326
327
393
329
330
331
332
333
380
629
736
884
885
3410
3411
3414
3415
3416
3417
3^85
3586
3587
3588
3589
3590
3620
3701
3811
3847
4046
5133
5134
5135
5130
5137
Paragraph.
?4
.. .
5
7
6
8
9
128
10
183
179
145
181
182
38
85
87
88
89
90
226
226
226
226
226
226
221
91
51
222
223
13
14
15
16
106
Section.
5138
5139
5140
5141
5142
5143
5144
5145
5146
5147
5148
5149
5150
5151
5152
5153
5154
5155
5156
5157
5158
5159
5160
5161
5162
5163
5164
5165
5166
5167
5168
5169
5170
5172
5173
5174
. .
Paragraph.
17
18,42
19
20,21
43,44
45
30
27
28
31
33
32
34
40
41
220
37
39
47
92
48
24 49
50
51
52
53
54
55
56
57
22, 23
25
26
59
61
62
Paragraph.
Section.
5182
5183
5184
5185
5186 . ..
5187
5188
5189
5190
5191
5192
5193
5194
5195
5196
5197
5198
5199
52uO
5201
5202
5203
5204
5205
5206
5207
5208
5209
5210
5211
5212
5213
5^14
5215
5216
5217..
--
63
78
65
35,64
102
164
166
167
93
94,95
96
99
100
103
77
107
108
109
110
111
112
113
114
115
117
165
176
178
118
119
121
122
80
81
82
83
Paragraph.
Section.
5218
5219
5220
5221
5222
5223
5224
5225
5226
5227
5228
5229
5230
5231
5232
5233
5234
5235
5236
5237
5238
5239
5240
5241
5242
5243
5413
5415
5430
5431
5432
5433
5434
5437
5488
5497
84
124
136
137
138
139
140
70
142
143
146
147
148,149
150
72
73
151
153
154
144
155
156,157
125-127
129
162
130
169
168
170
171
172
173
174
175
224
225
83
DIGEST OF NATIONAL BANK DECISIONS.
CONTENTS.
Page.
ABATEMENT
ACCOMMODATION PA PER
ACTIONS
..
__
99
99
101
A G E N T O F SHAREHOLDERS
APPEAL
.__
ASSESSMENT
ATTACHMENT
BONDS OF OFFICERS-.
BOOKS, INSPECTION OF
BRANCH BANKS
BROKER
.
CAPITAL STOCK
CASHIER _
CERTIFICATE OF DEPOSIT
CERTIFICATION OF CHECKS
CHECKS
_ -..'
CIRCULATION
COLLATERAL SECURITIES
COLLECTIONS
'.
CONSTITUTIONALITY
CONSTRUCTION OF LAW _
CONVERSION
CRIMINAL LAW
DEPOSITS
DEPUTY COMPTROLLER
DIRECTORS
DISTRICT ATTORNEY
DIVIDENDS
ESTOPPEL
EVIDENCE
EXECUTION
EXPIRATION
EXTENSION
FALSE ENTRIES
FORFEITURE OF CHARTER
FORGERIES
_
GUARANTY
INCREASE OF CAPITAL STOCK
INDICTMENT
INJUNCTION
105
105
-
_
_.
_
107
120
123
126
126
126
126
130
130
132
134
139
140
144
152
153
154
155
165
169
169
170
170
170
174
178
178
178
178
181
182
184
187
187
190
Page.
INSOLVENT BANKS
INTEREST
JURISDICTION
LEASE
LIABILITY OF BANK
LIEN
LIQUIDATION
LOANS
MANDAMUS
MARRIED WOMEN
_. _
MORTGAGE..
NEGOTIABLE PAPER . . .
NOTARY PUBLIC
NOTICE
OATH OF DIRECTOR. _.
OFFICERS
OFFSET
PASS BOOK
PLACE OF BUSINESS
POST NOTES
POWERS OF BANK
PRACTICE
PREFERENCE _ _
PREFERRED CLAIMS
PRESIDENT
R E A L ESTATE
RECEIVER
REDUCTION OF CAPITAL STOCK _ _
REPORT OF CONDITION
RESIDENCE
RESTRAINING A C T S .
SAVINGS BANKS
SHAREHOLDERS
_
SPECIAL DEPOSITS
__
TAXATION
TRANSFER OF STOCK
ULTRA VIRES ._
,.,_
USURY
VICE-PRESIDENT
VOTING
85
191
198
200
209
210
214
216
217
221
221
221
224
232
232
235
236
248
254
254
254
255
257
259
266
271
272
274
280
280
280
280
280
280
283
288
309
315
318
328
328
T A B I J E OF CASES.
A.
Page.
Aberdeen, First National Bank of, v.
Andrewsetal
. . . . 154,256,273
Aberdeen, First National Bank of, v.
Chehalis County et al
291,308
Adair, Tax Collector, v. Robinson et al.
294
Adams v. Daunis
204
Adams v. Mayor, etc., of Nashville
294
Adams v. Spokane Drug Company
251
iEtna National Bank v. The Fourth
National Bank
165
Agnew v. United States
_
162
Alabama National Bank v. Halsey
226
Albany, National Albany Exchange
Bank of, v. Hills et al
303,305
Albany City National Bank v. Maher,
Receiver, etc...
303
Albany, Supervisors of, v. Stanley
153
Alberger v. National Bank of Commerce
263
Albuquerque National Bank y. Perea . . 288,292
Aldrichet al., In re
302
Allen v. First National Bank of Xenia, 218
Allentown, First National Bank of, v.
Hoch...
126,316
Allentown, First National Bank of, v.
Rex
286
Allentown National Bank v. Trexler...
229
Alves v. Henderson National Bank
320
American Exchange National Bank v.
Crooks
235
American Exchange National Bank v.
Dugan..
235
American Exchange National Bank v.
Oregon Pottery Company _ _
247
American National Bank v. Love
185
American National Bank v. National
Wall Paper Company
173
American National Bank v. Stone et al.
309
American Surety Company v. Pauly...
125
Anderson v. Alton National Bank
151
Anderson v. First National Bank
316
Anderson v. Gill
.._
144
Anderson v. Kissam
237
Anderson v. Line
110
Anderson v. Pacific Bank
263
Anderson v. Philadelphia Warehouse
Company
113,281
Andrews v. Varrell
248
Anheuser-Busch Brewing Association
v. Clayton
147
Anniston National Bank v. School Committee of Town of Durham
_
235
Armour Packing Company v. Davis
151
Armstrong v. American Exchange National Bank
191
Armstrong v. Bank
195
Armstrong v. National Bank of Boyertown
149
Armstrong v. Chemical National Bank.
142,
215,220,261
Armstrong v. Ettlesohn
279
Armstrong, In r e . . .
145,194,262
Armstrong v. Second National Bank of
Springfield
126,254,255
Armstrong v. Stanage
128,191,275
Armstrong v. Trautman et al
208
Armstrong v. Warner
253
Armstrong u Wood
128,275
Arnau v. First National Bank
106
Arnot v. Bingham
152
Aspinwall v. Butler
128,174
Atchison, Exchange National Bank of,
v. Washita Cattle Company. _
205
Atlanta National Bank v. Davis
150
Atlantic National Bank v. Harris
154
Atlas National Bank v. Holm et al
227
Atlas National Bank v. Savery
200
Auburn, National Bank of, v. Lewis
Auburn Savings Bank v. Hayes
Austins. The Aldermen
Page
320
193,261
300
B.
Babcocku Wolf
258,317
Bain e t a l . u Peters.
193
Bailey v. Mosher..
236,244
Bailey v. Sawyer
109,112
Baker v. Ault et al
190
Baker v. Beach et al
118
Baker v. Old National Bank of Provid e n c e ^ . 1., etal
119
Baker v. Reeves et al._
119
Baker v. Texarkana National Bank et al.
106
Balbach et al. v. Frelinghuysen.. 147,166,248,268
Balch v. Wilson
250
Baldwins. Canfield
272
Baldwin v. State National Bank of Minneapolis
223
Ballinger National Bank v. Bryan
222
Baltimore, Central National Bank of,
v. Connecticut Mutual Life Insurance
Company...
217
Baltimore, National Exchange Bank of,
v. Peters etal
242
Baltimore, Third National Bank of, v.
Boyd
210,214
Bangor, Merchants1 National Bank of,
v. Glendon
174
Bank v. Armstrong
213,278
Bank of Bethel v. Pahquioque Bank
101,
102,178,191,200,274
Bank v. Kennedy..
274
Bank v. Lanier
214,218,310,315
Bank v. Latimer
264
Bank v. Mclntyre
154
Bankv. Zent
287
Bank of the Metropolis v. First National
Bank of Jersey City...
233
Bank of Redemption v. Boston
288,291,292
Bar hour v. National Exchange Bank...
253
Barhorst et ux. v. Armstrong et al
191
Barnesv. Swift
208
Bar net v. Muncie N ational Bank
318,319
Bar tlett v. Woodbine Savings Bank....
234
Bashaw v. United States.
170
Batchelor v. United States
157
Bates, In r e . .
263
Bates v. Paddock
140
Bates v. Salt Springs National Bank
215
Bath Savings Institution v. Sagadahoc
National Bank
170,314
Bayor v. American Trust and Savings
Bank
._._
194
Beal v. Essex Savings Bank
281
Beal v. National Exchange Bank of Dallas....
149
Bealu City of Somerville
268
Beard v. Independent District of Pella.
271
Beardsley v. Webber
224
Beaver v. Beaver
169
Becker's Investment Agency v. Rea
219
Beckham v. Shackelf ord
277
Bell v. Hanover National Bank
142
Belleville, People's Bank of, v. Manufacturers' National Bank of Chicago
185
Benton v. German-American National
Bank
232
Benton v. Holmes
248
Berney National Bank v. Guyon
263
Bickford v. First National Bank of Chicago
133,134
Bird's Executors y. Cockrem
278
Birmingham National Bank v. Bradley.
103,
139,176,203
Birmingham National Bank v. Mayer..
194
87
88
REPORT OF THE COMPTROLLER OF THE CURRENCY.
Page.
Bis sell v. The First National Bank of
Franklin
237
Blackmore v. Guarantee Company of
North Americaetal
124
Blackmore v. Woodward et al
114
Blaine, First National Bank of, v. Blake 235,236
Blair v. First National Bank of Mansfield
226
Blanchard v. Commercial Bank of Tacoma
175,278
Bletz v. Columbia National Bank
200
Bloch v. Creditors
139
Board of County Commissioners of Rice
County v. Citizens' National Bank of
Faribault
298
Board of Commissioners of Montgomery County v. Elston
140,289
Bobs v. People's N ational Bank
319
Boone County National Bank v. Latimer
262
Booth etal. v. Welles
268
Boston, Central National Bank of, v.
Hazard etal
275
Boston, City of, v. Beal
276,295
Boston National Bank v. Jose
224
Boston N ational Bank v. City of Seattle.
296
Bosworth v. Jacksonville National Bank
213
Bowdell v. Farmers and Merchants'
National Bank of Baltimore
109,280,309
Bowden v. fohnson
108,113,174,281,310
Bowden v. Santos
310
Bowen v. Needles National Bank 101,134,187,259
Bowman et al v Clark e t a l . . .
148
Bowman v. First National Bank
269
Boye™. Boyer
290,292,294
Boy kin v. Bank of Fayetteville
151
Boynolli;. State
289
Brayden's Estate In re
130
Bradley v The People
289
Brahan v First National Bank
228
Branch v. The United states
168
Branch v. United States National Bank.
152
Bressler v. Wayne County
304
Breyfogle et al. v. Walsh et al
190
Briggs v. Spaulding
239,243,244,274
Brinckerhoff v. Bqstwick
102,202,242
Britton v. Evansville National Bank...
291
Brodrick v. Brown
._
114
Brooke v. Tradesmen's National Bank..
137
Brown v. Carbonate Bank of Leadville..
266
Brown v.Ellis
118
Brown v. Farmers and Merchants' National Bank
172,246
Brown u Finn
281
Brown v. First National Bank
172
Brown v. French
173,190,279,306
Brown v. Marion National Bank
327
Brown v. Smith
209
Brown v The Second National Bank of
Erie
324
Brown v. Tillinghast..
118
Bruner v. First National Bank
198
Buchanan et al. v. Drovers' National
Bankof Chicago
319
Buchanan County, First National Bank
of, v. Deuel County
203,221
Buffalo County National Bank v. Gilcrest
106
Buffalo, Farmers and Merchants' National Bank of, v. Rogers
259
Buffalo German Insurance Company v.
Third National Bank.
_ 216
Buie v. Commissioners of Fayetteville..
306
Bullardv. Bank.
127,214,310
Bundy v. Cocke
116
Bundy v. Jackson
_ 311
Bunt v. Rheum
190
Burbage v. American National Bank...
235
Burlington, Howard National Bank of,
v. Loomis
223
Burnham et al. v. First National Bank
of Leoti--.
201
Burrill v. President, Directors, etc., of
theNahant Bank
242
Burroughs v. Tradesmen's National
Bank
138
Burrows v. Niblack
257
Burrows v. State
137
Page.
Burtv. Bailey
282
Burtnett, Administrator, v. The First
National Bank
168
Burton v. Burley..
..254
Bushnell v. Leland.
118
Bushnell v. The Chautauqua County
National Bank
255
Butler, Receiver, v. Aspinwall
Ill
Butler et al. v. Cockrill
172,194,215
Butler v. Coleman
123,260
Butler v. Demmon
123
Butler v. Eaton
107,128,129,281
Butler v. Mixter
123
Butleru Poole
102,110
Butler v. Whitney
123
C.
Cadiz, Bank of, v. Slemons
171
Cadle v. Baker
171
Cadle c Tracy
200
Cady v. Case
138
Cake v. The First National Bank of
Lebanon
324
California Bank v. Kennedy
117,208,283
Camden, National State Bank of, v.
Pierce
294
Cameron v. First National Bank
219
Campbell v. First National Bank
247
Canfield v. The State National Bank of
Minneapolis
219
Carlisle, First National Bank of, v.
Graham
214
Carthage, City of, v. First National
Bank of Carthage
294
Caseu Bank 1
102,112,310
Case v. Citizens Bank of Louisiana. 260,261,312
Case, Receiver, v. Small.
110,274,275
Case v. Terrell
202,274
Casey v. Adams
101,174
Casey v. Galli
107,112,154,155,171
Casey v. La Societe de Credit Mobilior
de Paris
171,192,260,261,316
Castle v. Corn Exchange Bank
139
Castles v. City of New Orleans
294
Cecil National Bank v. Thurber
190
Central National Bank v. P r a t t .
318
Central National Bank v. Richland National Bank
121
Central National Bank v. Spratlen
214
Central National Bank v. United States
288,
291,292
Centralia, First National Bank of, v.
. Marshall,.
217
Charleston v. People's National Bank.. 129,288
Charlotte, First National Bank of, v.
National Exchange Bank of Baltimore
255
Charnleyv. Sibley et al
252
Chase National Bank v. Faurot
225,323
Chattahoochee National Bank v. Schley
284
Chattanooga, National Bank of, v.
Mayor
....
294
Chemical National Bank v. Armstrong142,
199,213,277
Chemical National Bank v. Bailey
192
Chemical National Bank v. City Bank . 203,213
Chemical Bank v. City Bank of Portage.
104
Chemical National Bank v. Hartford
Deposit Company
193,209,210,278
Chemung, National Bank of, v. Elmira.
300
Chesapeake Bank v. The First National
Bankof Baltimore..
152
Chetwood v. California National Bank.
105
Chetwood, E x p a r t e
105,279
Chicago, First National Bank of, v.
Corbin
207
Chicago, First National Bank of, v.
Reno County Bank...
144
Chicago, First National Bank of, v.
Steinway et al
205
Chicago, German National Bank of, v.
KimbalL
304
Chicago, Merchants' National Bank of,
et al., v. Sabin etal
178
Chicago Railway Equipment Company
v. Merchants' Bank
233
Chipman v. Ninth National Bank
169
Chism v. First National Bank
138
REPORT OF THE COMPTROLLER OP THE CURRENCY.
Page.
Chrystie et al. v. Foster
246
Chubb v. Upton..
130
Cincinnati, Hamilton and Dayton Railroad Company v. Metropolitan National Bank..
102
Cincinnati, Union National Bank of, v.
Miller, Treasurer of H amilton C ounty,
Ohio
204
Cincinnati Oyster and Fish Company v.
National Lafayette Bank. _
134
Circleville, First National Bank of, v.
Bank of Monroe
145
Citizens' Bank v. Houston
150
Citizens' National Bank v. Dowd
192,269
Citizens'National Bank v. Win tier
226
City National Bank v. Paducah
_..
289
City National Bank v. Phelps
154
City National Bank v. Thomas
185
Claasen, In re
161
Claasen v. United States
160
Claffin v. Houseman
200
Clarion, First National Bank of, v.
Brenneman's Executors
178
Clarion, Second National Bank of, v.
Morgan
318,323
Clarke National Bank v. The Bank of •
Albion.
132,237
Clemmer v. Drovers' National Bank
166
Cleveland, Cincinnati, Chicago and St.
Louis Railway Company v. Hawkins
etal287
Cleveland, Brown & Co. v. Shoeman
140
Cleveland, Commercial Bank of, v. Simmons
i.
204
Clews et al. v. Bardon et al
241
Clinton, Iowa, National Bank of, v. Dorsett Pipe and Paving Company
259
Cochecho National Bank v. Haskell
171,237
Cochran v. United States
179,280
Cockrill v. Abeles et al
245,273
Cockrill v. Butler e t a l
244
Cockrill v. Cooper et al
245
Coffey v. The National Bank of Missouri
--- 154,284
Coffin v. United States
157,158,160,189
Collins v. Chicago
288
Collins v. State
165
Colt-y. Brown
249
Columbia National Bank v. Rice
172,176,235
Columbia National Bank v. Western
Iron and Steel Company
103,226
Columbus, The First National Bank of,
plaintiff in error, v. Garlinghouse
etal
325
Commercial Bank of Pennsylvania v.
Armstrong
148
Commercial National Bank v. Armstrong
149
Commercial National Bank v. Canniff-107
Commercial National Bank v. First National Bank
138
Commercial Bank, In re
167,262
Commercial National Bank v. King
County...
296
Commercial National et al. v. Pirie et al187
Commercial National Bank v. City of
Seattle
296
Commissioners of Rice County v. Citizens'National Bank of Faribault
289
Commissioners of Silver Bow County
v. Davis
304
Commonwealth v. Bank of Kentucky . _
296
Commonwealth v. Barry.
156
Commonweal h v. Deposit Bank
_
296
Commonwealth v. Farmers' Bank
296
Commonwealth v. Felton
156,200
Commonwealth v. Manufacturers and
Mechanics' Bank of Philadelphia
294
Commonwealth v. Merchants and Manufacturers' National Bank
296
Commonwealth v. Frankfort National
Bank
296
Commonwealth v. State National Bank.
296
Commonwealth v. Tenney
_
156
Commonwealth Bank v. Clark
272
Commonwealth ex rel. Torrey v. Ketner 156,200
Concord, First National Bank of, v.
Hawkins
117
89
Page
Concordia, First National Bank of, v.
Rowley...
322
Conklin y. The Second National Bank.. 126,310
Connecticut River Banking Company
et al. v. Rockbridge County
278
Consolidation National Bank v. Fidelity
and Casualty Company of New York.
124
Continental National Bank v. Eliot National Bank etal
121
Continental National Bank v. McGeoch 196,244
Conway v. Halsey
102,243
Conzman v. First National Bank
294
Cooke v. The State National Bank of
Boston
132
Cook County National Bank v. United
States
248,266
Cooper Insurance Company v. Hawkins.
316
Cooper v. Leather Manufacturers' National Bank
207
Corcoran v. Batchelder
_
217
Corn Exchange Bank v. Blye
275
Corn Exchange Bank v. Mechanics' National Bank of Newark, N. J
121
County Commissioners v. Farmers and
Mechanics' National Bank
289,304
County of Lancaster v. Lancaster County National Bank
303
Covington City National Bank v. Commercial Bank
234
Covington, Ky., Farmers and Traders'
National Bank of, v. Greene et al
175
Covington, City of, v. First National
Bank
296
Covington, City of, v. German National
Bank
296
Coxu Beck e t a l .
&27
Cox v. Elmendorf
283
Cox v. Montague
116
C o x u Robinson..
256,257
C r a g i e e t a l . v.Hadley
267,269
Craigie v. Smith
148
Crane y. F o u r t h Street National Bank_
151
Creveling e t al. v. Bloomsbury National
Bank
136
Crocker v. First National Bank of Chetopa
318
Crocker v. Marine National Bank of
New Y o r k . . .
204
Crocker^ Whitney
273
Crook v. First National Bank
103,168,272
Cruikshank v. F o u r t h National Bank..
205
Cummings v. National Bank
292
D.
Dakota, National Bank of, v. Taylor
312
Dallas, National Exchange Bank of, v.
Beal
146
Danforth et al. v. National State Bank
of Elizabeth
318
Darby v. Berney National Bank
237
Davenport Bank v. Davenport
290
Davenport National Bank v. Mittelbuscher, Collector, e t al
153
D a v i s u Cook
200,280
Davis v. Elmira Savings Bank
263,264
Davis v. Essex Baptist Society
109,280
Davis v. Industrial Manufacturing
Company
249
Davis u K n i p p
252
Davis v. Randall
318
Davis, Receiver, v. Stevens
109,281
Davis v. Weed
107
Dearborn v. The Union National Bank
of B r u n s w i c k . . .
_.
141
Dearborn 'v. Washington Savings Bank.
167
Decatur, First National Bank of, v.
Johnston
261
Decatur, First National Bank of, v.
Priest
212
Decorah, First National Bank of, v.
Holan
227
DeHaven v. Kensington National Bank.
214
Delano v. Butler
107,128
Delaware, Lackawanna and Western
Railroad Company v. Oxford Iron
Company
215
D e n t o n u Baker
279
90
REPORT OF THE COMPTROLLER OF THE CURRENCY.
Page.
Denver, American National Bank of, v.
National Benefit and Casualty Comp a n y e t al. (Wiswall, i n t e r v e n e r )
277
Deposit Bank v. F r a n k l i n County
296
Des Moines National Bank v. Harding- 222
D i t t y v. Dominion National Bank of
Bristol, Va
198,214
Dorchester, F i r s t National Bank of, v.
Smith
..._
323
Doty v. F i r s t National Bank
314
Doud et al. v. National P a r k Bank
184
D o u g h e r t y v. Hoffstetter
224
Dow v. I r a s b u r g h National Bank of
Orleans
205
D o w e t a l . v. United States
163
D r a k e s . Rolio
249
1
D r e s s e r s . Traders National Bank
316
Driesbach v. National Bank
319
Drover's National Bank v. Blue
226
Dumond, v. Merchants' National Bank.
212
Dumont^.Fry
216
Duncan v. First National Bank of Mount
Pleasant
199
D u t t o n v. Citizens 1 National Bank
297
D u t t o n v. First National Bank
297
E.
Eans v. Exchange B a n k . . .
154
East River National Bank v. Gove
211
Eastern Townships Bank v. Vermont
National Bank of St. Albans and
Another
219
Eaton v. Pacific National Bank
191
Eaton v. Union County National Bank.
296
Eccles v. Drovers and Mechanics' National B a n k . .
278
Elder v. F i r s t National Bank of Ottawa
218
Elkhart, First National Bank of, v. Armstrong
-.
146
E l k h a r t National Bank of E l k h a r t , Ind.,
v. N o r t h w e s t e r n G u a r a n t y Loan Co.
of Minneapolis, Minn., et a l . . .
118,208
Ellis v. L i t t l e .
274
Ellis v. F i r s t National Bank of O l n e y . . .
319
El Paso National Bank v. F u c h s . . . . 213,253.286
El wood v. F i r s t National Bank
217
Eno, In r e
200
Evansville Bank v. Britton
293
Evansville, F i r s t National Bank of, v.
F o u r t h National Bank of Louisville,. 210,233
Evansville National Bank v. Metropolit a n National Bank
....
312
E v a n s v. United States
_.
188
E r i s m a n v. Delaware County National
Bank
100
Exchange National Bank v. Clement.-.
122
Exchange National Bank v. Johnson
et al
229
Exchange National Bank v.Wolverton.
224
Exeter National Bank v. Orchard
323
F a i r b a n k s v. Merchants 1 National Bank.
235
Fairhaven, National Bank of, v. The
Phoenix W a r e h o u s i n g C o m p a n y . . 126, 170,280
Fallkill National Bank v. Sleight.
222
F a r m e r s 1 Bank v. Board of Councilmen
of City1 of F r a n k f o r t
296
F a r m e r s Bank v. City of H e n d e r s o n . . .
296
F a r m e r s ' Bank v. F r a n k l i n County
296
F a r m e r s 11 National Bank v. Backus
258
F a r m e r s 1 National Bank v. Dearing
319
F a r m e r s National Bank v. Thomas
100
F a r m e r s and Mechanics' Bank v. Baldwin....
315
F a r m e r s and Mechanics 1 Bank v. Dearing .
152,318
Farmers and Mechanics' Bank v. Hoag321
land
Farmers and Merchants1 National Bank
230
v. Novitch
Farmers and Merchants1 National Bank
317
v. Smith
Farmers and Merchants1 National Bank
v. Waco Electric Railway and Light
Company
106,122,172,196,215,219,226,278
F a r m e r s and T r a d e r s 1 National Bank v.
Connor
317
F a r m e r s and Traders 1 National Bank v.
Hoffman _
296
F a r m e r s and T r a d e r s ' National Bank v.
Snod grass
_
185
Fidelity and Casualty Company of N e w
York v Consolidated National B a n k .
124
Fidelity Safe Deposit a n d T r u s t Company v. A r m s t r o n g
209
Fifth National Bank v. A r m s t r o n g , e t c . 146,149
Fifth National Bank v. C e n t r a l National
Bank.
_
138
F i n n v. Brown
109,171
F i r s t National Bank v. Allen
182
F i r s t National Bank v. A r m s t r o n g
149
F i r s t National Bank v. A y e r s
297
F i r s t National Bank v. Bailey
296
F i r s t National Bank v. Bayliss
222
F i r s t National Bank v. Bonner
230
F i r s t National Bank v. Brodhecker
394
F i r s t National Bank v. California National Bank
177
F i r s t National Bank v. C a r t e r
223
F i r s t National Bank v. Cass County
106
F i r s t National Bank v. Cecil..
227
F i r s t National Bank v. Chehalis County
297
F i r s t National Bank v. Chilson
224
F i r s t National Bank v. City National
Bank
151
F i r s t National Bank v. City of Richmond
309
F i r s t National Bank v. Clark
138,168
F i r s t National Bank v. Cody
177
F i r s t National Bank v. Collins,.
226
F i r s t National Bank v. Commercial National Bank
263
F i r s t National Bank v. C r a i g . . .
151
F i r s t National Bank v. De Morse
251
F i r s t National Bank v. District Township of Doon ( I o w a ) . . .
176
F i r s t National Bank v. Douglas C o u n t y . 291,298
F i r s t National Bank v. Dovetail Body
and Gear Company
172,196
200
F i r s t National Bank v. F o r e s t
318
F i r s t National Bank v. Garlinghouse ..
199
F i r s t National Bank v. G r u b e r
273
F i r s t National Bank v. Haire
231
F i r s t National Bank v. H a r r i s
176
F i r s t National Bank v. Hellyer
298
F i r s t National Bank v. H e r s h i r e
152
F i r s t National Bank v. H u g h e s
F i r s t National Bank v. H u n t i n g t o n Dis215
tilling Company -.
222
F i r s t National Bank v. L a m b e r t
_
224
F i r s t National Bank v. Laughlin
_
235.324
F i r s t National Bank v. Led better
215
F i r s t National Bank v. L i n d e n s t r u t h ._
F i r s t National Bank v. City .of Louisville
172
F i r s t National Bank v. L y n c h
143
F i r s t National Bank v. Mann
F i r s t National Bank v. Mansfield Sav151
ings Bank
222
F i r s t National Bank v. Marshall
F i r s t National Bank v. Marshall a n d
222
Ilsley Bank
176
F i r s t National Bank v. McKinney
F i r s t National Bank v. Mclnturff
...
F i r s t National Bank v. M e r c h a n t s ' Na137
tional Bank
_
F i r s t National Bank v. Miller..
138
F i r s t National Bank v. Morgan
201,319
F i r s t National Bank v. M u n z e s h e i m e r . .
315
F i r s t National Bank v. National Ex255,315
change Bank
138
F i r s t National Bank v. Nelson
F i r s t National Bank v. N o r t h w e s t e r n
134,183
National Bank
127
F i r s t National Bank v. Peavey
168
F i r s t National Bank v. Peltz
289
F i r s t National Bank v. P e t e r b o r o u g h ._
263
F i r s t National Bank v. Sanford
._
143
F i r s t National Bank v. Schmidt
296
First National Bank v. City of S e a t t l e . _
227
F i r s t National Bank v. Smith
331
F i r s t National Bank v. S t u e t z e r
124
F i r s t National Bank v. Still
REPORT OF THE COMPTROLLER OF THE CURRENCY.
Page.
First National Bank v. Stone
172,309
First National Bank v. T u r n e r
324
First National Bank v. Van Ness
227
First National Bank v. Weston
235
First National Bank v. Wills Creek Coal
Company
..
_ 138
First National Bank v. Wood
100
First National Bank v. Zeims
_ 224
Fisher v. Adams
277
Fisher v. Continental National B a n k . . .
193
Fisher v. Denver National Bank
143
Fisher v. Knight
250
Fishery. Simons
277
Fisher v. Tradesmen's National B a n k . .
193
Fisher v. United States National Bank.
194
Fisher v. Yoder
202
Flannegan e t al. v. California National
Banketal...
236
Flint v. Board of Aldermen of Boston. 298
Flint Road Cart Company v. Stephens.
266
Florence Railroad a n d Improvement
Company v. Chase National Bank
99,323
Flour City National Bank v. Grover . . .
224
Flour City National Bank v. Miller
323
Foil's appeal
310
Follettv. Tillinghast...
208
Forster v. Second National Bank 103
F o r t Edward, National Bank of, v. The
Washington County National Bank.,
211
For tier v. New Orleans National Bank. 256,
272,273
F o r t Scott, First National Bank of, v.
Drake . . .
244
F o r t Worth, City National Bank of, v.
Hunter.
221
F o r t Worth, City National Bank of, In re
221
Foss v. First National Bank of Denver.
206
F o s t e r s . Chase e t a l .
115
Foster v. Lincoln e t al
114,117,314
Foster I?. Rincker
_
148
Foster v. Wilson...
283
F o u r t h Street National Bank v. Yardley, receiver
267
Fowler v. Scully...
_.
272
Fox v. Home Company
100
Franklin County National Bank v. BeaL
149
Franklin National Bank v. Newcombe.
143
Frazer v. Seibern
289
Freeman Manufacturing Company v.
National Bank of Republic
190
Freiberg v. S t o d d a r t
148
Frelinghuysen, Receiver, etc., v. Baldwin etal
278
Fribergv. Cox.
139,198
Friend, I n r e . . .
150
Fridley V. Bowen
272
F u r b e r v . Stephens
269
G.
Gallot v. United States
163
Gardes v. United States
_
163
Gar field National Bank v. Kirchway-..
106
G a r d n e r s . Dunn
225
Garner v. Second National Bank
122
Garnett, First National Bank of, v.
Ayers...
297
Gatchv. Fitch
113,260
Georgia National Bank v. Henderson..
211
German National Bank v. Leonard
176
German National
Bank
v.
Louisville
Butchers 1 Hide and Tallow Company.
171
German National Bank v. Meadowcrof t _
171
Germania National Bank v. Case
108,206
Gernerv. Thompson
102,182
Getman v. Second National Bank of Oswego
325
Gettysburg National Bank v. Chisolm..
224
Gibbons v. Anderson e t a l
244
Gibbons v. Hecox
_ 215
Gibbsv. Howard
248
Gibson v. Peters, receiver
_ 170
Girault v. United States
163
Glenn v. Porter
313
Gloversville, National Bank of, v. Wells.
258
Gold Mining Company v. Rocky Mountain National Bank.
217,218
Goldsbury v. Inhabitants of Warwick..
300
91
Page.
Goldthwaite v. National Bank
250
Gordon v. Third National Bank of Chattanooga
231
Goshen National Bank v. State
211,232
Graf ton, First National Bank of, v. Babbidgeetal
234
Graham v. National Bank of New York.
272
Grant v. Spokane National Bank et al._
276
Graves v. Corbin
207
Graves v. The Lebanon National Bank.
123
Graves v. United States
162
Gray v. Rollo
248
Green v. Purcell National Bank
139
Green v. Wallkill National Bank
101,102
Greenville, First National Bank of, v.
Sherburne
257
Griffins. P e t e r s
264
Growv. Cockrill
219
Gruber v. First National Bank of Clarion
326
Gruetter v. Stuart _.
120
Grundy County National Bank v. Rulison
178
Guelich v. The National State Bank of
Burlington
144
Guernsey v. Black Diamond Coal and
Mining Company (Iowa)
198
Guild v. First National Bank of Deadwood
322
Guntersville, Bank of, v. Webb
167
Guthrie v. Reid
144,325
H.
Hackettstown National Bank v. Ming.. 173, 190
106
Hadden et al. v. Dooley e t al
200
Hade v. McVay
Hagar v. Union National Bank
. . . 120. 214
280
Hale v. Walker
206
Hallamv. Tillinghast229
Hallo well National Bank v. M a r s t o n . . .
326
Hambright v. National Bank
177
Hamer v. First National Bank
215
Hammond v. Hastings
282
Hancock National Bank v. Ellis
Harrington v. First National Bank of
236
Chitt enango
121
Harvey v. Allen
152
Harvey v. Girard National Bank
99
Harvey, receiver, etc., v. Lord
Hatch v. Johnson Loan and T r u s t Company
231
Hathaway v. First National Bank of
259
Cambridge...
176
Hauerwas v. Goodloe
238
Haugan v S u n w o L .
166
Hauptman v. First National Bank
Havens v. National City Bank of Brooklyn
122
Hawkins v. State Loan and T r u s t Com104
pany
Hay den v. Chemical National Bank
196, 266
Hayden v. Thompson
103,170,182, 194
262
Hayes, receiver, v. Beardsley.
Hayes v. Shoemaker
I l l , 310
173
Hay ward v. Eliot National Bank
Hazard v. National Exchange Bank of
311
Newport
Heath v. Second National Bank of Lafayette
272
Heidelbach v. National P a r k Bank
138, 251
Hendee v. Connecticut and Passumpsic
Railroad Company
_
202
102
Henderson v, Mye:
150
Henderson v. O'Connor
Henderson, use of S e c o n d National
325
Bank of Titusville, v. Waid
316
Hennessy v. City of St. Paul e t al
278
Hepburn v. Danville National Bank
198
Hepburn v. Kincannon
309
Hepburn v. School Directors
276
Herman, In r e
Her shire v. First National Bank
291 298
231
Hettinger v. Meyers
Hibernia National Bank, appeal of
Higgins e t al. v. Citizens' National
323
Bank of Kansas City
195
Higgins v. Worthington
92
REPORT OF THE COMPTROLLER OF THE CURRENCY.
Page.
Hightstown, First National Bank of, v.
Christopher...
332
Higley v. The First National Bank of
Beverly
324
Hill v. National Bank of Barre
321
H i l l u Exchange Bank
294
H i m r o d u Baugh
248
Hindman v. First National Bank of
Louisville e t al.
317
Hines v. Mannoleio
199
Hintermister v. First National B a n k . . . 318,319
Hirsh v. Jones e t a l
_ 101
Hiscock v. Lacy
_ 201
Hitz v. Jenks
274
Hobart. receiver, etc; «?. Gould
110
Hobart, receiver, etc.. v. Johnson
110
Hobbs v. Chemical National Bank (Ga.).
105
Hobbsu. Western National Bank
243,312
Hoke v. People
205
Holmesv. Boyd
272
H o l t v . Thomas
113
Homer v. National Bank of Commerce. 216,253
Hopkinsville, City Bank of, v. Blackmore
209
H o m e v. Greene.
139,289
H o r t o n v Mercer
282
Hot Springs Independent School District, etc., v. F i r s t National Bank of
Hot S p r i n g s . .
202
Howe u Barney e t a l . .
_. 102,242
Howell v. The Village of Cassopolis
300
Hower v. Weiss Malting a n d Elevator
Company e t a l
190
H u b b e l l u Houghton
119
Huffaker v. National Bank of Monticello
171,173
Hughes v. Neal Loan and Banking Company
150
H u g h i t t v. Hayes
249
Hulings v. Hulings L u m b e r Company
etal
137
Hulittu Bell etal
119
Humphreys v. Third National Bank of
Cincinnati, Ohio
177,259
Hungerford National Bank v. Van Nos
trand
177
H u n t , appellant
131
Hunt, In r e
254
Hunt u Townsend...
_
148
Hutchinson National Bank v. Crow
175,273
I.
Illinois P a p e r Company v. Northwestern National Bank
264
Illinois T r u s t and Savings Bank v. F i r s t
National Bank and another, receiver,
etc
268
Imperial Roller Milling Company v.
First National Bank
248
Implement Company v.1 Stevenson
130
I m p o r t e r s and Traders National Bank
v Peters etal..
149
Independent District of Pella v. Beard.
271
Indian Head National Bank v. Clark . . .
226
Indiana National Bank v. First National
Bank
182
Indianapolis, Meridian National Bank
of, v. F i r s t National Bank of Shelbyville
134
Insurance Company v. Phinney
247
Irons e t al. v. Manufacturers' National
Bank of Chicago e t a l . . 110, 111, 115,217,274,311
Israeli. Gale
100
J.
Jackson v. Fidelity a n d Casualty Company
279
Jackson v. United States
248
Jacobus v. Mqnongahela National Bank
of Brownsville
121
Jefferson, National Bank of, v. Bruhn
etal
141,199
Jefferson, National Bank of, v. Fare et al 152,202
Jenkins v. National Village Bank of
Bowdoinham
141
Jewettu Whitcomb
202
Jewettetal. v. Yardley
198
Page.
J o h n s o n s . Laflin
309,310
Johnson v. National Bank of Gloversville
. . . 318,320
Johnston v. Charlottesville National
Bank
99
Johnston Fife H a t Company v. National
Bank...
213
Jones v. Kushyille National Bank
294
Jordan, administratrix, etc.. v. T h e
National Shoe a n d L e a t h e r Bank of
New York
248,315
K.
Kaiser et al. v. F i r s t National Bank of
Brandon
229
Kaiser v. United States National Bank
(Ga.)
104
Kansas City, Mo., Metropolitan National Bank of, v. Campbell Commission Company
264
Kansas City. Merchants 1 National Bank
of, v. Lovitt
233
Kansas National Bank v. Quinton
257
Kansas Valley National Bank v. Rowell.
272
Kelley v. Phoenix National Bank
152
Kelly, Maus & Co. v. Sioux National
Bank e t a l
207
Kelsey v. The National Bank of Crawford
154
Kennedy v. California Savings Bank
et al
256
Kennedy v. First National Bank.
314
Kennedy v. Gibson
101,
102,107,112,113,114,170,274,282
Kentucky, Bank of, v. Armstrong
296
Kentucky, Bank of, v. Board of Councilmen of City of Frankfort
296
Kentucky Flour
Company's Assignee v.
Merchants 1 National Bank
254
K e r r u Urie
118
Kesner v. World's Fair Hippodrome...
282
Keyser v. Hitz
107,169,221,280
King e t a l . v. Armstrong,
receiver
113,251
Kingman, Citizens1 National Bank of, v.
Berry e t a l
, . 245,247
Kirkwood v. Exchange National Bank.
232
Kirkwood v. First National Bank
232
Kissam v. Anderson
..197
K l e p p e r u Cox
198
Kyle v. The Mayor, etc
298
L.
Lacon, The First National Bank of, v.
Myers
131
La Dow v. First National Bank
199
L a F a y e t t e . The National State Bank
of, v Ringel
131
La Grande National Bank v. Blum
224
La Grande Butter Tub Company v. National Bank of Commerce
_ 263
Laing v. Burley
108
Lake Erie and Western Railroad Company v. Indianapolis National Bank..
262
Lake National Bank v. Wolfeborough
Savings Bank e t a l . . .
205
Lanaux, La., Succession of._
._
281
Lancaster County National Bank v.
Boffenmyer
_ 227
Lanham v. First National Bank
323
La Rose et al. v. Logansport National
Bank e t a l .
123
Latimer v. Bard et a l .
129
L a t i m e r u Wood e t al
100
L a w r e n c e s . Stearns
173,247
Lazear v. National Union Bank of Baltimore
315,318,325
Leach v. Hale
284
Leather Manufacturers' National Bank
v. Cooper, j r
201
Lebanon National Bank v, K a r m a n y . . _
326
Lehmanv Rothbarth
106
Leoti, First National Bank of, v. Fisher.
288
Le Sassier v. Kennedy
201
Lewisv S w i t z .
114,283
Lexington, Town Council of, v. Union
National Bank
105
REPORT OF THE COMPTROLLER OF THE CURRENCY.
Page.
L'Herbette v. Pittsfield National Bank. 166,213
Libby v. Union National Bank
-...
272
Lilianthal, In re
122
Lilly v. The Board of Commissioners of
Cumberland County
140,289
Lincoln National Bank v. Butler
230
Linn County National Bank v. Crawford
99,202,203,225
Lionberger v. Rouse
289
Little Rock, Merchants' National Bank
of, v. United States
140,292,305
Lockwood v. The American National
Bank
154,235
Logan County National Bank v. Townsend
153,201,255,315,316
Louisiana, Citizens1 Bank of, v. Board of
Assessors . .
292
#
Louisiana, Citizens1 Bank of, v. Janin..
142
Louisville Banking Company v. City of
Louisville
296
Louisville, City of, v. Bank of Kentucky.
296
Louisville, Third National Bank of, v.
Vicksburg Bank
214
Louisville Trust Co. v. Kentucky National Bank et al
327
Lowell, Prescott National Bank of, v.
Benjamin F.Butler
256
Luberg v. Commonwealth
157
Lucas v. Coe
.
119
Lucas v. Government National Bank . .
318
Lyndonville National Bank v. Fletcher. 172,184
Lyons v. Lyons National Bank
255
Lyons, First National Bank of, v. Ocean
National Bank
237,242
M.
Madison, National Bank of, v. Davis
321,324
Magruderv. Coltson
310
Maguire v. Board of Revenue and Road
Commissioners of Mobile County
308
Main, Assignee, v. Second National Bank
of Chicago
204
Manistee, Mich., First National Bank of,
et al. v. Marshall & Ilsley Bank of Milwaukee, Wis
174
Manufacturers' National Bank v. Continental Bank et al
149
Manufacturers' National Bank, In r e . .
192
Mapesu Scott
272,273
Marbury v. Farmers and Mechanics'
National Bank
_
141
Marine National Banku Humphreys._
228
Market Bank v. Pacific National Bank. _
261
Market and Fulton National Bank v.
Sargent
228
Marshall National Bank v. O'Neal
138
Masseyu Fisher...
193,252,262
Mathews v. Columbia National Bank of
TacomaetaL.
129
Matthews v. The Massachusetts National Bank
---.
237
Matthews v. Skinker
273
Maynard v. Bank..
_
155
Mayor v. First National Bank of Macon_
292
McAden v. Commissioners of Mecklenburg County.
306
Me Bee v. Pur cell National Bank
_
169
McCann v. First National Bank of Jefferson ville
130
218
McCartneys. Kipp
_
266
McClellan v. Chipman..
105
McConville v. Gilmour
138
McCordu California National Bank
154,
McCormick v. Market National Bank . .
210,317
152
McCulloch v. Maryland
McFarlin v. First National Bank
281
McGhee v. First National Bank of
Tobias
323
McGhee v. Importers and Traders 1 National Bank
186
Mclver v. Robinson
290
McLoghlin v. National Mohawk Valley
Bank.
175,200
McMahon, In re, v. Palmer
304
McVeagh v. The City of Chicago et a l . .
298
Mead v. National Bank of Pawling
231
93
Page.
195
Meldrum v. Henderson
Memphis National Bank v. Sneed
100
Mendota, First National Bank of, v.
Smith
300
Mercantile Bank v. New York
288, 291,307
Mercantile National Bank v. Shields...
295
Mercer v. Dyer
251
106
Merchants 11 National Bank v. Ault
286
Merchants National Bank v. C a r h a r t . .
141
Merchants' National Bank v. Demere..
Merchants' National Bank v. Guilmartin
286
106.
Merchants' National Bank v. McAnultv
177,227
158
Merchants' National Bank v. McGee...
176
Merchants' National Bank v. McNeir..
273
Merchants' National Bank v. Mears
107
Merchants' National Bank v. Peet
251
Merchants' National Bank v. Robinson.
Merchants' National Bank v. Sevier
321
etal
Merchants' National Bank v. Spates . . . 103,227
Merchants' National Bank v. State Na
tionalBank
132,133,211, 254,255
Merchants' National Bank v. Tracy
232
Merchantsand Farmers'Bank v. Austin.
149
Merchants and Manufacturers* National Bank v. Cummings
144
Merchants and Manufacturers' Bank v.
Pennsylvania
308
Merchantsand Planters1 National Bank
v. Trustees of Masonic Hall
178,278
Merrill v. National Bank of Jacksonville
107,195
Merrill v. Florida Land Improvement
Company
193,310
Metropolitan National Bank v. Claggett 154,201
Metropolitan Trust Company v. Farmers and Merchants' National Bank...
122,
172,196,215,219, 226,278
Meyers v. Valley National Bank
310
154
Michigan Insurance Bank v. Eldred
227
Midland National Bank v. Schoen
140
Miller's estate
178
Miller v. First National Bank
303
Miller v. Heilbron
244
Miller v. Howard etal
205
Miller v. National Bank of Lancaster..
166
Miller v. Western National Bank
172
Milmo National Bank v. Carter
Missouri River Telegraph Company v.
201,319
First National Bank of Sioux City
Mix v. The National Bank of Blooming174
ton
Mize u Bates County National Bank._.
281
Mobile, National Commercial Bank of,
305
v. Mayor, etc., of Mobile
125
Mohrenstecher et al. v. Westervelt
Monongahela National Bank v. Over326
holt
Monmouth, First National Bank of, v.
212
Brooks
287
Montagu et al. v. Pacific Bank et al
Montgomery, First National Bank of,
146
v. Armstrong
183
Monticello Bank v. Bostwick et al
Montpelier, First National Bank of, v.
204
Hubbardetal.
Montpelier, First National Bank of, v.
Sioux City Terminal Railroad and
Warehouse Company (Trust Com221
pany of North America, intervener).
Moore v. Jones.
Moore v. Mayor and Commissioners of 109,280
Fayetteville ._
305
Moores v. Citizens' National Bank of
Piqua
233
Morehouse v. Second National Bank of
Oswego
Moreland v. Brown
213
Morris v. Eufaula National Bank
111
Morrison v. Price
Mound City Paint and Color Company
152
v. Commercial National Bank
Mount Pleasant, First National Bank
199
of, v. Tinsman
168
Mount Sterling National Bank v. Green.
236,240
Movius, Receiver, etc., v. Lee et al
94
REPORT OF THE COMPTROLLER OF THE CURRENCY.
Page.
Multnomah County et al. v. Oregon National Banket a l . . .
262,267
Murphy v. First National Bank
166
Murray v. American Surety Company
of New York..
195,203
Murray v. Pauly
131
Mustard v. Union National Bank
200
N.
National Bank v. Butler
261
National Bank v. Carpenter
319
National Bank v. Case
107,280,281,310
National Bank of Redemption v. City
of Boston
..
306
National Bank v. Colby
122, J92
National Bank v. Commonwealth
291,307
National Bank v. Danforth
327
National Bank v. Drake
243
National Bank of Fayette County v.
Dushane . .
325
National Bank v. Earl
256
National Bank v. Graham
283
National Bank v. Insurance Company..
216
National Bank v. Johnson
198,318
National Bank v. Kennedy
102
National Bank v. Matthews
272,273
National Bank v. Taylor
228,282
National Bank v. United States
306
National Bank v. Whitney
272
National Bank of Commerce v. Atkinson
99,245,257
National Bank of Commerce v. City of
Seattle
_
296
National Bank of Commerce v. Galland..
175,226
National 1Bank of Commonwealth v. Mechanics National Bank
191,192
National Board of Marine Underwriters
v. National Bank of the Republic
182
National Commercial Bank v. McDonnell
140,171
National Commercial Bank v. Miller &
Co..--.
132,136
National Exchange Bank v. Peters et al 191
National Exchange Bank v. Wilgus's
Executors
228
National Gold Bank and Trust Company
v. McDonald
137
National Park Bank v. Goddard
122
National Park Bank v. Gunst
101
National Park Bank v. Harmon
116
NationalPemberton Bank v. Porter . . .
200
National Security Bank v. Butler
261
National Security Bank v. Edward F.
Cushman
235
National Security Bank v. Price, Receiver
260
National State Bank v. Young
289
Neadv. Wall
114,282
Nebraska National Bank v. Ferguson..
229
Nebraska, State of, v. National Bank of
Orleans
257
Neill v. Rogers Bros. Produce Company.
122
Nelson v. Burroughs
102
Nelson v. First National Bank of Killingly....
143,174,232,234
Newark Bank Company v. Newark
288,291
Newark, National State Bank of, v.
Boylan
320
Newark, North Ward National Bank
of, v. City of Newark
289
Newbegin v. Newton National Bank...
193
Newberg, National Bank of, respondent, v. Daniel Smith
169
Newell v. National Bank of Somerset . .
320
New Orleans Canal and Banking Company v. City of New Orleans
305
New Orleans National Bank v. Raymond
273
New Orleans, Germania National Bank
of, v. Case
108,206
Newton National Bank v. Newbegin...
196
New York, American Exchange National Bank of, v. First National Bank
of Spokane Falls et al
220
New York Breweries Company v. Higgins
165
Page.
New York, Chatham National Bank of,
v. Merchants' National Bank of West
Virginia, appellant.
__
..
204
New York, Chemical National Bank of,
v. Armstrong
257
New York, Germania Bank of, v. La
Folletteetal
225
New York, Market National Bank of, v.
Pacific National Bank of Boston
122
iSTew York, Mayor of, etc., v. Tenth National Bank.
219
New York, Mercantile National Bank of
City of, v. Mayor, etc., of City of New
York and another
S07
New York, Merchants' National Bank
of the City of, v. Samuel and another.
139
New York, National Shoe and Leather
Bank of the City of, v. Mechanics' National Bank of Newark, N. J
121
New York, People's Bank of the City of,
v. Mechanics' National Bank of Newark
121
New York, Security Bank of, v. National
Bank of the Commonwealth
102
New York Security and Trust Company
et al. v. Lombard Investment Company of Kansas et al
143,184
New York, the Metropolitan National
Bank of, v. Lloyd
135
Niblack v. Cosier
131,287
Nichols v. State
167
Nickersonv. Kimball...
302
Nicollet National Bank v. City Bank...
315
Nilesv. Shaw
295
Noblesville, Citizens' State Bank of, v.
Hawkins..
316
North Bennington, First National Bank
of, v. Town of Bennington
255
Northern Bank v. Bourbon County
296
Northern National Bank v. Maumee
Rolling Mill Company
99
N o r t h River Bank, In r e
_
267
N o r t h w e s t e r n National Bank v. J.
Thompson & Sons' Manufacturing
Company _
143
N o r t o n v. Derby National Bank
104
O.
Oates v. First National Bank of Montgomery _.
153,318
Ocean National Bank v. Carll
202,275
O'Connor v. Brandt
253
O'Connors. Witherby.I
115
Oddie et al. v. The National City Bank
of New York
135
O'Hare v. Second National Bank of
Titusville
217,218
Old National Bank v. German American
National Bank.
150
Oldhamv. Bank
231,253
Omaha, First National Bank of, v. County of Douglas
_.
204,297
Omaha National Bank v. Walker et al.
185
Onondaga County Savings Bank v.
United States
150
Ordway v. Central National Bank
200,216
Ornn v. Merchants' National Bank
272
Osborne v. Bank of the United States..
152
Oswego, Second National Bank of, v.
Burt.
236
Overholt v. National Bank of Mount
Pleasant
318
P.
Pacific National Bank v. Eaton
107,
128,129,280,281
Pacific National Bank v. Mixter.... 102,120,121
Palmer v. McMahon.
288,293
Palmer v National Bank of Allentown.
121
Pape v. Capital Bank of Topeka
255
Parkers. Robinson...
115
Parkersburg National Bank v. Als
166
Park Hotel Co. v. Fourth National Bank
of St. Louis
101
Parkhurst v. First National Bank of
Clyde
323
REPORT OF THE COMPTROLLER OF THE CURRENCY.
Paga
Pattison v. Syracuse National Bank
255,284
P a u l y v. Coronado Beach Company
317
P a u l y v. O'Brien
225
P a u l y v. S t a t e Loan a n d T r u s t Company.
117
P a u l y v.Wilson
142
P e a r c e a n d Miller Engineering Comp a n y v. Brouer
.... 143
Pearce v. Rice
_
. . - 186
Peck e t al. v. F i r s t National Bank
145
Pelton v. Commercial National Bank . . 289,292
Perm Bank v. F a r m e r s ' Deposit National Bank
254
Pennsylvania, Commercial Bank of, v.
Armstrong
148
People ex rel. Williams v. Assessors of
Albany
301
People ex rel. Williams v. W e a v e r
290
People v. The Commissioners of T a x e s
and Assessments
290
People ex rel. T r a d e s m e n National Bank
v. Commissioners of Taxes and Assessments
-.- 300
People v. T h e Commissioners
290
People v. Dolan
290
P e o p l e s . Fonda
206
People v. Merchants' Bank
150
People v. Remington
140
People v. St. Nicholas Bank
. . 132,252
People's Bank v. National Bank
171,255
People's Bank a n d T r u s t Company v.
Tufts
253
People's National Bank v. Clayton
230
People's Savings Bank v. Hughes.
238
Peterborough National Bank v. Childs.
320
Peters v. Bain
264
Peters v. Foster
279
Petition of Platt
275
P e t r i v. Commercial National Bank of
Chicago
_
206
Pettilon v. Noble
206
Philadelphia, F o u r t h Street National
Bank of, v. Yardley
270
Philadelphia National Bank v. D o w d . . .
146
Philadelphia, T h i r d National Bank of,
v. Miller
318
Philler v. J e w e t t
251
Phillerv.Patterson
99,143,256
Philler v. Yardley
252
Phillips v. Mercantile National Bank of
t h e City of New York.
211
Phipps e t al. v. Harding.
230
Pickett v. Merchants 1 National Bank of
Memphis...
320
Pickle v. People's National Bank
139
Pittsburg, Fifth National Bank of, y.
P i t t s b u r g h and Castle Shannon Railroad Company
206
P i t t s b u r g Locomotive and Car W o r k s
v. State National Bank of K e o k u k . . . .
140
P i t t s b u r g , Third National Bank of, v.
Mylin ._
206
P l a t t v. Beach
275
P l a t t t;.Beebe_.
171,174,276
P l a t t v. Bentley
248
P l a t t s b u r g , F i r s t National Bank of, v.
Sowleset al
242
Pollard v. The S t a t e .
153
Potters. Bealetal.
285
P o t t e r v. T r a d e r s ' National Bank
223
Poughkeepsie, City National Bank of,
v. P h e l p s . .
154
P r e s c o t t v. H a u g h e y
244
P r e s t o n National Bank v. Emerson
177
Preston u P r a t h e r
285
Price, Receiver, v. Abbott
275
Price, Receiver, v. Colson
275
Price, Receiver, v. Coleman e t al.
260
Price, Receiver of Venango National
Bank, v. Yates
109,153,275
Price, Receiver, v. W h i t n e y
111
Prosser v. F i r s t National Bank of Buffalo
283
Providence Institution for Savings and
Jewels v. City of Boston
301
P r y s e v. F a r m e r s ' Bank
._ 238
P u t n a m Savings Bank v. Beal
267,285
P u t n a m v. United States
159,247
95
Q
Quanah, Tex., City National Bank of, v.
Chemical National Bank of St. Louis,
Mo
Page.
239
R.
Rand e t al. v. Columbia National Bank
of Tacoma, Wash., e t a l . .
120
Randolph National Bank v. Hornblower
134
Raynor v. Pacific National Bank
121
Resh v. First National Bank of Allentown
168
R e y n e s u Dumont
.._ 216
Reynolds v. Bank of Mt. V e r n o n . - .
150
Reynolds v. Crawfordsville Bank
272
Rhoner v. National Bank of Allentown.
121
Ricaud v. Tysen
104
Ricaud v. Wilmington Savings a n d
T r u s t Company e t a l
313
Rich v. State National Bank of Lincoln.
255
Richards v. Attleboro National Bank.. 178,
217,315
Richards e t al. v. Incorporated Town of
Rock Rapids
207
Richards v. K o u n t z e . . .
223
Richmond, F i r s t National Bank of, v.
Davis
148
Richmond, First National Bank of, v.
City of Richmond e t a l
290
Richmond, F i r s t National Bank of, v.
Wilmington a n d Weldon Railway
Company
151
Richmond v. Irons
101,
108,113,199,216,275,281,310
Richmond, City of, v. Scott
290,300
Riddle v. Dow
222
Riddle v. First National Bank
130,254,274
Ridgely et al. v. First National B a n k . . .
223
Ridgely National Bank v. P a t t o n &
Hamilton
135
Ripley National Bank v. L a t i m e r
176,235
Riverside Bank v. F i r s t National Bank
of Shenandoah
134
Roberts, Receiver, etc., v. Hill, Administrator, etc...
260
Robertson v. Buffalo County National
Bank..
245
Robinson v. City of Wilmington e t al . .
204
Robinson v. Hall e t a l
243
Robinson v. National Bank of N e w b e r n . 121,205
Robinson v. Turrentine e t al
113
Rochester, First National Bank of, v.
Harris
255
Rochester, First National Bank of, v.
Pierson
101,315
Rock Springs National Bank v. L u m a n .
234
Rockville, The National Bank of, v. The
Second National Bank of L a F a y e t t e . .
137
Rockwell v. F a r m e r s ' National B a n k . . . 199,320
Roebling Sons Company v. First National Bank e t a l
273
Rome, Merchants' National Bank of, v.
Fouche
120
Rood v. Whorton
127
Root v. Erdelmeyer _
299
Rose v. Winnsboro National Bank
177
Rosenblatt v. Johnston
191,295
Ruffin v. Board of Commissioners
140,289
R u g g l e s u Kuler
248
Rush v. First National Bank, Kansas
City
225
S.
St. Albans, In r e First National Bank of.
107
St. Louis and San Francisco Railway
Company v. Johnston
147,193,268
St. Louis National Bank v. Allen et a l . .
205
St. Louis National Bank v. Bloch
139
St. Louis National Bank v. Brinkman_.
206
St. Louis National Bank y. Papin
290
St. Paul, Merchants' National Bank of,
v. Hanson
228
Safford v. First National Bank
118
Salisbury v. First National Bank
177,228
San Diego County v. California National
Bank
262,263,267
96
REPORT OF THE COMPTROLLER OF THE CURRENCY.
Page.
San Diego, In re Certain Shareholders
of the California National Bank of...
112
Sandy Hill, First National Bank of, v.
Fancher
_
298
San Francisco, Nevada Bank of, v. Portland National Bank
212
Sanger v. Upton
_
129
Savary v. Savary
248
Saylesv.Cox
_
195
Scammon v. Kimball
248
Schierenbergr v. Stephens
191
School District v. First National
Bank.
165
1
Schrader v. Manufacturers National
Bank of Chicago
186
Schuyler National Bank v. Bollong
319,320
Scofieid v. State National Bank of Lincoln
223
Scott v. Armstrong
248,249,251,274
Scott, Plaintiff in Error, v. National
Bank of Chester Valley
214
Scott et al v. Pequonnock National
Bank
311
Scovillv. Thayer...
130
Seattle National Bank v. City of Seattle
296
Seattle, Puget Sound National Bank of,
v. King County et al
291,296
Second National Bank v. Du nn
225
Second National Bank v. Hewitt.
226
Second National Bank v. Hughes et al. _
126
Second National Bank v. Sproat
143
Second National Bank v. Wentzel
183
Security National Bank v. National
Bank of the Commonwealth
101
Seeber v. Commercial National Bank of
Ogden
185,239
Seeley v. New York National Exchange
Bank
130
Seligman v. Charlottesville National
Bank.
99
Selma, City National Bank of, v. Burns.
136
Selma, First National Bank of, v. Colby. 99,121
Shafer v. First National Bank
320
Sharpe v. National Bank of Birmingham
141
Sheffield et al., First National Bank of,
v. Tompkins
211,233
Shenondoah National Bank v. Read 190,258,317
Shinkle v. The First National Bank of
Ripley
324
Shoemaker v. The National Mechanics'
Bank
140,217
Short et al. v. Hepburn
99,103,178,203
Showalter v. Cox
139
Shunk v. The First National Bank of
Galion
318
Shute v. Pacific National Bank
250
Sickelsv. Herold
252
Simmons v. Aldrich
297
Simmons v. United States
160
Simons et al. v. Fisher
245
Sioux City, First National Bank of, v.
Peavey.
127,203,258
Sioux Valley State Bank v. Drovers'
National Bank
138
Skiles V.Houston...
_
249
Sleppy v. Bank of Commerce et al
132
Smith v. First National Bank... 218,255,284,323
Smiths. Sabin
106
Smith v. The Exchange Bank of Pittsburg
315,318
Smithson v. Hubbell e t a l . .
207
Snohomish County v. Puget Sound
National Bank
_
208
Snyderv. Foster
314
Snyder v. Mount Sterling National Bank
324
Snyder's Sons Company v. Armstrong.
250
Somerville, City of, y. Beal
149,267
Southwick v. The First National Bank
of Memphis
121
Sowles v. National Union Bank of
Swanton
..:
123,279
Sowles v. Witters et al
112,170,208
Spafford v. The First National Bank of
TamaCity
221
Speckart et al. v. German National Bank
et al
209
Spokane, City of, v. First National Bank
269
Spokane County v. Clark
262
Spokane County v. First National Bank
269
Spokane, Exchange National Bank of, v.
Bank of Little Rock
184
Spring City, National Bank of, v. National Bank of Pottstown
215
Springfield, City of, v. First National
Bank of Springfield
304
Spurr v. United States..
164
Squires v. First National Bank
103,238
Stafford National Bank v. Dover
289
Stanley v. Board of Supervisors of the
County of Albany
205,305
Stanton v. Wilkeson
113,274
Stapylton v. Anderson e t a l .
_
101
Stapylton v. Carmichael
101
Stapylton v. Cie des Phosphates de
France
266
Stapylton v. Teague
101
State v. Bardwell
166
State v. Carpenter
221
State v. Eifert
_
158
States. Fields
157
State v. Gasting
140
State National Bank v. Flathers
273
State v. The National Bank of Baltimore
298
State, North Ward National Bank,
pros., v. Newark
305
State National Bank v. Newton National Bank _
238
State u Sattley
157
State v. Smith
158
State v. Teahan
158
State v. Tuller
156
State v. Wells.
159
Staunton v. Wilkeson _.
102
Stearns v. Lawrence
247
Steckel v. First National Bank of Allentown
286
Stephens v. Bernays
153,202
Stephens v. Follett
112
Stephens v. Monongahela National
Bank
181,319
Stephens v. Overstolz
181,182,242
Stephens v. Schuchmann
254
Stetson v. City of Bangor
153,292,298
Stevens^. Catlin
231
Stewart v. Armstrong
171,193
Stewart v. National Union Bank of
Maryland...
217,218
Stowed. Yarwood
248
Strong v. South worth et al
107,109
Stuart v. Hay den et al
114,120,257,313
Stufflebeam v. De Lashmutt
283
Sturdivant y. Memphis National Bank. 228,324
Sturgis National Bank v. Smyth.. _
224
Sturgis, The First National Bank of, v.
Bennett etal
245
Sumter County v. National Bank of
Gainesville
_
306
Sunmanf. Gatch etal
260
Supervisors v. Stanley
293
Swopef. Leffingwell
272,273
Sykesi'. Holloway etal
314
T.
Tabor v. Commercial National Bank
106
Tacoma, Columbia National Bank of,
et al., v. Matthews
130
Tacoma, Wash.. National Bank of Commerce of, v. Wade et al
208
Tacoma, Washington, National Bank
of, v. Eckels
217,276
Talbot v. Silverbow County, Montana. 288,293
Talcott v. First National Bank
254
Talmage v. Third National Bank
200,216
Tapley v. Martin
123,174
Tappan v. Merchants' National Bank
293
Taylor v. Hutton
,
236,246
Taylor v. National Bank
130
Tecumseh, First National Bank of, v.
Overman
_
319
Tecumseh National Bank v. Harmon.. _
258
Tehan v. First National Bank et al
202
Tennessee et al., State of, v. Bank of
Commerce et al
293
REPORT OP THE COMPTROLLER OP THE CURRENCY.
97
Page.
Union Stock Yards National Bank v.
Dumond
212
Union Stock Yards National Bank v.
Moore et al
169,259
Uniontown, First National Bank of, v.
Stauff cr
321
United States v. Allen
179
United States v. Allis
157,180
United States v. American Exchange
150,183
National Bank
United States, ex rel., v. Barry
_ 181,328
United States v. Bennett
139
United States v. Booker
160
United States v. Britton
155,156, 157,189
United States v. Cadwallader
156
United States v. Clinton National Bank_
184
United States v. Conant
156
United States v.Cooke County National
Bank
153
United States v. Crecelius
179
116,117 United States v. Curtis
189: 232,236
pany et al
203,278
United States v. Bdger ton
Thompson
pson vv. Pool
.189
Thompson v. St. Nicholas Nationa
ationalBank 132,315 United States v. Ege
179
134 United States v. Eno
Thompson
v. Sioux Falls National
al Bank188
x
Thornton v. National Exchange Bank.. 141,272 United States v. Fish
155, 156,179
203 United States v. Folsom
Thurber v. Miller
180
258 United States v. French et al
Ticonic National Bank v. Bagiey ..
179,188
United States v. GravesTiffany v. National Bank of the State of
179,280
198 United States v. Harper
Missouri
155,156. 178,241
130 United States v. Hughitt..
Tillinghast v. Bailey et al
179
279 United States v. Jewett
181
Tillinghast v. Carr...
199 j United States v. Knox
Timberlake et al. v. First National Bank.
„
108
I United States v. L e e .
Titusville, Appeal of Second National
160
United States, Plaintiff in Error, v.
325
Bank of..
Toledo, Merchants' National Bank of,
Mann
307
301 United States v. Means et al.
v. Gumming
236,241
United States v. Neale
Tompkins County National Bank v.
239
United States v. National Bank of AsheBunnell and Eno Investment Com226
pany
ville et al
166
Tootle et al. v. First National Bank of
United States v. National Exchange
316
Port Angeles
Bank
203
119
United States v. Northway
Tourtelot v. Finke
188
167 United States v. Patterson, Keeper, etc.
To wnsend v. Williams
161
Tradesmen's National Bank v. Bank of
United States v. Peters
164
100,219
Commerce
United States v. Potter
160,
187,188
Tradesmen National Bank, People ex
United States v. Stockgrowers1 National
rel., v. Commissioners of Taxes and
Bank of Pueblo
169
300 United States v. Taintor
Assessments
155
Trenholm, Comptroller, v. Commercial
United States v. Vorhees.. _
153
182 United States v. Warm
National Bank
187
Trent Title Company v. Fort Dearborn
United States Bung Manufacturing
National Bank of Chicago
212
Company v. Armstrong. 251
Trustees of First Presbyterian Church
Unitect States National Bank v. First
v. National State Bank
178,255
234,247
National Bank of Little Rock et al
Turner v. First National Bank of Keo224
United States National Bank v. McNair.
kukotal..
274 Upton v. National Bank of South Reading---272
Turner v. First National Bank of Madi129
son
272 Upton v. Tribilcock
Turner v, Uni on National Bank
104 Utica, First National Bank of, v. Waters
and another
303
Turner v. Utah Title Insurance and
Trust Company. _
104
Turner v. Wells, Fargo & Co
104
V.
Turtle v. Freiinghuysen
264
Twin City Bank v. Nebeker
307 Valparaiso, Ind., The Farmers 1 National
Tyson v. Western National Bank of BalBank of, v. Sutton Manufacturing
timore-.
145
Company
._
153
Page.
141
T e r r y v. Birmingham National B a n k . .
215
T e x a r k a n a National Bank v. Daniel
174
T h a t c h e r v. West River National Bank.
Thayer u. B u t l e r . .
107, 129,281
28
Third National Bank v. Angell
221,255
Third National Bank v. Blake
Third National Bank v. City of Louis29(5
ville
:
233
Third National Bank v. Harrison et al._
230
Third National Bank v. Hastings
275
Third National Bank, In r e
Third National Bank v. Merchants 1 Na182
tional Bank
_
.. _
Third National Bank v. Stillwater Gas
169
C omp any
245,256
Thomas v. City National
Bank
Thomas v. F a r m e r s 1 Bank of Maryland - 154,155
131
Thomson v. Beal
Thompson National Bank v. Dow
Thompson v. German' Insurance Corn-
U.
Ulrich v. Santa Rosa National Bank.... 104,106
Ulster County Savings institution v.
Fourth National Bank
201
Underwood v. Metropolitan National
Bank ._
223
Union Gold Hill Mining Conrpany v.
Rocky Mountain National Bank
219
Union Mills First National Bank v.
Clark...
136
Union National Bank v. City of Chicago 308
Union National Bank v. Citv of Cleveland
215
Union Nati onai Bank v. Grant
230
Union National Bank v. Hcnr y Dreyfus.
253
Union National Bank v. L , N. A. and C.
R. Company
319
Union National Bank v. Oceana County
Bank
135
CUR 98-
-7
Van Allen v. The American National
Bank
136,165
Van Alien v. The Assessors
288,289,293
Van Antwerp y. Hulburd
192,204
Van Campen, In re
155,156,179
Vance v. Mottley
238
Van Leuven v. First National Bank
256
VanSlyke v. State. _.
._.
289
Veazie Bank v. Fenno
140,152,292,294
Veeder v. Mudgett _.
130
Venango National Bank v. Taylor
249,250
Vernier v. Cox
263
Vicksburg Bank v. Worrell. _
289
Viets v. The Union National Bank of
Troy..
135
Vilas National Bank v. Barnard
100
Virginia, National Bank of, v. City of
Richmond et al
288
Vose v. Philbrook
_
248
Wachusett National Bank v. Sioux City
S t o v e W o rk s
.".
201
98
REPORT OF THE COMPTROLLER OF THE CURRENCY.
W.
Page,
Wadsworth v. Duncan
103
Wadsworth v. Hocking
103
Wadsworth v. Laurie
_
103
Wait v. Dowley
294
Walker v. Miller
175
Walker et al. v. Windsor National
Bank
201
Wallace v. Stone
. .*.
150
Warner v. Penoyer et al
_
244
Warren v. De Witt County National
Bank
._
272
Warren v. First National Bank
215
Washington National Bank v. City of
Seattle
20(3
Washington National Bank v. King
290
County. 235
Washington National Bank v. Pierce.-.
290
Wasson v. Bank
208
Wasson v. Hawkins
Waterloo, First National Bank of, v.
272
Elmore - 150
Waterloo Milling Company v. Kuenster
216
Watkins v. National Bank of Lawrence
107
Watson v. Sheaf e
211
Waxahachie National Bank v. Vickery
218
Weber v. Spokane National Bank 218
Weber et al. v. Spokane National Bank
Weckler v. The First National'Bank of
126,316
Hagerstown
Welles v. Graves
181, 182,241
111
Welles v. Larrabee .
111
Welles v. Stout
Wellsburg, The First National Bank of,
24G
v. Kimberlands
Wellston, First National Bank of, v.
HO, 250
Armstrong
...
H-0
West v. Bank of Rutland
144
West v. St. Paul National Bank
219,
Western National Bank v. Armstrong..
236,248
228
Western National Bank v. Wood-.
238
Westervelt v. Mohrenstecher et al
214
Weston v. Estey
West Side Bank t\ Mechanics" National
121
Bank of Newark, N. J
273
Wharry v. Hale
Wheeler v. Union National Bank of
321
Pittsburgh
Wheeler v. Walton & Whann Company.
Wheelock •??. Kost
171,191,280
290.293
Whitbeck v. Mercantile Bank
191,192
Whitev.Knox..
White et al. v. Iowa National Bank of
105
Des Moines
Whitehall, First National Bank of, Respondent, v. James Lamb et al., appellants _
327
Whitney v. Butler..
310
Whitney v. The First National Bank of
Brattle boro
Whitney et al. r.G-eneral Electric Cornpany
of New 1 ork et al.
r
National
291
W hhitney
i
~
••
' Bank
~
' v. P a r k e r
W h i t n e y et al., Appellants, v. Ragsdale,
T re a s ur e r
293
W h i t t a k e r v. Am well National Bank . . 10 L143
W h i t t e m o r e v. Amoskeag National
Bank
200
Wichita National Bank et al. v. Smith.
203
Wickham v. Hull
108,202
Wild, In r e . . _.
320
Wilder v. Union National Bank
206
|
|
;
|
j
;
:
wiiey v. The First National Bank of
Brattleboro...
284,285
Wiley v. Starbuck..
...
318
Williams, People ex rel., v. Weaver
290
Williams v. American National Bank of
Arkansas City, Kans,, et. al
130
Williams v. Board of Supervisors of the
County of Albany
304
Williams v. City National Bank _
243
Williams v. Cox..
139
Williams v. Weaver
290
Wiiliamsport National Bank v. Knapp. 177,205
Wilmington, First National Bank of, v.
Herbert, State Treasurer.. _
308
Wilson, Assignee, v. National Bank of
Rolla..
321
Wilson v. Paulv
106,234
Wingate v. Orchard
252
Winstandley v. Second National Bank .
194
W i n t e r s . Baldwin.
126
W i n t e r s v. A r m s t r o n g
128,275
Winterset, National Bank of, v. E y r e
etal.
200, 248,326
Winton v. Little
273
Witters v. Foster
102, 202,240
Witters v. Sowles
107,153,197,221, 251,284
Wolverton v. Exchange National Bank _
200
Wood, appeal of
130
Wood River Bank v.First National Bank
of Omaha
137,139, 145,213
Woods i'. People's National Bank of
Pittsburg
223
Woodward v. Ellsworth.
295,305
Woolman *; Capital National Bank
253
Worcester National Bank v. Cheeney.. . 272
Worcester, Mass., First National Bank
of,i\Lock-Stitch Fence Company et al.
229
Wright v. First National Bank of
Greensburg
318
Wright v. Merchants' National B a n k . . .
274
Wright v. Robinson et al
138
Wylie i\ Northampton National Bank.
284,
287,315
Wyman v. Citizens' National Bank of
Faribauit
218
X.
Xenia, First National Bank of, t>. Stew-
art
127,140,236
Y.
Yakima National Bank v. Knipe
174,199
Yardley v. Clothier
248,250
Y ardley v. Philler
270
Yardley v. Wilgns
112,281
Yerkes v. National Bank of Port Jervis - 256
Young v. Andrews et al
154,256,273
Young v. McKay
'113
Young i'. Wempe et al
112,169
Youngstown, First National Bank of, v.
Hughes etal
125,292,303
Z.
Zeigler v. First National Bank of Allentown
Zimmerman v. Carpenter
168
119
REPORT OF THE COMPTROLLER OF THE CURRENCY.
99
ABATEMENT:
1. An action brought by the creditor of a national bank is abated by a decree
of a district or circuit court dissolving the corporation and forfeiting its
franchises. First National Bank of Selma v. Colby, 21 Wall., 609.
2. A creditor's bill was filed against a national bank before the passage of the
act of Congress of June 80, 1876 (19 St. at L., 63), and a receiver was
appointed, who took possession of the property of the bank. An amended
"bill was filed in the cause, after the passage of that act, to secure the
benefits of the act, to which all the stockholders were made parties.
Subsequently the Comptroller of the Currency appointed a receiver to
wind up the affairs of the bank, and this suit was brought by him against
one of the stockholders. Held, on demurrer to a plea in abatement, which
set forth these facts, that the defendant is entitled to judgment on the
ground that as the stockholders" liability can be completely enforced in
the suit in equity, the general rule applies that a debtor shall not be vexed
by two suits in the same jurisdiction for the same cause of action.
Harvey, Receive?*, etc., v. Lord, 10 Fed. Rep., 236.
3. The pendency of a suit in a State court is not necessarily a bar to a suit in
a Federal court between the same parties, involving the same issues.
Short et al. v. Hepburn, 75 Fed. Rep., 113.
4. In an action by a creditor of a corporation against a stockholder to enforce
his statutory liability, an affidavit for attachment stating that the action
is to enforce the stockholders' liability under the Constitution and statutes for payment of the debts of the corporation and that the claim
against defendant is his liability as such stockholder, sufficiently states
the ' ; nature of plaintiff's claim," Rev. St., sec. 5522; Northern National
Bank v. Maumee Rolling Mill Co. (Com. PL), 2 Ohio N. P.. 2Go.
ACCOMMODATION PAPER:
1. A national banking association can not guarantee the paper of a customer
for his accommodation. Seligman v. Charlotiesville National Bank. 3
Hughes, 647.
2. The accommodation paper of a national banking association is void in the
hands of one who takes it with knowledge of its character. Johnston v.
Charlotteisville National Bank, 3 Hughes, 657.
3. A national bank can not become an accommodation indorser. National
Bank of Commerce v. Atkinson, 55 Fed. Rep., 465.
4. A private corporation can not defend an action on its accommodation note
on the ground of ultra vires, as against a bona fide holder. Florence
Railroad and Improvement Company v. Chase National Bank (Ala.), 17
So,, 720.
5. As against a holder for value, a maker of an accommodation note can
defend only on the ground of actual xmyment. Philler v. Patterson (Pa.
Sup.), 32 A., 26.
6. A director and stockholder ox a national bank gave an accommodation note
to the bank's president, on the latter's request and representation that
the note was to be put in the hands of his personal creditor as security,
and on condition that no money should be drawn on the note, and that
the note should not be put in the bank. Without the knowledge of the
maker, he being aged and infirm of sight, the note was made payable to
the bank and placed therein, and a certificate of deposit for the amount
thereof issued to the president, and by him deposited with his creditor,
who held the same until the bank's failure. Held, that the maker was
liable on the note to the bank's receiver. Linn County National Bank
v. Crawford (C. C), 69 Fed. Rep., 532.
7. Complainants, on the request of a national bank needing funds, signed an
accommodation note for $10,000, payable to its order, with the understanding that it would discount the same, and use the proceeds in its
business. The bank at the same time agreed to place to the credit of
complainants on its books an amount equal to the proceeds of the note,
complainants stipulating that they would not check against this credit
except to pay the note or to reimburse themselves for paying it. The
credit was accordingly made, and the bank, after continuing business
for some time, failed, and complainants were compelled to pay the note.
They thereafter recovered a judgment at law against the bank's receiver
for the amount paid to take up the note, and then sued in equity for the
100
REPORT OF THE COMPTROLLER OF THE CURRENCY,
ACCOMMODATION PAPER—Continued.
amount placed to their credit, according to the agreement. Held, that
they are not entitled to two judgments for the same debt and to dividends on both judgments until one of them was satisfied, and that the
bill must therefore be dismissed. Latimer v. Wood et al., 73 Fed. Bev.,
1001.
8. When the payee of an accommodation check, given for a particular purpose, deposits it in a bank in his own name and the bank makes advances
and extends credit on the faith of the dejjosit without notice of the trust,
its rights and equities are superior to the drawer of the check. Erisman v. Delaicare County National Bank, 1 Pa. Super. Ct,, 144* 37
W. N. C, 518.
9. In an action on a note, it appeared that plaintiff bank discounted P. & Co.'s
paper to the full extent, consistent with its rules, and, in reply to an application for a further discount, suggested that the company get defendant
bank to discount the paper and allow plaintiff to rediscount it. The
company made its note to defendant, who indorsed it, and sent it on to
plaintiff, with whom it had an account, and the proceeds were placed to
defendant's credit. Defendant placed the amount of the note to the
credit of P. & Co., by whom it was at once checked out. This specific
amount credited to defendant by plaintiff was not checked out by
defendant, but checks in various amounts, in ordinary course of business, were drawn against its account, none of which apparently had any
special reference to the amount of the discount. Held, that defendant
was not an accommodation indorser. Fox v. Home Co. (Sup.), 35 N. Y.
S., 896, distinguished. Tradesmen's National Bank v. Bank of Commerce (Slip.), 39 N. Y. S., 55If.
10. Where a note was signed by accommodation makers, and made payable to
a bank, on the understanding that it was to be deposited in the bank to
secure a loan for the purchase of wheat for a mill, with the ultimate
intention of paying off a mortgage on the mill, and such makers, without notice to the bank of any restrictions on the disposition of the note,
allowed the mortgagor, for whose benefit it was made, to have possession and control thereof, they can not complain that he effected an
immediate payment of the mortgage by procuring an indorsement to
himself from the bank, and then indorsing the note to the mortgagee.
First National Bank v. Wood (Tex. Civ. App.), 28 S. V/., 384.
11. An answer which alleges that the note sued on was accommodation paper,
and was made and delivered on condition that defendants should not be
held liable thereon, provided there was delivered to plaintiff good business paper of the person accommodated, is insufficient, because it does
not allege that the agreement to replace such note with other paper was
made with plaintiff. Vila.s National Bank v. Barnard (Sup.), 28
NY. S., 922.
12. Defendant, for the accommodation of the maker, indorsed blank notes in
the following form: '•
after date,
promise to pay to the
order of
, at the Farmers' National Bank, Adams, N. Y. Value
received." Held, that the delivery of the indorsed blanks did not
authorize the holder to fill them out so as to make them payable '' on
demand" instead of at a specified time after date, or to add the words
'' with interest." Farmers' National Bank v. Thomas (Sup.), 29 N. Y. S.,
887.
13. An accommodation indorser on a note given in renewal of a note on which
he was also accommodation indorser, at its maturity, is not relieved of
liability because of his insanity at time of signing it, the bank taking it
in renewal having no notice of his insanity, and he having been sane
when the prior note was executed. Memphis National Bank v. Sneed
(Tenn. Slip.), 33 S. W., 716.
14. Accommodation paper is put into circulation for the purpose of giving
credit to the party for whose benefit it is intended, and, although he
can not maintain an action upon it against the accommodation maker
or indorser. a purchaser can do so, who acquires it while still current,
and gives the credit it was intended to promote, although with knowledge of its original character. Israel v. Gale, 77 Fed. Rep., 532.
15. One who takes accommodation paper from the party for whose benefit it
was made and gives him credit for the same on a precedent indebtedness, though advancing no money, is a holder of such paper for value.
Ib.
REPORT OF THE COMPTROLLER OF THE CURRENCY.
101
ACCOMMODATION PAPER—Continued.
16. The general authority of the president of a business corporation to make
and discount its promissory notes gives him no power to make a note of
the corporation payable to his own order, and one who discounts such a
note can not recover thereon against the corporation without showing
special authority for its execution. Park Hotel Co. v. Fourth National
Bank of Si. Louis, 86 Fed. Rep., 742.
17. To the general rule that the acts and contracts of a general agent within
the scope of his powers are presumed to be lawfully done and made, there
is an exception as universal and inflexible as the rule. It is that an act
done or a contract made with himself by an agent on behalf of his principal is presumed to be, and is notice of the fact that it is, without the scope
of his general powers, and no one who has notice of its character may
safely recover upon it without proof that the agent was expressly and
specially authorized by his principal to do the act or make the contract,—Ib.
18. It is ultra vires of a corporation to make accommodation paper, or to
guarantee the payment of the obligations of others.—Ib.
19. A contract which a corporation has no power to make, it has no power to
ratify, and no power to estop itself from denying.—Ib.
20. A national bank receiver can not recover upon notes made for the accommodation and sole benefit of the bank, without consideration.
Stapylton
v. Teague; same v. Anderson et al.; same v. Carmichael, 85 Fed. Rep., 407.
21. Accommodation indorsements or acceptances by a national bank are ultra
vires, and void in the hands of holders with notice. Bowen v. Needles
National Bank, 87 Fed. Rep., 430.
ACTIONS.
See Jurisdiction.
1. A national banking association is a foreign corporation within the meaning of a State statute requiring corporations created by the laws of any
other State or country to give security for costs before prosecuting a
suit in the courts of the State. National Park Bank v. Gunst, 1 Abb.
N. C, 292,
2. As a national banking association can acquire no title to negotiable paper
purchased by it, it can maintain no action thereon in a State where the
person suing must be owner of the paper. First National Bank of
Rochester v. Pier son, 24 Minn., 1//J.
3. A stockholder in a national bank can not maintain an action at law against
the officers and directors thereof to recover damages for willful waste
of the assets whereby the value of his shares was decreased and he became liable to an assessment thereon. His remedy must be sought in
equity. Hirsh v. Jones et al., 56 Fed. Rep., 137.
4. The provision of the banking law, section 5198, Rev. Stat., which requires
that actions brought against national banking associations in State
courts shall be brought in the county or city in which the association is
located, applies only to transitory actions. It was not intended to apply
to actions local in their character. Casey v. Adams, 102 U. S., 66.
5. Under section 57 of act of 1864, suits may be brought by, as well as against,
any association. Kennedy v. Gibson, 8 Wall., 498.
6. Actions local in their nature may be maintained in the proper State court
in a county or city other than that where it is established. Casey v.
Adams, 102 U. S., 66.
7. A national bank may be sued in any State, county, or municipal court in
county or city where located. Bank of Bethel v. Pahquioque Bank, 14
Wall, 383.
8. Under the original ace respecting national banks, and before the act of
June 30, 187(5, a court of equity had jurisdiction of suit to prevent or
redress maladministration or fraud against creditors, in voluntary liquidation of such bank, whether contemplated or executed; and such suit
by one creditor must be for all. Richmond v. Irons, 121 U. S., 27.
9. Suit may be brought against a national banking association though it is in
the hands of a receiver. Bank of Bethel v. Pahquioque Bank. 14 Wall.,
383; Security National Bank v. National Bank of the Commonwealth, 2
•Hun., 287; Green v. The Wallkill National Bank, 7 Hun., 63.
10. A shareholder of a national banking association can not maintain an action
against the directors to recover damages sustained for neglect and mismanagement of the affairs of the association whereby it became insolvent and its stock was rendered worthless. Such an action can be
102
REPORT OF THE COMPTROLLER OF THE CURRENCY.
ACTIONS.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
28.
27.
See Jurisdiction—Continued.
brought only by the corporation itself. Conicay v. Halsey, 15 Vroom,,
462; Howe v. Barney, 45 Fed. Rep., 668.
But where the receiver refuses to bring an action against negligent directors to recover the amount which the shareholders have been compelled
to contribute to pay the debts of the association, an action against such
directors may be brought by a shareholder on behalf of himself and the
other shareholders. Nelson v. Burroughs, 9 Abb. N. C, 280.
And when the receiver is a director and one of the parties charged with
misconduct and against whom a remedy is sought, the action may be
brought by a shareholder on behalf of himself and the other shareholders.
Brinckerhoffv. Bostwick, 88 N. Y, 52.
A receiver may sue either in his own name or the name of the bank.
National Bank y. Kennedy, 17 Wall., 19.
Suits and proceedings under the act in which the United States or their
officers or agents are parties, whether commenced before or after the
appointment of a receiver, are to be conducted by the district attorney,
under the direction of the Solicitor of the Treasury. Bank of Bethel v.
Pahquioque Bank, 14 Wall., S83.
But section 380, Rev. St., is directory merely, and the employment of private counsel by the receiver can not be made a ground of defense to a
suit brought by him. Ib.
Receivers may sue in the courts of the United States by virtue of the act,
without reference to the locality of their personal citizenship. Ib.
The provisions of the codes that every action must be brought in the name
of the real party in interest, except in the case of the trustee of an
express trust or of a person authorized by a statute to sue, does not
apply to the receiver of a national banking association suing in a Federal court held in a State which has adopted the code procedure; for the
right of the receiver to sue is derived from the national banking law.
Staunton v. Wilkeson, 8 Ben., 357.
Under section 1001, Rev. St., no bond for the prosecution of the suit, or to
answer in damages or costs, is required on writs of error or appeals
issuing from or brought to the Supreme Court of the United States by
direction of the Comptroller of the Currency in suits by or against
insolvent national banking associations or the receivers thereof. Pacific
National Bank v. Mixter, 114 U. S., 463.
The State statute of limitations applies to a suit brought by the receiver of
a national bank against a shareholder to recover an assessment upon his
stock to pay the debts of the bank. Butler v. Poole, 44 Fed. Rep., 5SG.
Whether a suit against a director for negligent performance of his duties,
as required by the statutes of the United States and the by-laws of the
association, will survive against the executor or administrator depends
upon State Jaws. Witters V. Foster, 26 Fed. Rep., 737.
Such action is not prescribed by the limitation of one year in Louisiana.
Case v. Bank, 100 U. S., 446.
On a bill filed by receiver against stockholders under section 50, where bank
fails to pay its notes, action by Comptroller must precede institution of
suit by receiver, and be set forth therein. Kennedy v. Gibson, 8 Wall., 498.
Creditors of the bank are not proper parties to such bill. 16.
A compromise of a suit by the receiver of a national bank and counsel for
the United States will not be opened after a delay of seven years, no
fraud being shown. Henderson v. Myers, 11 Phil., 616; 3 N. B. C , 759.
An action may be brought against a national bank, notwithstanding a
receiver of it has been appointed. Security Bank of New York v. National
Bank of the Commonwealth, 4 Thompson & Cook, 518; 1 N. B. C , 774;
Green v. The Wallkill National Bank, 7 Hun., 63; 1 N. B. C, 786.
An action against the directors of a national bank under the provisions of
Rev. St., § 5239, can be maintained only by a receiver of the bank; and
an action by a private individual against such directors for damages
arising from the making of false reports or other violations of the national
banking act can only be maintained as an action at the common law in
the nature of an action of deceit. Gerner y. Thompson, 74 Fed. Rep., 125.
An action can not be maintained against a bank by the holder .of a check
for refusal to pay it, unless the check has been accepted, although there
stands to the credit of the drawer on the books of the bank a sum more
than sufficient to meet the check. Cincinnati, H. (& D. R, Co. v. Metropolitan National Bank (Ohio Sup.), 42 N. E., 700.
REPORT OF THE COMPTROLLER OF THE CURRENCY.
ACTIONS.
103
See Jurisdiction—Continued.
28. A bill by the receiver of an insolvent national bank against the shareholders to recover dividends unlawfully paid out of the capital at times
when the bank had earned no net profits may be brought without an
express order from the Comptroller of the Currency. Hayden v.
Thompson (O. C. A.), 71 F., 60.
29. Where both parties to an action claim title to land under legal proceedings, those"through which defendant derives title being alleged io be
fraudulent, it is reversible error to instruct the jury that, upon the
record evidence, the title is vested in the plaintiff, whereas in fact the
defendant has the better title, unless it is defeated by fraud. Short et
al. v. Hepburn, 75 Fed. Rep., 113.
30. In an action involving the validity of a title claimed by defendants to have
been acquired under attachment and execution against one C , while
plaintiff charges that C was a fictitious person, and the deed to him and
the proceedings against him were parts of a scheme of his supposed
grantor to defraud his creditors, it is error to charge the jury either
that, if C.'s whereabouts were unknown, it would make his title to the
property immaterial, or that the fact that C. was a fictitious person
would entitle the plaintiff to recover, irrespective of the circumstances
under which defendant acquired his title. Ib.
31. In an action by a depositor in an insolvent bank against the stockholders
to recover the balance due him at the time of the suspension of the bank,
it is not necessary to join as defendants persons who signed the articles
of incorporation, but have since transferred their stock, though such
transfer was not made in the manner provided by the articles of incorporation, Wadsivorth v. Hocking, 61 Fit. App., 156; Same v. Duncan,
Ib.; Samcv. Laurie, Fo.
32. Where a person holds stock in a banking association as trustee, he is a
proper party defendant, to the exclusion of his beneficiary, in an action
brought by a depositor against the stockholders to recover the balance
due him at the time of the suspension of the bank. Ib,
S3. An instrument headed by the name of a bank and a list of its officers,
reciting that plaintiff had left a sum of money to be loaned for his use,
"payable not to exceed six months, on return of this memorandum,"
and signed with the name of the person represented at the top of the
paper to be the cashier, the signature being followed by a scroll composed of the letters "chr.," shows prima facie a cause of action against
the bank for a return of the money loaned. Squires v. First National
Bank, 59 III. App., 13U.
34. An action ex contractu brought by an administrator to recover money
claimed to have been wrongfully paid to defendant by a bank constitutes an election and ratification of the payment, and precludes a subsequent action against the bank on the same claim. Crook v. First
National Bank (Wis.), 52 N. W., 1131.
35. The assignment of a promissory note vests the legal title in the assignee
and renders him a proper party plaintiff in an action thereon. Forster
v. Second National Bank, 61 III. App., 212.
36. In an action to recover the amount paid to the payee and indorser of a
check alleged to have been fraudulently altered as to amount, where
experienced cashiers were allowed to testify as experts for defendant to
the genuineness of the check, and chemical experts had testified for
plaintiff that writing could be removed by the use of acids without any
trace being left, plaintiff should have been allowed to cross-examine
defendant's expert witnesses as to their knowledge of the use and effect
of acids in removing ink. Birmingham National Bank v. Bradley {Ala.),
19 So., 791.
37. A complaint in an action on a note alleged its execution, and in a third
paragraph alleged that " n o part of said, sum has been paid, and the
same'is wholly due;" and the answer admitted the execution of the note,
but denied ''each and every allegation in paragraph three." Held, that
the denial was bad, as a negative pregnant. Columbia National Bank
v. Western Iron & Steel Co. (Wash.), 44 P. 145.
38. In an action by the assignee of an invalid nonnegotiable instrument
against the assignor thereof, plaintiff must show that the maker was
insolvent when the instrument was made or became due, or that he used
diligence to recover from the maker, and failed, or that suit against the
maker would have been of 110 avail. Merchants' National Bank v, Spates
(W. Va.), 23 S. E., 6S1.
104
REPORT OF THE COMPTROLLER OF THE CURRENCY.
ACTIONS.
See Jurisdiction—Continued.
39. In an action against the receiver of an insolvent corporation, the facts
that he represents the corporation and produces its books of account do
not prevent him from contradicting the entries therein, as he represents
creditors also. Whittaker v. Amicell National Bank (N. J. Ch.), 29 A.,
203.
40. In an action to recover on certificates of deposit alleged to have been
assigned plaintiff by deceased, where the complaint alleges and the
assignment recites a consideration of $1,000, and the assignment is
attacked as fraudulent, testimony that deceased said she intended j)laintiff to have all her property when she died is incompetent. Turner v.
Utah Title Insurance <$c Trust Co., (Utah), 37 P., 91; Same v. Wells,
Fargo & Co., Ib., 94; Same v. Union National Bank, Ib., 95.
41. In an action to recover money deposited by plaintiff with defendant under
an agreement that it is to be paid to a third person on condition that the
latter deliver a deed to plaintiff within a certain time, such person is not
a necessary party. Ulrich v. Santa Rosa National Bank (Gal.), 37 P.,
500.
42. By authority of the directors of a national bank in Chicago, which had
acquired some of its own stock, the individual note of its cashier, secured
by a pledge of that stock, was, through a broker in Portage, sold to a
bank there. The note not being paid at maturity, the Portage bank sued
the Chicago bank in assumpsit, declaring specially on the note, which it
alleged was made by the bank in the cashier's name, and also setting
out the common counts. The bank set up that the purchase of its own
stock was illegal, and that money borrowed to £>ay a debt contracted
for that purpose was equally forbidden by Rev. Stat., section 5201. The
trial court was requested by the Chicago bank to rule several propositions of law, and declined to do so. Judgment was then entered for the
Portage bank. The supreme court of the State of Illinois held that the
Portage bank was entitled to recover under the common counts, and that
it was not necessary to consider whether the trial court had ruled correctly on the proposition of law submitted to it. Held, that that court,
in rendering such judgment, denied no title, right, privilege, or immunity specially set up or claimed under the laws of the United States, and
that the writ of error must be dismissed. Chemical Bank v. City Bank
of Portage, GJdS Fed. Rep., 160.
43. No action may be maintained against a national bank upon a contract
injide by its cashier on its behalf to guarantee a contract between third
persons for delivery of building materials. Norton v. Derby National
Bank, 61 N. II., 589; 60 Am. Rep., 334; 3 N. B. C, 568.
44. In an action by a receiver to recover an assessment on certain shares of a
national bank, defendant pleaded a prior judgment dismissing a bill
brought to charge her father's estate with the same assessment, to which
suit she was also a party. Held, that the causes of action were different—
that in the earlier suit being the alleged ownership of the shares by the
father at the date of the bank's failure, and that in the latter the alleged
ownership by the daughter of the same shares at the same date—and that,
therefore, the former suit operated as an estoppel only as to the matters
actually litigated and determined. Ricaud v. Tysen, 78 Fed. Rep., 561.
45. Where the causes of action are different, and the decree in a former suit
does not show on its face that the question involved in the present one
was directly and necessarily determined, evidence aliunde, consistent with
the record, may be received to show that it was actually determined. Ib.
46. An action by the receiver of an insolvent national bank, in which it is
alleged that the defendant, to which negotiable paper was sent by the
bank i'or collection, appropriated the proceeds thereof and refused to pay
the same over on demand, is an action for the conversion of chattels,
and is governed by the limitation fixed by subdivision 3 of section HHS of
the California Code of Civil Procedure relating to actions for " taking,
detaining, or injuring any goods or chattels." Haickin.-y v. State Loan
& Trust Co., 79 Fed Rep., 50.
47. Where a note executed solely for the accommodation of a bank was made
payable to the order of the bank's cashier and indorsed in blank, the
mere fact that the president of the bank negotiated the note for his personal benefit to a third person, who knew his office, was not of itself
notice to the purchaser of the facts, or sufficient to put him o:i in uiry
as to the legality of the president's act. Kaiser v. United States National
Bank (Gal), 25 S. E., 620.
REPORT OF THE COMPTROLLER OF THE CURRENCY.
ACTIONS.
105
See Jurisdiction—Continued.
48. In an action by a bank upon a negotiable note payable to order, the title to
which, by appropriate endorsement, has become vested in the name of a
person as cashier, the declaration must show that such person is plaintiff's cashier, and that the ownership of the note sued upon is in plaintiff;
else it will be deinurrable. Hobbs v. Chemical National Bank (Ga.)y
25 S. E., 348.
49. A stockholder of an insolvent national bank may bring a suit in a State
court, in behalf of the bank and himself, as a representative stockholder,
against the directors, to recover money alleged to have been lost through
their negligence and breach of trust, when the bank's officers, the receiver,
and the Comptroller of the Currency have all refused to bring such a
suit. Ex parte Chehvood, 165 U. S., 443.
50. In an action by a national bank on railroad aid bonds the United States
alone can complain that the bank was not authorized to hold such bonds.
Town Council'of Lexingtonv. Union National Bank (Miss.), 22 So., 291.
AGENT OF SHAREHOLDERS:
1. The Federal courts have the same jurisdiction of suits by and against the
"agents" of national banks appointed under the national banking acts
of Congress, when the "receivers" of an insolvent bank have been displaced by such "agents." as they have of suits by and against the
"receivers" of such banks, each being in the same sense officers of the
United States, and each representing in precisely the same relation the
bank in its corporate capacity; and this jurisdiction attaches without
regard to any diversity of citizenship of the parties or the amounts
involved. McConville v. Gilmour et al., 30 Fed, Rep., 277.
2. When the receiver of an insolvent national bank has been displaced by an
"agent" appointed under the acts of Congress in that behalf, it is proper
practice to substitute, upon motion, the " agent" as the plaintiff on the
record in place of the "receiver" in a suit already commenced by the
latter. Ib.
3. That a receiver of an insolvent national bank has applied to the proper
circuit court for authority to sell assets, and that thereafter an agent
has been appointed, under 19 Stat., 63, as amended by 27 Stat.. 3?f), to
succeed the receiver, gives that court no authority to enjoin a stockholder in the bank from prosecuting actions in the State courts, in behalf
of the bank, against its directors, or against using the bank's name in
writs of error sued out from the United States Supreme Court to review
the judgments of the State supreme court in such actions. Ex parte
Chetwood, 165 U. S., 443.
4. A duly e'ected "agent," who is substituted under the act of June 80, 1876
(19 Stat., 63), as amended by the act of August 3, 1892 (27 Stat., 845),
for the receiver of an insolvent national bank, to complete the winding
up of its affairs, proceeds with like authority to that of the receiver,
and is not an officer of the circuit court, though he is required by the
statute to render an account to it of all his proceedings, expend-lures,
etc., and he and his sureties are finally discharged by its order. Ib.
5. Where an action brought by a stockholder in a national bank, in behalf of
the corporation while in the hands of a receiver, has terminated, an
agent of the corporation elected to succeed the receiver as provided by
law, and charged with the duty of controlling and disposing of its assets
and of distributing the proceeds, is entitled to receive the proceeds of
such action, less a reasonable allowance to the plaintiff for his costs,
disbursements, and attorney's fees. Chetivood v. California National
Bank (Cal.), 45 P., 854.
6. 27 Stat., 845, e. '160, \ 8, authorizes the election of an agent by the stockholders of a national bank in the hands of a receiver when all indebtedness to outside creditors has been paid, and provides that such a^ent,
after giving bond, shall be vested with the control of the bank's affairs
by the controller and receiver, being accountable to the circuit or district court of tiie United States. Held, that such agent takes the place
of the receiver, and is at least a quasi public officer, the regularity and
validity of whose appointment can not be questioned in a collateral
proceeding. Ib.
APPEAL:
1. Under act March o, 1801, S 11, a writ of error must be sued out within six
months in order to authorize a review by the circuit court of appeals.
White et al. v. loiva National Bank of Den Moines, 71 Fed, Rep., 97.
106
REPORT OF THE COMPTROLLER OF THE CURRENCY.
APPEAL—Continued.
2. Under the Louisiana Code of Practice providing (articles 384, 391) that third
persons may intervene in suits, either before or after issue, provided the
intervention do not retard the suit, but that persons so intervening must
be always ready to plead or exhibit their testimony, an appellate court
can not review the exercise of discretion by the trial court in refusing
an application by such an intervener, made after the commencement of
a trial, for a continuance, in order to enable the intervener to take steps
necessary to bring his intervention to an issue. It is not error to refuse
to admit evidence offered by such an intervener, when his intervention
has not been brought to an issue with the original parties. Baker v.
Texarkana National Bank et al., 74 Fed. Rep., 598.
8, On an appeal from an order denying a motion to dissolve an injunction
pendente lite, restraining an execution sale of personal property, held,
that the court of appeals could not determine questions of law which
might depend upon undisclosed facts, or questions of fact upon ex parte
affidavits of the character of those presented in the record; and that, as
the questions arising were proper subjects for deliberate examination,
the order would be affirmed under the rule that, where a stay of proceedings will not cause too great injury to defendants, it is proper to
preserve the existing state of things until the rights of the parties can
be fully investigated. Hadden et al. y. Dooley et al., 74 Fed. Rep., 1^29.
4. Where an order refusing to dissolve an injunction pendente lite restraining
a sheriff from selling certain silks on execution was affirmed, but it
appeared to the court that a sale of the goods would be to the pecuniary
advantage of both parties, held, that leave would be reserved to the court
below to modify its order so that by consent of the parties the silk
might be sold under the execution, after ample notice, and the proceeds
placed in the registry to await a final decision. Ib.
5. It is not indispensable that an exception to a ruling of the court on the
trial of an action should be brought before an appellate court by a bill
of exceptions if it fully appears upon the record proper. Wilson v.
Pauly, 72 Fed. Rep., 129.
6. The only question presented being one of fact, as to which the evidence
is conflicting and apparently evenly balanced, the finding and judgment
of the district court should not be disturbed. Buffalo County National
Bankv. Gilcrest (Neb.), 66 N. W.9 850.
7. Where the bill of exceptions purporting to contain the evidence in a case
is not authenticated*by the certificate of the clerk of the trial court it
will not be examined. First National Bank v. Cass County {Neb.), 66
N. W., 300.
8. As each party may appeal from the same final judgment without making
separate cases of each appeal, the appellate court may consolidate into
one proceeding separate cases on appeal from the same judgment.
Farmers and Merchants' National Bank v. Waco Electric Railway and
Light Co. (Tex, Sup.), 84 S. W., 737.
9. An order requiring an answer to be made more definite, so as to show what
is pleaded as defense and what as counterclaim, rests in discretion, and
is not aDpealable. GarfieldNational Bank v. Kirchway (City Cl> N. Y.),
87 N. Y. &, 1140.
10. Where the record fails to show that notice of appeal was given, the appeal
will he dismissed. Merchants' National Bank v. Ault ( Wash,) ,44 P., 129.
11. A finding on conflicting evidence can not, on appeal, be disturbed. Lehman v. Rothbarth (III. Sup.), 42 N. E., 777; Smith v. Sabin (Cal),43 P.,
588; Merchants' National Bank v. McAnulty (Tex. Sup.), 38 S. W., 963.
12. A rehearing will not be granted for consideration of a question not raised
on the original hearing. Arnau v. First National Bank (Fla.), 18 So.,
790.
13. Where, on appeal, the record does not contain the evidence, and findings
of fact were waived, it will be presumed that the allegations of the complaint were proven, and that the affirmative allegations in the answer
were not. Ulrich v. Santa Rosa National Bank (Cal.)f 87 P., 500.
14. An objection and exception to the introduction of certain evidence, for
which no ground was assigned, can not be considered on appeal. Tabor
v. Commercial National Bank (0. C. A.), 62 F., 383.
15. On a trial by the court, where no request was made for a peremptory declaration that the evidence was insufficient to entitle plaintiff to judgment, a general finding for plaintiff can not be reviewed on a single
exception to the finding and the judgment thereon. 1b.
REPORT OF THE COMPTROLLER OF THE CURRENCY. 107
APPEAL—Continued.
16. Where no question of law is presented by the record a certificate by the
appellate court that the case involves questions of law of such importance that they should be passed on by the supreme court does not present any questions of law to be determined. Commercial National Bank
v. Canniff (III. Sup.), 87 N. E., 89S.
17. In determining the questions at issue the supreme court can only look at
the record and not at the opinion of the ai>pellate court. Ib.
18. Where in an action against a firm on a note signed by one partner the
court tries the case without a jury and found that such partner had no
authority to sign the note, but also found that the other partner afterwards ratified the signature, error in admitting evidence as to the former's authority to sign the note is immaterial. Merchants' National
Bank v. Feet {Wash.), 87 P., 200.
19. An appeal taken to the circuit court of appeals from a decree of the circuit
court entered in accordance with the mandate of the former court upon
a previous appeal, will be dismissed, even though an appeal lie to the
supreme court from the decision of the circuit court of appeals. Merrill
v. National Bank of Jacksonville, 78 Fed. Rep., 20S.
ASSESSMENT. See Insolvent banks; Receiver; Shareholders; Transfer of stock.
1. Where a national banking association is insolvent, order of Comptroller of
Currency declaring to what extent the individual liability of stockholders shall be enforced is conclusive. Kennedy v. Gibson, S Wall., 498;
Casey v. Galli, 94 U. S., 673; National Bank v. Case, 99 U. S., 618.
2. Payments of assessments by stockholder in national bank on increased si ock
can not be applied, in law or in equity, to discharge assessments by Comptroller in final liquidation of the bank. Pacific National Bank v. Eaton,
141 U. S., 227; T'hayer v. Butler, Ib., 234; Butler v. Eaton, Ib., 240.
3. The assessments made by the Comptroller upon the shareholders of an
insolvent association bear interest from the date of the order. Casey v.
Galli, 94 U. 8., 678.
4. Where shareholders have assessed themselves to the amount of the par
value of the stock for the purpose of restoring impaired capital, the
contributions made in pursuance of such assessment, though all used in
paying the debts of the association, will not so operate as to discharge
the shareholders from their individual liability. Delano v. Butler, 118
U.S. ,634.
5. Where a married woman is by the State law capable of holding stock in a
national bank in her own right, she is liable to an assessment upon her
shares, though the law of the State does not authorize married women
to bind themselves by contracts for the payment of money. The law
annexes her obligations by its own force; no act or capacity to act on her
part is required. Witters v. Sowles, 32 Fed. Rep., 767; 85 Fed,. Rep., 640.
6. Married women who are permitted by the laws of the State in which they
reside to become shareholders in national banks are liable to assessments
under the national banking laws. In re First National Bank of Si.
Albans, 49 Fed. Rep., 120.
7. The coveture of a married woman who is a shareholder in a national bank
does not prevent the receiver of the bank from recovering judgment
against her for the amount of an assessment levied upon the shareholders
equally and ratably under the statute. Keyser v. Hitz, 138 11. S., 138.
8. It is not essential, in an action to enforce the individual liability of the
shareholders of an insolvent national banking association, to aver and
prove that the assessment was necessary, for the decision of the Comptroller on this point is conclusive. Strong v. South-worth, 8 Ben.. 331;
Kennedy v. Gibson, 8 Wall, 498; Casey v. Galli, 94 U. S., 678.
9. And the fact that the title to the stock of a deceased shareholder vests in
his administrator does not relieve the estate from the burden of an
assessment. Davis v. Weed, 44 Conn., 56V.
10. Nor will the fact that the administration is complete, and all the assets
have been distributed, defeat an action brought to recover the assessment. Ib.
11. The question whether there is a deficiency of assets, and when it is necessary to enforce the individual liability of shareholders, is for the Comptroller to determine; and his decision in this matter is final and conclusive. Kennedy v. Gibson, 8 Wall., 498; National Bankv. Case, 99 U. £.,
628; Casey v. Galli, 94 U. S., 673.
108
REPORT OF THE COMPTROLLER OF THE CURRENCY.
ASSESSMENT. See Insolvent banks; Receiver; Shareholders, etc.—Continued.
12. The amount contributed by each shareholder should bear the same proportion to the whole amount of the deficit as his own stock bears to the
whole amount of the capital stock at its par value. And the solvent
shareholders can not be made to contribute more than their proportion
to make good the deficiency caused by the insolvency of other shareholders. United States y. Knox, 102 U. S., 4-22.
13. Where, to discharge liabilities of an insolvent bank, Comptroller assessed
against shareholders a sufficient per cent on par value of stock held by
each, some being insolvent, he can not provide for deficiency by new
assessment. Ib.
14. The estate of a deceased owner of national-bank stock is liable (Rev. St.,
sec. 5152) to an assessment levied against his ex<^ Tutors in consequence
of the failure of the bank after his death. Wickham v. Hull et al , 60
Fed. Rep., 32G.
15. An action was brought against the executors of an estate to establish its
liability for an assessment on certain shares of national-bank stock.
The estate was at the time in possession of an Iowa probate court for
purposes of administration, for which reason the Federal court could
not enforce the liability, if adjudged to exist. Defendant set up the limitations contained in the Iowa statute (Code, sec. 2421) regulating the
settlement of estates. Held, That the Federal court would not pass upon
the question whether this provision debarred complainant from sharing
in the estate, for, as the claim established in the Federal court must be
presented for allowance in the probate proceedings, the better practice
was to remit the question to the probate court. Ib.
16. Where a national bank issues certificates of its shares to a subsequent
purchaser in lieu of the certificates of the prior owner, without observing its by-law in regard to a transfer on its books, so far as creditors of
the bank are concerned a party taking and holding such shares of stock
will be subject to the liabilities imposed by section 5151 of the national
banking law. Laing v. Bnrley,' 101 III., 591; 3 N. B. C, 369.
17. One to whom stock has been transferred in pledge or as collateral security
for money loaned, and who appears on the books of the corporation as
the owner of the stock, is liable as a stockholder for the benefit of creditors. Where the owner, holder, or pledgee of stock transfers it out and
out for the purpose of escaping liability as a shareholder to one who is
unable to meet such liability, or when the transfer is colorable and not
absolute, the transfer is ineffective as to creditors, and the transferrer
will be still liable. Therefore, when the G. bank loaned money and took
as collateral therefor shares of stock in the C. bank, which were duly
transferred in the books of the C. bank, and afterwards the G-. bank
transferred these shares to one of its clerks with an understanding that
he should retransfer on request, and the C. bank was then in failing condition, held, that the Q-. bank was liable to contribute as a stockholder
to the debts of the C. bank. Germania National Bank of Neiv Orleans
v. Case, Receiver, 99 U. S.. 628; 2 N. B. C, 25.
18. A letter addressed to the receiver, and signed by the Comptroller of the
Currency, directing him to institute legal proceedings to enforce the individual liability of every stockholder, under the statute, is sufficient evidence that the Comptroller decided, before the suit, that it was necessary
to enforce the personal liability of the stockholders. Bowden v. Johnson, 107 U. £., 251; 3 N, B. C, 55.
19. The liability of the stockholders bears interest from the date of said
letter. Ib.
20. Under the national banking act, the individual liability of the stockholder
survives as against the personal representatives of a deceased stockholder. Richmond v. Irons, 121 U. S., 27; 3 N. B. C, 211.
21. A stockholder sold certain stock several months before the insolvency of
the hank, but the transfer was not made on the books till the date of the
bank's failure. Held, that the stockholder incurred the statutory liability. Ib.
22. Fifty shares of the stock of a national bank were transferred to F. on the
books of the bank October 29. A certificate therefor was made out, but
not delivered to him. He knew nothing of the transfer, and did not
authorize it to be made. On October 30 he was appointed a director and
vice-president. On November 21 he was authorized to act as cashier. He
acted as vice-president and cashier from that day. On December 12 he
bought and paid for 20 other shares. On January 2 following, while the
REPORT OF THE COMPTROLLER OF THE CURRENCY.
109
ASSESSMENT. See Insolvent banks; Receiver; Shareholders, etc.—Continued.
bank was insolvent, a dividend on its stock was fraudulently made, and
$1,750 therefor placed to the credit of F. on its books. He, learning on
that day of the transfer of the 50 shares, ordered D., the president of the
bank, who had directed the transfer of the 50 shares, toretransferit, and
gave to D. his check to the order of D. individually for $1,250 of the
$1,750. The bank failed January 22. In a suit by the receiver of the
bank against F. to recover the amount of an assessment of 100 per cent
by the Comptroller of the Currency in enforcement of the individual liability of the shareholders, and to recover the $1,750, held, first, in view
of provisions of sections 5146, 5147, and 5210, Rev. St., it must be presumed conclusively that F. knew from November 21 that the books
showed he held 50 shares; second, F. did not get rid of his liability for
$1,250 by giving to D. his check for that sum in favor of D. individually.
Finn v. Broivn, 142 U.S., 56.
23. In winding up an insolvent national bank, the Comptroller of the Currency
is vested with authority to determine when a deficiency of assets exists,
so that the individual liability of the stockholders may be enforced, and
no appeal lies from his decision. Bailey v. Sawyer, 1 N. B. C., 356; %
Dill., 463.
24. The liability of a stockholder of a national bank is several, and is fixed by
his taking stock in the corporation, Ib.
25. When an assessment upon the stockholders is ordered by the Comptroller,
a suit at law is the proper remedy to enforce it. Ib.
26. A trustee holding shares in a national bank can not avail himself of his
exemption from personal liability for debts of the bank, unless his trusteeship appears on the books of the bank. Davis v. Essex Baptist Society,
44 Conn., 582; 2 N. B. C., 110.
27. With a bequest of money a religious society purchased, and held in its own
name, shares in a national bank. The society had other donations
otherwise invested. Held, that the society was not a trustee, but an
ordinary stockholder, and liable to assessment for debts of the insolvent
bank. 15.
28. One who procures a transfer to himself, on the books of a national bank, of
stock in such bank, becomes liable for the engagements of the bank as
prescribed in the national-bank act, although such stock was pledged
to him hy the owner simply as security for a debt. Moore v. Jones, 3
Woods, 53; 2 N. B. C., 1U29. One in whose name shares of the stock of a national bank stand on the
bank books is subject to the individual liability of a shareholder, although
his holding of the stock was originally as collateral security for a loan
and the loan has been repaid and the stock certificate surrendered with
an executed, power of attorney for transfer. Bowdeil v. Farmers and
Merchants' National Bank of Baltimore, 14 Bankers' Magazine,, 387: 2
N. B. C , 146.
30. The determination of the Comptroller as to the necessity of an assessment
on stockholders of an insolvent national bank for the payment of debts
is conclusive, and in a suit to enforce such an assessment the necessity
need not be alleged. Strong, Receiver, v. Sotithworth, 8 Ben,, 331; 2
' N. B. C, 172.
31. S. bought shares in a national bank and caused them to be transferred to
E., who was in his employ, S. remaining the real owner. Held, that S.
was liable as stockholder upon the failure of the bank. Davis, Receiver,
v. Stevens, 20 Alb. L. J., 490; 2 N. B. C\, 158.
32. In an action by the receiver of a national bank to enforce the liability of
a shareholder, it appeared that the date of the defendant's subscription
to the stock was prior to May, 1866, when the receiver was appointed;
that the Comptroller of the Currency decided on the 28th of June, 1876,
that the enforcement of this liability to its full extent was necessary,
and instructed the receiver accordingly, and that this action was thereupon brought. Held, that although such decision and order of the
Comptroller were necessary preliminaries to a suit against the share
holder, yet, having been delayed without sufficient apparent reason for
more than six years from the date of the subscription, the statute of
limitations was a bar to the action, the State courts having decided that
an act necessarily preliminary to the commencement of a suit upon a
contract must be done within six years, unless sufficient reason for the
delay is shown. Price, Receiver, v. Yates, 19 Alb. L. J., 295; 2 N. B. C ,
204.
110
REPORT OF THE COMPTROLLER OF THE CURRENCY.
ASSESSMENT. See Insolvent banks; Receiver; Shareholders, etc.—Con tinned.
33. Actions by the receiver of a national bank against stockholders for assessments on the stock are subject to State statutes of limitations. Butler
v. Poole, U Fed. Rep., 586.
34. A court has no power, under sec. 5324, U. S. Rev. St., to order the receiver
of a national bank to compound debts which are not "bad or doubtful;"
and a composition under such an order of debts not "bad or doubtful,"
as the debt of a shareholder arising on his subscription to the stock, is
ineffectual.
It.
35. A stockholder of an insolvent national bank, who happens also to be one of
its creditors, can not cancel or diminish the assessment to which the provisions of sec. 5151. Rev. St., make him liable by offsetting his individual
claim against it. Hobart, Receiver, etc., v. Gould, 8 Fed, Rep., 57.
36. Section 5151, Rev. St., among other things, provides that the shareholders
of every national banking association shall be held individually responsible for all contracts, etc., to the extent of the amount of their stock
therein, at the par value thereof, in addition to the amount invested in
such shares. Held, that upon the insolvency of such a bank a shareholder who happens to be one of its creditors pan not cancel or diminish
the assessment, to which the provisions of this section make him liable,
by offsetting his individual claim against it. Ib.
37. The liability which shareholders in national banks incur under section 12
of the act of 1804, which provides for a liability " t o the extent of the
amount of their stock therein, at the par value thereof, in addition to
the amount invested in such shares," is that of principals, not of sureties.
Hobart, Receiver, etc., v. Johnson, SFed. Rep.. 493.
38. Such a liability is not one on a " promise to pay the debt, or answer for the
default or liability, of any other person," within the meaning of the proviso to section 5 of the Revised Statutes of New Jersey of 1874, p. 469. Ib.
39. On the principle of estoppel, one can not take advantage of certain statutory provisions without incurring thereby the attendant liabilities. Ib.
40. Under sec. 5151, Rev. St., owners
of stock in a national bank are liable for
its debts, and persons wTho hold themselves out or allow themselves to
be held out as owners of stock are also liable, whether they own stock
or not. Case, Receiver, v. Small etal., 10 Fed,. Rep.. '722.
41. A married woman who owns stock in a national bank is not exempt on
account of her coverture from the liability imposed by the national currency acts upon all stockholders in such banks. Anderson v. Line, 14
Fed. Rep., 405.
42. After a national bank has become insolvent and lias closed its doors for
business, its shareholders' liability to creditors is so far iixed that any
transfer of their shares must be held fraudulent and inoperative as
against the creditors of the bank. Irons et al. v. Manufacturers' National
Bank of Chicago et al., 17 Fed. Rep., SOS.
43. The Pacific National Bank of Boston was organized in October, 1877, with
a capital of $250,000, with the right to increase it to $1,000,000. In
November, 1879, its capital was raised to $500,000; September 13, 1881,
the directors voted to increase the capital to $1,000,000. On November
18,1S81, the bank suspended. On December 13,1881, the directors voted
that as $33,700 of the increase of capital stock had not been paid in the capital be fixed at $961,300, and the Comptroller of the Currency was notified
to that effect, and he notified the bank, under Rev. St., sec. 5205, to pay
a deficiency on its capital stock by Tan assessment of 100 per cent. At
the annual meeting the assessment w as voted, and on March 18,1882, with
consent of the Comptroller and the approval of the directors and the
examiner, the bank resumed business, and continued until May 20,1882,
when it again suspended and was put in the hands of a receiver. Prior
to May 20, 1882, $742,800 of the voluntary assessment had been paid in.
Complainant was the owner of twenty-five shares of stock on September
13,1881, and after the vote to increase the stock took twenty-five shares,
for which he paid §2,500 on October 1, 1881, and received^ certificate.
He voted for the assessment at the annual meeting, and in February,
1882, paid the assessment on the old and new stock, and subsequently
sought to enjoin the suit at law against him by the receiver to enforce
his individual liability as a stockholder, under Rev. St., sec. 5151, on
the ground that the increase of capital was illegal and void, and that
the voluntary assessment, under Rev. St., sec. 5205, relieved the stockholders of individual liability. Held, that he was not entitled to relief,
REPORT OF THE COMPTROLLER OF THE CURRENCY.
Ill
ASSESSMENT. See Insolvent banks; Receiver; Shareholders, etc.—Continued.
and the bill should be dismissed. Morrison v. Price, Receiver, 23 Fed,
Rep., 217.
44. A discharge in bankruptcy releases a shareholder of a national bank from
his statutory individual liability to creditors of the bank where, at the
tinie of his discharge, the claims of such creditors were provable, not
merely contingent. Irons et al. v. Manufacturers' National Bank et al.,
27 Fed. Rep., 591.
45. When bank stock was sold, but not transferred on the books of the bank,
and the bank afterwards failed, the executors of the person in whose
name the stock stood on the books were held liable for assessment,
although said stock had been paid for by a purchaser buying at the
request of the president of the bank, who gave him a cashier's check for
that purpose, placing the money so furnished to the credit of said purchaser on the books of the bank as a temporary loan, the intention being
ultimately to transfer said shares to a third party as part of a larger
proposed investment in stock, for which funds had been placed in the
hands of the president of the bank. Price, Receiver, v. Whitnev et al.,
28 Fed. Rep., 297.
46. Defendant subscribed for new stock in the reorganization of a bank, and
received a certificate on the basis of a total subscription of $500,000.
The actual increase was $461,800. He protested against the same, and
refused to vote on the stock, but retained his certificate until the bank
went into the hands of a receiver several months later. Held, that he
was liable to the receiver on his subscription, and it was too late
to
claim that the increase as to him was invalid. Butler, Receive)1, v.
AspinwalL 33 Fed. Rep., 217.
47. A pledgee of shares of stock in a national bank, who does not appear by
the books of the bank or otherwise to be the owner, is not liable for an
assessment upon the shares on the insolvency of the bank, under Rev.
St., sec. 5151, rendering shareholders liable for the debts of the association to the extent of the par value of their stock. Welles v. Larrabee
et aL, 36 Fed. Rep., SCO.
48. One to whom the shares are assigned in trust as security for a debt due a
third person, and following whose name on the stock book of the bank
is the word "trustee," is not liable for the assessment under section 5151,
and is also within the provision of section 5152, exempting from such
liability persons holding stock as trustees. Ib.
49. In an action by the receiver of an insolvent national bank to recover of a
stockholder an assessment on his shares, the defendant alleged as a counterclaim that the Comptroller of the Currency had directed the bank to
restore the value of certain securities held by it which had been reported
worthless by an examiner; that certain of the stockholders, including
defendant, had raised a fund which was placed in the hands of trustees
to apply so much as might be from time to time required by the Comptroller to retire such securities; that the fund was deposited with the
bank with full notice of the purpose to which it was to be applied; that
a portion had been used to retire the securities designated, and that
when the bank failed the balance of the fund came into the hands of the
receiver, and was now claimed by him as a part of the ordinary assets
of the bank; that a certain portion of this balance belonged to defendant, which amount he asked to set off against plaintiff's demand. Held,
that a general demurrer based on the ground that no set-off or counterclaim was available in such an action would be overruled, as the claim
could be set off if it was of such a nature that the holder would be entitled to receive the full amount before distribution by the receiver to
general creditors. Welles v. Stout, 38 Fed,. Rep., 807.
50. Where a shareholder of a national bank makes a bona fide sale of his stock
and goes with the purchaser to the Dank, indorses the certificate, and
delivers it to the cashier of the bank with directions to make the transfer
on the books, he has done all that is incumbent upon him to discharge
his liability, and he is not liable, though the cashier failed to make the
transfer, upon the subsequent suspension of the bank, for an assessment
made by the Comptroller of the Currency, under Rev. St., sec. 5151, to
pay the bank's debts. Hayes v. Shoemaker, 39 Fed. Rep., 319.
51. Defendant, for the purpose of helping a bank, of which complainant was a
stockholder, in a financial crisis, loaned it certain securities belonging to
complainant, and when complainant was informed of the fact she did not
112
REPORT OF THE COMPTROLLER OF THE CURRENCY.
ASSESSMENT. See Insolvent banks; Receiver; Shareholders, etc.—Continued.
object. She was assured by the bank's officers that if the bank was saved
the securities would be returned, and if it failed the avails would be
credited on her assessment as a stockholder. The bank failed, and the
securities were not returned. Held, that she was not entitled, as against
other creditors, to set off the value of the securities against her assessment, but was, as to such value, on the same footing as any other creditor. Sowies y. Witters et al, 39 Fed, Rep., 403.
52. One who subscribes and pays for a specified number of shares of a "proposed increase" of the capital stock of a national bank, which increase
is in fact never issued, and to whom the bank officials transfer, instead,
old stock of the bank without his knowledge or consent, is not a "shareholder " within the meaning of Rev. St., sec. 5151, imposing individual
liability on the shareholders for the debts of national banks. Stephens
v. Follett et al, 43 Fed. Rep., 842.
53. The fact that the subscriber for the new shares received a dividend on the
old shares so transferred to him does not estop him from denying, his
liability as a shareholder, where such dividend was received in the belief
that it was paid to him by virtue of his subscription to the new stock. Ib.
54. A person who becomes a stockholder in a national bank thereby submits
himself to the provisions of the national-bank act, and becomes liable to
be assessed to the extent of his statutory liability for all debts of the
bank existing while he holds his stock. Young v. Wempe et al., 46 Fed.
Rep., 354*
55. In an action by the receiver of a national bank to enforce an assessment
under Rev. St., sec. 5151, against one credited on the transfer books
as a stockholder, it appeared that nearly a year before the failure he
had sold his stock to a broker for an undisclosed principal; that he
indorsed the same, and requested the broker to inform the cashier of
the transaction, and to have the stock transferred; that the broker
accordingly handed the stock to the cashier, gave him the necessary
information, and requested him to make the transfer. This the cashier
promised to do, but in fact the transfer was never made. The certificate recited that it was transferable on the books of the company k' by
indorsement hereon and surrender of this certificate." Held, that in
requesting the cashier to make the transfer the broker acted as the
seller's agent, and that the latter did all that was required of him as a
prudent business man, and could not be held liable as a stockholder.
Young v. McKay, 50 Fed. Hep,, 394,
56. A Federal court will not, even if it has the power under Rev, St., sec.
5234, grant an order authorizing a receiver of a national bank to compound the statutory liability of certain stockholders by accepting payment of a gross sum, less than is due, in satisfaction and discharge
thereof, although more money would thus be realized than by proceedings to collect the same in the usual way, when it appears probable
that such stockholders have fraudulently conveyed their property to
avoid their legal obligations as stockholders, or to shield themselves
from injury and exposure by litigation. In re Certain Shareholders of
the California National Bank of San Diego, S3 Fed. Rep., 38.
57. A person who is entered on the books of a national bank as the owner of
stock, but who is admitted to hold the stock in trust for the true owner,
is not liable as a stockholder for the debts of the bank, when the true
owner has been adjudged so liable, although nothing is realized upon
the execution of such judgment. Yardley v. Wilgus, 56 Fed. Rep., 965.
58. When the full personal liability of shareholders is to be enforced the
action must be at law. Kennedy v. Gibson,, 8 Wall,, 498; Casey v. Galli,
94 U. S., 673.
59. And it may be at law, though the assessment is not for the full value of
the shares; for, since the sum each shareholder must contribute is a
certain exact sum. there is no necessity for invoking the aid of a court
of equity. Bailey v. Sawyer, 4 Dill, 463; 1 N. B, 0., 356.
60. But the suit may be in equity. Kennedy v. Gibson, 8 Wall, 498.
61. It is no objection to a bill against stockholders within the jurisdiction of
the coart that other stockholders, not within such jurisdiction, are not
codefendants. Ib.; Case v. Bank, 100 U. S., 446.
62. But a pledgee of shares of stock in a national bank who, in good faith and
with no fraudulent intent, takes the security for his benefit in the name
of an irresponsible trustee for the avowed purpose of avoiding individual
REPORT OF THE COMPTROLLER OF THE CURRENCY.
113
ASSESSMENT. See Insolvent banks; Receiver; Shareholders, etc.—Continued.
liability as a shareholder, and. who exercises none of the powers or rights
of a stockholder, incurs no liability as such to creditors of the bank in
case of its failure. Anderson, Receiver, v. Phil a. Warehouse Company,
111 U. £., 479.
63. The individual liability of the shareholders of an insolvent association may
be enforced for the purpose of paying all of its liabilities, and not merely
for the purpose of paying its " debts," technically so-called. Stanton v.
Wilkeson, 8Ben., 357.
64. The individual liability of the stockholders must be restricted in its meaning to such contracts, debts, and engagements of the association as have
been duly contracted in the ordinary course of its business. And, therefore, creditors of an association who make settlements after the association is put into liquidation and receive from the president payment
of their claims in paper of the association, or of the individual notes of
the president himself, indorsed or guaranteed in the name of the association, are not to be considered as creditors of the association entitled to
subject the stockholders to individual liability, for these are new contracts. Richmond v. Irons, 121 U.S.,27.
65. The individual liability of the stockholders is enforceable only in behalf of
all the creditors, and any security given by a stockholder for his liability
in this respect should likewise be for the benefit of all the creditors.
Accordingly, a mortgage of all the individual property of a stockholder,
made after the bank has closed its doors, for the purpose of securing a
single depositor, is void as against a judgment obtained against such
stockholder in an action by the receiver to recover the amount of his
individual liability. Gatch v. Fitch, 34 Fed,. Rep., 566.
66. Bill filed by receiver against transferrer and transferee to enforce such
liability will lie where it is for discovery as well as relief, as the transfer
would be good between the parties. Bowden v. Johnston, 107 U. S., 251.
67. A shareholder in a national bank, who is liable for its debts, is liable for interest thereon to the extent of the bank's liability, and not in excess of
the maximum liability fixed by statute. Richmond, v. Irons, 121 U. S., 27.
68. The creditors of an insolvent association must seek their remedy through
the Comptroller, in the mode prescribed by the statute; they can not
proceed directly in their own names against stockholders or the debtors
of the bank. Kennedy y. Gibson, 8 Wall., 498.
69. Each shareholder of a national banking association is individually liable
for its debts to the extent of the amount of his stock at its par value, in
addition to the amount invested in the shares held by him, and a receiver
appointed to wind up the affairs of such an association that has become
insolvent is authorized, under the direction of the Comptroller of the
Currency, to enforce the liability of its stockholders, and to collect from
each of them the necessary amount, up to the extent of his liability, for
the
payment of the creditors. King et at. v. Armstrong, Receiver, 34
A7. E., 163; 50 Ohio St., 222.
70. Code N. C , sec. 1826, provides that no woman during coverture shall be
capable of making any contract to affect her real and personal estate
without the written consent of her husband. Held, that a purchase of
stock by a married woman is not a "contract" within the terms of the
statute, and that the wife is liable upon an assessment, although the
stock was purchased without the written consent of her husband.
Robinson v. Turrentine et al., 59 Fed. Rep., 554.
71. One in whose name stock of an insolvent national bank stood paid an
assessment thereon under a threat by the receiver to sue therefor,
though he claimed that he had sold the stock. More funds were collected than were required to pay the creditors of the bank. Held, that
such payment could not be recovered as having been made under a mistaken belief by the pay or that the whole amount would be required to
pay the creditors of the bank. Holt y. Thomas (Gal.), 38 P., 891.
72. The F. National Bank suspended business for lack of funds, and was
placed in charge of a bank examiner, who required that §50,000 should
be raised and placed in the bank before it could resume business. The
stockholders, including one B., the president, thereupon raised this sum,
in amounts equal to 50 per cent of their stock, and placed it in the bank.
The examiner caused entries to be made on the books indicating that
this contribution was a voluntary assessment, subject, after one year, to
the liabilities of the bank, and permitted the bank to resume. B., at a
CUR 98
8
114
REPORT OP THE COMPTROLLER OF THE CURRENCY.
ASSESSMENT. See Insolvent banks; Receiver; Shareholders, etc.—Continued.
meeting of the directors subsequently held, protested against these book
entries, but afterwards signed reports in which the $50,000 was included
as surplus. At the time of the advance the bank held two notes of B.,
and discounted another note of his a few days before the expiration of
a year from the advance. Shortly after the expiration of the year the
bank again suspended payment. * Held, that the advance to the bank
was a voluntary assessment, and not a loan, and could not be set off
by B. in an action against him on the notes by the receiver of the bank.
Brodrick v. Brown, 69 Fed. Rep., 497.
73. M. bequeathed to his wife "for life or widowhood" 40 shares of stock in a
national bank, together with other personal property, jjroviding that she
might use any of such personal property if necessary for her comfortable
support, and that, at her death or marriage whatever should remain of
such property should go in equal shares to his four children. The administrator with the will annexed of M.'s estate transferred the stock on the
books of the bank to M.'s widow. The bank having become insolvent,
and an assessment having been made by the Comptroller on the shareholders, for which a judgment was obtained against M."s widow, which
remained unsatisfied, the receiver of the bank brought suit against M.'s
administrator to compel payment of the assessment out of M.'s general
estate. Held, that whether the widow took an absolute title to the stock
by virtue of her power of disposal, or a life interest with remainder to
the children, the beneficial ownership of the stock, in either case, had
passed from M.'s estate, and the estate could not be made liable for the
assessment. Held, further, that the administrator properly transferred
the stock to the widow, and was not required to hold the legal title
thereto, as administrator or trustee, during her life or widowhood, but
that such transfer made no difference to the liability of the estate of M.,
since the beneficial interest would in either case have been in the widow
and children. Blackmore v. Woodward et al., 71 Fed. Rep., 321.
74. The capital, the unpaid subscriptions to the capital stock, and the liability
of the holders of the paid-up stock to pay an additional amount equal to
the par value of their stock under section 5151, Rev. St., constitute
a trust estate sacredly pledged for the security of the creditors of a
national banking association. The willful destruction or diminution of
any part of this trust estate or the diversion of the proceeds of any
of it from the creditors of the bank is a fraud upon these creditors, and
subjects its perpetrator to a suit by them or their legal representative
for proper relief. Stuart v. Hayden et al., 72 Fed. Rep., 402.
75. One who knowingly permits his name to be entered upon the stock books
of a national bank, as the owner, individually, of stock therein, can not
be permitted, as against creditors or a receiver of the bank representing
them, to show that he was not the owner of the stock, and he is liable
for an assessment thereon, though he held the stock, in fact, as trustee
for the bank itself. Lewis v. Switz, 74 Fed. Rep., 381.
76. One C. was the holder of stock in the D. National Bank, and was also an
officer of the L. bank, which held stock in the D. bank. In the latter
capacity he was informed of an urgent demand upon the L. bank to send
$3,000 by telegraph in aid of the D. bank. Within a week after this
demand L. transferred his stock in the D. bank, without consideration,
to his five children, one of whom was a married woman, and two minors.
Within five months thereafter the D. bank failed and an assessment
was made on the stockholders. Held, that the transfer must have been
made by L. in contemplation of the liability, and that both he and his
transferees were liable for the assessment, the latter because the liability
was cast upon them by law when they became stockholders. Foster v.
Lincoln et al., 74 Fed. Rep., 382.
77. In an action by the receiver of a national bank to enforce the individual
liability of a stockholder, an allegation in the complaint that on a given
date the Comptroller, having ascertained and determined that the assets,
property, and credits of the bank were insufficient to pay its debts and
liabilities, and, as provided by the act of Congress, made an assessment
and requisition on the shareholders of the said bank of a given sum upon
each share held and owned by them, respectively, at the time of its
default, and directed the receiver to take all necessary steps to enforce
the liability, is sufficient. Kennedy v. Gibson, 8 Wall., 498, distinguished;
Nead v. Wall (C. C.),70 F., 806.
REPORT OF THE COMPTROLLER OF THE CURRENCY,
115
ASSESSMENT. See Insolvent banks; Receiver; Shareholders, etc.—Continued.
78. One buying stock in a national bank in the names of his minor children
himself becomes liable to assessment as a shareholder, for minors are
incapable of assenting to become stockholders, so as to bind themselves
to the liabilities thereof. Foster v. Chase et al., 75 Fed. Rep., 797.
79. An executor who receives certificates of national-bank stock as part of the
assets of decedent's estate, and includes them in his inventory returned
to the probate court, is a shareholder, and liable as such for an assessment, under Rev. St., § 5151, subject to the
relief granted by section
5152. Parker v. Robinson (C. C. A.), 71I'7., 256.
80. The complaint, in an action by the receiver of an insolvent national bank
to enforce an assessment on the shareholders, made by the Comptroller
of the Currency, need not aver that there was a necessity therefor, or
that the Comptroller determined that there was such necessity, though
the law provides that the Comptroller may enforce the individual liability of the stockholders, if necessary to pay the debts of the bank. It
is enough that the complaint alleges that the Comptroller made the
assessment and directed its enforcement. O'Connor v. Witherby (CaL),
UP., 227.
81. The allegation of the complaint, in an action for an assessment on shareholders in a bank, that "defendant, though demanded, has failed and
refused to pay said assessment, or any part thereof,'' is a sufficient averment as against a general demurrer of nonpayment at the time action
was commenced. Ib.
82. In an action by the receiver of an insolvent national bank to enforce an
assessment on the shareholders, made by the Comptroller of the Currency, the necessity of the Comptroller's making as large an assessment
as that in suit can not be litigated. Ib.
83. The bill contemplated by the second section of the act of June 30, 1876, to
enforce the individual liability of stockholders in a national-banking
association that has gone into liquidation, need not purport expressly on
its face to be filed by the complainant on behalf of himself and all other
creditors, for the law would give it that effect and the court would so
treat it; but, if this was necessary, the bill might be amended in that
respect by leave of the court. Irons, Ex'r, etc., and others, v. Manufacturers' National Bank of Chicago and others, 17 Fed. Rep., SOS.
84. The manifest intention of the national-banking act is a distribution of its
assets in case a bank becomes insolvent equally among all the unsecured creditors, and the diligence of a creditor who files a creditor's bill
can give him no greater rights than are given any other creditor to share
in the distribution of the assets, and a prayer in the bill that such creditor be given priority over other creditors will not be granted. Ib,
85. Where the original bill, filed before the passage of the act of June 30,1876,
was amended after the passage of that act so as to make the individual
shareholders defendants, and subject them to liability, such bill will not
be considered on that account multifarious. Ib.
86. The act of June 30, 1876, did not create any new liability on the part of the
stockholders, or provide for enforcing such liability against them under
circumstances where it could not have been enforced before that act
was passed. This act is not retroactive, and does not create rights which
* did not exist prior to its passage as against existing stockholders, though
it may be construed as limiting the tribunal in which proceedings are to
be instituted for enforcing the stockholder's liability to a United States
court, instead of allowing creditors to resort to any competent tribunal
with equity power. Ib.
87. Entering an order that " t h e complainants confessing the pleas of bankruptcy of defendants, it is ordered that this case be stayed as to them,"
does not amount to a final decree, but simply confesses the facts set up
in the plea, leaving the court to adjudge the"law upon such facts whenever the main cause is heard. Ib.
88. Where the original bill was filed February 3, 1875, before the passage of
the act of June 30,1876, and a receiver was appointed February 26,1875.
thereunder, and an amended bill, making the individual stockholders
defendants, was filed October 5,1876, and after the filing of the amended
bill certain of the defendants were adjudged bankrupts, their pleas of
bankruptcy will constitute a sufficient bar in their behalf. Ib.
89. Where it is admitted by the defendants that they were shareholders in a
national bank, but the number of shares respectively held by them is
116
REPORT OF THE COMPTROLLER OF THE CURRENCY.
ASSESSMENT. See Insolvent banks; Receiver; Shareholders, etc.—Continued.
not admitted, the names of the shareholders and the number of shares
held by each, as shown by the stock ledger and stubs of the stock certificates and the dividend sheets of the bank on which they respectively
drew the last dividends, will be prima facie proof of the number of
shares held, and, unless rebutted, sufficient. Ib.
90. A bill to enforce against the separate estate of a married woman an assessment upon shares of national-bank stock is not open to the objection
that it does not allege that she had the capacity to become a stockholder,
whether she became such before or after marriage, where it alleges
that she was the owner of the shares, and where a statute of the State
in which the bank is located (Dig. St.' Ark. 1874, sec. 4194) provides
that a married woman may transfer her property, carry on any business and perform any services on her separate account, and that her
earnings shall be her separate property and may be used or invested by
her in her name. Bundy v. Cocke, 128 U. S., 185; 3 N. B. C., 316.
91. The bill alleging that the married woman is possessed of property in her
own right sufficient to pay the assessment and praying for a decree of
payment therefrom, and the bill of revivor filed after her death against
her husband praying for relief out of the assets received by him as her
legatee, devisee, or executor, the case is one of equitable cognizance. Ib.
92. A suit by the receiver of an insolvent national bank to collect an assessment by the Comptroller upon the stock from a stockholder who has made
an alleged fraudulent transfer of his shares is based upon the statutory
liability of the stockholder, and not upon any injury growing out of the
fraudulent transfer; and therefore the statute of limitations begins to run
from the date the assessment becomes due, and not from the discovery
of the fraud. Thompson v. German Bis. Co. et. al., 77 Fed. Rep., 258.
93. On a bill by the receiver of an insolvent national bank to collect an assessment by the Comptroller on the stock from a former stockholder, on the
ground that, to escape liability, he had transferred his shares, within
six months of the failure of the bank, to one haying no means, it
appeared that the transfer was made on the books of the bank, no concealment thereof being attempted, and that the receiver made no inquiry
as to the nature of the transfer, and took no action against defendant
until the assessment had become barred. Held, that equity would not
relieve against the bar of the statute. Ib.
94. It is not necessary, in order to hold liable for an assessment upon the
shareholders of an insolvent national bank one who has transferred his
stock to an irresponsible person, to show that the transferrer had actual
knowledge of the insolvency of the bank at the time of the transfer, but
it is sufficient if he had good ground to apprehend its failure, and made
the transfer with intent to relieve himself from individual liability.
Cox v. Montague, 78 Fed. Rep., 8J/.5.
95. Upon the trial of a suit brought by the receiver of an insolvent national
bank to collect an assessment from one who had transferred his stock, a
letter written by the defendant to a bank examiner, in reply to an
inquiry about the bank, in which defendant admits his transfer of his
stock when the bank was embarrassed, is not a privileged communication, though the bank examiner's letter, to which it is a reply, is marked
*' Confidential." Ib.
96. A corporation which receives shares of national-bank stock in pledge, with
power to use and seli, and which, in good faith, without suspicion of the
bank's insolvency, causes new certificates to be issued in the name of one
of its employees, merely because it is unwilling they should stand in the
name of the original owners, remains a mere pledgee, and is not liable,
as a shareholder, to assessment on the stock. National Park Bank of
City of New York v. Harmon, 79 Fed. Rep., 891.
97. L., a stockholder in the D. national bank, transferred his stock shortly
before its failure to his married daughter and other minor children. It
appeared from the circumstances surrounding the transaction that L.,
though perhaps not supposing the D. bank to be actually insolvent, was
advised of facts not generally known, which indicated such uncertainty
as to its ability to stand a run, which had apparently begun, as to make
it safer for him to dispose of his stock forthwith, and that the transfer
was made with the intent that, if all came out well, his children should
have the stock, while, if the bank met with disaster, he would not be
obliged to throw good money after bad, Held, that the transfer so made
REPORT OF THE COMPTROLLER OF THE CURRENCY.
117
ASSESSMENT. See Insolvent banks; Receiver; Shareholders, etc.—Continued.
could not stand against the creditors of the bank, and L. was liable at
the suit of its receiver for an assessment on the stock. Foster v. Lincoln's Ex*r, 79 Fed. Rep., 170.
98. A national bank which has purchased from a third party shares of stock
in another national bank as an investment, and which appears on the
books of the latter bank as a stockholder, is estopped, after the latter's
failure to deny liability to an assessment on the stock on the ground that
its purchase thereof was ultra vires. First National Bank of Concord
v. Hawkins, 79 Fed. Rep., 51. Overruled in California National Bank
v. Kennedy, 167 U. S., 362.
99. The liability of a shareholder in a national bank to an assessment on his
shares is not a contractual liability flowing from his acquisition of the
shares, but a liability which arises by force of the statute authorizing
the assessment. Ib.
100. The circuit court has jurisdiction of an action to ascertain or fix the liability upon shares of an insolvent national bank which are alleged to
have been transferred with a fraudulent intent to escape such liability
when the amount of the assessment exceeds $2,000 exclusive of interest
and costs. Thompson v. German Ins. Co. et at., 76 Fed,. Rep., 892.
101. The right of the receiver of an insolvent national iDank to enforce the liability of stockholders, though created by United States statute, may be
barred by the running of a State statute of limitations. Ib.
102. The bar of a statute of limitations will be enforced, when applicable, in
equity as well as at law. Ib.
103. The action of the Comptroller in making an assessment against the stockholders of an insolvent national bank creates a right of action against
the stockholders, but is not the institution of a suit to enforce it so as
to stop the running of limitation. The statute begins to run from the
date the assessment becomes due. Ib.
104. A creditor who receives from his debtor a transfer of shares in a national
bank as security for his debt, and who surrenders the certificates to the
bank, and takes out new ones in his own name, in which he irj described
as pledgee, and holds them afterwards in good faith as such pledgee and
as collateral security for the payment of his debt, is not a shareholder
subject to the personal liability imposed upon shareholders by Revised
Statutes, section 5151. Pauly v. State Loan and Trust Company, 165
U.S., 606.
105. The previous cases relating to the liability of such shareholder examined
and held to establish:
(1) That the real owner of the shares of the capital stock of a nationalbanking association may, in every case, be treated as a shareholder
within the meaning of section 5151;
(2) That if the owner transfers his shares to another person as collateral security for a debt due to the latter from such owner, and if, by the
direction or with the knowledge of the pledgee, the shares are placed on
the books of the association in such way as to imply that the pledgee is
the real owner, then the pledgee may be treated as a shareholder within
the meaning of section 5151 of the Revised Statutes of the United States,
and therefore liable; upon the basis prescribed by that section, for the
contracts, debts, and engagements of the association;
(3) That if the real owner of the shares transfers them to another
person, or causes them to be placed on the books of the association in
the name of another person, with the intent simply to evade the responsibility imposed by section 5151 on shareholders of national-banking
associations, such owner may be treated, for the purposes of that section,
as a shareholder, and liable as therein prescribed;
(4) That if one receives shares of the stock of a national-banking
association as collateral security to him for a debt due from the owner,
with power of attorney authorizing him to transfer the same on the
books of the association, and being unwilling to incur the responsibilities of a shareholder as prescribed by the statute, causes the shares to
be transferred on such books to another, under an agreement that they
are to be held as security for the debt due from the real owner to his
creditor-the latter acting in good faith and for the purpose only of
securing the payment of that debt without incurring the responsibility
of ar shareholder-—he, the creditor, will not, although the real owner
ma} , be treated as a shareholder within the meaning of section 5151; and
118
REPORT OF THE COMPTROLLER OF THE CURRENCY.
ASSESSMENT. See Insolvent banks; Receiver; Shareholders, etc.—Continued.
(5) That the pledgee of personal property occupies toward the pledgor
somewhat of a fiduciary relation, by virtue of which, he being a trustee
to sell, it becomes his duty to exercise his right of sale for the benefit of
the pledgor. Ib.
106. Where one residing in Maryland subscribes fcr stock of a national bank of
another State, and then transfers it to his wife, also a resident of Maryland, she becomes owner thereof, and is subject to stockholders' liability,
under Revised Statutes, United States, § .'>152, without regard to the
"laws of the other State relative to contract oy married women. Kerr v.
Urie {Mel.), 37 A., 780.
107. A person appearing on the books of a nations! bank to be absolute owner
of stock is subject to stockholders' liability, though holding it as
trustee. Ib.
108. It has been repeatedly settled by this court that the Comptroller of the
Currency has power to appoint a receiver of a defaulting or insolvent
national bank, and to call for a ratable assessment upon the stockholders
of such bank, without a previous judicial as certaimnent of the necessity
for such action; and the contention that there is presented in this case a
constitutional question not considered in the prior cases is an assumption
with no foundation in fact. Bushnell v. Leland, 164 U, S., 684.
109. As by Rev. St., U. IS., sec. 5342, an attachment issued before final judgment
from a State court against a national bank is prohibited, such an attachment does not operate as notice to the absent defendant, so as to give
the court jurisdiction of the party or subject-matter. Safford v. First
National Bank (Vt.), 17 A., 748.
110. An assessment against the estate of an owner of national-bank stock, in
the hands of his executrix, is enforceable i:i the Federal courts, though
proceedings for settlement of the estate are pending in the probate
court of Vermont. Brown v. Ellis, 86 Fed. Rep., 357.
111. The widow of a deceased stockholder of an insolvent national bank, who
by authority of the will undertook to settle the estate as executrix without judicial proceedings, but failed to trar.sfer such stock to herself or
other person, can not, on the ground that the estate is fully settled,
escape liability as executrix for assessments on such stock to the extent
of assets of the estate under her control. Baker v. Beach, et al.9 85
Fed. Rep., 836.
112. To a bill by a creditor of a corporation averrir.g its insolvency and demanding the appointment of a receiver, an accounting, and the enforcement
of the individual liability of the stockholders, the corporation is a necessary party defendant. Elkhart National Bank of Elkhart, Ind.. v.
Northwestern Guaranty Loan Company of Minneapolis, Minn., ei ah,
_ 84 Fed. Rep., 76.
113. Where the jurisdiction of the Federal courts depends on the diverse citizenship of the parties, the Federal courts of the residence of stockholders of an insolvent corporation, organized under the laws of another
State, have no jurisdiction of a suit brought by a creditor of the corporation for an accounting and a receivership and to enforce the individual
liability of the stockholders, if the corporation has not voluntarily
appeared in the action. In such case the nonresident corporation can
not be compelled to appear. Smith v. Lyon, 10 Sup. Ct., 303,133 U. S.,
315, and Improvement Co. v. G-ibney, 16 Sup. Ct., 272, 160 U. S.. 217,
followed and applied. Ib.
114. In such a case, the defendant stockholders who appear may set up this
defense by demurrer. Ib.
115. A payment made for stock of a national bank under an erroneous belief
that all of an increased issue of stock authorized by the stockholders,
and of which the stock paid for formed a part, had been sold, and the
subscriptions therefor had thus become binding, is not voluntary, and
the money may be recovered back, though the facts might have been
learned by the exercise of greater diligence and care. BrownY. Tillinghast, 84 Fed. Rep., 71.
116. The Comptroller of the Currency and the Treasurer of the United States
are not necessary parties defendant in an action against the receiver of
an insolvent national bank to recover an assessment made by the Comptroller, and paid by the plaintiff under ar erroneous belief that he was
a stockholder. Ib.
REPORT OF THE COMPTROLLER OF THE CURRENCY.
119
ASSESSMENT, See Insolvent banks; Receiver; Shareholders, etc.—Continued.
117. Defendant acquired stock of a national bank through his agents, in whose
names the shares were registered on the books of the bank, and so
appeared when the bank became insolvent. Defendant had all the time
held the certificates, so indorsed that he might have had the shares registered in his own name. Held, that the receiver can recover from
defendant an assessment on said stock for the benefit of creditors,
though he might have proceeded against those in whose names the
shares appeared on the bank's stock register. Hubbell v. Honghton, 86
Fed. Rep., 547.
118. On notice from the Comptroller, under Rev. St., § 5205, that the bank's
capital is impaired so as to require an assessment on the stockholders,
such assessment is to be made by the stockholders themselves, and an
assessment by the directors is void. Hulitt v. Bell et al., 85 Fed. Rep., 98.
119. An assessment to restore impaired capital, under Rev. St., § 5205, is only
enforceable by subjecting the stock of persons refusing to pay, and no
action will lie against the stockholders personally, lb.
120. When an executor refuses to recognize, as a claim against decedent's
estate, an assessment by the Comptroller of the Currency upon national
bank stock belonging to the deceased, a Federal court will assume jurisdiction of an action against the executor to determine the liability,
although the estate is in the course of administration in the probate
court. Zimmerman v. Carpenter, 84 Fed. Rep., 747.
121. The estate in the hands of an executrix at the date of the failure of a
national bank is liable for the assessment on stock belonging to the
estate in the same manner as if deceased was living (Rev. St., § 5152);
and the fact that the time for filing claims against the estate has expired
is no bar to an action to iix such liability, lb.
122. Where tank stock was transferred by an executrix to herself individually,
and she admits, before suit is brought, and again in her answer, that
the transfer was without consideration, and is void, such admission does
not vacate the transfer, and a bill in equity will lie to determine the
liability of the estate on an. assessment of the face value of the stock. lb.
123. Where, at the hearing, the defendant raises the point that the claimant
has a plain, speedy, and adequate remedy at law, the court will not
make a decree if there is a plain defect of jurisdiction, but the bill will
be construed more liberally than if the point had been raised by demurrer, lb.
124. A stockholder in a national bank, with knowledge that the bank is in a
failing condition, can not make a voluntary transfer of his stock to one
financially irresponsible, and thereby escape liability for assessments.
Baker v. Reeves et al., 85 Fed. Rep., 837.
125. The owner, by assignment of stock in a national bank at the time of its
failure, is liable for assessments thereon, though his assignor, who transferred it knowing that the bank was in a failing condition, is also
liable. lb.
126. A pledgee of national-bank stock is not liable as a stockholder for assessments except by estoppel. Baker v. Old National Bank of Providence,
R. I., et ah, 86^Fed. Rep., 1006.
127. Where shares of an insolvent bank are registered on the books " F . A.
Cranston, Cashier Old National Bank, Providence, R. I.,"the latter bank,
in a suit by the receiver to hold it liable as a shareholder for assessments,
is not estopped by the registry from setting up the fact that it holds the
stock merely as a pledge. lb.
128. And the cashier, individually, is not estopped from avoiding liability on
the same ground. lb.
129. An executrix, who is also the sole devisee and legatee under a will, does
not acquire title to national-bank stock constituting part of the estate,
so as to prevent the estate from being liable to an assessment made by
the Comptroller of the Currency, merely by the fact of having paid or
secured all the debts owing by decedent, the estate still remaining
unsettled. Tourtelot v. Finke, 87 Fed,. Rep., 840.
130. A trustee, though not appointed by a will or an order of a court or judge,
is not personally liable for assessments against stock of an insolvent
national bank owned by this cestui que trust, but standing in his name,
where he has been guilty of 110 fraud, concealment, or negligence.
Lucas v. Coe, 86 Fed. Rep., 972.
120
REPORT OF THE COMPTROLLER OF THE CURRENCY.
ASSESSMENT. See Insolvent banks; Receiver; Shareholders, etc.—Continued.
131. In fixing the liability for assessments against stock of an insolvent national
bank, the effort of the court should be to ascertain who is the actual
owner, and to hold him, releasing the apparent owner if he has done
nothing to deceive or mislead, Ib.
132. Where one subscribes for part of an increased issue of national-bank stock,
but actually receives original stock instead, and holds it for several
years, receiving dividends and paying assessments thereon, he will be
liable, upon failure of the bank, to assessment on such stock by the
Comptroller of the Currency. Rand et al. v. Columbia National Bank
of Tacoma, Wash., et al, 87 Fed. Rep., 520.
133. A sale of all the shares of stock held by a shareholder in a national bank,
when such sale is made under the provisions of and for the purpose set
forth in section 5205 of the Revised Statutes of the United States, as
amended by the act of June 30, 1876, is void, unless at such sale the
stock brings a price equal in amount to the assessment placed thereon
under the provisions of that section. Merchants' National Bank of
Rome v. Fouche, Supreme Court of Georgia, July, 1898.
134. One who holds shares of national-bank stock—the bank being at the time
insolvent—can not escape the individual liability imposed by the statute
by transferring his stock with intent to avoid that liability, knowing or
having reason to believe, at the time of the transfer on the books of the
bank, that it is insolvent or about to fail. Stuart v. Hayden, 169 U. S.9
1; Oruetter v. Stuart, Ib.
135. A transfer with such intent and under such circumstances is a fraud upon
the creditors of the bank, and may be treated by the receiver as inoperative between the transferrer and himself, and the former held liable as
a shareholder without reference to the financial condition of the transferee. Ib.
136. The right of creditors of a national bank to look to the individual liability
of shareholders, to the extent indicated by the statute, for its contracts,
debts, and engagements, attaches when the bank becomes insolvent; and
the shareholder can not, by transferring his stock, compel creditors to
surrender this security as to him, and force the receiver and creditors
to look to the person to whom his stock has been transferred. Ib.
137. If the bank be solvent at the time of the transfer, that is, able to meet its
existing contracts, debts, and engagements, the motive with which the
transfer is made is immaterial, as a transfer under such circumstances
does not impair the security given to creditors; but if the bank be insolvent, the receiver may, without suing the transferee and litigating the
question of his liability, look to every shareholder who, knowing or having reason to know at the time that the bank was insolvent, got rid of
his stock in order to escape the individual liability to which the statute
subjected him. Ib.
138. Whether, the bank being in fact insolvent, the transferrer is liable to be
treated as a shareholder in respect of its existing contracts, debts, and
engagements, if he believed in good faith at the time of the transfer that
the bank was solvent—not decided; although he may be so treated, even
where acting in good faith, if the transfer is tc one who is financially
irresponsible. Ib.
139. Where the circuit court and the circuit court of appeals agree as to what
facts are established by the evidence, this court will not take a different
view unless it clearly appears that the facts are otherwise. Ib.
ATTACHMENT:
1. The stock of a shareholder indebted to it may be attached by the association and sold on execution. Hagar v. Union National Bank, 63 Me., 509.
2. No State court can issue an attachment against the funds of a national bank.
Although the provision forbidding attachments was evidently made to
secure equality among the general creditors in the division of the proceeds of the property in an insolvent bank, its operation is by no means
confined to cases of actual or contemplated insolvency; but the remedy
is taken away altogether and can not be used under any circumstances.
The effect of the provision in sec. 5242, Rev. St., is to write into all State
attachment laws an exception in favor of national banks, and all such
laws must be read as if they contained an exception in favor of national
banks. Pacific National Bank v. Mixter, 124 U. S., 721.
3. No attachment can issue from United States circuit court in an action
REPORT OF THE COMPTROLLER OF THE CURRENCY.
121
ATTACHMENT—Continued.
"against a national bank before final judgment in the cause, and a bond
given on such attachment is illegal. Ib.
4. An attachment; can issue against a national bank from a State court. Robinson v. National Bank of Neivbern, 58 How. Pr., 306; 2 N. B. C, 809.
5. The provision of the national banking act that attachments, injunctions,
etc., shall not be issued by State courts against national banks before
final judgment relates only to actions against banks where the action is
brought, and not to cases where the action is against a nonresident corporation. SouthwicJc v. The First National Bank of Memphis, 7 Hun.,
96; 1 N.B.C., 789.
6. An attachment will not lie before final judgment against the property in
this State of a national bank situated and doing business in another State.
JRhoner v. National Bank of Allentown, Pa.; Palmer v. Same, 14 Hun.,
126; 2 N.B.C., 331.
7. An attachment can not be issued from a State court against a national
bank before final judgment, whether such bank be located in this State
or not. Central National Bank v. Richland National Bank, 52 Howard,
186; 1 N. B.C., 801.
8. The provision of the national-banking act prohibiting attachments in such
cases is not repealed by the act of Congress of July 12, 1883, providing
that the jurisdiction for suits thereafter brought against national banks
shall be the same as for suits against State banks and repealing laws
inconsistent therewith, Raynor v. Pacific National Bank, 98 N. Y., 371;
3 N.B. C., 624.
9. An unrecorded transfer of national-bank stock will take precedence of a
subsequent attachment in behalf of a creditor without notice. Continental National Bank v. Eliot National Bank et al., 7 Fed. Rep., 369.
10. The loss of interest occasioned by an attachment wrongfully laid is clearly
an injury for which damages are recoverable against the wrongdoer.
Jacobus v. Monongahela National Bank of Brownsville, 35 Fed. Rep., 395.
11. Where shares of corporation stock are attached, the subsequently declared
dividends are as much bound by the attachment as the corpus of the
stock itself is. Ib.
12. Counsel fees and other expenses (not taxable as costs) paid or incurred in
defending against an attachment wrongfully laid are not recoverable as
damages in an action upon a statutory recognizance given when the
attachment was issued, conditioned for the payment to the party
aggrieved of " such damages as the court may adjudge." Ib.
13. When a creditor attaches the property of an insolvent bank he can not hold
such property against the claim of a receiver appointed after the attachment suit was commenced. Such creditor must share pro rata with all
others. First National Bank of Selma v. Colby, 21 Wall., 609; Harvey
v. Allen, 16 Blatch., 29.
14. Sureties on attachment bond against national bank who have received
assets of the bank to secure them from loss thereon, the obligation being
illegal, will be discharged in equity and be compelled to transfer their
collateral to the receiver of the bank. Pacific National Bank v. Mixter,
124 U. S., 721.
15. An attachment from a State court may not issue against an insolvent
national bank of that State. National Shoe and Leather Bank of the
City of New York v. Mechanics' National Bank of Newark, N. J.; Corn
Exchange Bank v. Same; West Side Bank v. Same, 89 N. Y., 467; 8 N.
B. C, 601.
16. An attachment issued against an insolvent national bank is invalid (U. S.
R. S., sec. 5242) and is not made valid by the subsequent acquisition by
the bank of further capital. Raynor v. Pacific National Bank, 93 N. F ,
371; 3 N. B. CK, 624.
17. Although the bank after the issuing of the attachment paid a large amount
of its debts in full, this does not estop it from questioning the validity of
the attachment, Ib.
18. A receiver of a national bank situated in another State, though not a party,
may move to vacate an attachment. People's Bank of the City of Neiv
York v. Mechanics' National Bank of Newark, 62 How. Pr., 422; 3
N. B. C., 670.
19. In an action against a national bank of another State an attachment
issued against its property in this State will be vacated upon proof of its
insolvency. Ib.
122
REPORT OF THE COMPTROLLER OF THE CURRENCY.
ATTACHMENT—Continued.
20. The defendant, a national bank at Boston, Mass., on November 18, 1881,
closed its doors and was put in charge of a Government bank examiner
and thus continued till March 14,1882, when the Comptroller allowed it
to resume. It transacted business till May 22, 1882, when it was placed
in the hands of a receiver. An attachment was issued in this action
November 19, 1881, against defendant's property in this State. At that
time its assets would have paid its debts and liabilities exclusive of its
capital, but it had refused to pay various legal obligations then due.
Held, that defendant had committed acts of insolvency within U. S. Rev.
St., sec. 5242, and the attachment should be vacated. Market National
Bank of New York v. Pacific National Bank of Boston, 30 Hun.,, 50; 3
N. B. C., 672.
21. Bank property attached by individual creditor after bank is insolvent can
not be sold to pay his demand against the claim of a receiver subsequently
appointed. National Bank v. Colby, 21 Wall., 609.
22. Where service is made on a national bank only by attachment and publication or service out of the State the attachment, being prohibited by
Rev, St., sec. 5242, should be vacated and the service set aside. Garner
v. Second National Bank (C. C), 66 F., 369.
23. A bank which discounted a draft to which was attached, deliverable to its
order, a bill of lading of the goods against which the draft was drawn
was not required, on notice of nonacceptance of the draft, to charge the
amount thereof against the drawer's account, which was sufficient to
pay the draft, in order to enforce its lien on the property against an
attaching creditor of the drawer. Neill v. Rogers Bros. Produce Co.
(WWa.), 23 S. E., 702.
24. In an action by an attaching creditor against certain plaintiffs in an action
to repleyy the attached property for the appointment of a receiver, L.,
who claimed a lieu by virtue of an attachment prior to plaintiff's, was
not made a party to the action, and after the appointment of the receiver
he made a motion to modify the order made therein so far as it directed
the sheriff to deliver to the receiver the property held under his attachment. Held, that L. might appeal from anorder denying such motion.
National Park Bank v Qoddard (Sup.), 20 N. Y. S.9 Ii89; In re Lilianthai, ib.
25. A receiver who simply holds property pending the determination of an
action to settle the ownership of the same has no interest in such action
and will not be allowed to intervene. National Park Bank v. Goddard
(Sup.), 20 N. Y. S., 526.
26. An attaching creditor of an insolvent corporation acquires no right superior to other creditors. Fanners and Merchants' National Bank v'. Waco
Electric Railway and Light Co. (Tex. Civ. App.), 36 S. W., 131; Metropolitan Trust Co. v. Farmers and Merchants' National Bank, ib.
27. An attaching creditor of an insolvent corporation for which a receiver is
appointed after the attachment acquires no preference right or lien that
will deprive the court of the power to equitably apportion the earnings
of the property during the receivership to claims c'assed as operating
expenses. Ib.
28. An appearance by counsel of a nonresident attachment defendant, for the
sole purpose of moving a discharge of the levy and the dissolution of
the attachment, does not constitute a general appearance, and service
must be made by publication before default and judgment can be
entered. Exchange National Bank v. Clement (Ala.), 19 So., 814.
29. In an action against a nonresident commenced by attachment, unless the
levy is fictitious or merely colorable, the defendant can not, as a ground
for abating the action, dissolving the attachment, or vacating the levy,
traverse the ownership of the property attached, or deny having a
leviable interest therein. Ib.
30. A national bank holding funds belonging to a bankrupt estate as depositary of a bankrupt court can not be gamisheed in proceedings supplementary to execution. Havens v. National City Bank of Brooklyn, 6
Thompson & Cook, 346; 1 N. B. C., 7S3.
31. Under IT. S. Revised Statutes, section 5242, providing that no attachment
before final judgment shall be issued in any State court against a national
bank, and U. S. Revised Statutes, section 915, entitling the plaintiff in
actions in the Federal courts to similar remedies by attachment to those
provided by the laws of the State in which such courts are held, a Fed
BEPORT OF THE COMPTROLLER OF THE CURRENCY.
123
ATTACHMENT—Continued.
32.
33.
34.
35.
era! court may not issue a writ of attachment before final judgment
against a national bank. Butler v. Colenian, Same v. Mixter, Same v.
Whitney, Same v. Demmon, 12A U. £., 721; 3 N. B. C, 291.
A bond given to release property from an illegal attachment is void. Ib.
The principal in a bond given in an attachment suit may maintain an
action in equity to have the bond declared void and the property held
by the sureties'as indemnity returned. Ih.
The levy of an attachment on the shares of a national bank under the Vermont statutes (R. L. £§ 3201, 3262), which do not include national-bank
stock in their provisions, is of no effect against the defendant in attachment. Soivles v. National Union Bank of Stvanton, Vt., 82 Fed. .Rep.. (196.
It seems doubtful whether any attachment under State laws can operate
as a transfer of shares of national-bank stock, since such stock exists
solely under the laws of the United States, which provide for transfers,
and declare the effect thereof. IK
BONDS OF OFFICERS:
1. It is not necessary that national-banking associations shall signify their
approval of the official bonds of their officers by memoranda entered
upon the journals or minutes of the directors. The acceptance is to be
presumed from the retention of the bond, and from the fact that the
officer is permitted to enter upon or continue in the discharge of his
duties. Graves v. The Lebanon National Bank, 10 Bush., 23.
2. Where the sureties of an officer can reasonably be presumed to have been
deceived by the statement of the condition of the bank published just
prior to the execution of the bond, and to have been led to think that
there was no deficit, whereas there had been a misapplication of a *. rge
part of the funds by the officer whose bondsmen they became, which
fact would have been ascertained had the directors exercised ordinary
diligence, the sureties are discharged from their liability. Ib.
3. A surety on the bond of a cashier of a national bank is not discharged by
the fact that the cashier had, before the bond was given, committed
frauds upon the bank, if such frauds were unknown to the officers of
the bank, although they were guilty of gross negligence in not discovering them. Tapley v. Martin, 11(1 Mass., 275; 1 N. B. C, (111.
4. The engagement of a surety is a direct original agreement with the obligee
that in the event his principal fails lie will perform the original obligation, and whether it is entered into jointly with the principal or separately, the extent and character of the obligation are the same as to
both, depending only upon the form in which it is expressed. La Rose
et al. v. The Logansport National Bank et ah, 102 Ind.y 332.
5. The contract of obligors, whether entered into separately or jointly with
the principal, if by its terms it appears that the principal is separately
bound by an original, independent contract, to which the contract for
security is collateral, and the obligors agree therein that the principal
will pay or perform according to his original engagement, and that they
will answer for his default in the event of failure, is a contract of
guaranty. Ib.
6. The contract of the sureties in the bond of a bank cashier, conditioned for
the faithful discharge of his duties by such cashier, is a contract of
guaranty. Ib.
7. A failure to give notice to guarantors of the default of their principal,
except in cases governed by commercial rules, is a matter of defense,
and resulting damages must concur with such failure in order to work
a discharge. Ib.
8. Where by a by-law of a bank its cashier is made responsible for the funds
and valuables of the bank, it can not be implied that his bond would
not become operative until all the other officers and employees were
denied access to such funds and valuables nor that he is responsible for
losses which may occur through the delinquencies of others. IK
9. The bond of a bank cashier, executed and approved two weeks after he
enters upon his duties, is upon sufficient consideration, and is operative,
at least, from the date of its approval. Ib.
10. The knowledge by an employer of the misconduct of an employee whose
conduct and fidelity have" been guaranteed by another, which will, if
concealed, release the guarantor, must relate to the service in which the
124
REPORT OF THE COMPTROLLER OF THE CURRENCY.
BONDS OF OFFICERS—Continued.
11.
12.
13.
14.
15.
16.
employee is engaged, and must be something more than mere moral
delinquency unconnected with the subject-matter of the guaranty. Ib.
A continuing contract, guaranteeing the fidelity of a bank cashier, may
be revoked by the guarantors without cause, upon proper notice, but
the right must be exercised reasonably. Ib.
A bond of suretyship for an employee, which is to " embrace and cover
only acts and defaults committed during its currency and within twelve
months next before the date of discovery of the act or default upon
which such claim is based," covers not only embezzlements made during
the year actually preceding their discovery, but also earlier embezzlements which would have been discovered within a year but for the fact
that during the year preceding the actual discovery the employee had so
falsified the books as to prevent such discovery. Consolidation National
Bank v. Fidelity and Casualty Company of New York (C. C), 67 F., 374.
Plaintiff, as receiver of a national bank, sued a former employee of the
bank and a guaranty company upon a bond of indemnity, against the
fraudulent acts of such employee, which contained a provision that it
should be essential to the validity of the bond that the employee's signature be subscribed thereto. The defendants pleaded non est factum.
The bond offered in evidence was not signed by the employee of the
bank and there was no evidence that it had been executed by the defendant company. The court sustained defendants' plea, and dismissed the
suit. Held, no error. Blackmore v. Guarantee Company of North
America et al., 71 Fed. Rep., 363.
A bank employee's bond, conditioned for the reimbursement of any loss
sustained by reason of fraud or dishonesty in connection with his duties,
provided that any claim under the bond should embrace and cover only
acts and defaults committed during its currency and within twelve
months next before the date of discovery of the act or default upon
which such claim was based. Held, that the bond did not cover a default
committed more than twelve months prior to its discovery, which would,
however, have been discovered within a year from its commission had
not such discovery been prevented by the act of the employee in falsifying the books during the year preceding the discovery. 67 Fed. Rep.,
874, reversed. Fidelity and Casualty Company of New Yorkv. Consolidated National Bank, 71 Fed, Rep., 116.
The cashier
of a bank, whose bond, with sureties, was conditioned that he
would 4i faithfully and honestly discharge his duties as cashier, and
account for all such moneys, funds, and valuables " a s came into his
hands, cashed a draft, payable to his order, amply secured by bills of
lading of cotton, and duly forwarded the same, with the bills of lading,
to a bank in another city for collection. The draft and bills of lading
were lost in the mail. The cashier's bookkeeper, whose duty it was to
check the statements and accounts with other banks, reported the draft
as credited on their account with the bank to which they had been forwarded, and his accounts balanced according to his report. The agent
of the railroad company, without production of the bills of lading, and
without the consent of the cashier, delivered the cotton to the consignee.
Held, that the cashier was not liable on his bond. First National Bank
v. Still (Tex. Civ. App.),32 S. W.,61.
The A. Surety Co, executed and delivered to the C. bank a bond, insuring
the bank against loss by any act of fraud or dishonesty of its cashier in
connection with the duties of that office, or the duties to which, in the
bank's service, he might be subsequently appointed, occurring during
the continuance of the bond, and discovered within six months thereafter and within six months from the death, dismissal, or retirement of
the cashier from the service of the bank. The bond provided that the
surety company should be notified of " a n y act" of the cashier which
might involve a loss for which the company would be responsible "as
soon as practicable after the occurrence of such act shall have come to
the knowledge" of the bank, and it required proofs of loss to be furnished to the surety company. The bank suspended payment and passed
into the hands of a receiver who afterwards notified the surety company
of the discovery of dishonest acts of the cashier, furnished proofs of
loss, and brought suit against the surety company on the bond. The
evidence upon the trial as to the time when the dishonest acts of the
cashier were discovered being conflicting, held, that the question whether
REPORT OF THE COMPTROLLER OF THE CURRENCY.
125
BONDS OF OFFICERS—Continued.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
the required notice was given with reasonable promptness was for the
jury. -Held, further, that the terms of the bond did not require notice
to be given of suspicions of dishonest acts. American Surety Company
v. Fauly, 72 Fed, Rep., 470.
The bank having suspended business on November 12, 1891, but the cashier having continued in the service of the receiver until March following, when he resigned, held, that the services so rendered by him after
November 12th were rendered to the bank none the less because its
affairs were controlled by a receiver, and the surety company was not
absolved from liability for acts discovered more than six months from
November 12th, but within six months from his resignation. Held, further, that a proof of loss under the bond, which set forth with reasonable plainness, and in a manner by which a person of ordinary intelligence could not be misled, that certain sums of money had been taken
from the bank by means of acts of the cashier, described in such proof,
was sufficient, though it failed to aver explicitly that a loss had been
caused to the bank. Ib.
The "teller's book " of the bank, which had been kept by one G., who died
before the trial, was offered in evidence to show that on certain days no
money was received for certificates of deposit. Held, that in connection
with evidence of the course of business, by which, if received, such money
would be entered in the book, the evidence was competent, though not
conclusive. Ib.
For the purpose of showing the dealings with the bank of the president,
who was charged with having misappropriated the bank's money with
the cashier's aid, the president's ledger account was put in evidence,
together with the testimony of the bookkeeper who made the entries,
and who swore that they were correctly made from the original deposit
slips and checks furnished to him by the teller, who had died before the
trial; that it had been the teller's duty to verify all deposit slips, and to
pay the checks; and that all such slips and checks, when reaching the
bookkeeper's hands, bore marks indicating that they had been verified
or paid by the teller. Held, that the account was competent, and sufficiently proven. Held, further, that evidence of acts of fraud and dishonesty by the cashier, occurring before the date of the bond, and for
which no claim was made against the surety company, but which were
similar to the acts on which the claim was based, was admissible to show
that the acts on which the claim was based were intentional, and not
merely negligent, or due to oversight. Ib.
Prior to the issue of the bond sued on the cashier and president of the bank
had conspired to rob it, and had been engaged in fraudulent practices.
When application was made for the bond the surety company required
a certificate from the bank of the cashier's good character. Such certificate was made by the president without, so far as appeared, any direct
authority from the board of directors, or any knowledge by them that
such certificate was made or required. Held, that the president's knowledge of the cashier's dishonesty was not to be imputed to the bank, so
as to make it responsible for the misrepresentations contained in such
certificate. Ib.
When a case goes twice to an appellate court, questions decided upon the
first occasion will not be considered upon the second. Mohrensteeher
et al. v. Westervelt, 87 Fed. Rep., 157.
Error in denying a motion to compel the plaintiff to elect between causes
of action is cured by instructions eliminating all but one cause. Ib.
It is error to give instructions authorizing the jury, in determining whether
a transaction by which the cashier of a national bank obtained possession
of some of its funds was a misapplication thereof, to consider the fact
that his indebtedness to the bank exceeded 10 per cent of its capital. Ib.
Instructions that no devices for concealment, however elaborate, which a
bank cashier may adopt to conceal a transaction amounting to a misappropriation of its funds, can protect him, are erroneous, when there is
no evidence of any concealment whatever in respect to the transaction
in question. Ib.
The making of a loan exceeding 10 per cent of a national bank's capital, in
the absence of fraud, is not a breach of the cashier s bond. Ib.
To constitute a misapplication of the funds of a bank, it is necessary that
some portion thereof shall be withdrawn from its possession or control,
126
REPORT OF THE COMPTROLLER OF THE CURRENCY.
BONDS OP OFFICERS—Continued.
or that some conversion be made, so as to deprive the bank of the benefit thereof. Mere renewal of notes already in the bank's possession does
not, of itself, constitute a misapplication of funds. Ib.
27. The cashier of a bank having made large purchases of real estate, one of
the sureties on his bond rnade inquiries of several officers of the bank,
actively engaged in its affairs, as to whether the cashier had borrowed
money of the bank in order to make such purchases, and was informed
that the purchases were for the benefit of the bank, that no liability
accrued therefrom to the cashier to the bank, and that the cashier's total
indebtedness to the bank was but a few hundred dollars. Held, that the
bank was estopped subsequently to deny these statements, when the
sureties had relied thereon, and the cashier had in the meantime become
insolvent. Ib.
28, In a suit upon a bank cashier's bond, one of the sureties thereon was not
allowed to testify to' statements of bank officers in reference to the
cashier's dealings with the bank, but the cashier himself was afterwards
permitted to testify to practically the same effect as the testimony offered.
Held, that the rejection was not harmless error, as the evidence could
not be considered merely cumulative, in view of attacks made upon the
cashier's credibility, and of his interest in misrepresenting his transactions, if illegal. Ib.
BOOKS, INSPECTION OF:
1. Code of Alabama, 188C, sec. 1677, which provides that stockholders of all
corporations have the right to have access to and inspection and examination of the books, records, and papers of the corporation at all reasonable and proper times, applies to national banks located within the State;
and mandamus will lie against the officer having custody of the books
to enforce the right. Winter v. Baldwin, 7 So., 734; 89 Ala., 483.
2. The rights of stockholders are not curtailed nor the statute in conflict with
U. S. Rev. St., which provide that national banks shall not be subject
to visitorial powers other than those authorized by Congress or vested
in the courts ot" justice. Ib.
3. The officers of a national bank can not be compelled to exhibit the books
of the bank to State officers for the purpose of furnishing a basis for
State taxation of the deposits as against the depositors. First National
Bank of Youngstownv. Hughes et al.; Second National Bank v. Same,
2 N B. C, 176.
BRANCH BANKS:
1. A national bank located in another State can not keep an office for discount and deposit in New York, and can not maintain an action upon
a note discounted at such office. National Bank of Fairhaven v. The
Phcenix Warehousing Co., 6 Hun., 71; 1 N. B. C, 784.
2. Under Rev. St., sec. 5190, providing that " t h e usual business of each
national banking association shall be transacted at an office or banking
house located in the place specified in its organization certificate," a
national bank can not make a valid contract for the cashing of checks
upon it at a different place from that of its residence, through the agency
of another bank. Armstrong v. Second National Bank of Springfield,
38 Fed, Rep., 883.
BROKER:
A national banking association is not authorized to act as a broker or agent
in the purchase of bonds and stocks. First National Bank of Allentown
v. Hoch, 89 Penn. St., 324; Weckler v. The First National Bank of Hagerstoivn, 42 Mel., SSI.
CAPITAL STOCK.
See Shareholders; Transfer of stock.
1. A national bank can acquire an interest in its own stock only by purchase
to prevent a loss upon a debt previously contracted in good faith; and a
provision in certificates of stock in such bank that they shall not be
transferred until all the liabilities of the stockholder to the bank are
paid is void and of no effect. Conklin v. The Second National Bank, 45
N. Y., 655; 1 N. B. C , 693.
2. Where a national bank made a loan upon the pledge of its own shares and
afterwards sold the shares to obtain payment of the loan which exceeded
the amount realized from the shares, held, that the owner of the shares
REPOKT OF THE COMPTROLLER OF THE CURRENCY.
127
CAPITAL STOCK. See Shareholders; Transfer of stock—Continued.
could not: on the ground that the statute forbids a national bank to take
its own shares as security recover from the bank the amount realized
upon the sale of the shares. First National Bank of Xenia v. Stewart,
107 U. S.9 676; 3 N. B. C, 06.
3. The articles of association and the by-laws of a national bank prohibited
the transfer of stock owned by any stockholder indebted to the bank
until such indebtedness should" be satisfied. Held, that the prohibition
was invalid, under section 85 of the national banking act, and that the
bank could not thus acquire a lien on the shares of the stockholders.
Bidlard v. Bank, IS Wall, 589; 1 N. B. C , 93.
4. The right of creditors to look to unpaid portions of the capital stock as a
fund for the payment of their claims is not created by State statutes,
but is derived from general principles of law. The enforcement of such
right, therefore, is not dependent upon remedies provided by State legislation; and if it appear that the State has, by statute, provided legal
remedies for the enforcement of equitable rights, the creditor may, at his
election, when proceeding in a Federal court, adopt the form of remedy
appropriate in courts of equity, or may sue at law, under the statute.
First National Bank of Sioux City v. Peavey, 69 Fed. .Rep., 455.
5. The question whether the right of a creditor to look to unpaid capital stock
is legal or equitable in its nature, in any particular case, is to be determined, it seems, by the following principles: If a person has subscribed
for or purchased the stock under such circumstances that the corporation
itself, and through it its creditors, can call upon the stockholder for the
unpaid portions of the stock, then this claim is one at law, based upon
the express or implied terms of the subscription or purchase. If, however, by the terms of the original subscription or purchase, no liability is
assumed to make any further payments to the corporation on this stock,
and it is agreed between the corporation and the stockholder that the
stock shall be considered as full paid, then a creditor's right to look to
unpaid portions of the stock is equitable, and can not be enforced by
action at law, unless so provided by statute. Ib.
6. The A. Co. was organized with a capital of $1,000,000, in 40,000 shares of
$25 each, all of which were subscribed for by the eight incorporates of
the company. No cash was paid on the subscriptions, but property,
valued at $220,000, was conveyed to the company in payment for the
stock, without application to any specific shares. Immediately after the
organization of the company it was agreed by all the subscribers, at a
stockholders' meeting, that 16,000 shares should be contributed by the
subscribers to secure working capital, and that such shares should be
issued to trustees, who were authorized to sell the same as full paid and
nonassessable stock, at not less than $3 per share, two-fifths of the proceeds to be paid to the incorporates and three-fifths into the treasury
of the corporation. It did not appear that enough of the stock so contributed was sold to equal $220,000 at par value; but defendant purchased from one W., who was engaged on behalf of the company in
selling the stock, 800 shares, in the belief that they were owned by W.,
and were fully paid, as they were stated on their face to be, having no
knowledge or notice of the transactions leading to the sale of the stock
or of the facts in regard to its payment. Afterwards, the company having become insolvent, a receiver of its property sued defendant for the
amount of an assessment of $15 per share on the subscriptions to the
stock. Held, That the proceedings for the sale of the stock, as full paid,
must be construed as an appropriation, by the shareholders and the corporation, of the unapplied credit of $-220,000 to the 10,000 shares contributed for sale, or to such of them as should be issued; and as it did
not appear that enough of the stock was sold to equal the $220,000, the
stock purchased by defendant, in the belief that it was full paid, must
be treated as being so in fact, and, accordingly, the defendant was not
liable for the assessment. Rood v. Whorlon, 7//- Fed. Rep., 118.
7. Where suit is brought in equity to enforce subscriptions to the capital
stock of a corporation as part of a trust fund for the benefit of the creditors of such corporation, the bill must be so framed as to be for the
benefit of all the creditors who are entitled to the trust fund. First
National Bank v. Peavey (C, C), 75 P., 154.
8. National banks have no authority to increase their capital stock except
as provided by Rev. St., sec. 5142, and act of Congress May G, 1886; and
128
REPORT OF THE COMPTROLLER OF THE CURRENCY.
CAPITAL STOCK. See Shareholders; Transfer of stock—Continued.
where an increase is attempted to be made without obtaining the consent of two-thirds of the stock, the payment in full of the amount of
such increase, and the certificate and approval of the Comptroller of the
Currency, as required by those statutes, the proceedings are invalid, and
preliminary subscriptions to such increase can not be enforced. Winters
v. Armstrong; Armstrong v. Stanage; Same v. Wood, 87 Fed. Rep., 508.
9. Such a subscription is impliediy conditioned on the subscription of the
whole amount of the proposed increase and on the compliance by the
corporation with all the requirements of the statute necessary to make
the increase stock valid, and in case of noncompliance with such requirements there is a failure of consideration, Ib.
10. In an action by the receiver of a national bank to enforce subscriptions to
a proposed increase of its cajjital stock, an allegation that the bank,
subsequent to defendants' subscriptions, and with their knowledge,
represented to the public by means of circulars, letter heads, etc., that
its capital stock had been so increased and that defendants allowed their
names to remain '' upon the list of those subscribing for and entitled to
such new or increase of stock," but without alleging that the public
gave credit to the bank on the faith that the defendants were part
owners of such increase of stock, or that they allowed themselves to be
held out as actual stockholders, does not show that they estopped to
plead the failure of the bank to comply with the statutory requirements
in perfecting such increase. Ib.
11. The receiver stands in the shoes of the bank, and can assert no rights
against the subscribers which the bank coald not have asserted. Ib.
12. A subscriber who has made payments on his subscription to the proposed
increase, believing that the statutory requirements would be complied
with, is entitled to have the amount thereof allowed as a claim against
the assets of the bank in the receiver's hands. Ib.
13. Where one subscribes for shares in the increase of the capital of a national
banking association in a certain amount, such subscription being paid
in full and the entry made on the stock book of the bank, he becomes a
shareholder, although no stock certificate is issued. Pacifie National
Bank v. Eaton, 141 U. S., 2/J7.
14. And the certificate of the Comptroller of the Currency approving the
amount of increase that has been paid in, which amount includes what
was paid by the dissenting subscriber, will be conclusive upon such
subscriber. Ib.
15. But if such subscriber has assented to or ratified the change he will be
held a shareholder. Delano v. Butler, 118 U. S., 634.
16. When the previous proceedings looking to an increase in the capital stock
of a national bank have been regular and all that are requisite, and a
stockholder subscribes to his proportionate part of the increase and pays
his subscription, the law does not attach to the subscription a condition
that it is to be void if the whole increase authorized be not subscribed,
although there may be cases in which equity would interfere to protect
him in case of a material deficiency. Aspinwall v. Butler, 133 U. S.,595.
17. The Comptroller of the Currency has power bylaw to assent to an increase
in the capital stock of a natianal bank less than that originally voted by
the directors, but equal to the amount actually subscribed and paid for
by the shareholders under that vote. Ib.
18. Where one subscribes for shares in an increase of capital stock of a national
bank and pays for the same, without waiting to see whether the whole
amount of the increase is taken, he is bound by such subscription and
payment, though the amount of the increase is afterwards reduced by
the bank and the Comptroller of the Currency. Butler v. Eaton, 141
U. S., 240.
19. The conditions imposed by Rev. St., sec. 5142, as to the validity of increase
of national-bank capital were intended to secure actual cash payment
of subscriptions and to prevent watering stock, not to invalidate bona
fide subscriptions actually made and paid. Aspinwall v. Butler. 133
U.S., 595.
20. Stockholder in national bank who, with knowledge of its insolvent condition and of all material facts, subscribes for increased stock to same
amount as his original stock, and amount of proposed increase is afterwards reduced, can not question validity of proceedings for such increase
to annul such subscription and payment, Delano v. Butler, 118 U. S.f
REPORT OF THE COMPTROLLER OF THE CURRENCY.
129
CAPITAL STOCK. See Shareholders; Transfer of stock—Continued.
634; Pacific National Bank v. Eaton, 141 ib., 227; Thayer v. Butler, ib.,
284; Butler v. Eaton, ib., 240.
21. There can be no increase of the capital of a national bank until the Comptroller of the Currency approves" thereof and issues his certificate, as
provided by section 13 of the act of Congress providing for the organization of national banks. Charleston v. People's National Bank, 5 South
Carolina, 103; 1 N. B. C, 898.
22. The stockholders of the C. National Bank voted to increase its capital
$300,000, and M. subscribed and paid for 23 shares of the proposed
increase. Only $150,000 of such proposed increase was ever paid for,
and the directors applied to the Comptroller of the Currency to approve
the increase to the amount of $150,000, which was refused. Afterwards
the stockholders voted an increase of $150,000, and applied for approval
thereof, which was refused; but later the Comptroller, on his own
motion, on the eve of the bank's insolvency, approved this increase. M.
sued the bank and its receiver to recover the amount paid by him under
his subscription to the first proposed increase. Held, that the Comptroller's refusal to approve the first increase to the extent of $150,000,
nullified the vote for the increase andM.'s subscription to the stock,
leaving him in the position of a creditor of the bank for the amount j)aicl
in, and the subsequent proceedings, he not having participated therein,
could not reanimate his contract of subscription. Matthews v. Columbia
National Bank of Tacoma et al., 77 Fed. Hep., 372.
23. Where a vote by the stockholders of a bank to increase the capital stock
to a certain amount never became effective because only one-half the
proposed increase was subscribed and paid for, the board of directors
was not authorized to cancel one-half the proposed additional stock
which had not been subscribed for, nor to give the assent of the corporation to an increase to any amount, the shareholders alone being
authorized to determine whether there should be any increase, and to
fix the amount. And a stockholder who subscribed and paid for new
stock issued under the original plan is entitled to recover back the
amount thus paid, even though there was afterwards a valid vote of the
stockholders to increase the stock to the smaller amount, as he never
assented to a subscription for stock under the new plan. Matthews v.
Columbia, National Bank et al., 79 Fed. Rep., 558.
24. Where the articles of association of a bank provided that meetings of
shareholders might be called by the board of directors, or by any three
shareholders, a resolution carried at a meeting called by the president
and cashier was not a valid act of the corporation, all the shareholders
not being present. Ib.
25. A stockholder in a corporation is not estopped from questioning the validity of a stockholders' meeting by reason of his participation in the proceedings by proxy, as his agent was only authorized to act at lawful
meetings. Ib.
26. Under the national banking law (Rev. St., § 5142) and the amendment of
May 1, 1886 (24 Stat., 18), the action of the Comptroller of the Currency
in approving of an increase in the capital of a national bank, and certifying that the amount thereof has been paid in, is conclusive, and the
validity of the increase can not be assailed in a collateral proceeding
such as an action to enforce the liability of the stockholders. Latwier
v. Bard et al., 76 Fed. Rep., 536.
#
27. Where the capital of a national bank has been increased, and defendants
have received their additional stock, and for several years held themselves out as stockholders, they can not, when the bank becomes insolvent and they are assessed to pay its indebtedness, deny their liability
upon the ground that the increase of capital was fraudulent, and that
they could not have discovered the fraud with ordinary care. More
diligence was required of them, and they are estopped by their laches.
Upton v. Tribilcock, 91 U. S., 45, and Sanger v. Upton, ib., 64, followed. Ib.
28. The officers, in taking the necessary steps for such increase, act as the
agents of the stockholders, and such stockholders can not set up the
fraud of the officers concerning the increase to defeat the claims of
innocent creditors. Ib.
29. Under the United States statutes national banks have the abstract power
CUR 98
9
130
REPORT OF THE COMPTROLLER OF THE CURRENCY.
CAPITAL STOCK. See Shareholders; Transfer of stock—Continued.
to increase their capital to such a limit as may be approved by the Comptroller of the Currency, and where stockholders have assented to an
increase they can not set up any defects or irregularities in the exercise
of the power as a defense in an'action to enforce their liability. Chubb
v. Upton, 95 U. S., 665; Veeder v. Mudgett, 95 N. Y., 295, followed. Scovill v. Thayer, 105 U. S., U-3, and Implement Co, v. Stevenson, 13 C. C. A.,
661, 66 Fed., 60S, distinguished.
1b.
30. A national bank reducing its capital can not retain, as a surplus or for any
other purpose, any portion of the money which it received for retired
stock, and having refused to permit shares thus retired to be transferred
on its books, is liable for the value of the shares to the holder. Seeley v.
New York National Exchange Bank, 78 N. Y., 60S; 4 Abb. Neiv Cases,
61; 2 N. B. C, 340.
31. The capital of a national bank having become impaired by the nonpayment
of the interest on some paper among its assets to the amount of $71,000,
in order to avoid an assessment by the Comptroller the stockholders
reduced its capital stock and carried the bills and notes to the account of
suspended or "bad debts," which were not thereafter included as assets,
although retained in its custody. Some years afterwards the bank realized $75,000 from collaterals pledged for the security of that paper. In
a suit by a stockholder to recover his share of the amount realized proportioned to the amount of stock surrendered, held, that he could not
recover. McCann v. First National Bank of Jeffersonville. 112 Ind., 354;
3 N B. C, 434.
32. Under Comp. Laws, sees. 3589, 4515, relating to the rescission of contracts
procured through fraud, one induced to purchase bank stock by fraudulent representations as to its value may rescind the purchase and recover
his notes given therefor against a holder of the notes having notice of
the fraud. Taylor v. National Bank (S. D.), 62 N. W., 99.
33. The State legislature may authorize the sale under execution of nationalbank stock. In re Braden's Estate, 30 A., 746; Appeal of Wood, ib.
34. A certificate of stock in a national bank, though in due form, may be
shown aliunde to have been issued to the apparent stockholder solely as
collateral security for money loaned. Williams v. American National
Bank of Arkansas City, Kans., et al., 85 Fed. Rep., 376.
35. It is no defense to an action against a national bank for money had and
received that the collateral security it gave to plaintiff was issued without authority of law. Ib.
36. The certificate of the Comptroller of the Currency, approving an increase
of the capital stock of a national bank, is conclusive of the existence of
the facts authorizing such certificate, and a subscriber to the stock can
not question its validity. Tillinghast v. Bailey et al., 86 Fed. Rep., 46.
37. Subscribers to a duly authorized increased issue of stock by a national
bank, who accept certificates therefor, vote the stock by proxy, and take
dividends thereon, can not question the validity of such stock as against
the receiver after the bank has become insolvent. Ib.
38. The certificate of the Comptroller of the Currency that the capital stock of
a bank has been increased to a certain amount is conclusive of the sufficiency of the facts and the regularity of the proceedings requisite to an
increase, and can not be questioned in any collateral proceeding. Columbia National Bank of Tacoma et al. v. Matthews, 85 Fed. Rep., 934.
39. One who subscribes to a proposed increase of stock with knowledge that
the stockholders had by a resolution authorized the officers, with the
approval of the Comptroller, to increase the capital stock in any multiple of $50,000 up to $300,000, as the subscriptions shall be paid in, is
estopped from questioning the regularity of the proceedings- after the
certificate of the Comptroller to such an increase is obtained. Ib.
40. A stockholder who, by power of attorney, has authorized another to vote
his stock at any and all stockholders' meetings "in the same manner as
I should do were I there personally present," is estopped by the vote of
his proxy as respects any irregularity in the proceedings or calls of the
meeting, which he could have waived if personally present. 79 Fed.
Rep., 558, reversed. Ib.
CASHIER.
See Officers.
CERTIFICATE OF DEPOSIT:
1. National-banking associations may issue certificates of deposits.
v. First National Bank, 27 Fed. Rep., 503.
Riddle
REPORT OF THE COMPTROLLER OF THE CURRENCY.
131
CERTIFICATE OF DEPOSIT—Continued.
2. Certificates of deposit in the ordinary form issued by a national bank to
depositors and payable to order are not post notes within the prohibition of sec. 5183, Rev. St. Ib.
3. A certificate of deposit, payable to the order of the depositor on the return
of the certificate, is not due or suable until demand made and return of
the certificate. Ib.
4. Certain persons, directors of a savings and of a national bank, procured
money from the former on notes made by a third person to them for the
payment of stock of the national bank issued in the name of such third
person for their benefit. Theso persons were behind in their accounts
with the national bank, and the savings bank all owed them to overdraw
their accounts with it to a large amount, which was used in settling
their accounts with the national bank. Thereafter the savings bank
delivered the notes and the check to the national bank, which issued to
it a certificate of deposit for an amount covering the whole amount represented by them. Held, that this certificate of deposit was without
consideration and void, and any loss accruing to the savings bank by
virtue of the transactions was due to the fraud or incompetency of its
own officers. Hurray v. Pauly, 56 Fed. Rep., 962.
5. A certificate of deposit is evidence of so high and satisfactory a character
as to the sum deposited, that to escape its effect the maker must overcome it by clear and satisfactory evidence. Where the testimony, aside
from the certificate, is balanced as to the amount deposited, the certificate will turn the scale. The First National Baiik of Lacon v. Myers,
83III., 507.
6. A certificate of deposit issued by a national bank, payable to the order of
the depositor on return of the certificate properly indorsed and understood between the bank and the depositor not to be payable until a future
day agreed upon, is not in violation of the national-banking act. Hunt,
Appellant, 141 Mass., 515; S N. B. C., 47 4.
7. Suit against a bank upon a stolen certificate of deposit given by the defendant to the plaintiff, reciting that he had deposited in said bank a certain
number of dollars, payable to his order in current funds on the return
of the certificate properly indorsed. Held, that the instrument should
be regarded as the promissory note of the bank, assignable under the
statute, but that it was not negotiable as an inland bill of exchange,
being made payable, not in money, but " i n current funds," The
National State Bank of Lafayette v. Ringel, 51 Lid., 393.
8. Held, therefore, that the payee could recover on said stolen certificate without giving a bond to indemnify the bank against a subsequent claim
thereunder by another person. Ib.
9. A person depositing money in a bank accepted from the cashier a certificate
of dex^osit, which made no mention of interest, but with a verbal agreement that interest should be paid. The cashier at the same time indorsed
a memorandum of the rate of interest on the stub from which the certificate was taken. Held, that the stub should be read with the certificate,
as evidence of the entire contract, Thomson v. Beal, 48 Fed. Rep., 6I4.
10. A bank, on receiving certain notes as a special deposit, issued a certificate
for the amount of the notes, made out a printed form, from which the
words " i n current funds'' were erased, and the words " i n certain
notes" substituted. The certificate was marked "Special deposit."
Having been transferred, this certificate was sent by the holder to the
bank for payment. The notes had not then been" collected, and the
cashier was directed to return the certificate, but, as the signature was
torn, he was instructed to prepare and transmit a duplicate. In doing
so he carelessly omitted to change the printed form by erasing " in current funds" and substituting " i n certain notes." Held, that there was
no ground for a claim that the second certificate was given in payment
of the first, that it was only a substitute for it, and that the receiver of
the bank was only required to surrender to the holder the notes constituting the special deposit, for which the original was issued. Niblack
v. Cosier, 74 Fed. Rep., 1000.
11. Knowledge by a member of a firm of the true consideration of a certificate
of deposit, which the firm discounted with a bank, and which had been
negligently altered in making out a duplicate, held, to be the knowledge
of the bank, where such member was also its cashier, and, as such, acted
as the sole representative of the bank in discounting the certificate. Ib.
132
REPORT OF THE COMPTROLLER OF THE CURRENCY,
CERTIFICATE OF DEPOSIT—Continued.
12. The defendants unlawfully detained a certificate of deposit of the value of
$2,000 from the plaintiff. Held, that the plaintiff was entitled to recover
damages for such detention equal to legal interest on the value of the
certificate from the date of the demand therefor and refusal to the recovery, and this without any evidence that the plaintiff would have converted said certificate into money and put it to use, other than his right
to do so and the defendants' illegal prevention of the exercise of such
right. Sleppy v. Bank of Commerce and others, 17 Fed. Rep,, 712.
CERTIFICATION OF CHECKS.
See Collections.
1. A national banking association may "certify" a check.
Merchant's
National Bank v. State National Bank, 10 Wall., 6O4.
2. The certification of a check by a bank is, in effect, merely an acceptance
and creates no trust in favor of the holder of the check and gives no lien
on any particular portion of the assets of the bank. People v. St. Nicholas Bank, 28 N. Y. St., 407; 58 N. Y. St., 712.
3. A certified check has a distinctive character as a species of commercial
paper, the certification constituting a new contract between the holder
and the certifying bank. The funds of the drawer are, in legal contemplation, withdrawn from his credit and appropriated to the payment of
the check, and the bank becomes the debtor of the holder as for money
had and received. National Commercial Bank v. Miller & Co., 77 Ala.,
168.
4. Where the defendant has a right of election, on account of a tort committed, either to sue for the tort, or, waiving the tort, to sue for money
had and received, the relation of debtor and creditor does not exist until
he elects to sue for the money; and his creditors can not defeat his election by garnishment against the wrongdoer. But this principle does not
apply where the garnishees, having received a check from the defendant,
* with authority to collect for deposit and use, have had the check certified by the bank on which it is drawn, before the service of the garnishment; being authorized to have it certified, and the relation of the
parties being thereby changed, they are liable to the defendant for the
amount of the check, as for money had and received, and that liability
may be reached by garnishment. 76.
5. A broker received coupon railroad mortgage bonds to cover future margins
of a customer and pledged them to a bank as collateral security for any
indebtedness he might owe it. Afterwards the bank advanced money
and certified checks on the faith of these bonds, when broker did not have
money on deposit equal in amount to the checks. Held, under sec. 5208,
that although the certifications were unlawful the checks certified were
good and valid obligations against the bank. Thompson v. St. Nicholas
National Bank, ljfi U. S., £40.
6. In an action by a bona fide holder of a check drawn on defendant, a
national bank, and certified by its cashier. Held, that the defendant
was liable, although the drawer had no funds in the bank when the
check was certified. Cooke v. The State National Bank of Boston, 52
N. Y.,96; IN. B.C., 698.
7. Where a postdated check is certified by the cashier of the bank on which
it is drawn to be '-good,' by indorsement thereon before the day of its
date, the instrument, upon its very face, communicates facts and information to persons receiving the same that the cashier, in making such
certification, was not acting within the known limits of his power, and
that he was clearly exceeding them. The Clarke National Bank v.The
Bank of Albion, impleaded, etc.,52 Barb., 592.
8. It appearing, on the face of such paper, that it was certified by the cashier
before its payment could have been legally demanded, and before it
could be presumed that the drawer had made a deposit for its payment,
this is, in the law, full notice to a purchaser, lb.
9. To enable a holder of such check to recover of the bank upon it, it must
appear that he became the owner and holder in good faith for a full and
fair consideration in the usual course of business, and without notice of
the cashier's want of power to make the certification. He must have
parted with something of value upon the strength and in cosideration
of the transfer of the paper. Ib.
10. If he parted with nothing before the check was dishonored, he stands in
privity with his immediate indorsers, and is affected by all that will
affect them. 76.
REPORT OF THE COMPTROLLER OP THE CURRENCY, 133
CERTIFICATION OF CHECKS.
See Collections—Continued.
11. Crediting the indorsers with the avails of the check on the books of the
holder is in no sense a paying over. The holder, upon receiving notice
of dishonor, has an undoubted right to erase such credit, and to restore
it only at the special instance of the indorsers from whom he received
the check. Ib.
12. The receipt of a.certified check is not, of itself, payment. Such a check
does not cease to be commercial paper and become money. Certifying
a check to be "good ' is nothing more than a promise by the bank upon
which it is drawn to pay it when presented, as in the case of the acceptance of the bill of exchange. If an accepted bill be protested for nonpayment, and the drawer duly notified thereof, he is bound to pay the
bill, with damages and costs. The same is the law with regard to a certified check. Bickford v. First National Bank of Chicago, 42 III., 238.
13. As the acceptance of a bill of exchange does not discharge the drawer, so
neither should the acceptance of a check, manifested by the word
" good" placed upon it by the bank, discharge the drawer. They rest
on the same principles, In this respect there is no difference between
an uncertified and a certified check; the dishonor of either must make
the drawer liable. Ib.
14. There is this difference, however, between a certified and an uncertified
check: In case of the former, the amount of the check is supposed to be
at once charged up against the drawer, and thus placed beyond his control, while the holder of an uncertified check may be anticipated by
another, who also holds a check on which he may draw the money. The
certificate is a r unconditional promise on the part of the bank to pay
the check on demand. The object in certifying the check is to give it a
currency value and to enable the holder to use it as money. Ib,
15. Although it be the fact that certified checks pass from hand to hand as
cash, still they are not cash or currency, in the legal sense of those
terms, and they do not lose, on that account, any of their characteristics
as bills of exchange, and therefore, when dishonored, the holder has a
right to look to the drawer for payment, lb.
16. In this case a check was drawn and certified and deposited in a bank after
10 o'clock a. m., and before 3 o'clock p. in., on a certain day, where it
remained until the next morning, when it was taken, in the usual course
of business, to the bank on which it was drawn. The bank was closed
and continued so. The check was protested for nonpayment and due
notice given. This was sufficient diligence to hold the drawer, Ib.
17. The holder of a certified check has the right to hold the drawee and
acceptor, as well as the drawer. So, where the acceptor has failed and
made an assignment, the holder waives none of his rights against the
drawer by giving notice to the assignee of the acceptor not to pay over
any money to the drawer out of assets which might come to his hands
in that capacity, lb.
18. A certificate of a bank that a check is good is equivalent to an acceptance;
it implies that a check is drawn upon sufficient funds in the hands of the
drawee; that they have been set apart for its satisfaction, and that they
shall be
so applied whenever the check is presented for payment. Merchants1 National Bank v. State National Bank, 10 Wall., €04; 1N. B. C., 47.
19. National banks have the power to certify checks, and this power may be
exercised by the cashier without special authorization. The directors
may limit his exercise of this power as they deem proper, but such limitation will not affect a person ignorant thereof who deals with the cashier
in relation to matters apparently within the scope of his power. 16.
20. A bank, knowing that the county treasurer of the county had not sufficient
county funds in his hands to balance his o3icial accounts, consented to
give him a fictitious credit in order to enable him to impose upon the
county commissioners, who were about to examine his accounts. They
accordingly gave him a "cashier's check" for $16,571.01, which he
indorsed and took to the commissioners. They received it, but refused
to discharge him or his bondsmen, and placed the check and such funds
as he had in cash in a box and delivered them to his bondsmen. The
latter deposited the money and the check in another bank in the same
place, which bank brought suit against the bank which issued the check
to recover upon it. Held, 1, that the circumstances under which the
check was issued were a plain fraud upon the lav/, and also upon the
county commissioners; 2, that their receipt of it and turning it over to
134
REPORT OF THE COMPTROLLER OF THE CURRENCY.
CERTIFICATION OF CHECKS.
See Collections—Continued.
the sureties was a single act, intended to assist the sureties in protecting
themselves, and was inconsistent with the idea of releasing them from
their obligations. Thompson v. Sioux Falls National Bank, 150 U. S.,231.
21. Though the drawer of a check, before delivering it, has it certified, he will
not be relieved from liability thereon, the bank having failed before
payment thereof, though presented in due season. Randol})h National
Bank v. Hornblower et al, 85 N. E.< 850; 160 Mass., 401.
22. Where the drawer of a check, before delivering it to the payee, has it certified as good by the bank upon which it is drawn, and the rjayee presents it in good season for payment, and gives due notice to the drawer
of its nonpayment, and the bank had failed at the time of presentment
for payment, the drawer will not be discharged from liability on the
check. Cincinnati Oyster and Fish Co. v. National Lafayette Bank, 36
N. E.,833.
23. As a general rule the certification of a check in the hands of the payee, the
body dt which is unaltered, releases the drawer from further liability
and creates a direct liability from the bank to the payee, while as between
the bank and the drawer it operates as a payment, to that extent on his
account; and although prior to its being certified the check may be countermanded by the drawer, after its certification it has passed beyond
his control and he no longer has power to countermand its payment.
Meridian National Bank of Indianapolis v. First National Bank of Shelby ville, 34 N. E., 60S; 7 Ind. Ap., 322.
24. The indorsement of a check by the person to whom it was actually issued
and by whom the drawer intended the money should be received, is an
effectual indorsement to pass title to the check to a bank cashing the
same; and the indorsement is not, as to such bank, invalidated by reason
of the payee acting under an assumed and fictitious name when he was
not impersonating any other individual. Ib.
25. A bank, cashing in good faith a check so drawn and indorsed, may collect
the amount thereof of the bank which has certified the same. Ib.
2G. Tho acceptance or certification of a bank check does not warrant the signatures of the indorsers to be genuine. First National Bank v. Northwestern National Bank (III), 38 N. E., 739.
27. The certification by a bank of a note made payable at such bank, where
the maker keeps an account, is an absolute promise by the bank to pay
such note, not as the debt of another but as its own obligation, entitling
the holder to suspend any remedy against the maker and relax steps to
charge an Endorser, and can not be rescinded by the bank because made
under a misapprehension of fact as to the sufficiency of the maker's
account to meet the note. .Riverside Bank v. First National Bank of
Shenandoah, 74 Fed. Rep., 270.
23. The payment of a note by the bank at which it is made payable, although
made under misapprehension of the state of the maker's account with
the bank, concludes the bank as against the holder of the paper who
has surrendered it, and the payment can not be recovered back of the
holder. Ib.
29. A bank certifying a check without funds is not liable except to a bona fide
holder. Boiven v. Needles National Bank, 87 Fed. Rep., 430.
CHECKS: See Certification of checks; Collections.
1. A check is, substantially, an inland bill of exchange, and the rules applicable to such bills are alike applicable to checks. Bickford v. First
National Bank of Chicago, 42 III., 238.
2. The check of a depositor upon his banker, delivered to another for value,
transfers to that other the title to so much of the deposit as the check
calls for, which may again be transferred by delivery, and when presented at the bank the banker becomes the holder of'the money to the
use of the owner of the check, and is bound to account to him for that
amount, provided the drawer has funds to that amount on deposit subject to his check at the time it is presented. These checks are received
and passed and deposited with bankers as cash, subject, of course, to be
made good if not paid on presentation. This is the legal effect of an
ordinary uncertified check. Ib.
3. In order to fix the liability of the drawer of an inland bill of exchange or
check in case of nonpayment, the holder should present the bill or check
to the person or bank on which it is drawn, within business hours of the
REPORT OF THE COMPTROLLER OF THE CURRENCY,
135
CHECKS. See Certification of checks; Collections—Continued.
day next succeeding the receipt of the paper, and give notice of the dishonor to the drawer. Ib.
4. In the case of a deposit of a check drawn upon itself, the bank becomes at
once the debtor of the depositor, and the title to the deposit passes to the
bank. Oddie et al. v. The National City Bank of New York, 45 N. Y., 735.
5. Where a depositor draws his check on his banker, who has funds to an
equal or greater sum than his check, it operates to transfer the sum
named to the payee, who may sue for and recover the amount from the
bank, and a transfer of the check carries with it the title to the amount
named in the check to each successive holder. The Union National
Bank v. The Oceana County Bank, SO III., 212.
6. After a check has passed into the hands of a bona fide holder it is not in
the power of the drawer to countermand the order of payment. Ib.
7. An instrument drawn by a depositor on a bank in; the following form,
after giving the date and the name of the bank, ' Pay to A. and B., for
account of C. & Co., ten hundred and eighteen 23-100 dollars," and
signed by the depositor, is a valid bank check, and will operate to
transfer to the payees an amount of the drawers' funds on deposit
equal to the sum named on its face. The words "for account of C.
& Co.'" do not change its character as a check. A bill or note, without
at all affecting its character as such, may state the transaction out of
which it arose or the consideration for which it was given. The Ridgely
National Bank v. Patton <Sc Hamilton, 100 III., 479.
8. A bank check payable to attorneys on account of a debt due from the
drawers to the clients of the attorneys vests the legal title in the payee
named as trustees for the clients, and a suit thereon against the bank is
properly brought in the names of the payees. Ib.
9. A debtor gave his check on a bank for the amount of his indebtedness,
payable to the attornej^s of the creditor, which the bank refused to
pay, alleging an agreement of the debtor to apply his deposits on other
indebtedness. It was held that the bringing of an action by the creditor
against his debtor did not estop him from bringing an action on the
check in the name of his attorneys, the payees, against the bank. Ib.
10. M., who kept an account with theM. andM. Bank of Troy, deposited with
that bank a check given for value, drawn by defendant, payable to the
order of M., and indorsed by him in blank. Said bank credited the
amount of the check in M.'s bank passbook, which was returned to him,
and on the same day it mailed the check to plaintiff, its correspondent
in New York, and its creditor, to be credited on account, aiid it was so
credited. M. stopped payment of the check, and when plaintiff caused
payment to be demanded of the drawee it was refused. Notice of presentation and protest was given to defendant, who subsequently paid
the amount to M. In an action upon the check, held, that upon the
deposit the M. and M. bank became the owner of the check, and as such
could and did give a perfect title to its transferee, and that plaintiff was
entitled to recover. The Metropolitan National Bank of New York v.
Lloyd, 90 N. Y., 580.
11. The implied contract between a bank and its depositors is that it will pay
the deposits when and in such sums as are demanded, the depositor having the election to make the whole payable at one time by demanding
the whole, or in installments by demanding portions; and whenever a
demand is made by presentation of a genuine* check in the hands of a
person entitled to receive the amount thereof for a portion of the amount
on deposit, and payment is refused, a cause of action immediately arises,
and the statute of limitations begins to run as against the installment so
due and payable. Vietsv. The Union National Bank of Troy, 101, N. Y.,
563.
12. While a check drawn by a depositor against a general bank account does
not operate as an assignment of so much of the account, it authorizes
the payee, or one to whom he has indorsed and delivered it, to make a
demand, and a refusal of the bank to pay on presentation gives the
drawer aright of action, in case he has funds in bank to meet the check,
and the refusal was without his authority. Ib.
13. It is not enough to make an equitable assignment of money on deposit in
bank that a check be drawn therefor; but where the money was deposited as the money of the holder of the check, though in the drawer's
name, and that fact is communicated to the bank before any other right
136
REPORT OF THE COMPTROLLER OF THE CURRENCY.
CHECKS. See Certification of checks; Collections—Continued.
has accrued to the fund, the same becomes in equity the property of the
holder of the check, and he may recover it from the bank. Van Allen
v. The American National Bank, 3 Lans., 517.
14. The holder of a check on a bank can not sue the bank for refusal to pay
it on presentation, though the drawer have sufficient on deposit to meet
it. C reveling et al. v. Bloomsbury National Bank, 4,6 N. J., 255.
15. The implied engagement on the part of a banker to pay the checks of his
depositor does not inure to the benefit of the holder of a check so as to
enable him to enforce payment thereon against the bank prior to acceptance, and in the absence of assent by the banker the giving of the check
does not operate as a transfer or assignment of the debt created by the
making of the deposit. First National Bank of Union Mills v. Clark,
IS4 N. Y., 868.
16. Where it is shown to be out of a bank's course of business to receive for
collection checks drawn on it by its depositors, and a check on it drawn
by one of its depositors in favor of another is presented by the latter
and the amount thereof is credited on his pass book as a deposit, and
the check is placed on the file of paid and canceled checks, and afterwards the amount of the check is also entered to his credit and charged
against the drawer on the books of the bank, these facts constitute a
payment of the check, and the amount of it can not be withheld by the
bank on discovering that the check was an unauthorized overdraft and
the drawer was insolvent. City National Bank of Selma v. Burns, 68
Ala., 600.
17. A charge is erroneous and properly refused which affirms, as matter of
law, that if the drawer and payee of a check are customers of the bank
on which it is drawn, the presentation of the check by the payee to the
bank and the noting or entry of it by the bank on his pass book as a
deposit do not operate as a payment of the check, and that if within a
reasonable time the bank ascertains that the check is an unauthorized
overdraft and offers to return it there is no liability to the depositor. Ib.
18. In such case no presumption arises that the bank received the check merely
for collection and in the capacity of agent for the holder; but a presumption of payment of the check does arise and the onus of overcoming that
presumption rests upon the bank, and it can only be removed by evidence
that such was not the intention of the parties, derived from the course
of business with the depositor or from contemporaneous acts or declarations. Ib.
19. If a holder of a check, with full knowledge that the drawer is without
funds in the bank to meet it, and has no just reason to believe that the
check will be honored in the absence of funds, he is wanting in good
faith if he demands and receives payment, especially if it is known to
him that the drawer is insolvent and the bank is ignorant of the insolyeiicj.
Ib.
20. In such case, fraud being imputed to the holder of the check, knowledge
of the want of funds must be clearly traced to him. It can not be
inferred from the relations existing between him and the drawer,
however intimate, unless connected with inculpatory facts or circumstances. Ib.
21. A check, drawn and delivered to the person to whose order it is payable,
does not, without acceptance by the drawee, operate as an assignment
of the sum in his hands for which it is given. It may be revoked by
the drawer at any time before acceptance, and is revoked by his death;
and there being no privity, expressed or implied, between the payee and
the drawee, the former can maintain no action on it against the latter.
National Commercial Bank v. Miller & Co,, 77 Ala., 168.
22. "When a bank receives from a customer a check on another bank for the
special purpose of collection, the title does not pass by the special indorsement for that purpose, nor does the receiving bank owe the amount until
the check is collected. But where the customer has a deposit account
with the bankers, on which he is accustomed to deposit checks payable
to himself, which are entered on his pass book,
and to draw against such
deposits, an indorsement of the words ; i For deposit" on a check so
deposited "is,in the absence of a different understanding, presumptive
of more than a mere agency or authority to collect," it is a request and
direction to deposit the sum to the credit of the customer, and ^ives to
the bankers authority, not only to collect, but to use the check in such
REPORT OF THE COMPTROLLER OF THE CURRENCY.
CHECKS.
137
See Certification of checks; Collections—Continued.
manner as, in their judgment and discretion, having reference to the
conditions and necessities of their business, may make it most available
to their protection, and they may have it certified by the bank on which
it is drawn. Ib.
23. When checks on another bank are handed by a depositor to the receiving
teller of a bank and are by the teller credited on the depositor's pass book,
they are only received for collection, and if not paid on presentation may
be returned and the credit in the pass book canceled. National Gold
Bank and Trust Company v. McDonald, 51 Cat., 64.
24. If a customer of a bank hands the receiving teller a check drawn by another
person upon the same bank, and at the same time hauds him his pass
book, and the teller receives the check and enters a credit for the amount
in the pass book, but no entry is made on the books of the bank, and
nothing else is said or done, and the drawer has no funds in the bank,
the check may be returned to the depositor and the credit in the pass
book canceled. Ib.
25. In such case a finding by the court that the check was received as a cash
deposit is erroneous. Ib.
26. The fact that the cashier of a bank upon which a check is drawn takes the
check and places it upon the "canceling fork" does not constitute such
an acceptance as will prevent him from declining to pay and returning
the same upon learning that the drawer has not sufficient funds, or if
the check is not in proper form. The National Bank of Rockville v. The
Second National Bank of Lafayette, 69 Ind., 4-79.
27. Where the larceny of a bank check is charged, the question of its value is
for the jury, and it is error to instruct them that a check drawn on a
bank where the maker has funds sufficient to meet it is presumptively
of some value. Burrows v. Slate, 87 N. E., 271.
28. The act of Congress of March 3,1869 (Rev. St., sec. 5208), making it unlawful for national banks to certify checks unless the drawer has at the
time an amount of funds on deposit equal to the amount specified in the
check, does not invalidate an oral acceptance of a check, or promise to
pay a check, there being at the time sufficient funds of the drawer in
possession to meet it. First National Bank v. Merchants' National Bank,
7 W. Va., 5U; 1 N. B. C, 915.
29. A check drawn on a national bank was presented for acceptance, whereupon the bank promised to pay it as soon as it received information that
a certain draft left with it for collection was paid. The draft was paid
and the bank informed. Held, That the acceptance was good and binding on the bank. Ib.
30. The refusal of the bank to pay a check upon presentation gives the drawer
a right of action in case he has funds in the bank to meet the check,
and the refusal to pav was without authority. Brooke v. Tradesmen's
National Bank, 22 N.Y. St., 633: 68 Hun., 129.
31. The measure of damages will be the amount of actual loss the party has
sustained, which may fairly and reasonably be considered as naturally
arising from the breach of the contract, according to the usual course of
things. Ib.
32. The ordinary amount of damages in such case would be the amount of
check, interests, and costs. Ib.
33. The immediate entering of a judgment against the drawer, and the seizure
ot his business by the sheriff, in consequence of the failure of the bank to
pay the check, is not an injury for which the bank would be liable. Ib.
34. The term %<protest," as applied to inland bills of exchange, includes only
the steps essential to charge the drawer and indorser. Wood River Bank
v. First National Bank of Omaha, 55 N. W., 289; 36 Neb., 744-.
35. Bank checks in the country are regarded as inland bills of exchange, for
the purpose of presentment and demand and notice of dishonor, and do
not require a formal protest in order to charge the indorsers. Ib.
36. They are also due upon presentation and not entitled to days of grace. Ib.
37. A check operates as an equitable assignment pro tanto from the time it is
drawn and delivered, as between the drawer and the payee or holder.
Hidings v. Hidings Lumber Company etal.,18 S. E., 620; 38 W. Va., 351,
38. A general assignment for the benefit of creditors does not defeat the check
holder, although the check be not presented to the bank for payment
until after such assignment. Ib.
138
REPORT OF THE COMPTROLLER OF THE CURRENCY,
CHECKS. See Certification of checks; Collections—Continued.
39. In the absence of proof to the contrary, it will be presumed that the name
of the payee appearing in a check was written in when the check was
signed. Fifth National 'Bank v. Central National Bank (Stir).), 31
N: Y. s.,541.
40. Evidence of a custom of passing checks payable to a person "or bearer"
by delivery only does not affect the operation of Code, sec. 1761, requiring such checks to be construed as payable to a person "or order."
First National Bank y. Nelson (Ala.), 16 So., 707.
41. Where a person deposits in bank money held by him in a fiduciary capacity,
mixing it with his own moneys, and afterwards draws checks against
his account, such checks will be applied first to the moneys belonging
to the drawer; and in such case the rule that checks will be applied to
the deposits in the order in which the deposits were made does not apply.
Heidelbaeh v. National Park Bank (Sup.), 33 Ar. Y. S., 794.
42. Where a bank, in consequence of an error, fails to pay a depositor's check
when presented, but discovers the error and pays the check five days
later, the depositor can recover only nominal damages against the bank.
Burroughs v. Tradesmen's National Bank (Sup.), 33 NY. $., 864.
43. A tender of bank checks payable in sixty and ninety days is not a tender
of payment. Cady v. Case (Wash.), 39 P., 375.
44. A check, unless objected to, is a sufficient tender. Wright v. Robinson et
ah, 32 NY. S.< 403.
45. The crediting by a bank of the amount of a check to the account of a
depositor indebted to it does not make the bank a bona fide holder for
value of the check. First National Bank v. Nelson (Ala.), 16 So., 707.
46. The indorser of an ordinary check is released from liability thereon where
the indorsee might have presented the check for payment within twentyfour hours, but sent the same by a circuitous route, so that it was not
presented until five days, when payment was refused. 55 N W.. 1064; 37
Nebr., 500, affirmed; First National Bankv. Miller (Nebr.), 62 N. W., 195.
47. The indorsement of a bank draft by the payee to the order of a fictitious
person in good faith, and believing him to be real, is not in law an
indorsement to bearer, such not being the intention of the indorser; and
the indorsement of the name of the fictitious indorsee by a third person
without authority is a forgery, and does not protect the bank in payment
of the draft. Chism v. First National Bank (Term. Sup.), 36 S. W.,387.
48. A bank can not refuse to cash a check, although it knows that the check
was drawn in payment of a bet made in violation of a law on the result
of an election; and the fact that a check was so cashed is not ground on
which the drawer can recover the amount from the bank. McCord v.
California National Bank (Cal.), 31 P., 51.
49. The giving of a check by a bank depositor for the full amount of the
deposit does not operate as an assignment to the holder of the check, so
as to enable him to enforce payment thereon against the bank prior to
its acceptance of the check. First National Bank v. Clark (N. Y. App,),
32 N. E., 38.
50. Title to a check payable to H. B., intended for N. B., can not be obtained
under indorsement by H. B., made fraudulently, though the indorsee
be deceived and pay value. Sioux Valley State Bank v. Drovers'1 National
Bank, 58 III. App., 395.
51. Where a bank discounts a draft in advance of its acceptance, it is not a
bona fide holder for value unless it has funds in its hands which it
releases or fails to withhold from the drawer because of the acceptance.
First National Bank v. Wills Creek Coal Co. (Mich.), 68 N. W., 232.
52. The holder of a check can not sue the bank on which it is drawn until
such check is accepted by the. bank. Commercial National Bank v. First
National Bank (N. C), 24 S. E., 524.
53. A stipulation, stamped on the face of a check, that it will not be paid to a
certain company or its agents, is valid. Ib.
54. A draft was drawn payable to the order of the drawer, and by it indorsed
specially to the defendant corporation, and by defendant indorsed in
blank, and cashed by the plaintiff bank for another corporation, whose
indorsement was written above the indorsement of the defendant. Held,
that the position of the indorsements was not notice to plaintiff that
defendant was an accommodation indorser. Marshall National Bank v.
O'Neal (Tex. Civ. App.), 34 S. W.9 344.
REPORT OF THE COMPTROLLER OF THE CURRENCY.
139
CHECKS. See Certification of checks; Collections—Continued.
55. Where the payee of a check deposited the same with a bank for collection,
and said bank sent it for collection to defendant, and defendant received
from the bank upon which the check was drawn a draft in payment
thereof, defendant is not liable to the payee for the conversion of said
draft, in the absence of a demand therefor, and neither a telegram sent
to defendant by the drawer of the check, instructing defendant to hold
the draft, nor an inquiry by the bank upon which the check was drawn
as to whether defendant could hold the draft, is a sufficient demand on
behalf of said payee. 26 N. Y. S., 1035 affirmed,; Castle v. Corn. Exch.
Bank (N. Y. App.), 42 N E., 518.
56. The holders of a draft before maturity are not bound by the acts of indorsers
after the transfer. Block v. Creditors {La.), 16 So., 267; St. Louis
National Bank v. Block, Ib.
57. The payee of a forged check who indorses it and receives full value therefor guarantees its genuineness; and as to him the indorsee is under no
obligation to discover that it is forged, and may recover back the money
so paid. Birmingham National Bank v. Bradley (Ala.), 15 So., 440.
58. Bank checks are due on presentation, and are not entitled to days of grace.
Wood River Bank v. First National Bank (Nebr.)y 55 N. W., 239.
59. Where the indorsee of a draft accepts the drawee's check in payment,
instead of cash, and neglects to present it for payment or certification
until the next day, and the check is dishonored m consequence of the
delay, and the draft has to be protested for nonpayment, the drawer can
not be held liable. Merchants' National Bank of the City of Neiv York v.
Samuel et ah, 20 Fed. Rep., 66Jh
60. Plaintiff accepted in good faith a check in which the indorsement of the
payee's name was a forgery, and after indorsing the same delivered it to
defendant bank for collection. Defendant collected the check and paid
the money to plaintiff, but on subsequently discovering the forgery paid
back such amount to the bank on which the check was drawn without
notifying plaintiff of the forgery or that it had paid back the sum collected. Held,, that any fund belonging to plaintiff subsequently coining
into possession of defendant could be legally applied to the reimbursement of the latter for the amount advanced on the check, plaintiff being
chargeable with notice of the forgery. Green v. Purcell National Bank
(Indian Ter.), 37 S. W., 50.
61. A regular customer of a bank sent to it a check with an unrestricted
indorsement, and directed it to be placed to his credit. The check was
received and credited and the customer so advised. On the day of
receipt the bank sent the check to its correspondent for collection, paid a
check drawn by the customer from a part of the proceeds of the credit,
and closed its doors as insolvent. Held, that the check was not deposited
for collection, but as cash for immediate use. Williams v. COJJ (Tenn.
Sup.), 37 S. W.,282.
62. Where a bank accepts a check on another bank as cash, giving therefor
a sum of money, a certificate of deposit, and the balance in a credit to
the account of a third person, such transaction creates merely the relation of debtor and creditor between the bank and its customer, and the
latter can not, on the insolvency of the bank, follow up the check, or its
proceeds, as his property. Fnberg v. Cox (Tenn. Sup.), 37 S. W., 283.
63. Where a check drawn on another bank is deposited in an insolvent bank
without any special instructions, and it is not placed to the customer's
credit, and immediately thereafter the receiving bank fails, and the
check goes into the hands of the bank examiner and is afterwards collected, the proceeds are the property of the customer, and not of the
bank. Shoivalter v. Cox (Tenn. Su%).), 37 S. W., 286.
64. The holder of a check can not sue the bank on which it is drawn, unless
it has been accepted by the bank. Pickle v. People's National Bank
(Pickle v. Muse), 12 S. W.t 910; 88 Tenn., 880.
CIRCULATION:
1. The circulating notes of a national banking association are valid though
they do not bear the imprint of the seal of the Treasury. Such imprint
was intended to be simply evidence of the contract, and forms no part
of the contract itself. United States v. Bennett, 17 Blatch., 857.
2. The State can not tax the circulating notes of national banking associations. Home v. Greene, 52 Miss., 452.
140
REPORT OF THE COMPTROLLER OF THE CURRENCY.
CIRCULATION—Continued.
3. The State, until forbidden by Congress, has the power to tax national-bank
bills. Lilly v. The Board of Commissioners of Cumberland County, 69
N. C., 300.
4. The circulating notes of national banks, known as "national currency,"
are not exempt from taxation by a State. Board of Commissioners of
Montgomery County v. Elston, 32 hid., 27; 1 N. B. C., 425.
5. The power of a State to tax the circulation of the national banks depends
upon whether such circulation is for the use of the United States Government or for private profit. Congress can protect the circulation of
those banks by forbidding the States to tax it. Until this is done the
States have a right to tax it. Ruffin v. Board of Commissioners, 69
N. C, 498; 1 N. B. C, 806.
6. The tax of 10 per cent imposed by the act of July 13, 1866 (14 Stat. at
Large, 146, sec. 9), on the circulation of State banks used for currency
and paid out by the national or State banks is not rep-ugnant to the Constitution, either on the ground that the tax is a direct tax, which must
be apportioned among the several States, or that the act impairs franchises granted by the State. Veazie Bank v, Fenno, 8 Wall., 533; 1
N B. C., 22.
7. Congress having undertaken, in the exercise of undisputed constitutional
power, to provide a currency for the whole country, may constitutionally
secure the benefit of it to the people by appropriate legislation, and to
that end may restrain by suitable enactments the circulation of any
notes not issued under its own authority. Ib.
8. The provision of section 3413 of the national-bank act, t h a t ' ' every national
banking association, State bank or banker, or association, shall pay a tax
of 10 per cent on the amount of notes of any town, city, or municipal
corporation paid out by them"' is constitutional, even wnere its effect is
to tax an instrumentality of a State. Merchants' National Bank of Little
Rock v. United States, 101 U. S., 1; 2 N. B. C , 100.
9. The circulating notes of national banking associations are included in the
phrase ''United States currency" when used in a penal statute. State
v. Gasiing, 23 La. Ann., IGuv.
COLLATERAL SECURITIES:
1. A national banking association may take stock of a corporation as collateral security for a loan. Shoemaker v. The National Mechanics' Bank,
2 Abb. U. S., 416; 1 N. B. C, 169.
2. And it may take for such purpose the stock of another national banking
association. National Bank v. Case, 99 U. S., 628.
3. A national banking association may take a pledge of personal chattels as
security for a loan. Piitsburg Locomotive and Car Works v. State
National Bank of Keokuk, 2 Cent. L. J., 692; 1 N. B. C., 315.
4. A national banking association may take as collateral security for a loan a
warehouse receipt for merchandise. Cleveland, Brown & Co. v. Shoeman, 40 Ohio St., 176.
5. Where stockholder borrows money from bank and gives as security certificate of his shares of its stock, he is not entitled to recover when, on
nonpayment of loan, the bank sold his stock and applied proceeds to his
credit. First National Bank of Xenia v. Stewart, 107 U. S., 676.
6. Creditor of insolvent bank has the right to prove and have dividends upon
his entire claim, irrespective of collateral security he may hold. Peoples
v. Remington, 121 N. Y., 328.
7. A pledgee of stock in a private corporation holding the certificates as collateral security, and having had the transfer duly entered on the books
of the corporation, is liable to creditors as the owner thereof on the subsequent insolvency and dissolution of the corporation, and this liability
is governed by the law in force when their debts were created (Rev.
Code, 1867, sec. 1760), although it had been repealed or abrogated before
the stock was transferred to him. National Commercial Bank v.
McDonnell, 92 Ala., 387.
8. It is the duty of a receiver, if a secured debt is so reduced by dividends
that the security will more than pay it, to redeem the security for the
benefit of his trust. West v. Bank of Rutland, 19 Vt., 408; Millers
Estate, 82; Penn. St., 113; Bates v. Paddock, 7 W. Rep., 222.
9. A sale of shares of stock pledged as collateral security, without notice to
the pledgor, is not a conversion, when it appears that the stock was
knocked down to a nominal purchaser without his knowledge or consent,
REPORT OF THE COMPTROLLER OF THE CURRENCY.
141
COLLATERAL SECURITIES—Continued.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
and that the certificates, though changed into his name, were never
delivered to him, but were retained by the pledgee until after a subsequent sale pursuant to notice. Terry v. Birmingham National Bank, 93
Ala., 599.
For an unauthorized sale of stock pledged as collateral security amounting to a conversion, the pledgor is entitled to recover, as damages, the
market value of the stock at the time of the sale, with interest to the
day of the trial; and the jury may, In their discretion, allow the highest
market value at any time between the sale and the trial. Ib.
This suit was brought to recover the value of certain bonds, which, it is
claimed, had been left at the bank as collateral security for money which
the bank might, from time to time, advance the plaintiff. The plaintiff
testified that on July 1, 1888, he went to the bank to obtain a loan upon
this security; that the bonds could not be found, but that he received
the money. The defendant requested the court to instruct the jury that
."if the bonds were not found by the bank when the note of July 1 was
offered and were not afterwards found, the jury are not authorized to
find that they were taken and held as collateral security for the note of
July 1." Held, that this instruction was properly refused. Dearborn v.
The Union National Bank of Brunswick, 01 Me., 369.
A bank is bound to take only ordinary care of United States bonds pledged
to it as collateral security for the payment of a, note discounted by the
bank. Jenkins v. National Village Bank of Bowdoinham, 58 Me., 275.
A writing, executed by the cashier, acknowledging the receipts by the
bank, ' • to be returned to him on the payment of his note in four months,
dated May 9, 1865,"' is not a contract which increases the common-law
liability of the bank, even if the cashier had the authority to do so. Ib,
Securities taken by sureties for their indemnity inure to the benefit of the
creditor. Thornton v. National Exchange Bank, 71 Mo., 221; 3 N. B. C ,
5 to.
Creditors holding collateral security are liable for negligence in realizing
thereon. National Bank of Jefferson v. Bnilin et al., 64 Tex., 571.
In an action by a pledgee upon the debt secured by the pledge he is not
required to account for nonnegotiable securities pledged to him by
defendant, in the absence of any allegation or proof that he has lost or
misappropriated them. Marberry v. Farmers and Mechanics' National
Bank, 26 S. W., 215.
The cashier of a bank has no authority to assign collaterals belonging to
himself, which were given to secure a loan to another person for the
cashier's benefit. Merchants' National Bank v. Demere, 19 S. E., 38.
One who borrows money from a bank for the cashier thereof, on collaterals
belonging to the cashier, is not entitled to credit for amount of such
collaterals after they have been wrongfully withdrawn and converted
by the cashier. Ib.
When shares of stock in a private corporation are pledged as collateral
security for a debt, and default is made in the payment of the debt at
maturity, the pledgee may file a bill in equity to foreclose the pledge by
a sale under the order of the court, or he may exercise the implied power
to sell without resorting to judicial proceedings; but if he elects to pursue the latter remedy, the sale must be at public auction, in the absence
of a special agreement, and reasonable notice must be given to the pledgor;
and if he sells privately, without notice, becoming himself the purchaser,
the relation between him and the pledgor is not thereby dissolved.
Sharp v. National Bank of Birmingham, 87 Ala., 644.
If the pledgor, when notified of the irregular or unauthorized sale, accepts
its benefits, giving his note for the balance of his debt remaining unpaid,
this is presumptively a ratification of the sale, and he can not afterwards
impeach it; but if he acted in ignorance of the fact that the pledgee
himself was the purchaser, and did not intend to make an absolute and
unconditional ratification without regard to the facts attending the sale,
he may disaffirm it within a reasonable time after discovering that the
pledgee was the purchaser. Ib.
If a part owner of certificates of stock pledges them, with the consent of
the other owner, as collateral security for his own debt, and they are
converted by the pledgee, the pledgor is entitled to recover as if he were
the sole^owner, fche pledgee being estopped from denying his absolute
ownership. Ib.
142
REPORT OF THE COMPTROLLER OF THE CURRENCY.
COLLATERAL SECURITIES—Continued.
•
23. Rev. St,, sec. 5242, which declares all deposits, all transfers of deposits,
and all payments of money made by a national bank after an act of
insolvency, or in contemplation thereof, to be null and void, does not
render illegal the retention of a balance standing to the credit of an
insolvent national bank with a correspondent on the day of its failure
which has been pledged for the purpose of securing loans made by the
correspondent to the insolvent bank. Bell v. Hanover National Bank,
57 Fed. Rep., 821.
23. Where a deposit with a correspondent has, long prior to the commission
of the act of insolvency by a national bank, been pledged as collateral to
secure the payment of loans made to the insolvent by its correspondent,
neither the subsequent insolvency of the bank, nor the appointment of
the receiver, destroys the lien of the correspondent, or its rights to dispose of the pledge to satisfy the debt secured. Ib.
24. Creditors of an insolvent national bank can not be required, in proving
their claims, to allow credit for any collections made after the date of
the declared insolvency from collateral securities held by them. Chemical National Bank v. Armstrong, 59 Fed. Rep,, 872.
25. Rev. St. U. S., sec. 5242, which prohibits all transfers by any national
banking association made after the commission of an act of insolvency,
or in contemplation thereof, with a view to the preference of one creditor over another, is directed to a preference, not to the giving of security when a debt is created; and if the transaction be free from fraud in
fact, and is intended merely to adequately protect a loan made at the
time, the creditor can retain property transferred to secure such loan
until the debt is paid, though the debtor is insolvent, and the creditor
has reason at the time to believe that to be the fact. Armstrong v.
Chemical National Bank, 41 Fed. Rep., 284.
26. The plaintiff, a judgment creditor of the defendant, had the steamboat
Kinta seized. The defendant had pledged it to the Third National
Bank of New York, but remained in possession for his own account,
and never completed the pledge by an actual delivery to the pledgee.
The act of pledge was drawn up in the common-law form, and was
intended to operate as a chattel mortgage. It contains,
as to the form
of the act, the essentials of an act of pledge. Citizens'1 Bank of Louisiana v. Janin {Third National Bank of New York, Intervener), 15 So.,
471, 46 La. Ann.
27. The Third National Bank, as pledgee, claimed the proceeds of the sale. The
property, when it was seized, was in the possession of the subtenant, It
is not proved that the plaintiff colluded with the defendant and thereby
gained an improper advantage. Pledge is not made perfect by the consent of the parties. It requires absolute possession. The alleged pledgee
never was in possession during the tenure of the defendant. Ib.
28. It (the Third National) could not obtain possession through the agency of
the sublessee, who held possession for his lessor, the defendant. Ib.
29. A pledge can not be made perfect by the sublessee's delivery of possession
without the consent of his lessor. Ib.
30. The obligation of the lessor to account for the property, and whatever revenues were realized therefrom, binding between him and his creditor, the
Third National Bank—the property not having been delivered—did not
affect his other creditors, who could seize the property in his possession,
or in that of his sublessee, who held possession for his lessor. Ib.
31. In an action by a bank on a promissory note, it appeared that the defendant delivered as security the promissory note of S., to which was annexed
as collateral secarity a certificate of corporate stock in the name of S.;
that defendant, with the consent of S., agreed that the bank might sell
the stock and take in jJlace of the note of S. the note of the purchaser,
secured by the same stock reissued in the name of the purchaser; and
that the bank sold the stock and took in payment notes secured by the
stock, payable to itself, with which notes defendant had no connection,
and over which he had no control. Held, that as the bank had converted
the stock to its own use, defendant's note must be credited with the
value of the stock at the time of conversion. Pauly v. Wilson, 57 Fed.
Rep.. 548.
32. Plaintiff had in his possession collateral security for a debt due from a
third party, who also owed the defendant. Held, that an agreement by
the parties in interest that any sum received on such collateral security
REPORT OF THK COMPTROLLER OF THE CURRENCY.
143
COLLATERAL SECURITIES—Continued.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
in addition to the indebtedness first secured thereby should, be applied
on the debt due from defendant operated as an equitable assignment to
defendant of such surplus, if any there should be. Second National
Bank v. Sproat, 56 N. W., 254.
A clearing-house committee, created by the agreement of several banks,
which receives deposits from such banks of securities at a fixed ratio on
their capital stock, and issues certificates therefor to be used in paying
balances, becomes an owner, for value, of the securities. Philler v. "Patterson (Pa. Sup.), S2 A., 26.
The fact that a transfer of a bill of lading to a bank as security was, after
its doors were closed for the day, for the purpose of deposit and check
does not affect its right as against the vendor who stops the goods in
transit, though, before its doors are again opened, it learns of the insolvency of the vendee. First National Bank v. Schmidt (Colo. Anp.), 40
P., 479.
As against the right of a vendor to stop goods in transitu, a bank to which
the vendee has transferred the bill of lading as security is a holder for
value, even though the transfer was for a preexisting debt, and not for
a loan made on the promise of such transfer. Ib.
Where the debt for which a note was pledged is paid pending an action on
the note by the pledgee, the latter may continue the action, subject to
all equitable defenses, holding the proceeds as trustee for the pledger.
First National Bank v. Mann (Tenn.), 27 S. W., 1015.
The transferee of a note before maturity as collateral security for a loan
made in good faith is a bona fide holder to the extent of the loan. Pearce
& Miller Engineering Company v. Brouer (City Ct. N. F.). 31 N. Y. S.,
195.
Where the holder of an indorsed note has exchanged collateral, held to
secure such note, without the indorsers consent, the measure of the
indorsees damages is the difference between the value of the collateral
originally held and that for which it is exchanged, at the time of the
exchange. Nelson v. First National Bank of Killingly, 69 Fed. Rep., 798.
The fact that a creditor's claim is secured by mortgage or otherwise does
not affect his right to prove for the full amount of the claim, nor does
the fact that he has realized part thereof out of the collateral since the
date of the receivership; but in the latter case he is entitled to dividends
only until the balance of his debt is satisfied. New York Security <Sc
Trust Co. et al. v. Lombard Inv. Co. of Kans. et al., 73 Fed,. Rep., 537.
The acceptance by a payee, as collateral of the note of a third party secured
by mortgage payable after maturity of the original note, does not establish an extension of the time of payment of the original note to the date
when the collateral note becomes payable, in the absence of evidence of
an express agreement therefor. Fisher v. Denver National Bank (Colo.
Sup.), 45 P., 440.
One holding collaterals as security for a debt due at a certain time, and
authorized by his contract to sell on maturity of the debt, need not
demand payment before selling. Franklin National Bank v. Neiveombe
(Sup.), 37 N. Y.S.,271.
One having collaterals as security for a note, which, by the terms of his
contract he was at any time after maturity of the note at liberty to sell
at private or public sale, with or without notice, can not be held liable
by reason of selling them when the market was in poor condition, they
having been sold two weeks after maturity of the note, at public sale,
after notice. Franklin National Bank v. Newcombe (Sup.), 37 N. Y. S., 271.
A person having notes in his possession
as collateral security for a debt is
bound, so far as the general owTner of the notes is concerned, to use reasonable diligence to protect the security so held, and see that it is not
outlawed. Northwestern National Bank v. J. Thompson & Sons Manufg
Co. {C. C. A.), 71 F., 113.
Where a debtor assigns to different persons assets as collateral security for
their claims, after such claims are satisfied, from whatever source, if
any balance from such assets remain, they are bound to return such
balance to the debtor or to his representative. Whittaker v. Amivell,
National Bank {N. J. C!i.)f*29 A., 203.
The maker of a note held by plaintiff gave to one J., who was accommodation indorser thereof, a second note, indorsed by defendant, to secure
J. against loss by reason of his indorsement, and J. transferred the col-
144
REPORT OF THE COMPTROLLER OF THE CURRENCY.
COLLATERAL SECURITIES—Continued.
lateral note to plaintiff. Held, that plaintiff eoulci sue on the collateral
note, though J. had paid nothing on account of his liability as indorser;
a creditor being entitled to all collaterals given \>y the principal debtor
to his sureties. Merchants & Manufacturers' National Bank v. Cummings (Sup.), 29 N. Y. S., 782.
46. A judgment creditor realized the amount of his demand from collateral
security. The debtor notified him that the amount due was disputed,
and required him not to apply the collateral to its payment until the
amount was determined. The plaintiff, notwithstanding, applied the
funds and satisfied the judgment of record. Held, that the defendant
was entitled to have the entry of satisfaction struek off and be admitted
to defend. Guthrie v. Reid, 107Penn, St., 251; 3N. B. C , 751.
COLLECTIONS: See Checks; Certified checks.
1. Where the holder of a bill of exchange, payable at a distant place, deposits
it with a local bank for collection, he thereby assents to the course of
business of banks to collect through correspondents, and the correspondent of the local bank to which the bill is forwarded becomes his
agent and is responsible to him directly for negligence in failing to
present the bill for payment within the proper time. Guelich v. The
National State Bank of Burlington, 56 Iowa, 434.
2. The payee of a check deposited it for collection with bank A on the same
day it was made. The bank presented it for payment the next day
shortly before 11 o'clock, and the drawee's check on bank B, only a few
blocks distant, was taken in payment. The drawee became a bankrupt
at I o'clock. Several checks given after this, one by the drawee on bank
B, were paid before 1 o'clock. Before 3 o'clock bank A presented the
check in question for payment, which was refused; whereupon it immediately went to the drawee, and, after recovering the original check,
protested it. Held, that the drawer of the check was not liable thereon.
Anderson v. Gill, 29 A., 527.
3. Where the payee of a check makes a demand on the drawee and receives
something other than cash in payment, he can not, by making a second
demand, though within the time allowed for presenting a check, undo
the first, and render the drawer liable on the bankruptcy of the
drawee. Ib.
4. Two bills of exchange, belonging to the plaintiff at Chicago, were indorsed
lor collection to a bank at Atchison, ~Kans., and by said Atchison bank
to a bank at Kansas City, Mo., and by the latter to defendant, a bank at
Hutchinson, Kans. Held, that they remain the property of plaintiff, all
the indorsements being restrictive. First National Bank of Chicago v.
Reno County Bank, 1 McCrary, 491.
5. An indorsement on a bill of exchange directing the drawee to pay to
another "on account of " the indorser, or "for collection,"is a restrictive
indorsement, the effect of which is to restrict the further negotiability
of the bill, and to give notice that the indorser does not thereby give
titie to the bill or to its proceeds when collected. Ib.
6. Although there may be no privity between the owner of the bill and the
last indorsee, yet, if the latter collects the bill, he is bound to pay the proceeds to the owner, and the latter may recover in assumpsit on the
ground that the defendant has property in his possession which belongs
to the plaintiff and refuses to pay the same over. Ib,
7. A bank receiving an indorsed note before maturity for collection is required
to take the proper steps to fix the liability of the indorser. West v. St.
Paul National Bank, 56 N, W., 54; 54 Minn., 466.
8. In an action by the owner of the note for neglect of that duty, resulting
in the discharge of the indorser, the question of the solvency of the
maker is material as affecting the measure of damages. Ib.
9. Insolvency may be shown prima facie by proof of general reputation.
Proof of insolvency within a reasonable time after the maturity of the
note held admissible. Ib.
10. A bank receiving for collection, from a correspondent, checks drawn upon
it by a customer, with instructions to protest in case of nonpayment, is
required, in case payment is refused for want of funds, to give notice to
the bank from which they were received not later than the next day
after dishonor; and when they are held for two days in order to enable
the drawer to provide funds for payment thereof a jury will be warranted in finding that the bank intended to accept them and become
REPORT OF THE COMPTROLLER OF THE CURRENCY.
145
COLLECTIONS. See Checks; Certified checks—Continued.
liable thereon. Wood River Bank v. First National Bank of Omaha,
55 N. W., 239.
11. The indorsement of a draft to a bank " for collection," accompanied by a
credit of the amount to the indorser's account, does not transfer title to
the bank, and correspondent of the bank who collects draft for it is
responsible therefor to indorser. Tyson v. Western National Bank of
Baltimore, 26 Atl. Rep., 520.
12. The Winters National Bank sent to the Fidelity Bank a note of $2,000 for
collection and indorsed " Pay Fidelity National Bank, Cincinnati, Ohio,
or order, for collection for account of the Winters National Bank, Dayton, Ohio, J. C. Reber, cashier." The Fidelity Bank forwarded it to
the Drovers and Mechanics' Bank, which received payment thereof at
maturity. Before the Fidelity Bank received notice and remittance of
the .$2,000 it became insolvent and went into the hands of a receiver,
who took the $2,000 and credited the Winters Bank therewith. Held,
that the Fidelity Bank did not own the note, and the Winters Bank was
entitled to the full $2,000 as against the Fidelity Bank's receiver. In re
Armstrong, 33 Fed. Rep., 405.
13. Plaintiff sent to F. bank a draft indorsed " For collection,' accompanied
with instructions to "collect and credit proceeds." F. bank sent the
draft to the defendant and the latter collected it, received the proceeds,
and credited them to the F. bank, in accordance with the usual course
of business between the F. bank and the defendant, and notified the F.
bank of the credit. The F. bank suspended business before crediting
plaintiff with the proceeds, but after they had been collected and after
it had received notice of the credit. After the suspension of the F*. bank
the receiver appointed over its affairs credited plaintiff with the proceeds of the draft on the books of the bank. Held, that the indorsement
" F o r collection " was notice to the defendant of the qualified title to the
F. bank, and defendant could not acquire any better title to the draft or
the proceeds than that of the F. bank, and could not, as against the
plaintiff, apply the proceeds to an account owing the defendant from
the F. bank, and that the defendant could only defeat an action brought
to recover the proceeds in its hands by showing that the draft or its proceeds belonged to the F. bank. First National Bank of Circleville v.
Bank of Monroe, 33 Fed. Rep., 408.
14. Held, further, that the relation of principal and agent continue between
the plaintiff and the F. bank so long as the latter did not assume the
relation of primary debtor to the plaintiff for the proceeds of the draft;
that the plaintiff not having been credited with the proceeds by the F.
bank, the relation between them remained that of principal and agent,
and not debtor and creditor; and that the F. bank, not having credited
the plaintiff with the proceeds while it was a going concern, could not,
by doing so subsequently, change the existing relation. Ib.
15. Reid, in an action brought by the plaintiff against the defendant to recover
the proceeds of the draft, the defendant, not having remitted the proceeds to the F. bank, was liable to the plaintiff for the amount. Ib.
16. Plaintiffs sent to a certain bank a bill of exchange indorsed to said bank
for collection. At the time the bank received the bill of exchange it was
insolvent to the knowledge of the managing officer, and on that day, or
following morning, it failed. Prior to the failure it indorsed the bill of
exchange to defendant bank, which collected it and kept the proceeds,
crediting the insolvent bank, which was indebted to it, with the amount
thereof. Held, that the first bank acquired no title because of its fraud
in not disclosing its insolvency, and defendant had no better title, as
plaintiffs' indorsement showed that the bank was merely plaintiffs' agent
to collect the proceeds. Peck el al. v First National Bank, 4$ Fed. Rep., 356.
17. Plaintiff sent to defendant's bank paper indorsed "For collection and
immediate return " to plaintiff, and the paper was collected and the proceeds mingled with other moneys of the bank, instead of forwarded to
plaintiff. The bill contained an uncontroverted allegation that defendant's bank, at all times subsequent to the collection and at the time of
defendant's appointment as receiver, had on hand cash to a greater
amount than that due plaintiff. The bill asked to have the balance, due
plaintiff paid in full, on the ground that the bank by receiving the paper
for collection and immediate return became a trustee, and that either its
CUR OS
10
146
REPORT OF THE COMPTROLLER OF THE CURRENCY.
COLLECTIONS. See Checks; Certified checks—Continued.
entire property or the money in its vaults became impressed with the
trust Held, that if the mingling of the funds was a breach of trust it
was a conversion, and plaintiif became a simple contract creditor, with
no preference at law. Philadelphia National Bank v. Dowd, 38 Fed.
Rep., 172.
18. It was immaterial whether or not the bank stood in a fiduciary capacity to
plaintiff, as the facts stated in the bill showed that the money collected
could not be traced into any specific investment or fund, but had been
indistinguishably mingled with the general assets. Ib.
19. By agreement and custom the Fidelity Bank received drafts from its correspondent bank at E., and credited them to it as cash, with the understanding that any draft which was unpaid should be charged back to
the correspondent. The latter forwarded drafts, which were credited
to it but were not collected before the Fidelity Bank failed. The drafts
were paid after the appointment of a receiver and the moneys actually
came into his hands. The drafts were indorsed payable to the Fidelity
Bank "for collection" for the bank at E. Held, that as the drafts were,
when received, credited as cash to the bank at E., which had the right at
once to draw against them, the indorsement for collection did not affect
the result, and the bank had only the rights of a general creditor. First
National Bank of Elkhart y. Armstong, 39 Fed. Rep., 231.
20. A draft sent to a bank specially indorsed for collection was paid by the
drawee by check, which the bank collected through the clearing house.
A memorandum was placed with the bank's cash, to indicate that the
proceeds of the draft was the property of the sender. The bank was
closed the next morning, and the receiver credited such proceeds to the
sender of th^ draft on the books of the bank. Held, that the fund was
not so mingled that it could not be traced and identified, and that the
sender could recover the same. First National Bank of Montgomery v.
Armstrong, 36 Fed. Rejo., 59.
21. Checks and drafts sent from one bank to another were indorsed "for collection," and credited "subject to payment," according to the dealings
between the banks. Part of them were paid to the receiver of the latter
bank after its failure, and the balance were credited to it by the payors.
Held, that the amount paid the receiver should be accounted for as a
trust fund but the balance as a general debt. First National Bank of
Wellston v. Armstrong, 4-2 Fed. Rep., 193.
22. The claimant bank sent to the F. bank a sight draft, drawn on a third party,
indorsed " p a y " F. bank, or order, "for collection for " claimant bank.
It was the practice for the F. bank in its dealings with claimant to credit
the latter on the day of receipt for all drafts, checks, etc., sent for collection that were payable at sight or on demand, and the balance thus
created was subject to be drawn on; bat if the paper was not paid it was
charged back to claimant. On receipt of the draft the F. bank notified
claimant that it has been credited, "subject to payment;" but the credit
was not drawn against nor were advances made on the faith of it.
Claimant merely kept a memorandum of its transmission for collection.
The F. bank sent the draft to its reserve agent, indorsed, for collection,
and the amount of it was counted as a part of the F. bank's reserve fund,
though this fact was not known to claimant. Held, that the indorsement being restrictive, the F. bank acquired no title to it, and that upon
the insolvency of the F. bank, before notification of the collection of
the draft, the claimant was entitled to the proceeds of it in the hands
of the collecting agent. Fifth National Bank v. Armstrong, Farmers'
National Bank et al., Interpleaders, 40 Fed. Rep., jG.
23. A bank which had received a draft for collection sent it to its correspondent
bank at the residence of the drawee, and the draft was paid to such correspondent. There were no mutual accounts between the two banks,
but it was the custom of the correspondent to remit the proceeds of collections at stated periods. Held, that until this remittance was made,
or the principal bank had given the original owner of the draft credit
for the avails, the original owner of the draft, as the owner of the proceeds thereof, was entitled to recover them from the correspondent bank.
National .Exchange Bank of Dallas v. BeaU 50 Fed. Rep., 355.
24. Though the correspondent was the agent of the first bank, and payment to
it was to that extent a payment to the principal, yet until the proceeds
were actually remitted to such principal and mingled with its general
REPORT OF THE COMPTROLLER OF THE CURRENCY.
147
COLLECTIONS. See Checks; Certified checks—Continued.
funds, or were so credited, the owner of the draft had the option to decline
to consider it his debtor and to claim the proceeds in the hands of the
agent. Ib.
25. Where the principal fails, and a receiver is appointed, he takes the proceeds
of the draft, when remitted to him, subject to the same right of reclamation by the owner that the latter had as against the agent. Ib.
26. Where, in such a case, there are mutual accounts between the two banks,
the right of the agent to set off the amount of the collection against the
principal's indebtedness to it can not be adjudicated in a suit in equity
between the owner of the draft and the principal without making such
agent a party. Ib.
27. Checks deposited in a bank by its customers for collection do not at once
become the property of the bank; the bank continues to be the agent of
the customer until the collection of the check, which remains, in the
meantime, the property of the depositor. Balbach et al. v. Frelinghuysen,
Receiver, etc., 15 Fed. Rep., 675.
28. The rule is different where such checks are deposited to make good an
overdrawn account of the customer or when the amount deposited by
check is immediately drawn against; in that case the bank may hold
the deposit until the overdraft is made good from other sources. Ib.
29. The indorsement by the customer of a check, deposited for collection, is
only intended to put the paper in such shape that the bank may collect
it, and not to thereby pass the title to the bank. Ib.
30. The practice which has grown up among banks to credit deposits of checks
at once to the account of the depositor, and to allow him to draw against
them before the collection, is a mere gratuitous privilege, which does
not grow into a binding legal usage. Ib.
31. A, who for several years had kept an account with the Marine National
Bank of New York, on May 5, 1834, deposited a sight draft, dated that
day, and drawn by him on a corporation of Boston, Mass., which was
indebted to him in the amount of the draft. The bank was insolvent at
the time, but the draft was forwarded to its collection agent at Boston,
and paid May 7, after the bank had failed and closed its doors. On several previous occasions A had deposited similar drafts, and been credited therewith as cash, and they were treated by him as cash deposits.
On the occasion in question the bank credited plaintiff with the draft as
a cash item. Held, that the draft was not the property of A when paid
by the drawee, and that he was not entitled to recover the amount
thereof from the receiver. St. Louis & S. F. Ry. Co. v. Johnston,
Receiver, etc., 27 Fed. Rep., 2J+3.
32. When a sight bill is credited by a bank to a customer as a cash item, with
the latter's assent, the transaction is equivalent to a discount of the bill
by the bank. Ib.
33. Where a check of a depositor is accepted by a correspondent bank in payment of a draft for collection, which charges the same to the drawee
and credits the drawer without separating the amount from its general
fund, it holds the money as agent for the drawer, who, after insolvency,
becomes a mere general creditor, notwithstanding the State constitution provides that '' depositors who have not stipulated for interest shall
for such deposits be entitled in case of insolvency to preference of payment over all other creditors."' Anheuser-Busch Brewing Association
vt Clayton, 56 Fed. Rep., 759.
34. A bank in Ohio contracted with a bank in Pennsylvania to collect for it at
par, at all points west of Pennsylvania, and remit the 1st, 11th, and 21st
of each month. In executing this agreement the Pennsylvania bank
stamped upon the paper forwarded for collection, with a stamp prepared
for it by the Ohio bank, an indorsement "Pay to'' the Ohio bank, "or
order, for collection f o r ' the Pennsylvania bank. The Ohio bank
failed, having in its hands or in the hands of other banks to which it
had been sent for collection proceeds of paper sent it by the Pennsylvania bank for collection. A receiver being appointed, the Pennsylvania
bank brought this action to recover such proceeds. Held, first, that
the relation between the banks as to nncollected paper was that of
principal and agent, and that the mere fact that the subagent of the
Ohio bank had collected the money due on such paper was not a commingling of those collections with the general funds of the Ohio bank,
and did not operate to relieve them from the trust obligation created by
148
REPORT OF THE COMPTROLLER OF THE CURRENCY.
COLLECTIONS. See Checks; Certified checks—Continued.
the agency, or create any difficulty in specially tracing them. Commercial Bank of Pennsylvania v. Armstrong, 148 U. S., SO.
35. Second, that if the Ohio bank was indebted to its subagent, and the collections when made were entered in their books as a credit to such indebtedness, they were thereby reduced to possession and passed into the general funds of the Ohio bank. Ib.
36. Third, that by the terms of the agreement the relation of debtor and creditor was created when the collections were fully made, the funds being
on general deposit with the Ohio bank, with the right in that bank to
their use until the time of remittance should arrive. Ib.
37. A bank received two drafts indorsed to it for collection, on account of the
drawers, against two of its depositors. After acceptance by the latter
the bank charged to each depositor's account the amount of the draft
accepted by him. Before remitting to the drawers the bank assigned,
having on "hand cash sufficient to pay such drafts. Held, that the
drawers were not entitled to a preference as to the funds on hands at
the time the bank failed, where the assignee holds nothing which he or
such drawers can identify with the drafts or trace as a payment of them.
Freiberg v. Stoddart, 28 Atl. Rep,, 1111.
38. A national bank collected a note for plaintiff by accepting a draft for the
amount on another party, which it forwarded to its correspondent for
collection, and at the same time sent plaintiff a draft on the same correspondent as a remittance of the proceeds of his note. The correspondent received the money on the draft, sent it for collection, but before
plaintiff's draft was paid by the correspondent the bank failed. Held,
that the bank was only agent for plaintiff, and that the money derived
from his note was a trust fund, which did not become a part of the
bank's assets. Foster v. Rincker, 35 P., 470.
39. B forwarded to bank a draft for collection. On July 22, 1893, bank made
collection, and the same day forwarded its draft on New York. On
July 26 bank failed, and a receiver was appointed. Draft was presented
after the failure and payment refused. B brought suit to secure a preference in payment. Held, that when a draft is forwarded to a bank for
collection, in the absence of instructions to the contrary, it is with the
understanding that upon collection the title to the proceeds shall vest
in the collecting bank, and that said bank shall remit to its correspondent the equivalent of such proceeds by the system of exchanges established by the universal custom among banks, and when this has been
done no preference can arise. Bowman et al. v. Clark et al, 38 P., 211.
40. Where one deposits a draft with a national bank and the bank sends it to
an agent for collection, who collects it, and the bank fails before receiving the avails, having been insolvent at the time of the deposit, the
depositor may rescind the transaction for fraud and recover the avails
from the agent. Craigie v. Smith, 14 Abb. N. C, 4-09; 3 N. B. C, 679.
41. Plaintiff sent a draft to a bank for collection. The bank collected it and
then passed into the hands of a receiver without remitting. The bank
*
had previously made similar collections for plaintiff, the proceeds of
which were always remitted to him promptly and never credited to him
as a deposit. Held, that plaintiff was entitled to be paid the entire proceeds of the draft out of the bank assets in the receiver's hands, since
. the bank was his trustee and not his debtor. Hunt v. Townsend, 26
S. W.,310.
42. Under an agreement between plaintiff bank and the H. bank that the
latter should collect notes and checks forwarded it by plaintiff for a
commission and remit daily, the relation of principal and agent as to
any paper ceased on collection, and the relation of creditor and debtor
as to cash immediately arose. First National Bank of Richmond v.
Davis, 19 S. E., 280.
43. On failure of the H. bank, it being shown that its cashier had no knowledge of its insolvency till the failure, it is not chargeable as for a conversion of funds of plaintiff which it has mingled with its own funds,
since, in the absence of such knowledge on the cashier's part, the contract, with its necessary implication as to the disposition to be made of
plaintiff's money on collection, remained in force till the failure. Ib.
4A. Where plaintiff and defendant banks for several years had acted as agents
for each other in the collection of checks, notes, and drafts, and where
plaintiff sent defendant a note "for collection and credit" which on
REPORT OF THE COMPTROLLER OF THE CURRENCY.
149
COLLECTIONS. See Checks; Certified checks—Continued.
maturity was paid by a check and credit was immediately given on the
books, but defendant failed and the check passed into the hands of a
receiver. Held, that in view of the course of dealing the two banks
stood in the relation of debtor and creditor with respect to the amount
of the check, and it became part of the assets of the bank. Franklin
County National Bank v. Beal, 49 Fed. Rep., 606.
45. Whether the title to a check deposited with a bank passes to the bank
before collection, so as to immediately create the relation of debtor and
creditor between it and the depositor is a question of fact, depending
upon the circumstances and course of dealing in each particular case.
City of Somerville v. Beal, 49 Fed. Rep., 790.
46. Where a bank, in accordance with its custom, credited checks deposited by
a customer at the close of each day's business, retaining the right to
subsequently charge off the same if'returned unpaid from the clearing
house, and the bank became insolvent on a succeeding day. title in the
checks passed to the bank so as to create the relation of debtor and
creditor. Ib.
47. Where a national bank collected all papers sent to it by complainant under
an arrangement which constituted the bank the agent of complainant,
the latter can recover, on the ground of a trust, from a receiver of the
bank such portion only of the proceeds of its paper sent to the bank as
it shows has passed into the receiver's hands, either in its original or
some substituted form. Commercial National Bank v. Armstrong, 39
Fed. Rep., 684.
48. Where checks and drafts sent from one bank to another indorsed "For collection" and credited " subject to payment" according to the dealings
between the banks, and part of them were paid to the receiver of the
latter bank after its failure and the balance were credited to it by the
payors, the amount paid the receiver should be accounted for as a trust
fund, but the balance as a general debt. First National Bank v. Armstrong, 42 Fed. Rep., 198.
49. Negotiable paper with restrictive indorsement credited by agent on date
of receipt "subject to payment," although account is subject to be
drawn upon, title is not transferred, and upon the insolvency of the
agent before receiving notice of the collection of the item, the owner is
entitled to the proceeds in the hands of the collecting agent. Fifth
National Ba.nk v. Armstrong, 40 Fed. Rep., 46.
50. The drawers of a draft deposited with a bank for collection, and by it forwarded to a correspondent bank, are entitled to the amount as against
the receiver of the forwarding bank, which was insolvent, and known
to be so by its officers when it received the draft, and suspended payment before the proceeds were withdrawn from the collecting bank.
Importers and Traders' National Bank v. Peters et al, 123 N Y., 272.
51. When a bank which has received a draft for collection sends it to another
bank for that purpose, and on being advised that the latter bank has
collected the draft credits the depositor and then becomes insolvent
without having received the money from the collecting bank, the depositor remains the owner of the draft, and is entitled to its proceeds from
the collecting bank against the receiver and the creditors of the insolvent bank. Armstrong v. National Bank of Boyertown, 11 S, W.9 4H'>
Manufacturers' National Bank v. Continental Bank et al., 20 N. W., 193.
52. A bank which collects a draft sent to it by another bank for that purpose,
with directions to remit the proceeds to a third bank for the owner's
account, does not thereby become a trustee, so that the fund can be
followed into the hands of a receiver, although it had become mixed
with the other cash of the bank before his appointment; especially when
it appears that the business was carried on, and money paid out, for
several days after the collection was probably made. Merchants and
Farmers' Bank v. Austin et al., 48 Fed. Rep., 25.
53. Where bank sends paper to another bank for collection and credit on general account, the custom being to enter credit only when paper is collected, the relation being that of principal and agent until collection
and receipt of money by the second bank, and if latter sends to another
bank, which collects, but does not remit until latter bank has failed, the
former can recover the proceeds from the receiver thereof. Beal v.
National Exchange Bank of Dallas, 55 Fed. Rep., 894.
150
REPORT OF THE COMPTROLLER OF THE CURRENCY.
COLLECTIONS. See Checks; Certified checks—Continued.
54. A bank which, upon a draft being deposited with it for collection, refuses
to accept it as a deposit, but advances a small amount to the payee on
her check, and charges her therewith on its books as an overdraft, and
sends it for collection to its correspondent, and, upon receiving notice
of its collection, credits the payee's account therewith, is the payee's
agent, and the proceeds constitute a trust fund, which the payee is
entitled to recover from the receiver. Henderson v. O'Connor (CaL),
30 P., 786.
55. Where a bank received a draft as agent for plaintiff, of which fact the
indorsement was a notice to other banks, it did not thereby become
indebted to plaintiff for the amount thereof till after collection and possession of the proceeds, either actually or by settlement with the parties;
and defendant bank, to which the draft had been sent by the first bank
for collection, could not escape liability to plaintiff by making payment
to the first bank, or giving the credit to it on the account between the
banks after the first bank had stopped payment. Old National Bank v.
German American National Bank, 15 S. Ct., 221.
50. A bank which has received a check for collection is not made liable to the
drawee for its amount by the fact that, upon protest of the check for nonpayment, it has accepted from the maker thereof a check upon another
bank, payable to tke order of its cashier, the drawee of the first check
being absent from the city, which latter check is also protested for nonpayment. Citizens' Bank v. Houston (Ky.), 32 S. W., 307.
57. Where a draft upon a nonresident drawee is deposited for collection with a
local bank, and by it transmitted to another bank for collection, according to custom, the local bank is not responsible for loss occasioned by
the default of the latter bank, since such latter bank is the agent of the
depositor. 58 III. App., 61, affirmed; Waterloo Milling Co. v. Kuenster
(III. Sup.), 41 N. E., 006.
53. Where a bank, on collecting drafts for another bank, transmits bank drafts
to such bank, which credits the depositor with the amount of such drafts,
and then collects only part of the drafts on account of the failure of the
other bank, it has a right of action against the depositor for the deficit. 1b.
59. Where a check properly indorsed was sent by due course of mail for collection to the bank on which it was drawn, the drawer haying sufficient
funds on deposit to pay the check, and was returned unpaid through the
negligent mistake of an employee of the bank, it constituted a refusal to
pay. Atlanta National Bank v. Davis (Ga.), 23 S. E., 190.
60. A bank which, as collecting agent of another bank, collects at the subtreasury a pension draft on which the payee's name has been forged
after her death, indorsing the draft as collecting agent, and remits the
proceeds, without knowledge of the forgery, is not liable to the United
States for the amount so collected. Onondaga Co. Sav. Bank v. United
States (C. C. A.), 64 F., 703, distinguished; United States v. American
Exchange National Bank (D. C.), 70 F., 232.
61. Where a mortgage is sent to a bank for collection, with direction to remit,
the relation of creditor and debtor is not established between the sender
and the bank, where the latter fails to remit, and therefore, on the
insolvency of the bank, a trust will be imposed on its assets in favor of
the sender as against general creditors of the bank. Wallace v. Stone
(Mich.), 65 N. W., 113.
62. Where the owner of a check, Twhich had been collected without her authority by a bank, accepted, w ith knowledge of the facts, part of the proceeds of the collection, and a note for the balance of her claim arising
out of the transaction, she thereby ratified the collection, and the bank
was, hence, not liable to her. Hughes v. Neal Loan & Bankina Co.
(Ga.),23 S. E.,823.
63. A bank holding a note for collection from one not a depositor, and which
receives payment thereof by charging to the account of a depositor having sufficient to his credit to meet it. does not become thereby a debtor
of the owner of the note, but holds the amount of the collection in trust
for him; such trust being impressed on all the funds of the bank, which
may be followed though they pass into the hands of a receiver. People
v. Merchants' Bank (Sup.), 36 N. Y. S., 980; In re Friend. Ib.
64. Where a note was placed in a bank for collection, with instructions to collect when due and apply the proceeds to the depositor's paper, and a
person voluntarily selected by the bank to present the note at the place
REPORT OF THE COMPTROLLER OF THE CURRENCY.
151
COLLECTIONS. See Checks; Certified checks—Continued,
named for payment and receive payment thereon, collected the note, the
bank was liable for the proceeds to the owner. First National Bank
v. Craig (Kan. App.). 4: I\, 83u,
65. Where a bank in the State receives for collection a draft payable at another
bank within the State, but transmits the draft to a foreign bank in the
course of collection, which in turn transmits it to the bank at which it
is payable, the last-named bank is responsible for its negligence in collection only to the foreign bank. First National Bank v. Mansfield
Savings Bank, 10 Ohio Cir. Ct. R.,233.
60. Where a bank receives a draft for collection, and transmits it in the course
of business to another bank, the cashier of the latter bank has no implied
authority to agree to defend in behalf of his bank an action against the
first bank by the drawer of the draft for negligence in collection. Ib.
67. In an action by the drawer to recover the proceeds of a draft collected by
a bank the fact that the bank has credited such proceeds to the account
of another bank from which the draft was received, is 110 defense where
the indorsement thereon showed that the sending bank held it for collection only, the money being subject to the order of the real owner,
unless actually paid over to the sending bank before notice of the revocation of its agency. Boykin v. Bank of Fayetteville {N. C.), 24 S. E., 357.
68. That a check deposited with a bank for collection was unrestrictedly
indorsed to the bank, and credit therefor given the depositor, does not
pass the title to the bank where, on nonpayment of the check, its amount
was to be charged up to the depositor so as to prevent its recovery by
the depositor from a receiver appointed for the bank. Armour Packing
Co. v. Davis (N. C ) , H S. K, 365.
69. The owners of a draft on a bank indorsed it to the K. bank for collection,
and it was sent by the latter bank to the clearing house, in due course,
with other checks and drafts. The K. bank was closed before the balance against it on the clearing-house settlement was adjusted, and thereupon the clearing house called upon the drawee, also one of its members,
to pay to ib the amount of the draft. Held, that the payment being to
a stranger to the draft, who had no interest in the proceeds nor authority to act as agent for the owners, it was no defense to an action by the
owners against the drawee for the amount of the draft.—Cranex. Fourth
St. National Bank (Pa. Sup.), 34 A., 296.
70. A bank which has a draft for collection will not be excused for negligence
in sending it direct to the drawee, instead of through a third person, if
it would have been collected had it been sent at the time it was sent to
a third person, though, had the bank delayed sending it as long as it
might have without negligence, it would not have reached its destination in time to be collected. First National Bank v. City National Bank
(Tex. Civ. App.), 34 S. IF., 458.
71. A bank having a draft of $2,000 for collection will not be held liable for
negligence in sending it direct to the drawee bank, instead of through a
third person, where, at 1 o'clock on the day 011 which it reached its destination, the drawee bank required $1,000 to insure its ability to meet
local checks which might be presented that day after the hour, and was
furnished that amount by another bank for that purpose, to prevent a
general run on local banks. Ib.
72. A bark which receives checks to be transmitted to another place for collection without compensation fully discharges its duty by sending them
in due season to a solvent and competent correspondent, with proper
instructions for their collection, and is not liable for any loss occasioned
by the negligence of such correspondent. Anderson v. Alton National
Bank, 59 III App., 587.
73. When a bank indorses commercial paper "for collection'' and forwards
the same to another bank for collection and remittance, the collecting
bank, though it acts only as agent for the remitting bank, and has no
mutual account with it, is not required, to keep the moneys collected
separate from all other moneys in its possession, and to remit the identical money, nor is the payer of such paper required to see that the
identical money is remitted. First National Bank of Richmond v. Wilmington and W. R. Go., 77 Fed. Rep., 401.
74. When a bank indorses commercial paper "for collection" and forwards
the same to another bank, the latter, though it acts only as agent for the
remitting bank and has no mutual account with it, is not required to
152
REPORT OF THE COMPTROLLER OF THE CURRENCY.
COLLECTIONS. See Checks; Certified checks—Continued.
keep the moneys collected separate from other moneys in its possession
and to remit the identical money, nor is the payer required to see that
the identical money is remitted. Ib.
75. Transfer of a note to a bank for collection gives it such ownership thereof
that it can sue the maker thereon. First National Bank v. Hughes
(Cal.),46 P., 272.
76. That the correspondent has credited the account of the remitting bank with
the proceeds of the collection does not preclude the owner from recovering such proceeds of the correspondent upon the insolvency of the
remitting bank. Branch v, United States National Bank (Neb.), 70
N W., 34.
77. The owner of negotiable paper placed it with a Boston bank to be transmitted to its New York correspondent for collection for the account of
the owner, and the Boston bank so instructed the New York bank. Held,
that the New York bank became the agent of the owner of the paper
and was liable to him for negligence in making the collection. Kelley
v. Phoenix National Bank (Sup.), 45 N. Y. S., 538.
78. Defendant bank received for collection a draft drawn on plaintiff, payable
at another bank where he had funds and had left instructions to meet
it. Defendant negligently failed to present the draft until the failure
of the bank at which it was payable, so that plaintiff became discharged
from liability thereon. Held, that plaintiff could not recover back the
amount of the draft paid by him to defendant with knowledge of the
facts, although he made the payment under protest and to save his
credit. Harvey v. Girard National Bank (Pa.), 13 A.. 202.
79. Collecting commercial paper is part of the regular business of banking,
and a national bank will be liable for negligence in collecting a draft
the same as any other bank or agent. Mound City Paint & Color Co. v.
Commercial National Bank, 9 P., 709; 4 Utah, 353.
80. Where the owner of a note sends it to a bank for collection only, and the
maker's check is drawn on that bank for the amount thereof, and is delivered to it, and the note is thereupon canceled and surrendered, and the
check is charged to the account of the maker, which was good for the
amount, there is a collection of the amount from the general fund of
the bank and a special appropriation of that amount to the payment
of the note, and as between the owner of the note and the receiver of
the bank the title to the money dedicated to the payment of the note
remains in the owner. Arnot v. Bingham, 9 N. Y, S., 68; 55 Hun., 553.
CONSTITUTIONALITY :
1. Congress has the constitutional power to incorporate banks, McCulloch v.
Maryland, 4 Wheat., 316; Osborne v. Bank of the United States, 9
Wheat., 738.
2. Congress has power to clothe national banking associations, as to their
contracts and dealings with the world, with any special immunities and
privileges exempting them, in their trade and intercourse with others,
from the laws and remedies applicable in like cases to other citizens.
The Chesapeake Bank v. The First National Bank of Baltimore, 40 Md.,
269.
3. Thus, the provision of the banking law that no attachment, injunction, or
execution shall issue against a national banking association before final
judgment in any suit, action, or proceeding in a State court is constitutional. Ib.
4. Congress having, in the exercise of undisputed constitutional powers,
undertaken to provide a currency for the whole country, may secure the
benefit of it to the people by appropriate legislation. Veazie Bank v.
Fenno,8 Wall., 533.
5. Congress has the power to divest the United States courts of their jurisdiction of suits by or against national banking associations. National
Bank of Jefferson v. Fare et al., 25 Fed. Rep., 209.
6. National banking associations, being instruments designed to aid the Government in the administration of a branch of the public service, can not
be controlled by the States, except in so far as Congress may see proper
to permit. Farmers and Mechanics' Bank v. Dearing, 91 U. S., 29.
7. A State law prohibiting the establishment of banking companies in the
State without the authority of the legislature was not intended to apply
to banking corporations created by authority of Congress, since such
REPORT OF THE COMPTROLLER OF THE CURRENCY.
153
CONSTITUTIONALITY—Continued.
corporations may be legally established in the State without the consent
of the legislature. Stetson v. City of Bangor, 56 Me., 274.
8. National banking corporations, organized under the acts of Congress providing for their creation, are agencies or instruments of the General
Government, designed to aid in the administration of an important
branch of the public service, and are an appropriate constitutional
means to that end. Pollard v. The State ex rcl. Zuber, 65 xila., 628.
9. The national banking act is an enabling act for associations organized
under it, and one can not rightfully exercise any powers except those
expressly granted, or such incidental powers as are necessary to carry
on the business for which it was established. Logan County National
Bankv. Toivnsend, 139 U.S.,67.
CONSTRUCTION OF LAW.
1. The Federal courts, when called upon to construe the general commercial
law of Indiana in respect to a question which is a new one in the Federal
courts, should give weight to the Indiana decisions, although they are
not absolutely bound thereby. The Farmers' National Bank of Valparaiso, Ind., v. Sutton Manufacturing Company, 52 Fed. Rep.. 191.
2. The intention of the legislature, clearly expressed in a constitutional enactment, should not be defeated by too rigid adherence to the letter of the
statute, or by technical rules of construction. Any construction should
be disregarded which leads to absurd consequences. Oaies v. First
National Bank of Montgomery, 100 U. S.,239; 2 JV. B. C.,35.
3. The Federal courts are not bound by decisions of State courts upon questions of general commercial law. • Ib.
4. In a statute which contains invalid or unconstitutional provisions, that
which is unaffected by those provisions, or which can stand without
them, must remain. If the valid and invalid are capable of separation,
only the latter are to be disregarded. Supervisors of Albany v. Stanley,
12 Fed. Rep.,82.
5. Where the State and Federal courts have concurrent jurisdiction, a State
statute of limitation may be pleaded as effectively in a Federal court as
it could be in a State court; and in such cases the Federal courts will
follow the decisions of the local State tribunals and will administer the
same justice which the State courts would administer, between the
same parties. Price, Receiver of Venango National Bank, v. Tates, 19
Alb. L. J., 295; 2 N. B. C, 204. *
6. Repeals by implication are not favored by the courts, and in the absence of
express words of repeal it is the duty of the court to give effect to a
prior statute, if it can be done, unless the repugnancy between the two
is so absolute and palpable as to be recognized at once. United States
v. Cooke Co. National Bank, 25 Int. Rev. Record, 266; 2 N. B. 0., 128.
7. It is the peculiar province of the supreme court of the State to determine
the meaning of the statutes of such State, and with such determination
courts of the United States will hesitate to place upon a State statute
any construction which will bring such statute in conflict with a statute
of the United States, and therefore render it void. Davenport National
Bank v. Mittlebuscher. Collector, et aL. 15 Fed. Rep., 225.
8. The punctuation of a statute is not made to be relied on, and must be disregarded if it requires a construction which is repugnant to a sense of
justice. United States v. Voorhees, 9 Fed. Rep., 143.
9. Where Congress has enacted a law covering a particular case, such law
must prevail in the Federal courts though it differs from the State law.
Stephens v. Bernays, 42 Fed. Rep., 488.
10. Among the assets of an insolvent national bank were three mortgages
which were sought to be impeached by the assignees of the mortgagor
as having been given in violation of the insolvency law of the State.
Plaintiff, receiver of the bank, claimed that the State law was inoperative upon the assets of a national bank, and was ineffectual to divest
him of the title acquired by the mortgages. Held, that the mortgages
were governed by the State law, and the bank took them with all the
limitations imposed by the laws of the State upon them.
Witters,
Receiver, etc., v. Sowles et al., 32 Fed. Rep., 758.
11. As the Supreme Court of the United States has decided that it has authority to reexamine the judgment of a State court as to the power of
national banks under the act of Congress, a State court should follow
154
REPORT OF THE COMPTROLLER OF THE CURRENCY.
CONSTRUCTION OF LAW—Continued.
its decisions on the question. First National Bank of Aberdeen v.
Andrews et al.; Young v. Same, 34 P., 913; 7 Wash., 261.
12. By the provisions of Rev. Stat. U. S., § 5184, suhd. 2, requiring an association formed for the purpose of conducting a national bank to designate
in its organization certificate " t h e place where its operations of discount
and deposits are to be carried on,'' the town or city is meant, and not
the office or building. 61 III. App., 33, affirmed.. McCormick v. Market
National Bank (III. Sup.), U N. K, 381.
CONVERSION;
1. Where a State bank has been converted into a national banking association
it may enforce all contracts made with it while a State corporation.
City National Bank v. Phelps, 97 N. F., 442. And it is liable, after the conversion, for all the obligations of the old institution. Coffee v. The National Bank of Missouri, 46 Mo., 140; Kelsey v.
The National Bank of Crawford, 69 Penn. St., 426.
3. A national banking association, organized as the successor of a State bank,
may take and hold the assets of the bank whose place it takes, though
there was not in form a conversion from a State to a national corporation, but the organization of a new corporation. Bank v. Mclntyre, 40
Ohio St.,528.
4. And such association will be liable to the depositors of the former bank.
Bans v. Exchange Bank, 79 Mo., 182.
5. A State law authorizing national banking associations which have been
converted from State banks to use the name of the original corporation
for the purpose of prosecuting and defending suits is not in conflict with
the national banking law, and therefore proceedings based upon a judgment obtained before the conversion may be instituted by such association in its former corporate name. Thomas v. Farmers' Bank of Maryland, 4.G Md., 43.
6. The conversion of a State bank into a national bank, with a change of
name, under the national-bank act does not affect its identity or its right
to sue upon liabilities incurred to it by its former name. Michigan
Insurance Bank v. Eldred, 14s U. S., 293.
7. ]STo authority other than that conferred by act of Cpngress is necessary to
enable any State bank to become a national banking association. Casey
v. Oalli, 94 U.S., 673.
8. When a State bank is converted into a national banking association all of
the directors at the time will continue to be directors of the association
until others are appointed or elected, though some of them may not have
joined in the execution of the articles of association and organization
certificate. Lockwood v. The American National Bank, 9 B. I., 308.
9. But even were the oath required, a majority of all who were directors at
the time of the conversion, and not merely a majority of those who take
the oath, are necessary to constitute a quorum. Ib.
10. A national bank, changed from a State bank, may maintain an action on
a continuing guaranty for loans held by it before the change—for loans
both before and after the change. City National Bank of Poughkeepsie
v. Phelps, 97 N. Y, 44; 49 Am. Rep., 513; 3 N. B. C, 627.
11. A State bank paid its president money to reimburse him for money which
he falsely represented he had paid to its creditor. The State bank was
afterwards changed to a national bank, and the creditor recovered judgment against it for his debt. Held, that it could maintain an action
against the president for money had and received, although the State
statute provided that the State bank should be continued a body corporate for three years for the purpose of prosecuting and defending
suits, closing its concerns, and conveying its property. Atlantic National
Bank v. Harris, 118 Mass., 147; 2 N. B. C, 45412. The provisions in the statute in New York of April 11,1859 ^Laws of 1859,
chap. 28*5), as to the redemption of circulating notes issued by a State
bank, and the release of the bank if the notes should not be presented
within six years, do not apply to a State bank converted into a national
bank under the act of March 9, 1865, and not "closing the business of
banking." Metropolitan National Bank v. Claggett, 141 U. S., 520.
13. The conversion of a State bank in New York into a national bank, under
the act of the legislature of that State of March 9, 1865 (N. Y. Laws of
1865, chap. 97), did not destroy its identity or its corporate existence, nor
REPORT OF THE COMPTROLLER OF THE CURRENCY.
155
CONVERSION—Continued.
14.
15.
18.
17.
discharge it as a national bank from its liability to holders of its outstanding circulation, issued in accordance with State laws. Ib.
No authority from a State is necessary to enable a State bank to become a
national bank. Casey v. Galli, 94 U. S., 673; 1 N. B. C, lift.
The conversion of a State bank into a national bank, under the act of Congress of June 3d, 1864, did not work an annihilation or dissolution, but
only a change of the bank. Maynard v. Bank, 1 Breicsier, 4-83.
Such change does not adeem a residuary legacy in certain shares of the
bank, limited upon a life estate in such shares which is to become an
absolute one, in case the bank should pay off or refund its stock by reason
of the expiration of its charter or from any other cause. The change is
not equivalent in law to a paying off in fact, and the residuary legatee is
entitled to the stock on the death of the legatee for life. Ib.
A State statute authorizing the State banking institutions to become banking associations under the laws of the United States, and
providing for
the surrender and extinction of their State charter, and ; 4 that said bank,
etc., may continue to use its corporate name for the purpose of protecting
and defending suits instituted by or against it, and of enabling it to close
its affairs, but not for the purpose of continuing under the laws of this
State its business," etc., is not in conflict with the national banking act.
Thomas Y. Fanners' Bank of Maryland, 46 Md,, 43; 2 N. B. 0., 2/f8.
CRIMINAL LAW. See False entries; Indictment.
1. The willful misapplication of the moneys and funds of a national banking
association, made an offense by sec. 5209, Rev. St., must be for the use
or benefit of the party charged, or of some person or company other than
the association. United States v. Britton, 107 U. S., 655.
2. It is not necessary that the officer should personally misapply the funds of
the association. He will be guilty as a principal offender though he
merely procures or causes the misapplication, United States v. Fish,
24 Fed. Rep., 585.
3. A loan in bad faith, with intent to defraud the association, is a willful
misapplication within the meaning of the statute. Ib,
4. It is no defense to a charge of embezzlement, abstraction, or misapplication of the funds of a national banking association that the funds were
used with the knowledge and consent of the president and some of the
directors. The intent to defraud is to be conclusively presumed from
the commission of the offense. United States v. Taintor,11 Blatch., 374.
5. If, with intent to defraud the association, an officer allows a firm in which
he is a member to overdraw its account, he will be guilty of misapplying
the funds of the association. In the matter of Van Campen, 2 Ben., 419,
6. Allowing the withdrawal of the deposit of one indebted to the association
can not be charged as a misapplication of the money of the association.
United States v. Britton, 108 U. S., 193.
7. It is not a willful misapplication of the moneys of the association within
the meaning of sec. 5209, Rev. St., for a president who is insolvent to procure the discounting by q.he association of his note not well secured. Ib.
8. To constitute the offense of a willful misapplication of the moneys, funds,
or credits of the association within sec. 5209, Rev. St., it is not necessary
that the person charged with the offense should have been previously in
the actual possession of such moneys, funds, and credits under or by
virtue of any trust, duty, or employment committed to him. Nor is it
necessary to the commission of this offense that the officer making the
willful misapplication should derive any personal benefit therefrom.
When the funds or assets of the bank are unlawfully taken from its
possession, and afterwards willfully misapplied by converting them to
the use of any person other than the bank, with intent to injure and
defraud, the offense as described in the statute is committed. United,
States v. Harper, 33 Fed. Rep,, 471.
9. This criminal act may be done directly and personally, or it may be done
indirectly through the agency of another. If the officer charged with
it has such control, direction, and power of management by virtue of
his relation to the bank as to direct an application of its funds in such
manner and under such circumstances as to constitute the offense of
willful misapplication, and actually makes such direction or causes
such misapplication to be made, he is equally as guilty as if it was done
bv his own hands. Ib,
156
REPORT OF THE COMPTROLLER OF THE CURRENCY.
CRIMINAL LAW. See False entries; Indictment—Continued.
10. The officers of a national banking association may be prosecuted under
State statutes for fraudulent conversion of the property of individuals
deposited with and in the custody of the association. Commonwealth v.
Tenney, 97 Mass., 50; State v. Tidier, 34 Conn., 280.
11. As the national banking law makes the embezzlement, abstraction, or
willful misapplication of the funds of a national banking association
merely a misdemeanor, a person who procures such an offense to be
committed can not be punished under a State statute which provides
that a person who procures a felony to be committed may be indicted
and convicted of a substantive felony. Commonwealth v. Felton, 101
Mass., 204.
12. It is not a conspiracy against United States, under sec. 5440, Rev. St.,nor
a willful misapplication of money of bank, under sec. 5209, for president
and director of bank to cause shares of its stock to be purchased with its
money and held on trust. United. States v. Britton, 108 U. S., 192.
13. It is not a willful misapplication of bank money by the president, under
sec. 5209, for him to procure the discount by bank for his own benefit
of an unsecured note on which both maker and indorser are insolvent
to his knowledge. Ib., 193.
14. Nor is" president liable for a criminal violation of that section solely by
reason of permitting a depositor who is largely indebted to bank to
withdraw his deposits without first paying such indebtedness. Ib.
15. The procuring by two or more directors of the declaration of a dividend
at a time when there are no net profits to pay it is not a willful misappropriation of money of bank within sec. 5204, Rev. St. Ib., 199.
16. Where the president, charged as a trustee with the administration of the
funds of the bank in his hands, converts them to his own use without
authority for so doing, he embezzles and abstracts them within the
meaning of sec. 5209, Rev. St. In the matter of Van Campen, 2 Ben., 419.
17. To constitute the offense of willful abstraction by an officer, defined by the
statute, it is necessary that the money or funds of the association should
be withdrawn by the officer or by his direction; that such taking or withdrawing should be without the knowledge or consent of the bank, or of
its board of directors; that the money or funds so taken or withdrawn
should be converted to the officer's own use or for the benefit and
advantage of some person other than the association, and that this
should be done with intent to injure and defraud the association. Ib.;
United States v. Harper, 33 Fed. Rep., 471.
18. An officer of a national banking association can not be punished under
State laws for embezzling the funds of the association. Commonwealth
ex rel. Torrey v. Ketner, 92 Penn. St., 372; Commonwealth v. Felton, 101
Mass., 204.
19. But where the offense committed by an officer is properly a larceny of the
funds, and not an embezzlement, he may be indicted under a State law.
Commonwealth v. Barry, 116 Mass., 1.
20. The word "embezzle," as found in the United States Rev. St., is used to
describe a crime which a "person has an opportunity to commit by reason
of some office or employment, and which may include some breach of
confidence or trust. United States v. Conant, 9 Cent. L. J., 129; 2
N. B. a , 148.
21. Section 1025 of the Rev. St. provides: " N o indictment * * * shall be
deemed insufficient * * * in a matter of form only." Held, that anything that forms a part of the description of the crime is not a *' matter
of form." Ib.
22. Embezzlement, abstraction, and willful misapplication of the moneys,
funds, etc., of a national bank, as described in Rev. St., sec. 5209, constitute three separate crimes or offenses, which, under Rev. St., sec.
1024, may be joined in one indictment, but must be stated in separate
counts. United States v. Cadwallader, 59 Fed. Rep., 677.
23. The exercise of official discretion in good faith, without fraud, for the
advantage or the supposed advantage of the association, is not punishable; but if official action be taken in bad faith, for personal advantage
and with fraudulent intent, it is punishable. United States v. Fish, 24
Fed. Rep., 585.
24. It is competent for a State by penal enactments to protect its citizens in
their dealings with national banking associations located within the
State. State v. Tidier, 34 Conn., 280.
REPORT OF THE COMPTROLLER OF THE CURRENCY.
157
CRIMINAL LAW. See False entries; Indictment—Continued.
25. And an officer may be punished under State laws for making false entries
in the books of the association with intent to defraud it. Luberg v.
Commonwealth, 04 Perm, St., 85.
26. Purchase of stock in violation of sec. 5201, Rev. St., made with intent to
defraud, and by officers named in sec. 5209, is not punishable under latter section, United States v. Brit con, 107 U. S., 655.
27. Rev. St., sec. 5209, relating to national banks, provides that officers or
agents thereof who willfully misapply any of its moneys, or who make
any false entry or reports with intent to injure or defraud it, or to
deceive any officer of a bank, or any agent appointed to examine its
affairs, and "every person " who, with like intent, aids or abets any
officer or agent in any violation of the section, shall be guilty, etc.
Held, that persons not officers or agents of a national bank may be aiders and abettors of the president of the bank in violation of such statute.
Coffin v. United States, 15 S. Ct,. 394,
28. Acts eighteenth general assembly, chap. 153, sees. 1 and 2, making it a
felony for " a n y officer" of a bank to receive deposits with knowledge
that the bank is insolvent, apply to officers of national as well as other
banks. State v. Fields (loiva), 62 N. W.,653.
29. Acts eighteenth general assembly, chap. 153, sees. 1 and 2, making it a
felony for " a n y officer" of a bank to receive deposits with knowledge
that the bank is insolvent, are not void, in so far as they apply to nationalbank officers, as an attempt to control and regulate the operations of
national banks. Ib.
30. An indictment under Rev. St., sec. 5209, for willfully misapplying the
moneys, funds, and credits of a national bank of which defendant was
president, as well as a director and agent, must supplement the allegation of willful misapplication by allegations showing how the misapplication was made, and that it was an unlawful one. Batchelor v.
United States, 15 S. Ct., 44.6.
31. If much the larger number of the jury are for conviction, a dissenting
juror should consider whether a doubt in his own mind is a reasonable
one which makes no impression upon the minds of others equally honest
and equally intelligent with himself, who have heard the same evidence
with an equal desire to arrive at the truth, and under the sanction of
the same oath. On the other hand, if a majority are for acquittal, the
minority ought to seriously ask themselves whether they may not reasonably, and ought not to, doubt the correctness of a judgment which is
not concurred in by most of those with whom they are associated, and
to distrust the weight and sufficiency of that evidence which fails to
carry conviction to the minds of their fellows. United States v. Allis,
73 Fed. Rep,, 165.
32. An indictment under Rev. St., 1889, sec. 3581, charging a bank officer with
receiving a deposit knowing that the bank was insolvent, is not defective
because each count concludes with the words " did take, steal, and carry
away." State v. Sattley (Mo. Sup.), 33 S. W., 41.
33. Rev. St., 1889, § 3581, providing that any bank officer who shall receive or
assent to the reception of a deposit, or who shall create or assent to the
creation of any indebtedness by the bank, knowing that it is in a failing
condition, shall be guilty of larceny, and punished, etc., sufficiently prescribes the nature of the crime, as required by Const., art. 12, § 27. Ib.
34. The receiving of a deposit, and issuing of a certificate therefor, creates
" a n indebtedness," within Rev. St., 1889, § 3581, making it a crime for
any bank officer to create or assent to the creation of any indebtedness
by the bank, knowing its insolvency, etc. Ib.
35. On the trial of a bank officer for receiving deposits knowing that the bank
was insolvent, evidence that depositors demanded their money, and of
the refusal of the bank employees to pay them, is admissible/whether
or not defendant personally heard the demands, to show the failure of
the bank to meet its obligations in the ordinary course of business. Ib.
36. If a bank employee, by authority of his superior officer given before the
latter had knowledge that the bank was insolvent, receives a deposit
after its insolvency, such officer, unless he revoked the authority after
he became aware of the condition of the bank, will be liable to prosecution under Rev. St., 1889, § 3581, making it a crime for a bank officer to
assent to the receipt of a deposit knowing that the bank is in failing
circumstances. Ib.
158
REPORT OF THE COMPTROLLER OF THE CURRENCY.
CRIMINAL LAW. See False entries; Indictment—Continued.
37. An instruction, in the language of the statute, that the failure of the bank
" i s prima facie evidence of knowledge on the part of its cashier that
the same was in failing circumstances," coupled with a statement that
" p r i m a facie evidence is such that raises such a degree of probability
in its favor that it must prevail unless it be rebutted or the contraryproved/' is not erroneous, Ib.
38. Where an indictment under Rev. St., 18S9, § 3581, contains a count for
receiving a deposit knowing that the bank is insolvent, and another
count for assenting to the creation of an indebtedness by the bank with
such knowledge, and the evidence shows but one transaction, which
consisted in receiving a deposit and issuing a certifiate therefor, a general verdict of guilty, without specifying on which count, is sufficient. Ib.
39. Two or more persons, partners as bankers, may jointly commit the crime
of receiving deposits with knowledge that they and the bank are insol-
vent. State v. Smith (Minn.). 6Jh N. IF., 1022.
40. On trial of an indictment of a banker for receiving deposits when insolvent, it was proper to charge that, though the deposit was received by
defendant's son after defendant had instructed him to refuse deposits,
if defendant, on learning that the deposit was so received, placed it among
the funds of the bank, he "knowingly accepted and received" it within
the statute. State v. E'ifert (loica), 65 N. IF., 809.
41. Where there has been no administration on the estate of a deceased insolvent who had fraudulently conveyed his property in his lifetime, a
simple contract creditor is not debarred from filing a bill against the
fraudulent grantee to subject the property fraudulently conveyed to the
satisfaction of his claim. Merchants' National Bank v. McGee {Ala.),
19 So., 356.
42. One who has an interest in a company for the benefit of which the president of a national bank criminally misapplies its funds may be guilty as
an aider and abettor in such misapplication, although the president has
no interest in or relation to him or to said company, and although he
has no interest in the bank, or with the president thereof, of any kind.
State v. Teahan, 50 Conn., 92, distinguished; Coffin v. United States, 16
S. Ct., 9Ji3.
43. It is not necessary to the guilt of aiders and abettors who are not officers
of the bank that they should have a common purpose with the principal to subserve joint interests with him by the misapplication of the
bank's funds. Ib.
44. Persons who have no official relation to a national bank may be indicted,
under Rev. St., § 5209, as aiders and abettors of some officer of the bank
in criminal misapplication of its funds, or in the making of false entries
in its books. Ib.
45. If a violation of the statute is committed by an officer of the bank and by
an outsider, the officer must be prosecuted as the principal, and the
other can only be prosecuted, under the terms of the statute, as an aider
and abettor. Ib.
46. An indictment charging the aiding and abetting of an officer of a national
bank in making false entries, etc., is not defective because it charges
the principal offender with having made the false entries with intent" to
injure and defraud the bank, and also with intent to deceive agents
appointed to examine the bank's affairs, whereas it merely charges the
aider and abettor with an intent to deceive such agents; for it is immaterial that the principal offender may have had several intents, if both
principal and aider and abettor were actuated by the criminal intent to
deceive such agents. Ib.
47. An indictment for aiding and abetting one H., the president of a bank, in
the criminal misapplication of its funds, charged that, on a specified
date, the said H. misapplied a named sum, by causing the same to be
paid out on the checks of a company having no moneys in the bank.
The aiding and abetting clause charged that the accused did " on [specifying the same date] aid and abet said H., as aforesaid, to wrongfully,"
etc., misapply the moneys of the bank, " t o wit," specifying an identical
sum. Held (overruling a contention that the words "said" and " a s
aforesaid " did not refer to the same moneys previously charged to have
been misapplied by the president), that the language sufficiently connected the acts charged against the aider and abettor with the offense
stated against the principal. Ib.
REPORT OF THE COMPTROLLER OF THE CURRENCY.
159
CRIMINAL LAW. See False entries; Indictment—Continued.
48. An indictment for violating the national banking laws averred that the
bank in question had been " heretofore" created and organized under
the laws of the United States. Held, that even if it were assumed that
the word should have been "theretofore," in order to make it certain
that the bank had been incorporated prior to the finding of the indictment, the result was only an imperfect statement of what the law implies
to be true after verdict. Ib.
49. On the trial of persons charged with aiding and abetting the president of
a national bank in criminally misapplying its funds and making false
entries in its books, the court charged that if the jury were satisfied that
the president did knowingly and purposely make, or cause to be made,
the false entries as charged, they could not find the defendants guilty as
aiders and abettors, unless they were satisfied that defendants, " w i t h
like intent, unlawfully and knowingly did or said something showing
their consent to, and participation*in, the unlawful and criminal acts"
of the said president, " and contributing to their execution." Held, that
this language was not open to the objection that the expression "unlawful and criminal acts" might have been understood as relating to
unlawful and criminal acts of the president generally. Ib.
50. Under Rev. St., § 3581, making it a crime for any bank officer to " receive
or assent" to the reception of any deposit of money, knowing the bank
to-be insolvent, a conviction can not be had on an indictment charging
merely that defendant " did receive " the deposit, on proof of an ' • assent"
to the reception of the deposit. State v. Wells (Mo. Sup.),35 S. W., 6 IS.
51. An indictment against its president for defrauding a national bank,
described the bank as the "National Granite State Bank," "carrying on
a national banking business at the city of Exeter." The evidence
showed that the authorized name of the bank was the '' National Granite
State Bank of Exeter." Held, that the variance was immaterial. Putnam v. United States, 162 U. S., 687.
52. Conversations with a person took place in August, 1893. In December,
1893, he testified to them before the grand jury which found the indictment in this case. On the trial of this case his evidence before the grand
jury was offered to refresh his memory as to those conversations. Held,
that that evidence was not contemporaneous with the conversations, and
would not support a reasonable probability that the memory of the witness, if impaired at the time of the trial, was not equally so when his
testimony was committed to writing; and that the evidence was therefore inadmissible for the purpose offered. Ib,
53. On the trial of a national-bank president for defrauding a bank, a witness
for the Government was asked, on cross-examination, as to the amount
of stock held by the president. This being objected to, the question was
ruled out as not proper on cross-examination, the Government "not
having opened up affirmatively the ownership of the stock." Held, that,
as the order in which evidence shall be produced is within the discretion of the trial court, and as the matter sought to be elicited on the
cross-examination for the accused was not offered by him at any subsequent stage of the trial, no prejudicial error was committed by the
ruling. Ib.
54. When an. offense against the provisions of Rev. Stat., section 5209, is begun
in one State and completed in another, the United States court in the
latter State has jurisdiction over the prosecution of the offender. Ib.
55. The proof of guilt in this case was sufficient to warrant the court in leaving to the jury to decide the question of the guilt of the accused. Ib.
58. The sentence on both counts having been distinct as to each, the entire
amount of punishment imposed will be undergone, although the conviction and sentence as to the second count are set aside. Ib.
57. Coffin v. United States, 156 U. S., 432, affirmed on the following points:
(1) That the offense of aiding or abetting an officer of a national bank
in committing one or more of the oifenses set forth in Rev. Stat., section
5209, may be committed by persons who are not officers or agents of the
bank, and consequently it is not necessary to aver in an indictment
against such an aider or abettor that he was an officer of the bank or
occupied any specific relation to it when committing the offense; (2)
that the plain and unmistakable statement of the indictment in that
case and this, as a whole, is that the acts charged against Haughey
were done by him as president of the bank, and that the aiding and
160
REPORT OF THE COMPTROLLER OF THE CURRENCY,
CRIMINAL LAW. See False entries; Indictment—Continued.
abetting was also done by assisting him in the official capacity in which
alone it is charged he misapplied the funds. Coffin v. United States,
162 U. S., 004.
58. Instructions requested may be properly refused when fully covered by the
general charge of the court. Ib.
59. When the charge, as a whole, correctly conveys to the jury the rule by
which they are to determine, from all the evidence, the question of
intent, there is no error in refusing the request of the defendant to single out the absence of one of the several possible motives for the commission of the offense, and instruct the jury as to the weight to be given
to this particular fact independent of the other proof in the case. Ib.
60. The refusal to give, when requested, a correct legal proposition does not
constitute error, unless there be evidence rendering the legal theory
applicable to the case. Ib.
61. When it is impossible to determine whether there was evidence tending
to show a state of facts adequate to make a refused instruction pertinent,
and there is nothing else in the bill of exceptions to which the stated
principle could apply, there is no error in refusing it. Several other
exceptions are examined and held to be without merit. Ib.
62. A bank president, not acting in good faith, has no right to permit overdrafts when he does not believe, and has no reasonable ground to believe,
that the moneys can be repaid; and, if coupled with such wrongful act,
the proof establishes that he intended by the transaction to injure and
defraud the bank, the wrongful act becomes a crime. Ib.
-63. When the principal offender in the commission of the offense, made criminal by Rev. Stat., section 5209, and the aider and abettor were both
actuated by the criminal intent specified in the statute, it is immaterial
that the principal offender should be further charged in the indictment
with having had other intents. Ib.
64. The first clause of section 5209 of the Revised Statutes provides for three
distinct offenses: First, embezzlement; second, abstraction; and, third,
willful misapplication of the moneys, funds, or credits of the bank by
any president, director, cashier, teller, clerk, or agent of any association organized as a national banking association. United States v. Lee,
12 Fed. Rep., SIC.
65. It was the intention of Congress to make criminal the misapplication and
conversion of the funds of national banking associations without regard
to whether or not the party so misapplying received any of the funds or
other advantage, directly or indirectly. Ib.
66. If it appears that the funds of the banking association have been abstracted
or willfully misapplied by defendant, he is precluded from denying that
it was done with unlawful intent. Ib.
67. It is not a necessary ingredient of the offense of making a false entry in a
report under Rev. St., § 5209, that the report shall be one of those mentioned in sections 5211, 5212, or one which the bank is bound by law to
make. It is sufficient if the report is one made in the due course of
business. United States v. Potter, 56 Fed. Rep., 83, 97, disapproved;
United States v. Booker, 80 Fed. Rep., 376.
68. When it is made to appear to the court during the trial of a criminal case
that, either by reason of facts existing when the jurors were sworn, but
not then disclosed and known to the court, or by reason of outside influences
brought to bear on the jury pending the trial, the jurors, or any of them,
are subject to such bias or prejudice as not to stand impartial between
the Government and the accused, the jury may be discharged and the
defendant put on trial by another jury; and the defendant is not thereby
twice put in jeopardy, within the meaning of the fifth amendment to
the Constitution of tne United States. Simmons v. United States, lJ/,2
U. S.9 14s.
69. The judge presiding at a trial, civil or criminal, in any court of the
United States may express his opinion to the jury upon the questions
of fact which he submits to their determination. Ib.
70. An indictment on Rev. Stat., sec. 5209, is sufficient which avers that the
defendant was president of a national banking association; that by
virtue of his office he received and took into his possession certain bonds
(described), the property of the association, and that, with intent to
** injure and defraud the association, he embezzled the bonds and converted them to his own use. Claasen v. United States, 142 U. S., 140.
KEPORT OF THE COMPTROLLER OF THE CURRENCY.
161
CRIMINAL LAW: See False entries; Indictment—Continued.
71. In a criminal case a general judgment upon an indictment containing several counts and a verdict of guilty on each count can not be reversed on.
error if any count is good and is sufficient to support the judgment. Ib.
72. Upon writ of error no error in law can be reviewed which does not appear
upon the record, or by bill of exceptions made part of the record. Ib.
73. Under sec. 5 of the act of March 3, 1891, entitled "An act to establish circuit courts of appeals, and to define and regulate in certain cases thejurisdiction of the courts of the United States, and for other purposes,"
a writ of error may, even before July 1, 1891, issue from this'court to a
circuit court in the case of a conviction of a crime under sec. 5209 of
the Revised Statutes where the conviction occurred May 28, 1890, but a
sentence of imprisonment in a penitentiary was imposed March 18, 1891.
I)i re Claasen, Vfi U. 3., 200.
74. A crime is '• infamous" under that act where it is punishable by imprisonment in a State prison or penitentiary whether the accused is or is not
sentenced or put to hard labor, i b.
75. Such writ of error is a matter of right, and under sec. 999 of the Revised
Statutes the citation may be signed by a justice of this court as an
authority for the issuing of the writ under sec. 1004. Ib.
76. At the time of the conviction no writ of error from this court in the case was
provided for by statute, nor was any bill of exceptions, with a view to a
writ of error, provided for by statute or rule, and therefore a mandamus
will not lie to the judge who presided at the trial to compel him to settle
a bill of exceptions which was presented to him for settlement after the
sentence, nor can the minutes of the trial, as settled by the judge by consent, and signed by him, and printed and filed in July, 1890. and on
which a motion for a new trial was heard in October, 1890, be treated
by this court, on the return to the writ of error, as a bill of exceptions
properly forming part of the record. Ib.
77. A criminal court in the southern district of New York, sitting as a circuit
court therein, under sec. 613 of the Revised Statutes, and composed of
the three judges named in that section, to hear a motion for a new trial
and an arrest of judgment in a criminal case previously tried by a jury
before one of them, is a legally constituted tribunal. Ib.
78. A justice of this court on allowing such writ and signing a citation had
authority also to grant a super sedeas and stay of execution. 76.
70. Upon a plea of guilty to three indictments found under section 5209, Rev.
St., U. S., one for the misapplication of funds of a national bank by the
accused while cashier thereof, one for false entries to conceal such misapplication, and the third for making a false statement with intent to
deceive the examining officers, the district court pronounced sentence
upon the accused as follows: "That the prisoner be confined at hard
labor in the State's prison of the State of New Jersey for the term of
five years upon each of the three indictments above named, said terms
not to run concurrently, and from and after the expiration of said
terms until the costs of this prosecution shall have been paid." Held,
that the words "said terms not to run concurrently" are uncertain and
incapable of application, and therefore void; and that the sentences
commenced at once and ran concurrently. United States v. Patterson,
Keeper, etc., 29 Fed. Rep., 775.
SO. The judgment of the district and circuit courts of the United States in
criminal cases is final, and can nob be reviewed by writ of error; but if
a judgment, or any part thereof, is void, either because the court that
renders it is not competent to do so for want of jurisdiction, or because
it is rendered under a law clearly unconstitutional, or because it is senseless and without meaning, and can not be corrected, or for any other
cause, the party imprisoned by virtue of such judgment may be discharged on habeas corpus. Ib.
81. On a habeas corpus the decision should be made upon the actual status
of the case at the time of the decision, and not according to the state
of things when the writ was allowed. When, at the time the writ of
habeas corpus for the discharge of a prisoner, under three sentences of
five years, each running concurrently, was allowed, the first term of five
years had not expired by lapse, although at least one of the sentences
had been satisfied by means of remissions for good conduct. Held, that
the five years having entirely elapsed since the allowance of the writ.
CUR 98
11
162
REPORT OF THE COMPTROLLER OF THE CURRENCY.
CRIMINAL LAW: See False entries; Indictment—Continued.
the question of the applicability of the remission for good conduct to all
the sentences may be waived, and the prisoner discharged. Ib.
82. When an officer of a national bank, indicted under Rev. St., $ 5209, for
making false entries in a report of the condition of such bank in respect
to amounts of overdrafts and of loans and discounts, has testified that
certain overdrafts, in respect to which the depositors had consulted the
bank officers and obtained permission to overdraw, were treated by the
officers and directors of the bank as temporary loans, and were reported
by him among loans, and not among overdrafts, in the belief that they
might properly be so reported, it is error to charge the jury that the
defendant was required by law to place, under the heading ' ' Overdrafts"'
in the report, all sums drawn out by depositors in excess of their deposits,
and that the transfer of any such sums to the heading " Loans and discounts " was the making of a false entry, since such charge takes from
the jury the right to consider, upon the question of intent, the explanation given by the defendant, while, if they believed such explanation, and
that the defendant acted in good faith, the entries were not false within
the meaning of the statute. Mr. Justice Harlan dissenting. Graves v.
United States. 165 U. S., 823.
8o. Where a transaction by a national-bank officer with intent to defraud is
entered on a deposit slip, entry of the contents of such slip upon the
books of the bank by him, or by his direction, is making a *' false entry "
within Rev. St., \ 5209. Agnew v. United States, 165 U. S., 36.
84. On trial of the president of a bank for conversion of its funds, the cashier,
who has testified as a witness for defendant, may be asked, on crossexamination, whether he did not resign because of transactions of the
defendant similar to that charged in the indictment. Ib.
85. The evidence showed that defendant, president of a national bank, without authority of the directors, purchased $20,000 bonds, of little value,
at a great discount, and had them placed in the assets of the bank, and
to his credit at face value, giving his written guaranty for the principal
and interest, which, by reason of his financial condition, was almost
worthless. Held, that it was not error to refuse to charge that, from
the guaranty, the jury might find that there was no intent to defraud
the bank. Ib.
80. A charge to the effect that if defendant, a bank president, purchased bonds
which were worthless, or of but little value, placed them among the
assets of the bank at a greatly exaggerated value, and had such exaggerated value placed to his own credit, these facts create a presumption
of an intent to defraud the bank, which " t h r o w s the burden of proof
upon the defendant,'' and that evidence to overcome the presumption
" m u s t be sufficiently sti^ong to satisfy you beyond a reasonable doubt
that there was no such guilty i n t e n t / ' is not error, where the character
of such evidence and the nature of a reasonable doubt are sufficiently
explained in other portions of the charge. Ib.
87. A charge that if the defendant "either embezzled or willfully misapplied"
the funds or credits of the bank, "whereby, as a necessary, natural, or
legitimate consequence, its capital was reduced, or placed beyond the
control of the directors, or its ability to meet its engagements or obligations, or to continue its business, was lessened or destroyed, the intent
to injure or defraud the bank may be presumed," is correct. Ib.
SS. It is not reversible error to refuse to charge that, if defendant used the
proceeds of a check belonging to the bank, and which he had caused to
be placed to his credit, in the payment of a debt of the bank, the j u r y
must find that he did not fraudulently embezzle the amount, especially
where defendant's explanation of the transaction is unsatisfactory. Ib.
89. Evidence of the commercial rating of a president of a bank at the time of
an alleged conversion by him of its funds, by purchasing for the bank,
without authority, and having placed to his credit, worthless bonds,
which he had guaranteed; and the testimony of the cashier of another
bank as to whether, at the time of the transaction, he considered defendant's guaranty for such an amount good, are irrelevant. Ib.
90. Under rule 11 of the circuit court of appeals (21 C. C. A., cxi, and 78 Fed.
Rep.. cxi), requiring the assignment of errors to quote the full substance
of evidence alleged to have been erroneously admitted or rejected, and to
set out the part of the charge referred to totidem verbis, assignments
that " t h e court erred in permitting evidence as shown in bills of excep-
REPORT OF THE COMPTROLLER OF THE CURRENCY.
163
See False entries; Indictment—Continued.
tions numbers two and three/' which errors can only be ascertained by
a careful reading of a voluminous record, and that "the court erred in
its charge," etc., referring to marked lines and numbers in the written
opinion for instructions erroneously given and refused, will not be con-
CRIMINAL LAW:
sidered. Gallot v. United States, 87 Fed. Rep., 446.
91. The death of the principal before indictment is no obstacle to the prosecution and punishment of one charged with aiding and abetting an officer,
clerk, or agent of a national bank to abstract, misapply, or embezzle the
funds thereof, in violation of Rev. St., 2 5209, which makes such offense
a misdemeanor. Ib.
92. A juror who says he has an impression or opinion as to guilt or innocence
of defendant, formed from newspapers and rumors, that it would require
evidence to remove it, but that it would yield to evidence, and that he
can and will give the defendant a fair and impartial trial according to
the evidence that may be adduced before him, is competent. Ib.
98. "Where an indictment contains many counts, all alike, except as to amounts
of money and dates of misapplication, it is sufficient to read one count
in full to the jury, explain the difference, and state the amount and
date charged in each of the other counts. Ib.
94. One indictment in thirty-six counts charged defendant with aiding in the
abstraction of thirty-six specified amounts of money, at thirty-six specified dates. Another indictment charged him with aiding in the misapplication of the same amounts, upon the same dates. The two were
tried together, and the jury returned a verdict of " guilty as charged."
Held, that the verdict was definite, certain, responsive to the issues, and
not a double conviction, the sentence imposed by the court being imprisonment for a less term than the maximum under any one count. Ib.
95. An indictment under Rev. St., § 5209, against officers of a national bank
and a depositor, charged willful misapplication of the funds of the bank,
with intent to injure and defraud the bank. On the trial it appeared
that the depositor made and deposited fictitious checks, which were
credited to his account. Held, that it was necessary to show that some
portion of the funds were withdrawn from the possession or control of
the bank, or a conversion in some form was made thereof, so that the
bank would be deprived of the benefit thereof. Dow et cd. v. United
States, S3 Fed. Rep., 904.
9G. In such a case, a statement by the court to the jury that under a State
statute it is made a misdemeanor to draw a check on a bank where there
are no funds to meet it, tends to mislead the jury, and constitute error.
Ib.
97. The mere fact of payment by the officers of a national bank of a check
which creates an overdraft does not necessarily constitute a fraudulent
misapplication of the funds of the bank. Ib.
98. Under such an indictment, where the issues involve the intent with which
certain acts were done, the trial court is justified in giving a reasonably
wide latitude to the introduction of evidence tending to show the relations of the parties, the mode in which the business was carried on, and
the knowledge which the officers had of the character of the operations
carried on by the depositor. Ib.
99. If, in an indictment under Rev. St., ^ 5209, it is the purpose of the Government to charge the making of false entries in the books of the bank
because of the receiving and crediting of checks drawn thereon by
parties who had no funds there, the indictment should set forth ti
description of the checks, with an averment of the reasons why they
were to be deemed false or valueless. Ib.
100. If an overdraft is made and allowed under circumstances justifying it, or
even under circumstances making it a fraud upon the bank, the entry
of the transaction just as it occurred on the books of the bank is not a
false entry, under Rev., St., £ 5209. Ib.
101. Where an indictment consists of numerous counts, the trial court may. in
the exercise of sound judicial discretion, require the Government to
elect certain counts upon which it will ask conviction; but where the
counts are all for transactions connected together, or of the same class,
their joinder is proper under Rev. St., g 1024, and the exercise of the
court's discretion will not be disturbed, except in a clear case of improvidence or abuse. Gardes v. United States: Girault v. Same. 87 Fed. Rep.,
164
REPORT OF'THE COMPTROLLER OF THE CURRENCY.
CRIMINAL LAW: See False entries; Indictment—Continued.
102. Where, during the trial, a juror becomes disqualified, and the court
adjudges a mistrial, a plea of former jeopardy is not good on a second
trial, even though all parties were willing to proceed with eleven
jurors. Ib.
103. Where defendants have been arraigned, and have waived reading of the
indictment, they may not subsequently complain if the whole' indictment is not read at the trial, but such parts of it are read, and such
explanations made of the other parts, as may give the jury the clearest
comprehension of it. Ib.
104. Where the jury find accused guilty upon all counts of an indictment,
" Guilty as charged," without specifying the counts., is a proper form of
verdict" Ib.
105. Where the verdict is sustained by one good count in the indictment, it
must stand, even if all the other counts are bad. Ib.
100. Where, after mistrial, and before a new trial, amendments are made to
purely formal parts of certain counts of an indictment, and the defendants are not rearraigned, even if the irregularity is material, it can
affect only the counts so amended, and the error is cured by arrest of
judgment on such counts. Ib.
107. Where the statute under which a prisoner is sentenced provides for imprisonment, but not at hard labor, the words " a t hard labor"' should not be
inserted in the sentence, even if hard labor is a part of the discipline of
the prison at which the sentence is to be served. Ib.
10S. In a prosecution against a national bank president for unlawfully certifying checks, it is not error to instruct the jury that the presumption is
that he had knowledge of the condition of the account upon which the
checks were drawn, where the same instruction cautions them that such
presumption may be rebutted by evidence that the defendant did not in
fact have such knowledge. Spurr v. United States, 87 Fed. Rej)., 701.
100. In order to convict a national bank officer of wrongfully certifying
checks, it is not necessary to show that he had actual knowledge that
the account against which the checks were drawn was not sufficient; it
is enough if he willfully refrained from investigation, in order to avoid
knowledge. Ib.
110. Upon the trial of the president of a national bank for certifying checks
without funds, evidence of speculations by the cashier with funds of
the bank, with defendant's knowledge, is admissible for its bearing upon
the right of the latter to rely upon the former's representations as to the
state of the customer's accounts. Ib.
111. The period of time within which collateral transactions offered to show
a guilty intent must have occurred is largely discretionary with the
court. Ib.
112. Upon the trial of a national bank officer for official misconduct, evidence
as to the defendant's reputation for honesty and integrity should be limited to such reputation down to the time of the failure of the bank. Ib.
It:]. In general, where no attempt has been made to impeach the defendant's
testimony, he may not add to the weight of his evidence by evidence of
his general reputation for truthfulness. Ib.
114. A plea of former jeopardy set up certain prior proceedings had in the same
court under the same indictment. Counsel for the Government having
objected thereto, the court treated his objection as a demurrer to its
sufficiency in law, and thereupon overruled the plea. The trial then
went on, without objection by defendant to the subsequent proceedings.
Held, that there was no error in thus proceeding with the cause without
first setting down the plea for trial, as the only question arising thereon
was one of law, which was iinally disposed" of by the former ruling.
United States v. Peters, S7 Fed. Rep., 9S5.
115. Rev. St. § 1025, forbidding the court to quash an indictment for defect of
form, makes it unnecessary, in criminal indictments, to repeat an averment contained in the first count, where subsequent counts refer back
to the first, and are thereby rendered sufficiently explicit in stating the
offense. Ib.
116. An indictment charged the making of false entries in the books of a
national bank for the purpose of showing that on a certain date a county
treasurer deposited $10,000 "special," which was drawn out again a few
days later. Evidence was offered by the Government to prove that no
such deposit was made, and the treasurer himself was called by it, and
REPORT OF THE COMPTROLLER OF THE CURRENCY.
165
Sec False entries; Indictment—Continued.
testified that lie had some recollection of having deposited a large sum
about the time in question. Thereupon his books were produced, and,
after he had testified that he believed them to be correct, he was permitted to testify as to the entries therein on the dates referred to. By
these entries it did not appear that $10,000 had been either deposited in
bank, or drawn from the cash on hand. The treasurer, however, then
reiterated his former statement, and was even more positive that he had
made the deposit. Held that, in view thereof, there was no prejudicial
error in admitting his testimony as to the book entries. Ib,
11?. If money is left with a national bank in a sack, with the express understanding that it is not to be mingled with the bank's funds, but the
identical biils or coins are to be returned in the same condition, and
this is done to make a showing of money to a bank examiner, as if it
were the money of the bank, then the entry thereof on the books of the
bank as money deposited is a false entry. Ib.
118. If the jury be charged that a false entry on the books of a national bank
alone gives rise to the presumption, not only that the entry was made
with criminal intent, but also with knowledge of its falsity, but elsewhere in the charge it was said that a false entry must be known to be
false, and designed and intended to deceive, the charge is not erroneous. Ib,
119. Where the court has several times stated to the jury that the indictment
charges the making of false entries in the books of the bank, with intent
to deceive the bank examiner, and the making of false reports, with intent
to deceive the comptroller, it is not misleading to thereafter say that
defendant is guilty if he made such false entries and report ' * with the
intent mentioned in the statute," although the statute mentions several
other intents. Ib,
CRIMINAL LAW:
DEPOSITS:
1. The relation of banker and depositor is that of debtor and creditor.
Deposits on general account belong to the bank and are part of its general fund. The bank becomes a debtor to the depositor to the amount
thereof, and the debt pan only be discharged by payment to the depositor, or pursuant to his order. The JEtna National Bank v. The Fourth
National Bank, 40 N. F , 82.
2. The contract has none of the elements of a trust. For a breach on the part
of the bank of the obligation resulting from the relation between the
parties the depositor alone can sue. Ib.
3. General deposits in a commercial bank on account of the depositor, without being complicated by any other transaction than that of the depositing and withdrawing of the moneys, transfers the ownership of the
money to the bank: and the relationship with reference thereto, as
between the bank and the depositor, is simply that of debtor and creditor. Collins v. State, 15 So., 21Jh
4. A deposit made in the usual course of business vests in the bank, and can
not be recovered by the depositor on the ground of fraud, though the
bank was insolvent and failed on the next day, and though the deposit
was made in reliance on representations of the president that the bank
was all right, unless the officers of the bank knew of its insolvency at
the time of the deposit. New York Breweries Co. v. Higgins, 29 N, Y. S.,
/flO.
5. A trustee wiio deposits in a bank and causes to be credited to his private
account money of the trust fund without giving notice that it is not his
private property or making any special agreement in regard to it,
thereby converts it to his own use; so that the bank, in the absence of
any notice that it is not his private property, may apply it as such.
School District v. First National Bank, 102 Itfdss., 174.
6. Where an agent deposits in a bank, to his own account, the proceeds of
property sold by him for his principal under instructions thus to keep it,
a trust is •imposed upon the deposit in favor of the principal, and his
right thereto is not affected by the fact that the agent at the same time
deposits other moneys belonging to himself; nor is it affected by the fact
that the agent, instead of depositing the identical moneys received by
him on account of his principal, substitutes other moneys therefor. I an
Allen v. The American National Bank, 52 N, F , 1.
?. Where an agent or trustee has deposited money belonging to his principal
or beneficiary in a bank to which he is himself indebted, and the bank,
1G6
REPORT OF THE COMPTROLLER OF THE CURRENCY.
DEPOSITS—Continued.
without his authority and in ignorance of the true ownership of the
fund, has applied it on the debt, the owner is not debarred from recovering it from the bank if it can be identified. Burtnett, Adm'r, v. The
First National Bank, 38 Mich, 630.
8. A bank is not chargeable with interest on sums deposited to the credit of
customers to be drawn against by check until payment be demanded,
unless upon special contract. Parkersburg National Bank v. Als., 5
W. Va., 50.
9. Unlike checks, cash deposited by customers with the bank ceases to be the
property of the depositor, and becomes the property of the bank, creating
at once the relationship of debtor and creditor. Balbach et al. v. Fre~
lingJiuysen, Receiver, etc., 15 Fed, Rep., 675.
10. Plaintiff made a certain payment to defendant bank, and received in
exchange a note signed by a. firm composed of the officers of the bank,
and the business of which was transacted in the bank's office. He subsequently gave a check to his wife, which was also exchanged at the
bank office for a similar note. Plaintiff and his wife could both read
and write, and had transacted considerable business with the banks.
Plaintiff retained the notes for two years, and upon the failure of the
firm began suit to re-form the notes and change them into certificates
of deposit of the bank on the ground that he intended to deposit his
money with the bank. Held, that plaintiff was not entitled to a decree.
Murphy v. First National Bank (Iowa), 63 N W., 70,?.
11. Where several deposits in bank have been made on the same account, and
the title to one of the deposits is disputed, checks drawn on the account
will be first applied to the deposits not in dispute. Hauptmann v. First
National Bank (Sup.), 31 N. Y. S., 36 j .
12. Testimony that the cashier of a bank failed to enter deposits on its books
is not admissible as against the depositor to show that the deposits were
made with the cashier in his individual capacity. L'Herbette v. Pittsfield
National Bank (Mass.), 38 N. E., 368.
10. An envelope, on which the sums paid into and drawn out of a bank by a
depositor are entered by the cashier, is admissible against the bank to
show the state of his account. Ib.
14. A national bank, not designated as a depository of public moneys, which
receives, under the permissive authority of law and the regulations of the
Post-Office Department, deposits of money made by postmasters in their
official capacity, thereby assumes a fiduciary relation to the Government, and becomes a bailee of the Government, so as to become directly
responsible to it for any moneys which it knowingly or negligently
allows the postmaster to withdraw by private check, or otherwise appropriate to his own use; and where, after the removal of the postmaster,
he deposits a sum to make good a shortage in his balance, the bank can
not apply it in discharge of a debt due it from him personally. United
States v. National Bank of Asheville et al., 73 Fed. Rep., 379.
15. By reason of this trust relation, equity has jurisdiction of a bill by the Government to require an account and settlement of the moneys so deposited
with it; and this remedy is not affected by the fact of a cumulative
remedy at law against the postmaster on his official bond. Ib.
10. Where a bank knows that money deposited with it to the general credit of
a depositor is held in trust by such depositor, the bank has no right to
apply such deposit to the payment of a note due to it from
the depositor;
57 111. App., 107, reversed. Clemmer v. Drovers1 National
Bank
(III. Sup.), 41 N. E., 728.
17. An indictment under a statute declaring it an offense if an officer of a bank
shall receive a deposit, " knowing, or having good reason to believe, the
establishment to be insolvent," is not sufficient where it does not allege
the insolvency, but merely follows the words of the statute, as there
would be no offense if the bank was not insolvent, though the officer
believed it was. State v. Bardicell (Miss.), 18 So., 377.
18. Where one mails to a bank money and checks for deposit, but the bank
refuses to acknowledge receipt thereof, and persistently denies such
receipt, the relation of depositor and depositee is not created. Miller v.
Western National Bank (Pa. Sup.), 83 A., 684.
19. Where a bank positively and repeatedly denies one's right to make any
claim upon it in respect of currency and checks mailed by him to it for
deposit, the depositor need not make demand before bringing suit on
account of such deposit. Ib.
REPORT OF THE COMPTROLLER OF THE CURRENCY.
167
DEPOSITS—Continued.
20. On trial on an indictment under Coinp. St. 1895, £§ 087, G88, for receiving
a deposit in an insolvent bank, defendant offered to show that the deposit
was made by a customer whose account was at the time overdrawn in
an amount larger than the deposit. Held, that the evidence was admissible as tending to show that the deposit was made and accepted as an
application on the depositor's indebtedness to the bank. Nichols v.
State {Neb.). 65 N W., 774.
21. When a customer of a bank who has overdrawn his account makes a
deposit, the presumption is, in the absence of evidence, that the deposit
was general, and was made and received toward the payment of the
overdraft. Ib.
22. A bank depositor, on rumors of its insolvency, went to withdraw his
deposits, but was informed by the vice-president and director that the
bank was perfectly solvent, and that " w e have got all the money you
want. You need never have any fears of this bank as long as I am in
it." Such depositor, relying on such representations, permitted his
deposits to remain. It was in fact insolvent when the representations
were made. Held, that such vice-president and director was personally
liable to such depositor for the money lost by the failure of the bank.
Townsend v. Williams (N. C ) , 23 S. E., 461.
23. A person deposited money with a bank, taking from it a deposit slip in the
form used for general deposits. Upon such slips were the words,
"Security for signing bond to be held by bank." Subsequently the
depositor, in order to change the security so the $700 would be available
for one purpose and $800 for another, drew an ordinary check, which
was marked "Paid," and a certificate of deposit for $800 made out, to be
held by the surety, and $700 to secure other bondsmen. The firstnamed certificate was afterwards paid by the bank. The depositor testified that the deposit was a special one. Held, a general deposit and
not a trust fund in the hands of a receiver. Dearborn v. Washiur/ton
Sav. Bank (Wash.), A2 P., 1107: Watson v. Sheafe, ib.
24. A deposit made in a bank at a time when the officers knew that it was
insolvent can not be recovered from the assignee unless it can be iden-J
tified and traced into his hands. In re Commercial Bank (Ct. Insolv.), ::
Ohio N.P., 170.
25. In an action by a bank to recover money advanced on a draft, for goods
sold, deposited with it by the vendor, where it claims that the deposit
was made for collection, and the depositor that it was a sale, it is proper
to instruct that if it was a sale the bank could not recover, though
there is evidence that the vendee, after the deposit, paid part of the price
for which the draft was drawn directly to the vendor. Bank of Guntersville v. Webb (Ala,), 10 So., 14.
26. An instruction that if an illiterate depositor, to whom a bank cashier
fraudulently gave a deposit slip showing a deposit of a draft for collection instead of as a discount, " within a reasonable time, and on his first
opportunity," repudiates the transaction as shown by the slip, would make
no difference, is not objectionable as leaving to the jury the question of
reasonable time. Ib.
27. Where a bank cashier, in receiving from an illiterate person a draft sold to
the bank, fraudulently makes out his deposit slip for him so as to show
a deposit for collection, and the depositor subsequently, on discovering
the fraud, repudiates the transaction as a deposit for collection, and, on
an issiie as to whether the transaction was a purchase or a deposit for
collection, the bank admits that the slip was a receipt for the draft, and
the depositor claims that it was one for the proceeds, it is proper to refuse
to instruct for the bank that the retention of the slip by the depositor
after repudiation, and using it as evidence of its demand against the
bank, rendered it binding on him. Ib.
28. Where a bank cashier, in receiving from an illiterate person a draft sold
to the bank, fraudulently makes out his deposit slip for him so as to
show a deposit for collection, it is error to admit evidence that the bank
required the cashier to pay the draft on failure to collect it, on the issue
as to whether the bank was liable as purchaser or as a receiver for collection only. Ib.
29. On an issue as to whether the delivery of a draft to a bank was a purchase
or a deposit for collection, the depositor may testify to his illiteracy to
explain his accepting the deposit slip; and, having on cross-examination
168
REPORT OF THE COMPTROLLER OF THE CURRENCY.
DEPOSITS—Continued.
given the name of the person who first informed him of its contents, he
may testify when and where the information was given, Ib.
30. One who draws a check on a bank in which he has sufficient funds for its
payment, not encumbered by an earlier lien in favor of the bank, may
sue such bank for damages on its refusal to pay the check to the drawee.
ML Sterling National Bank v. Green (Ky.), 35 S. TV., 911.
31. A bank may properly refuse to honor the check of a depositor who is
indebted to it on a past-due note for an amount greater than the sum on
deposit. Ib.
32. The duty which a bank holding a note owes to an indorser thereon, to
appropriate a deposit in the bank to payment of the note, exists only
where the maker of the note, at its maturity, has a deposit sufficient to
pay it, and not previously appropriated to any other jjurpose, and does
not apply to a deposit made after the maturity of the note, or to a deposit
by a prior indorser, though he be in fact the principal debtor, and the
maker be an accommodation maker. First National Bank v. Peltz
(Pa. Sup.), 35 A., 218.
33. Decedent deposited bonds and coupons with a bank, and took a writing,
signed
by the cashier, acknowledging their receipt, and that they were
i;
to be sold, and the proceeds placed to her credit." Held, that a delivery of the receipt, with an indorsement thereon, signed by decedent,
requesting the cashier t o ' ; let" plaintiff "have the amount of the within
bill,'' and with the intention to pass title thereto, constituted a valid
gift of the money
due from the bank. Crook v. First National Bank
(Wis.).,52 N. Ti7., 1131.
34. A deposit slip issued by a banker, acknowledging the receipt of the amount
of money therein named, is intended merely to furnish evidence, as
between the depositor and the bank, that on a given day there was
deposited a given sum, and not that such sum remains on deposit, and
hence the delivery of a deposit slip to a> third person by the depositor
does not operate as an assignment of the deposit. First "National Bank
v. Clark (N. Y. App.)t 32 N. E., 38.
35. A conversation between a bank depositor and a third person, to whom he
had delivered the deposit slip, and in whose favor he had drawn a check
for the amount, in which he stated that the deposit would not be available for ten days, and that he wanted the chock discounted immediately,
which was accordingly done, and the money paid him by such third
person, does not, as a matter of law, operate as an assignment of the
deposit to such third person: and a finding by the jury that it did not
will not be disturbed on appeal. Ib.
36. Designating a national bank as a depositary of public moneys does not constitute it an agent of the Government, or render the Government liable
for moneys lost by a failure of such bank. Branch v. The United States,
1KB.
C.,303.
37. Such bank does not become a custodian of public moneys deposited with
it, but it becomes a debtor to the United States the same as it does to
other depositors for individual deposits. Ib.
38. Certain moneys coming into the possession of the clerk of a Federal court
pending a litigation were by him deposited in i\ national bank which
had been designated as a depositary of public moneys. The bank failed.
Held, that the United States were not liable for the money so deposited.
Ib.
39. Defendant, who had money on deposit in a national bank, when de?nanding payment thereof, was induced by an officer of the bank to sign a
promissory note, which was represented to him to be a receipt for the
money. He was unable to read English. Held, that he was not liable
to the bank upon the note. Resh v. First National Bank of Allentown,
93 Penn. St., 397; 3 N. B. C, 724.
40. Plaintiff, who was unable to read, deposited money in a national bank and
took a certificate of deposit therefor, which the officers of the bank represented was a certificate of the bank. It was, on its face, the certificate
of a private banking firm, composed of some of the officers of the bank.
Held, that the bank was liable for the amount of the deposit. Zeigler
v. First National Bank of AUentoicn, 93 Penn. St., 393; 39 Am. -Rep., 758;
3 N. B.C., 721.
41. Where the officers of a bank, when they received a deposit which they
applied to the payment of a debt due from the depositor to the bank,
REPORT OF THE COMPTROLLER OF THE CURRENCY. 169
DEPOSITS—Continued.
42.
43.
44.
45.
46.
47.
48.
knew or had reason to believe that the deposit contained moneys belonging to others, for whom the depositor was but the agent or factor, the
persons who were in equity the owners of the money were entitled to
recover it from the bank. Union Stock Yards National Bank v. Moore
eta!., 79 Fed. Rep., 705.
A postmaster at Lewiston. Idaho, with intent to defraud the .Government.
and without receiving any money, issued post-office orders jipon the
postmaster at Pueblo in favor of the Stockgrowers' Bank. Be mailed
the orders to the bank with a letter purporting to be written by one
Wilson, and directed the bank to draw the money and hold it subject
to said Wilson's order. The bank, without knowledge of the fraud,
obtained the money as directed, but in doing so acted as a principal
without disclosing" their agency in the matter. The Lewiston postmaster, under the name of Wilson, subsequently drew the greater part
of the money from the bank, and suit was afterwards brought against
it by the United States to recover the money so obtained on the order.
Held, that the bank was liable. United States v. Stockgrou'ers" National
Bank of Peublo, 30 Fed. Rep., O.U.
Money deposited in a bank without stipulation as to place of payment is
payable to the depositor at the bank. McBee v. Parcel! National Bank
JIndian Ter.), 37 S. W., 55.
Where, after the maturity of a promissory note held by a bank, and due
protest and notice thereof, the maker makes a general deposit in the
bank of an amount sufficient to pay the note, this does not of itself, as
between the bank and an indorser. operate as a payment. In the absence
of any expressed agreement or directions it is optional with the bank
whether or not to apply the money in payment; it is under no legal
obligation so to do. The National Bank of Newburgh, respondent, v.
Daniel Smith, appellant, 00 N. Y., 371.
Tii6 mere discounting of paper, and placing the amount thereof to the
credit of a depositor who already has a large balance to his credit, does
not make the bank a purchaser for value so as to protect it against infirmities in the paper. Entering the amount of the discount to the credit of
the depositor simply creates the relation, between the bank and the
depositor, of debtor and creditor: and as long as that relation remains
and the deposit is not drawn out the bank has simply promised to pay
the depositor, has parted with no value, and is not entitled to the protection of a bona fide holder of paper. 1b.
A trust can not be implied from a mere deposit in a bank by one person of
his own money in the name of another. Bearer v. Beaver (N. Y.). JJ
N E., 0//); 117 N. F . , .£•?/.
Although the relation between a bank and its depositor is that merely of
debtor and creditor, yet the fund does not change its character from the
fact that the money has been deposited in bank to the credit of the
depositor. If the money in his hands was impressed with a trust in
favor of another the deposit will remain subject to the same trust.
Third National Bank v. Stilhvater Gas Co., 30 N. W., MO; M Minn.. 75.
A firm made an assignment, parts of its assets consisting of a sum on
deposit in defendant bank. The assignee made demand for the deposit,
which was refused, and he brought suit. After the demand, but before
suit, a note against the assignors, held by the bank at the date of the
assignment, matured. Held, that it could not be set off in the suit by
the assignee. CJiipmein v. Ninth National Bank (Pa.), 13 A.. 707.
DEPUTY
COMPTROLLER:
1. A certificate signed by the Deputy Comptroller of the Currency as '-Acting
Comptroller of the Currency •"' is a sufficient certificate by the Comptroller of the Currency within the requirements of Rev. St., par. 5154.
Keyser v. Hitz, 133 U. 8., 13S.
2. The Deputy Comptroller of the Currency being authorized by law to act
for the Comptroller in certain contingencies, the courts will presume, in
the absence of any showing to the contrary, that the deputy, in acting
for the Comptroller in any particular instance, has acted lawfully.
Young y. Wempe et ah. Jfi Fed. Rep., 35 Jh
DIRECTORS: See Officers.
170
REPORT OF THE COMPTROLLER OF THE CURRENCY.
DISTRICT ATTORNEY:
1. For services performed by the district attorney in bringing a suit against
a national bank, and obtaining a forfeiture of its charter, he is not
entitled to more than $10, the fees prescribed by section 824, there being
no other law in the United States giving a compensation to a district
attorney for such services. Bashaw v. United States, 47 Fed. Rep., 40.
2. The 56th (now 153d) section of the act providing tliat suits under it, in
which officers of the United States are parties, shall be conducted by
the district attorney of the district, is directory only. Ken nedy v, Gibson,
S Wall, 498.
3. District attorney can not recover compensation for services in conducting
suit arising out of the provisions of the national-banking law in which
the United States or any of its agents or officers are parties. Gibson v.
Peters, Receiver, 150 U. S.. 342.
4. The expenses of a receivership can not be held to include compensation of
district attorney for conducting a suit in which the receiver is party,
and he can not receive any compensation for services so rendered or
offered to be rendered. Ib.
DIVIDENDS:
1. Equity has jurisdiction of a suit by the receiver of an insolvent national
bank against all its shareholders to recover dividends unlawfully paid
to them out of the capital at times when the bank had earned no net
profits, and was in fact insolvent, it being in effect a suit to execute a
trust, to undo a fraud, and to prevent a multiplicity of suits. Hayden
v. Thompson et al., 71 Fed, Rep., GO.
2. A bill by the receiver to recover the dividends illegally paid may be brought
without an express order from the Comptroller of the Currency. Ib.
0. It can not be urged as a defense to such suit that the remedies provided
by the national-banking act are exclusive, the right to recover diverted
trust funds not being dependent on statute. Ib.
4. The fact that some of the defendants participated in but one or two of the
sixteen dividends on which the suit was based, that others participated
in more, and others in all the dividends does not render the bill multifarious. Ib.
5. The national courts, sitting in equity, act or refuse to act in analogy to the
statute of limitations of the States in which they are sitting. Ib.
6. A stockholder in an insolvent bank who receives a dividend from funds
properly belonging to the creditors holds it under an implied and not an
express trust in favor of the creditors, and hence limitations run in his
favor against an action to recover the dividend. Ib.
7. The rule that the time limited for beginning an action for fraud shaU not
commence to run while defendant conceals it does not apply when the
concealment is by a third person. Ib.
8. In the absence of fraud the cause of action to recover the dividend wrongfully paid arose when the payment was made, and not upon the appointment of the receiver and the discovery that the other assets of the bank
were insufficient to pay its debts. Ib.
9. A bank has a right to accumulate a surplus before declaring dividends on
its stock. Reynolds v. Bank of Mt. Vernon (Sup.), 39 N. Y. S., 623.
10. Where complainant has a decree in equity that defendant pay her dividends on stock held by her, and defendant has against complainant an
unsatisfied judgment at law for an assessment on said stock, the court,
on motion, will order the amounts to be paid under the decree applied
on the judgment, though the judgment was at a former term and complainant intends to appeal therefrom. Sowles v. Witters et al., 40 Fed.
Rep., 413.
11. Liquidation dividends of a national bank belong to the holder of the shares,
whether those shares be recorded upon the books of the bank or not, and
must be paid to the holder of such shares on demand. Bath Sav. Inst.
v. Sagadahoc National Bank lie., 36 A., 996.
ESTOPPEL:
1. Where one sued by a national bank is accustomed to deal with it as such
and does so deal with it in respect to the matter in suit, he is estopped
from denying its incorporation. National Bank of Fairhaven v. The
Phoenix Warehousing Company, 6 Hun., 71.
REPORT OF THE COMPTROLLER OF THE CURRENCY.
171
ESTOPPEL—Continued.
2. A director is not, by reason of his position, estopped from setting up the
defense of usury m an action brought against him by the association.
Bank of Cadiz v. Slemons, 34 Ohio St., 142.
3. Where a national-banking association has entered into a contract which
it is not authorized to make, a party who has enjoyed the benefit of
such contract can not question its validity. Casey v. La Societe de
Credit Mobilier, 2 Woods, 77; German National Bank v. Meadoivcroft,
95 III, 124.
4. Where officer of a bank guaranteed payment in name of bank and sold the
note, the bank by retention and enjoyment of the proceeds is estopped
to deny officer's act. People's Bank v. National Bank, 101 U, S., 181.
5. The organization of a national bank under the national banking act may
be put in issue by a party who has not estopped himself. But a party
who has accepted as payee a promissory note payable at a banking institution which the parties to the note style a national bank, and has sold
and transferred the note to such banking institution, can not be allowed
to raise that issue by merely averring want of knowledge or information
sufficient to form a belief as to whether the institution is a body corporate, etc. Huffaker v. National Bank of Monticello, 12 Bush, 287;
1 N. B. C., 504.
6. If, upon inquiry by the surety, the cashier, knowing that he is a surety,
inform him that the note is paid, intending that he should rely upon
his statement, and the surety does so, and in consequence changes his
position by giving up securities, or indorsing other notes for the principal, or the like, the bank will be estopped to deny that such note is
paid. Coehecho National Bank v. Haskell et al, 51 N. II, 116.
7. A stockholder of a private corporation, when sued by its creditors, is
estopped from denying the legal existence of the corporation, or insisting that its charter has been forfeited by noncompliance with statutory
provisions for which a forfeiture might be judicially declared. National
Commercial Bank v. McDonnell, 92 Ala.. 387.
8. Where an officer of a bank loaned money for his individual benefit upon
pretended collateral security of the bank. Held, that his bank was
estopped to deny the loan and is liable therefor, as the lender dealt with
him solely in his official capacity. Stewart v. Armstrong,5G Fed. Rep.,
167.
9. Vice-president of bank, also manager of a commercial house, substituted
as collateral notes to order of his house, and indorsed by them without
consideration. Held, that, as against holders of collateral, the house
was estopped to deny that these notes were properly pledged as security
for a loan to his bank. Ib.
10. The estoppel upon his bank exists only in favor of lender. Hence, his
house has no remedy against it for any liability enforced by the lender
on account of its indorsed notes so pledged, Ib.
11. A shareholder who has held himself out to the world as such is estopped
to deny that the association was legallv incorporated. Casey v. Galli,
94 IL 8., 673; Wheelock v. Kost, 77 IU.,r296.
12. A person who received dividends on shares of stock standing in his name
on the books of a national bank is estopped from denying his liability on
the ground that he returned the same by check to an officer of the bank.
He is presumed to be the owner of the stock when his name appears
upon the books of the bank, and the burden of proof is upon him to show
that he is not in fact the owner. Finn v. Brown, 142 U. S., 56.
13. A shareholder against whom suit is brought to recover the assessment made
upon him by the Comptroller will not be permitted to deny the existence of the association, or that it was legally incorporated'. Casey v.
Oalli, 94 U. S.. 673.
14. In such suit stockholder is estopped to deny existence or validity of corporation. Ib.
15. The legality of the appointment of the receiver can not be questioned by
the debtors of the bank when sued by him. The bank may move to have
the appointment set aside, but the debtors can not. Cadle v. Baker,
20 Wall., 650; Matt v. Beebe, 57 N. Y.. 339.
16. A corporation which received and used the proceeds of a discount of notes
by its president is estopped to deny his authority to discount the paper.
German National Bank v. Louisville Butchers' Hide and Tallow Co.
(Ky.),29$.
W.,S82.
172
REPORT OF THE COMPTROLLER OF THE CURRENCY.
ESTOPPEL—Continued.
17. Where the cashier, intrusted by its directors with its entire management,
has been accustomed in having paper rediscounted to guarantee its payment, the bank will be estopped from denying his authority to so guarantee it. First National Bank v. Stone (Mich.), 64 N. IF., 487.
IS. Where the president of a bank procures advancements to be made to a relative by the bank, promising to become liable therefor, and not to receive
payment of any part of the amount which such relative owes him individually until the bank was paid, he is estopped to claim the benefit of a
priority given his debt in a mortgage executed by such relative over that
due the bank, and whatever benefit accrues to him under such mortgage
is subordinate to the claim of the bank. Brown v. Farmers and Merchants' National Bank (Tex, Civ. App.), 31 S. IF., 216.
10. A bank which causes property owned by it to be conveyed by a deed regular in form to a worthless corporation, organized by its own directors,
and then loans such corporation money, takes its notes and discounts
them with strangers, by representing them as prime paper and on the
strength of such corporation's apparent ownership of such property, is
thereafter estopped, as against the holders of the notes, to assert that the
conveyance was ultra vires. Butler et ah v. Cockrill, 73 Fed. Rep,. 9Jj5.
20. The holder of part of the bonds of an insolvent corporation is not estopped
to set up the invalidity or want of consideration of other of the bonds
not in the hands of innocent holders. Farmers & Merchants' National
Bank v. Waco Electric Railway & Light Co. (Tex. Civ. App.), 36 S.W.,
131; Metropolitan Trust Co. v. Farmers & Merchants' National Bank, ib.
21. In order to constitute a ratification of an unauthorized act, the act relied
on as such ratification miist be performed with knowledge of the material facts in the absence of circumstances creating an equitable estoppel.
Columbia National Bank v. Rice (Neb.), 67 N. IF., 165.
22. The fact that the bank stamped the original note "Paid,"' instead of
•' Renewed," in the belief that the forged signature of the surety on the
renewal note was genuine, does not estop it from enforcing its claim
against the surety on the original note, though the surety, seeing the
latter in the hands of the principal, believed it had been paid, and signed
other notes of the principal as surety, to his damage.
LyndonvHie
National Bank v. Fletcher (Vi.), 34 A., 3S.
23. After a party has recovered judgment against a corporation, as such, and
obtained the appointment of a receiver therefor, he can not in the same
suit deny its corporate entity and seek to hold the stockholders thereof
liable as partners. First National Bank v. Dovetail Body & Gear Co.
(Lid, Siqj.), 42 N E.. 924.
24. A bank which received a letter from another bank asking in regard to the
character and financial standing of a certain person, without any intimation as to the making of a loan, is not estopped, as against a loan subsequently made by the inquiring bank, to claim a chattel mortgage lien
on the man's property, because, in its answer, it merely stated the man's
character and assets above his indebtedness, without stating that he was
indebted to it. First National Bank v. Marshall & Ilsley Bank (Mich.),
65 N. I F , 604.
25. Statements of a mortgagor, made for the purpose of obtaining credit for a
corporation of which he was a member, that he had sold to it the mortgaged property, would not conclude the mortgagee, unless it had knowledge thereof at the time, and kept silent. Ib.
26. One who has demanded a certain amount as a balance due on a trade is not
estopped from suing for a greater amount, and may explain the demand.
First National Bank v. Lynch (Tex. Civ. App.), 25 S. IF., IO42.
27. A partner who is made known by his fellow-partner to a third person, in
order to obtain credit, can not afterwards claim to be a dormant partner
as to such person, so as to relieve him from the necessity of giving notice
upon retiring from the partnership. Milmo National Bank v. Carter
(Tex. Civ. App.), 20 S. I F , 836.
28. The fact that a party to a contract which is void as against public policy
has received the benefits therefrom does not estop him when sued
thereon from setting up such defense. Brown v. First National Bank
(Ind. Sup.), 37 N. E., 15S.
29. The maker of a note payable at Tuscaloosa Fence Factory is estopped in a
suit thereon by an innocent purchaser for value to deny the existence of
such a place. Broicn v. First National Bank (Ala.). 15 So., 435*
REPORT OF THE COMPTROLLER OF THE CURRENCY.
173
ESTOPPEL—Continued.
30. A wife, jointly with another person, signed a note to her husband's order,
and delivered it to him to have discounted, and with the proceeds pay a
debt of his. The husband applied to a bank official, who had notice that
the note was made without consideration, out did not have notice that
the proceeds were to be applied for the husband's benefit, and the official
offered to discount it by a check to the wife's order, which the husband
accepted, and afterwards procured his wife to indorse and deliver to
him, she knowing that it was the proceeds of her note. Held, that the
wife was estopped from setting up against the bank that she was a mere
surety on the note. Hackettstoivn National Bank v, Ming. (N. J, C7i.).
27 A., 920.
31. The organization of a national bank under the national banking act may
be put in issue by a party who has not estopped himself. But a party
who has accepted as payee a promissory note, payable at a banking institution which the parties to the note style a national bank, and has sold
and transferred the note to such banking institution, can not be allowed
to raise that issue by merely averring want of knowledge or information
sufficient to form a belief as to whether the institution is a body corporate,
etc. Huffaker v. National Bank of Monticello. 12 Bush., 2S7; 1 N B. C.,
32. H., being indebted to a national bank for a considerable sum. for which
the bank held certain corporate stock as collateral security, in writing
authorized the president and directors of the bank to sell at their discretion all the stock and apply the proceeds of the sale upon his indebtedness. Thereafter, after giving H. ample notice of an intention to sell,
the stock was sold and transferred to three of the directors of the bank,
at a price above the market value, and the amount received from the
sale applied upon the indebtedness of H. H. received an itemized statement of the proceeds of the sale and of its application upon his indebtedness, to ail of which he made no objection. Five years thereafter H.
commenced an action against the bank for the purpose of obtaining a
decree redeeming the stock, and for an accounting. Held, that the
action could not be maintained: First, because by his silence he was
estopped; and second, because of delay in bringing suit. Hayicard v.
Eliot National Bank, 96 U. S., 611; 2 N. B. C . 1.
33. A national bank purchased the stock of a dealer in wall paper at a sale
under an execution in its favor, and afterwards organized a corporation
to take and dispose of this stock, such corporation being managed by
the officers of the bank, and controlled by it. In order to dispose of the
stock with advantage, new stock was purchased on credit, the bank,
through its cashier, informing the seller, upon inquiry, of the relation
between the bank and the corporation, and that the bank would see
that the bills were paid if the goods were sold. Held, that whether or
not it was within the powers of the bank to purchase new stock to help
the sale of that brought on execution sale, the bank having received
and appropriated the proceeds of the goods purchased, was estopped to
set up in a suit for the price a want of power to make the purchase.
American National Bank v. National Wall Paper Co., 77 Fed, Rep., 85.
34. A national bank which returns its capital for taxation is not thereby
estopped from setting up that the same was not subject to taxation, and
refusing to pay the tax. Brown v. French, 80 Fed. Rep., 160.
35. The judgment in an action is conclusive in a subsequent action between
the same parties upon the same cause as to all questions which might
have been presented and determined in the first suit; but in a subsequent action between the same parties upon a different cause it is conclusive only upon such questions as were actually litigated and determined in the first suit. Lawrence v. Stearns, 79 Fed. Rep., 878.
36. One who has been prosecuted to judgment upon a cause of action based
on the negligent "act of another, who has been called in to defend and
has defended the suit, may sue such other party for indemnity, and
rest his case upon the former adjudication, it being shown that it was in
consequence of such negligence that the former judgment passed. 16.
37. The cashier of a bank does not act as its agent or representative in answering an inquiry addressed to him by another bank as to the business
standing of a third person; and the bank is not bound or estopped by
statements so made by him, his act being one not relating to the business of his bank, but simply one of customary courtesy, rendered
174
KEPORT OF THE COMPTROLLER OF THE CURRENCY.
ESTOPPEL—Continued.
without consideration. First National Bank of Manistee, Mich., et ah,
v. Marshall and Ilsley Bank of Milwaukee, Wis., 83 Fed. Rep., 725.
88. The failure of the officers of a bank, in answering a general inquiry from
another bank as to the character and standing of a customer, to disclose
the fact that the customer was indebted to their bank, and that it held
liens on certain of his property, will not estop it to assert such liens as
against a mortgage subsequently taken by the inquiring bank in the
absence of any fraudulent intent. Ib.
EVIDENCE:
1. The certificate of the Comptroller of the Currency that an association has
complied with all the provisions required to be complied with before commencing the business of banking is admissible in evidence upon a plea of
•nul tiel corporation; and such certificate, together with proof that the
association has been acting as a national banking association for a long
time, is amply sufficient evidence to establish, at least prima facie, the
existence of the corporation. Mix v. The National Bank of Bloomington,
91 III, 20; Merchants' National Bank of Bangorv. Glendon, 120 Mass., 97.
2. The certificate of the Comptroller of the Currency duly made is sufficient
evidence of the appointment of the receiver in an action brought by him.
Platt v. Beebe, 57 N. F., 339; 1 N. B. C., 725.
3. And in a suit against the association or its shareholders such certificate of
the Comptroller is conclusive as to the completeness of the organization.
Casey v. Galli, 94 U. S., 673.
4. Under the national banking act, a copy of the certificate of organization
of a United States national bank, which is certified by the Comptroller
of the Currency and authenticated by his seal of office, is competent evidence in a State court. Tapley v. Martin, 116 3Iass., 275; 1 N. B. C., 611.
5. In an action by " T h e West River National Bank of Jamaica, Vermont."
Held, that the certificate of the Comptroller of the Currency of the existence of a corporation under the name of "The West River National
Bank of Jamaica," described as located in the town of Jamaica, Vermont,
was admissible under the general issue for the purpose of proving the
plaintiff's corporate existence. Thatcher v. West River National Bank,
19 Mich., 196; 1 N. B. C, 622. ^
6. It is no objection to the admission in evidence of the certificate of the
organization of a national bank that the notary "before whom it was
acknowledged was one of the shareholders of the bank. The Comptroller's certificate of compliance with the act of Congress removes any
objection which might otherwise have been made to the evidence on
which he acted. Ib.
7. A certificate signed by the Deputy Comptroller of the Currency as *'Acting
Comptroller of the Currency" is a sufficient certificate by the Comptroller of the Currency within the requirements of Rev. St., sec. 5154.
Aspinwall v. Butler, 133 U. S., 595.
8. A letter from the Comptroller directing the receiver to institute suit, if
not objected to at the time, is sufficient evidence that the Comptroller
has decided that the enforcement of the individual liability of the
shareholders is necessary. Bowden y. Johnson, 107 U. S., 251.
9. In an action by a national bank, plaintiff may prove that it is a corporation de facto by parol evidence; that it is carrying on a general banking business as a national bank, authorized by the" general laws of the
United States, under the name by which it has sued, the court taking
judicial notice of such laws. Yakima National Bank v. Knipe, 33 P..
834; 6 Wash., 348.
10. In accordance with the provisions of the Minnesota statute (Gen. St., 1878,
c. 26, § 8; Gen. St., 1894, § 2275), making the certificate of protest of a bill
or note of any notary public of that or another State evidence of the
facts therein certified, such a certificate is competent evidence, in a Federal court sitting in Minnesota, of the presentment, demand, dishonor,
or notice of dishonor of a note drawn in Minnesota and payable and
protested in Connecticut. Nelson v. First National Bank of Killingley,
69 Fed. Rep., 798.
11. A letter written in the ordinary course of business by a clerk in the office
of one sought to be charged as indorser of a note, acknowledging the
receipt of notice of the protest thereof, is competent evidence of the
sending of the notice. Ib.
REPORT OF THE COMPTROLLER OF THE CURRENCY.
175
EVIDENCE—Continued.
12. Upon the question of the value of stock in a corporation which has been
placed in the hands of a receiver, under a statute of the State creating
it, in proceedings for its dissolution as insolvent, the opinions of competent witnesses as to the value of the stock are admissible, as is also
evidence of the amount and value of the assets and liabilities of the
corporation at different times between the appointment of a receiver
and the sale of the assets in accordance with the statutory requirements. Ib.
13. Upon the same question it is also admissible to prove the amounts realized
at the sales made of the property of the corporation by the receiver,
under the order of the court, in the regular course of the insolvency
proceedings, though taking place at a time remote from that to which
the inquiry as to the value of the stock relates. Ib.
14. A witness ought not to be permitted to give an opinion as to the value of
an article when it does not appear that he has acquired any correct
information from which to form an opinion, or that he has formed any
opinion whatever. Ib.
15. When evidence which may have been irrelevant, or otherwise open to an
objection seasonably taken, has been admitted without objection, the
witness being examined and cross-examined by the respective parties,
it is not error to deny a motion to strike out such evidence, made after
its tendency and effect have been disclosed. Farmers & Traders' National
Bank of Covington, Ky., v. Greene et ah, 74 Fed. Rep., 439.
16. When the books of a bank are offered in evidence by one party to a suit,
the other party is entitled to avail himself of any part of the evidence
contained therein, such as the state of a particular account. Blanchard
v. Commercial Bank of Tacoma, 75 Fed. Rep., 249.
17. In an action to recover a sum alleged to have been loaned to a bank, the
receiver thereof claimed that the loan was to the president of the bank
personally. He also contended that the bank's books should not be considered as evidence that the loan was to the bank because they were not
properly kept, and he offered to show by expert testimony what would
have been the proper method of entering the transaction if the loan had
been made to the bank. Held, that this evidence was properly excluded.
as it did not appear that there was any such ambiguity in the account
as to require expert evidence in relation thereto. Ib.
18. Where a jury is waived and the court makes special and general findings.
an appellate court is not required to weigh the evidence and determine
the preponderance thereof, but will only consider whether the pleadings
and special findings are adequate to support the judgment. Walker v.
Miller, 8 C. C. A., 331; 59 Fed. Rep., 870, followed.
19. On an issue as to whether the deposits of plaintiffs' testator in defendant
bank were interest bearing, evidence of the value of the use of money
in vicinity of the bank, and that testator received interest on similar
deposits in other banks, and that one bank offered him 5 per cent on any
money that he might deposit, is admissible in rebuttal of defendant's
evidence that the agreement between the parties, by which testator's
account should be interest bearing, was abrogated by a subsequent
agreement that it should not bear interest. Merwin, J., dissenting.
McLoghlin v. National Mohawk Valley Bank (Sup.), 20 N. Y. S., 171."
20. An instruction that a party alleging fraud must prove it by a preponderance of the evidence, so clear that it leaves the mind well satisfied that
the charge is true, requires too high a degree of proof, since it is sufficient if the jury believe a material fact in issue, from the evidence, even
if the proofs do not generate a belief which entirely satisfied the mind.
Hutchinson National Bank v. Crow, 56 III. App., 558.
21. The certificate of organization of a national bank, issued by the Comptroller of the Currency, is competent evidence of the incorporation of the
bank. National Bank of Commerce v. Galland (Wash.), 45P., 35.
22. Where the cashier of a bank, who assumed to be acting as such, applied
to another bank in the usual course of business to discount a note pro. duced by him, payable to himself, and regularly indorsed by him in
both his individual and official capacity, neither the fact that he appeared
to be the payee and first indorser and his bank the second indorser, nor
that the avails of the note were received by him x>ersonall}', was conclusive evidence that the indorsement of his bank was unauthorized or
170
REPORT OF THE COMPTROLLER OF THE CURRENCY.
EVIDENCE—Continued.
for his own accommodation. Merchants' National Bank v. McNeir
(Minn.), 53 N. TF.. 17S.
23. In an action by a bona fide holder on bonds of a school district, purporting
to have been issued in satisfaction of a judgment against the district,
as authorized by acts 17th Gen. Assem., c. 132, the defense was that
such bonds had been fraudulently issued after the judgment had been
already satisfied by a prior issue of bonds. Held, that, after a showing
that a diligent search had been ineffectually made for the records of the
district authorizing the first issue of bonds, and after the then secretary
of the district identified one of such bonds as having been issued in payment of the judgment in question, and had partly described the others,
such bonds purporting on their face to have been issued by the officers
of the district, and having been afterwards found to be valid obligations
of the district by a court of competent jurisdiction, were themselves
properly admitted in evidence. First National Bank y. District Tp. of
Boon (Iowa), 53 N. TF., 301.
24. Depositing in the post-office a. letter properly addressed, with postage prepaid, is prima facie evidence that the sendee received it. Ripley
National Bank v. Latimer, 2 Mo. App. Rep'r, 907.
2.5. In an action to recover the amount paid to the payee and indorser of a
check, on the ground that the amount of the check had been raised,
where experts had testified that writing could be removed by acids without leaving any trace, and there was evidence that the name of the payee
and amount in the check in question had been altered, but none that the
check had been subjected to acids, experienced cashiers were properly
allowed to testify as to the genuineness of the check, though not shown
to be experts as to the effect of acids on writing. Birmingham National
Bankv. Bradley (Ala.), 19 So., 791.
26. On an issue whether a check had been raised in amount, it was error to
admit in evidence a check which bore evident signs of having been
altered, as a result of experiments with acids which had been made
thereon, for the x>urpose of showing that an alteration could not be made
without detection. Ib,
27. The testimony on another trial of an officer of a corporation with relation
to previous corporate acts can not be proved as an admission binding
upon the corporation. Columbia National Bank y. Bice (Neb.), 07 N
W.,165.
28. Proof of false statements knowingly made by the purchaser of goods.
whereby he is shown to be possessed of a large amount of property over
and above his liabilities, is admissible under an allegation that, being
insolvent, he knowingly concealed his insolvency from the vendor. First
National Bank v. McKinney (Neb.), 66 N W.~280.
29. In an action on a note dated on Sunday, the burden is on plaintiff to show
that it was in fact executed on a day which was not Sunday. Hauerwas
v. Goodloe (Ala.), 13 So., 507.
',10. In an action by a bank on a note dated on Sunday, its " discount register*'
is not admissible in evidence to show that the note in suit was a renewal
of a note which matured on Sunday, and that the renewal note was
made on a certain week day after its date and dated back to the date of
the maturity of the first note, according to the custom of the bank. Ib.
31. In an action by a bank on a note dated on Sunday, it is not error to admit
evidence that the note is in the handwriting of the bank's cashier, and
that he was not in the employ of the bank until after the date of the
note, and that the note is a renewal note, and dates back. Ib.
32. Where defendant, in a suit by a mortgagee against the mortgagor for the
mortgaged property, claims payment of the debt the burden is on him
of proving such payment. First National Bank y. Hellyer (Kan.), 37
P., 130.
33. The testimony of a witness in another case may be proven by anyone who
heard it, and the reporter's notes are not the only or best evidence.
German National Bank v. Leonard (Neb.), 59 N. W., 107.
34. The testimony of a witness in an action to which he was not a party may
be proved in a subsequent action to which he is a party as an admission. Ib.
35. Parol evidence is admissible to show that the word " accounts,''as used in
an assignment, for the purpose of security, of the "good and collectible
accounts " of the assignor, covered not only such accounts as showed an
REPORT OF THE COMPTROLLER OF THE CURKENCY.
177
EVIDENCE—Continued.
unconditional liability on the part of the debtor at the date of the
assignment, but also partially executed contracts and consignment contracts which called for payment in the future and on conditions to be
performed. Preston National Bank v. Emerson (Mich.), GO N. IF., 981.
36. As against bona fide purchasers of a note signed in blank on the back
thereof by a third person before delivery to the payee, parol evidence is
not admissible to show that such person signed as accommodation
indorser, and not as joint maker, as presumed by law. Salisbury v.
First National Bank (Neb.), 56 N. IF., 727.
37. In an action by one bank against another on a note, and for money loaned,
where defendant asserts that plaintiff bought the note, proof of the
negotiations for the loan, and that defendant received its proceeds, is
not incompetent as varying the written instrument. First Natioiml
Bank v. California National Bank (CaL), 35 P., 639.
38. Where the genuineness of the signatures of certain letters alleged to have
been written by plaintiff were in question, and she admitted her signature to a certificate of stock, it was not error to send the stock book to
the jury for a comparison of signatures. Rose v, Winnsboro National
Bank (S. C), 19 8. E,, 487.
39. An unsigned entry on a deed is inadmissible to show the time it was filed
for record. First National Bank v. Cody (Ga.), 19 8. E., 831.
40. Parol evidence is admissible to show that a note, though in the possession
of the payee, was delivered with the understanding that it would not be
binding upon the makers unless signed by other persons. Merchants'
National Bank v. McAnidty (Tex. Civ. App.), 31 8. W., 1091.
41. In an action for malicious prosecution of an attachment, it is not error torefuse to permit plaintiff to testify whether defendant had any motive
in procuring the issuance of the attachment other than an honest desire
to collect a debt, and to limit him to a statement of the facts. Hamcr
v. First National Bank (Utah), 33 P., 9S+1.
42. In an action by a national bank against a maker of a promissory note, the
fact that the note is made payable at the iDlaintiff bank is not conclusive
evidence that such bank is a corporation. Hungerford National Bank
v. Van Nostrand, 106 Mass., 559; 1 N. B. C, 589.'
43. Under the acts of Congress authorizing questions arising on a trial or
hearing before two judges in the circuit court, and upon which they
are divided in opinion, to be certified to the Supreme Court of the
United States for decision, each question certified must be one of law
and not of fact, nor of mixed law and fact, and it must be a distinct
point or proposition clearly stated, and not the whole case nor the
question whether upon the evidence the judgment should be for one
party or for the other. Williamsport National Bank v. Knapp. il'j
U. 8., 357; 3 N. B. C., 184.
44. An indorser on certain notes made a compromise with the indorsee by
which he gave his notes for a part of the amount due, he to be released
from liability on the original notes upon payment of the compromise
notes at maturity. Held, that evidence that money with which he made
part payment on the compromise notes was borrowed by him was not
admissible on an issue as to whether the indorsee, after accepting such
payments, was estopped to hold him liable on the original notes.
Humphreys v. Third National Bank of Cincinnati, 75 Fed. Rep., 85;?.
45. An indorsee of a note agreed to receive, in compromise of an indorsers
liability thereon, secured notes for a less amount, the indorsee to have
the rigiit, if the compromise notes were not paid when due, to sue the
indorser for the balance remaining due on the original notes, after
applying thereon the partial payments made on the compromise notes,
and the proceeds of the security given therefor. Held, that the indorsee
did not, by receiving part payments on the compromise nptes after their
maturity, waive the right to sue the indorser on the original notes. CO
Fed. Rep., 872, affirmed. Ib.
43. iNTor did he waive his right to proceed on the original note by failing to
tender back the compromise notes or the security given therefor. Ib.
47. Where the facts do not appear on the face of the judgment, oral evidence
is admissible to show how credits thereon came to be allowed and what
they were allowed for. Ib.
CUR 08
12
178
REPORT OF THE COMPTROLLER OF THE CURRENCY.
EXECUTION:
1. A judgment against a national bank in the hands of a receiver only establishes the validity of the claim; the plaintiff can have no execution on
such judgment, but must wait pro rata distribution. Bank of Bethel v.
Pahqnioque Bank,14 Wall., 883.
2. A sheriff in Texas has no power to levy upon or sell land lying outside his
county, and his deed, describing by metes and bounds land purporting
to have been levied on and sold, part of which lies outside his county, is
void as to such part. Short v. Hepburn, 75 Fed. Rep., 113.
8. The imperfect description of property in a notice of sheriff's sale under
execution will not necessarily vitiate the sale where the description is
sufficiently certain so that no one is deceived as to the identity of the
property 'sold. Griindy County National Bank v. Rulison," Gl III.
A pp., 388.
4. Where judgment has been rendered in a State court against a national
bank, and upon the execution issuing thereon a return of nulla bona
has been made by the sheriff of the county where the bank is located,
and the bank has ceased to discharge its functions as a fiscal agent of
the United States, and is disposing of its assets which can not be reached
by levy and sale under the common-law execution among its stockholders, thereby endangering the safety of those assets and the judgment
debt of the creditor, equity will relieve by the grant of injunction and
the appointment of a receiver. Merchants and Planters' National Bank
v. Trustees of Masonic Hall, 2 N. B. C.,220.
5. A bill by a judgment creditor for discovery, showing that when the execution was returned unsatisfied arid when the bill was filed there was
property, within the knowledge of the creditor, subject to levy on execution, fails to show that the legal remedy has been exhausted, and is
demurrable. Merchants' National Bank of Chicago et ah v. Sabin et ah,
34 Fed. Rep., 492.
EXPIRATION OF CORPORATE EXISTENCE:
Under the act of Congress, July 12, 1882, extending for the purpose of liquidation the franchises of such national banking associations as do not
extend the periods of their charters, and making applicable to them the
statute relating to liquidation of banking associations, such an association may continue to elect officers and directors for the purpose of effecting liquidation. But after the expiration of the term of its charter the
stock of such an association is not transferable so as to give the transferee the right to share in the election of directors, and such transferee,
not being a stockholder, is ineligible as a director under Rev. St., sec.
5145. Richards v. Attleboro National Bank, 14S Mass., 187; 3 N. B, C,
495.
EXTENSION OF CORPORATE EXISTENCE:
1. The identity of a national bank is not affected \>y the extension of its term
of existence. Trustees of First Presbyterian Church v. National State
Bank, 29 A., 320.
2. The committee provided for by the fifth section of act of Congress of July
12,1882, to appraiseithe national-bank shares of shareholders who do not
assent to amendments to the articles of association,, may correct a mistake made by them in their approval within thirty days therefrom.
First National Bank of Clarion v. Brennemaws Executors, 114 Pemi. St..
315; 3 N. B. C, 755.
FALSE ENTRIES:
1. The only remedy for the making of a false return to the auditor, by the
cashier of a bank, of the resources and liabilities of the bank, for the purposes of taxation, is afforded by revised statutes of Ohio, section 2679,
which provides that the auditor may examine the books of the bank, and
any officer or agent of it under oath, and make out the statement; and
any officer of the bank may be fined not exceeding §100 for failing to
make the statement, or for willfully making a false one. Miller v. First
National Bank, 21 N. E., 860.
2. Any entry on the books of the bank which is intentionally made to represent what is not true or what does not exist, with intent either to deceive
its officers or defraud the association, is a false entry within the meaning
of the statute. United States v. Harper, 33 Fed. Rep.y 4.71.
REPORT OF THE COMPTROLLER OF THE CURRENCY.
FALSE
179
ENTRIES—Continued.
8. It may be made personally or by direction. Ib.
4. The erasure of figures already written in the books of a national bank and
the substitution of other figures which falsify the state of the account
constitute a " false entry" within the meaning of sec. 5209, Rev. St., by
which it is declared to be a misdemeanor to make any " false entry in
any book, report, or statement of the association, with intent to injure
or defraud," etc. United States v. Crecelius, 84 Fed. Rep., 80.
5. Where false entries are made by a clerk at the direction of the president,
the latter is a principal. In the matter of Van Campen, 2 Ben., 419;
United States y. Fish, 24 Fed. Rep., 585.
6. A report of condition of a national bank, whether called for by the Comptroller of the Currency or not, which is a report in the usual form made
by an officer of the bank in his official capacity, if it contains a false
entry made with intent to deceive, is within Rev. St., sec. 5209, which
declares such false entries to be a misdemeanor. United States v.
Hughitt, 45 Fed. Rep., 47.
7. Where false entries were made by a bookkeeper in a statement requested
by a national-bank examiner, purporting to give the balance due to depositors, which statement it was the duty of the examiner to make and not
the bookkeeper, an indictment for making "false entries in a statement
of the association " will not be sustained. United States v. Ege, 49 Fed.
Rep., 852.
8. In an indictment of an officer of a national bank under sec. 5209, Rev. St.,
for making false entries in a report to the Comptroller of the Currency,
it is no defense that such entries were made by a clerk and verified by
the officer without actual knowledge of their truth, since it was his duty
to inform himself. United States v. Allen, 47 Fed. Rep., G9G.
9. A " false entry " in a report by a national-bank officer or a director to Comptroller of the Currency within the meaning of sec. 5209 is not merely an
incorrect entry made through inadvertent negligence or mistake, but is
an entry known to the maker to be untrue and incorrect and by him
intentionally entered while so knowing its false and untrue character.
United States v. Graves, 53 Fed. Rep., 684.
10. In determining whether a certain false entry, made by a national-bank
officer in a report to the Comptroller, was made with intent to deceive
or defraud, etc., within the meaning of the statute, the jury are authorized to infer the intent if the natural and legitimate resultof such false
entry would "be to deceive any other officer or officers of the bank or any
agent appointed to examine into its affairs. Ib.
11. In determining whether defendant made a '' false entry " within the meaning of the statute when he included in such reports as " Loans and discounts" of the bank amounts which were being carried on the books of
the bank as "overdrafts," the jury will not consider whether other
national banks followed the same practice; but the jury, in determining
whether such entry, if a "false entry," was made with intent to deceive
and defraud, may consider whatever knowledge defendant is shown to
have had as to practice of any other national bank in this respect. Ib.
12. It is not necessary to complete the offense of making a "false entry " in a
report to the Comptroller of the Currency of the condition of a national
bank, with intent to deceive or defraud, that any person shall have been
in fact actually deceived or defrauded, for the making of such a ''false
entry " with the intent to deceive or defraud is sufficient. Ib.
13. Under sec. 5209 of the national-bank act it is an indictable offense to make
a false entry in a report to the Comptroller of the Currency, or to aid
and abet the making of such an entry. United States v. French et ah,
57 Fed. Rep., 382.
14. It is not a "false entry " to enter under heading of "Loans and discounts"
items which, on books of the bank and for convenience of its officers,
have been temporarily withdrawn from that heading, and which are,
from day to day, carried on the books of the bank under heading of '' Suspended loans " while awaiting action of directors as to same being withdrawn from character of loans and entered up as a loss on profit and
loss account. United States v. Graves, 58 Fed. Rep., 63415. The president and assistant cashier of a national bank are indictable as
principals, under Rev. St., sec. 5209. for making a false entry in a report,
although neither of them actually signed or attested the report. CoeJiran
v. United States, 15 S. CL, 028.
180
REPORT OF THE COMPTROLLER OF THE CURRENCY.
FALSE ENTRIES—Continued.
10. The assistant cashier of a bank is indictable under Rev. St., sec. 5209, for
making a false entry in a report to the Comptroller, although he is not
one of the officers authorized by section 5211 to make such a report; for
he may be regarded as within the category of " clerk or agent," within
the terms of section 5209. Ib.
IT. An indictment under Rev. St., sec. 5209, for making a false entry in a
report to the Comptroller need not allege that such report was made by
the banking association, or that it was actually verified by the oath or
affirmation of the president or cashier, or attested by the directors, as
required by section 5211; but it is sufficient to aver that defendant made
such false entry ''in a certain report of the condition of the First
National Bank, * * * made to the Comptroller of the Currency in
accordance with the provisions" of Rev. St., sec. 5211. Ib.
18. The jury are warranted in finding that false entries were made with guilty
intent from the testimony of defendant that the said entries were made
under his direction, with the knowledge that they were not transactions of the day on which they were entered in the books of the bank.
United States v. Folsom, 3S P.. 70.
19. The "false entry" in the books or reports of a bank, which is punishable
under Rev. St., sec. 5209, is an entry that is knowingly and intentionally
false when made. It is not the purpose of the statute to punish an
officer who, through honest mistake, makes an entry in the books or
reports of the bank which he believes to be true, when it is in fact false.
United States v. Allis, 73 Fed. Rep., 165.
20. If a president or cashier makes a false entry in a report of the condition
of the bank to the Comptroller of the Currency, the jury are authorized
to presume, from the false entry itself, in the absence of any explanation or of any other testimony, that he knew it to be false. This presumption results from the fact that it is the duty of the officer who verifies the report to know the condition of the bank, and if the report is
false there is a prima facie presumption that he knew it. Ib.
21. A false entry, either in the books of the bank or in a report of its condition,
is punishable only when the jury find that it was made by the defendant,
or by his direction, with the intent either (1) to injure or defraud the
bank, or some other corporation, or some firm or person; or (2) to deceive
some officer of the bank; or (3) to deceive some agent appointed or thereafter to be appointed to examine the affairs of the bank. If any one of
these intents is present the offense is complete. Ib.
22. Where an entry in the books or in a report of the bank's condition is in fact
false, the jury are authorized to infer, from the false entry itself, an intent
of the defendant to injure or defraud the bank, or some other corporation or individual, or to deceive some officer of the association, or an
agent appointed to examine into the condition of the bank, if such would
be the natural and probable consequence of the false entry. Ib.
23. A false entry made in the books or reports of a bank by a clerk, bookkeeper, or other subordinate employee, by the command or direction of
the president of the bank, is a false entry made by the president, and
he is liable to punishment for it if he gives the direction knowing the
entry to be false, or with the intent to defraud, deceive, etc. Ib,
24. If a false entry in the books or reports is made with a criminal intent, it is
no defense that another false entry is also made, which offsets the former
entry, with a like intent; but changes of this character are not as strong
evidence of an intent to injure or defraud the bank, or to deceive its
officers or examiners, as false entries which enable the officer making
them to withdraw the funds of the bank without consideration. Ib.
25. Every overdraft, whether made by previous arrangement or not, whether
secured or not, and whether drawing interest or not. is a loan, and is
required by the law and the rules prescribed by the Comptroller to be
listed and reported as an overdraft. It is, therefore, no defense to a
charge of false entries in respect to overdrafts that they had been
arranged for or secured, or that interest was to be paid upon them by
agreement, if such false entries were made with a criminal intent; but
in determining the intent the jury may consider the testimony of defendant that he considered the overdrafts as loans. Ib.
26. If the president of a bank makes or causes to be made false entries in its
books, or in reports to the Comptroller, with the intent to deceive or
defraud, etc., it is no defense that he struggled to save the bank from
REPORT OF THE COMPTROLLER OF THE CURRENCY.
FALSE
27.
28.
29.
30.
31.
32.
181
ENTRIES—Continued.
failure and to provide money to pay its depositors by sacrificing his own
property and borrowing money from others. Ib.
Rev. St., § 5209, making embezzlement, abstraction, or willful misapplication of the property of a national-banking association by an officer or agent
a misdemeanor, applies to an agent in liquidation appointed by the stockholders. United States v. Jewett, Sj. Fed, Rep., 1'^.
Averments in an indictment that the defendant was appointed agent in
liquidation for a national-banking association, and accepted that office,
are not inconsistent with further averments that he afterwards acted as
president, clerk, and director of the association. Ib,
An indictment against a defendant for the embezzlement and abstraction
of the property of a national banking association is not demurrable
because it charges the receipt of the property by him in different capacities, both as an officer and as an agent of the association. Ib.
An averment in an indictment against an officer and agent of a national banking association that the defendant "did steal, abstract, take, and carry
away" property of the association, does not charge two offenses. Ib,
An allegation that defendant, an officer and agent of a national banking
association, did secretly, in a manner and by particulars to the jurors
unknown, willfully, unlawfully, and fraudulently convert to his own
use, and misapply, from said; association to himself, certain funds, sufficiently charges the offense of ' willful misapplication" of property, under
Rev. St., §5209. Ib.
Under Rev. St., § 5209, prohibiting "every * - * cashier * * * of
any " national bank from making *' any false entry in any * - * report * '- """ with intent to injure or defraud," etc., and prescribing a
like penalty for "every person who, with like intent, aids or abets any
officer," etc., the intent is a material ingredient under each clause; and
therefore an indictment which, after duly charging the act and intent
in respect to the cashier, merely charges another person with aiding
and abetting him to make said false entries " i n manner and form as
aforesaid," is open to demurrer. United States v. Berry et ah. So Fed.
Rep., 208,
FORFEITURE OF
1. Forfeiture of the privileges and powers of a national bank must be determined by a suit brought by the Comptroller of the Currency and until
determined it may do business, and no person, by a conspiracy to evade
its regulations, may escape liability for borrowed money loaned by it
upon personal security in the manner authorized. Stephens v. Monongahela National Bank, SS Penn. St., 167; 3d Am. Bej)., 438; 2 JV. B, C.
398,
2. Under Rev. St., sec. 5239, providing that if the directors of a national bank
shall violate any of the provisions of the title relating to the organization and management of banks, the franchises of the "bank shall be forfeited, such violation, however, to be determined by a proper court of
the United States in a suit therefor by the Comptroller, and that in case
of such violation every director participating therein shall be personally
liable for all damages which the bank, its shareholders, or any other
person shall have sustained in consequence thereof, the Comptroller can
not authorize the receiver to bring suit, under sec. 5234, to enforce such
personal liability, until it has been adjudged by a proper court that such
acts have been done as authorize a forfeiture of the charter. Welles v.
Graves, Jfl Fed, Rep., 459.
u. The forfeiture of the rights, privileges, and franchises of a bank authorized
by Rev. St., sec. 5239. for violation by its directors of the provisions
of the banking act, comes within sec. 1047, limiting suits for any penalty or forfeiture accruing under the laws of the United States to five
years. Ib.
4. The right to maintain an action under Rev, St., sec. 5239, to recover from
a bank director the damages sustained by his bank in consequence of
excessive loans made by him while serving in the capacity of director,
is not affected by the fact that the Comptroller has or has not procured a forfeiture of the bank's charter. Stephens v. Overstolz, J+3 Fed,
Rep., 771.
5. In an information charging that " t h e banking association and the directors
thereof did knowingly permit," etc., the allegation that the association.
182
REPORT OF THE COMPTROLLER OF THE CURRENCY.
FORFEITURE OF CHARTER—Continued.
aside from the directors, permitted the doing of the alleged acts, tenders
an immaterial issue, and should be stricken out on motion. Trenhohn,
Comptroller, v. Commercial National Bank. 38 Fed. Rep,, 823.
G. As the section only refers to acts done by the directors, or by the executive
officers with the knowledge of the directors, an information, seeking a
forfeiture, which charges that the association did the act is insufficient. Ib.
7. It seems that to maintain a suit by the receiver of a national bank to enforce
the liability of its directors, arising under the provisions of Rev. St.,
§ 5239, it must appear that a forfeiture of the charter of the bank has
been adjudged by a court of the United States, at the suit of the Comptroller of the Currency, as provided in that section. Welles v. Graves,
41 Fed. Rep,, 459, reaffirmed. Hay den v. Thompson, 17 C. C. A , 592; 71
Fed, Rep., 60, distinguished. Stephens v. Ouerstolz, 43 Fed. Rep., 771,
disapproved. Gerner v. Thomson et ah. 74 Fed. Rep., 125.
FORGERIES :
1. A depositor owes a duty to the bank to make an examination of his pass
book and vouchers within a reasonable time; and if loss would result
to the bank from his failure to do so he can not recover for forged checks
paid by the bank and charged to his account. First National Bank v.
Allen, 14 So., 335.
2. Where the examination is committed to a clerk or agent who has himself
committed the forgeries, his concealment of such forgeries will not relieve
the depositor from the consequences of the failure to discover the fraud
and notify the bank. Ib.
o. But if the omission of the depositor to discharge such duty has resulted in
no injury to the bank, the depositor may recover. Ib.
4. Where, however, forgeries by the same person are committed after the
depositor is chargeable with knowledge of the fact, the failure of the
depositor to give the bank notice may estop him to dispute the genuineness of such checks. Ib.
5. Plaintiff bank paid defendant bank money on a forged order, made payable
at plaintiff bank, bearing the general indorsement of the payee aiid of
defendant, the latter being "For collection." The person by whom the
order purported to be drawn was a customer of plaintiff, and had directed
it to pay orders drawn by him. The forgery was not discovered for four
weeks. Held, that an answer alleging that at the time of the payment
the payee had property from which the order could have been collected,
but that before the discovery of the forgery the payee had departed with
his property, was not sufficient to prevent recovery of the money paid
defendant, as it did not show how long the payee and the property
remained within reach, and therefore failed to show loss to defendant by
unreasonable delay of plaintiff in discovering the forgery and notifying
defendant. Indiana National Bankv. First National Bank, 36 N E., 382.
6. In an action against a bank by a depositor to recover the amount of checks
drawn by plaintiff, but alleged to have been paid by defendant on indorsements of the payees' names forged by plaintiff's cashier, part of whose
duty was to fill in the body of checks for plaintiff to sign, pay bills, and
keep the accounts, it appeared that the money on the checks in question
had been obtained by plaintiff's cashier, but there was no evidence that
any payees had been named in them, the canceled checks having been
destroyed by the cashier. Held, that plaintiff could not recover, as it
would not be presumed that the cashier committed forgery in addition
to the embezzlement, when he could have avoided forgery by making
the checks payable to "cash" or "bearer/" in which event defendant
would not be liable. National Board of% Marine Underiuriters v.
National Bank of the Republic, 29 N. Y. S., G9S.
7. Defendant bank received a check drawn on plaintiff for collection. After
plaintiff had remitted to defendant and defendant had paid the holder
of the check, it was discovered that the payee's name was forged. Held,
that delay of plaintiff in notifying defendant of the forgery did not
relieve defendant from liability, where the only evidence of injury from
the delay was that of defendant's cashier, who said: "If more seasonable notice had been given the forger would have been arrested earlier,
and more favorable
results might have arisen." Third National Bank
1
v. Merchants National Bank, 27 N. Y. S,, 1070.
REPORT OF THE COMPTROLLER OF THE CURRENCY.
183
FORGERIES—Continued.
8. In an action by a bank which has paid to another bank a check drawn on
the former bank and transferred to the latter by a forged indorsement,
it is immaterial whether the signature of the drawer of the check is
genuine, since-both parties are estopped to deny its genuineness. First
National Bank v. Northwestern National Bank (111,), OS N. E., 739.
9. The defendant, as collecting agent of the Bellaire Bank of Ohio, collected
at the subtreasury, New York, a pension draft on which the payee's
name was forged after her death. The defendant, in making the collection, indorsed the draft as collecting agent of the Bellaira Bank, as
appeared by the terms of its indorsement, and on collection at once paid
over the money to the principal, without notice of the forgery, before
this action was commenced. Held, that the defendant was not liable.
The case of Onondaga Co. Sav. Bank, 12 C. C. A., 407; 64 Fed. Rep., 703,
distinguished. United States v. American Exchange National Bank. 7"
Fed. Rep., 232.
10. Defendants, who were note brokers at Omaha, and who had clone business
as such with the plaintiff bank in Iowa, sent to plaintiff by mail a list
of commercial paper offered for sale, including a note described as made
by seven persons jointly to the order of one B., and indorsed by B, and
another. The list sent plaintiff was headed by defendants' business card
as brokers, and it contained sundry items of information about the parties to the note, purporting to be the result of inquiries as to their solvency and standing, and indicating that the same were good. Plaintiff
purchased the note, and, by defendants' directions, remitted the sum
paid therefor to a bank in Chicago. Defendants received from such
sum only their commission for selling the note, the balance being paid
to B., for whom they sold it. It afterwards proved that all the signatures on the notes, except that of B., were forgeries, and that B., although
at the time of the sale of the note reported to be solvent, was in fact
insolvent and wholly worthless. Plaintiff sued defendants to recover
the amount paid for the note on an alleged warranty of genuineness.
Held, that there was nothing in the note or in the circumstances of the
transaction between plaintiff and defendants to justify an assumption
that defendants had any interest in or ownership of the note, but, on
the contrary, that the plaintiff bank must have known that it was taking title as the indorsee of B., and that defendants were acting as brokers only, and, accordingly, that defendants, having acted only as agents
of a disclosed principal, could not be held personally liable for the note.
Monticello Bank v. Bostwick ct al., 71 Fed. Rep., 641.
11. The forgery of the maker's name to a renewal note, delivered by the payee
to the holder of the original note, does not discharge the maker from
liability on such original note, as the giving of a forged note in lieu of
it does not operate as payment. Second National Bank v. Wentzel (Pa.
Sup.) 24 A,, 1087.
12. In an action on a note by a bank against the indorser, who alleges his signature to be a forgery, evidence by the cashier and teller of the bank
that the indorser had admitted the genuineness of his signature on
another note, not in evidence, and that such other signature was precisely the same as the signature to the note in suit, is not competent for
the purpose of estopping the indorser from denying such signature. Ib.
13. Testimony by the teller of the bank that the indorser had admitted his
signature to a note for which the one in suit was given as a renewal is
properly stricken out as irrelevant, where the teller subsequently
acknowledges that the indorser's admission related to another note, not
connected with the one in suit. Ib.
14. Evidence by defendant, on cross-examination, denying that he had received
the proceeds of other notes, not in suit, which had been indorsed by
him, and which had been negotiated by the maker, who also negotiated
the one in suit, can not be contradicted by plaintiff in rebuttal, since
such cross-examination related to an irrelevant matter. Ib.
15. In an action against an indorser on a renewal note, who was released from
liability on the original note because it was not protested for nonpayment, it is error to charge that there may be a recovery if the indorsement on the first note was genuine, notwithstanding the indorsement
on the renewal note was a forgery; but the jury having found for the
indorser, plaintiff can not complain of such instruction. Ib.
184
REPORT OF THE COMPTROLLER OF THE CURRENCY.
FORGERIES—Continued.
10. An admission by the indorser of a note as to the genuineness of his signature, made to the holder after it had discounted the same, does not
estop him from denying the genuineness of the alleged indorsement on
a renewal note given by the maker, the indorser having been release^
from liability on the original note by reason of its nonprotest for nonpayment. Ib.
17. A bank, which holds a note made by two persons as principal and surety,
in accepting, in good faith, at maturity, a renewal note to which the
name of the surety was forged by the principal, is not bound to know
the handwriting of the surety, and is, hence, not guilty of negligence,
entitling the surety to a discharge from liability on the original note, in
failing to compare the surety's signatures on the two notes, respectively,
with reference to ascertaining the genuineness of that on the renewal
note. Lyndonville XationaPBank v. Fletcher (VL), 34 A.. 38.
18. The right of the United States Government to recover money paid on a
check on the Treasury, under a forged indorsement, is conditioned on
promptness in giving notice to the person to whom the check was paid.
United Stales v. Clinton National Bank, ?8 Fed, Rep., 357.
19. A bank clerk, whose duty it was to prepare exchange for the cashier's signature, so drew a draft for $25 to his own order that the amount could
be readily altered, and, after procuring the cashier's signature by pretending that he wished to make a remittance of that amount, altered the
draft so that it presented the appearance of a genuine draft for $2,500,
and thereafter indorsed it, and procured it to be discounted. Held, that
the forgery by the clerk, and not the negligence of the bank, was the
proximate cause of the loss, and the bank was not liable therefor.
Exchange National Bank of Spokane v. Bank of Little Bock, 5S Fed.
Rep., 140.
20. The bank was not liable on the ground that the forger was its confidential
employee, because in this transaction he acted as a purchaser and not as
an employee, and because the purchase of the draft was complete, and
he was the owner of it when the forgery was committed. Ib.
GUARANTY:
1. A personal guaranty, given by stockholders and directors to another bank
in consideration of loans, discounts, or other advances to be made, for
the repayment of any indebtedness thus created, imposes a liability on
the guarantors when acted on by the guaranty, though no notice of the
acceptance of the guaranty was given, for the contract shows a personal
interest of the guarantors in the advances constituting a consideration
moving to them. Doud ct at. v. National Park Bank, 54 Fed. ttep., 846,
2. Receivers were appointed for an insolvent investment company, incorporated under the laws of Missouri, whose liabilities consisted mainly of
guaranties, in various forms, indorsed on bonds, secured by real estate
mortgages, executed by borrowers to the company, and subsequently
sold and transferred by it to investors with the guaranties mentioned.
Held, that the rights of such investors were governed by the State statute relating to assignments for benefit of creditors, which provides that
the assignment shall be ' • for all the creditors of the assignor in proportion to their respective claims" (Rev. St. JMo. 1889, § 424); that, in the
distribution of the property of such company, all claims should be allowed
which, at the time of the appointment of the receivers, (1) furnished a
present cause of action against the guarantor, or (2) constituted direct
obligations on its part, whether due or to become due, or (3) which,
though not then matured, or not constituting direct obligations, thereafter matured or would mature, or become direct obligations, before
any order of distribution was made; and that all claims should be
rejected (1) which arose on guaranties of collection, as distinguished
from guaranties of payment, where no proceedings had been taken by
the holder to collect from the maker or from the mortgaged premises, or
(2) which were not matured, and in respect to which there had been no
default of interest, or (3) in which by agreement between the holder
and maker, without the assent of the guarantor, the time of payment of
the principal obligation had been extended. New York Security &
Trust Co. et ah v. Lombard Inv. Co. of Kansas et al., 73 Fed. Rep., 537.
3. A claim against a guarantor of payment matures, so as to become a direct
obligation, not only on the date the guarantesd debt becomes due, but
REPORT OF THE COMPTROLLER OF THE CURRENCY.
185
GUARANTY—Continued.
on default in payment of interest or other preliminary obligation, when,
by the terms of the contract, such default is made to precipitate maturity of the debt. Ib.
4. Receivers were appointed for an insolvent investment company, which
had sold and transferred obligations secured by mortgage, with, guaranties of payment thereof, but with a provision that, in case of default,
it should have two years within which to collect and pay over the
amount of the debt. Held, that claims arising on these guaranties were
provable against the receivers where default had occurred and the two
years had expired, whether these two events had occurred both before
the appointment of the receivers, or one before and one after such
appointment, or both after the appointment; and, further, that such
claims were provable after default, although the two years should not
expire before the order of distribution. Ib.
5. A guaranty of collection of an obligation secured by mortgage which is
transferred by the guarantor is an undertaking to pay the debt on condition that the person to whom the guaranty is given shall diligently
proceed against the principal debtor and the mortgage security, and, in
default of such diligence, the guarantor is released. Ib.
6. An investment company selling and transferring
an obligation secured by
mortgage agreed, by indorsement thereon, 4< first, to guarantee the payment of the coupons attached hereto at the maturity thereof; second,
to collect at its own expense, and to pay over the principal hereof at
maturity, provided the same is paid by the maker; third, in event of
default being made by the maker, to collect at its own expense and to
pay over the principal hereof within two years from maturity of the
same," with interest at 6 per cent per annum. Held, that this was a
guaranty, not of collection merely, but of payment. Ib.
7. Payment of interest in advance on a note is not of itself evidence of an
agreement for the extension of time of payment sufficient to release a
suretv from liability. American National Bankx. Love, 6.2 Mo. App..
378.
8. Where one of several sureties, after all have signed, but before the debt
has been paid, obtained a mortgage from the principal as indemnity,
it
inures to the benefit of his cosureties. Farmers & Traders1 National
Bank v. Snodgrass {Or.), 45 P-, 758.
9. Where one purchased negotiable paper from the president of a bank with
a guaranty of payment executed by him apparently in behalf of the
bank, on his representation that the paper belonged to the bank, and
the transaction occurred in the banking house where the president was
apparently engaged in performing his duties as such, the bank was
ifable on the guaranty. City National Bank v. Thomas (Neb.). 05
N.W.,895.
10. Where a promissory note is transferred, and the collection of it is guaranteed by the payee in the following form, to wit: "'' This note is transferred, and the collection of the same guaranteed to the holder hereof,"
the makers can make any defence to a suit commenced by an assignee
that could have been made to a suit if commenced by the payee, notwithstanding the assignee may take the note before due and without
knowledge of any infirmity in the note. Omaha National Bank v.
Walker et al., 5 Fed. Rep., 899.
11. A contract by a national bank to indemnify one for loss incurred as surety
on an attachment bond is not void on the ground of public policy, the
loss having occurred, though the bond is not given for the benefit of the
bank. Seebery. Commercial National Bank of Ogden, 77 Fed. Rep., 957.
12. The vice-president of a national bank, upon making a transfer for value of
certain notes belonging to the bank (the bank being the correspondent
of the transferee), executed this guaranty: " I n accordance with your
telegram, I herewith hand you ten notes of $5,000 each." "We debit your
account,$50,000." ''This bank hereby guarantees the payment of the
principal sum and interest of said notes." This was done in behalf of
the bank, and the notes were also endorsed by the same individual as
vice-president of the bank. It was done with the knowledge and consent
of the president and cashier of the bank, but without authority of the
directors, as a board, or the majority of its members individually. Held.
that the bank was liable on the guaranty. Peoples Bank of Belleville v.
Manufacturers' National Bank of Chicago, 101 U. $., 181: iiN. B. C, 97.
186
REPORT OF THE COMPTROLLER OF THE CURRENCY.
GUARANTY—Continued.
13. F. owed H. & Co., on account, about $2.2.000. He settled this in part by a
cash payment and in part by a transfer of promissory notes payable to
himself, the payment of two of which, for $5,000. each, was guaranteed
by him in writing. H. & Co. transferred these notes to a bank as collateral to their own note for about $13,000. They then became insolvent
and. assigned all their estate to P., as assignee, for distribution among
their creditors. The bank sued F. on his guaranty. He set up in defence
that his indebtedness to H. & Co. grew out of dealings in options in
grain and other commodities to be settled on the basis of "differences,''
and that it was invalidated by the statutes of Illinois, where the transactions took place. The court held that he could not maintain the statutory defence as against a bona fide holder of the guaranteed notes, and
gave j udgment against him. Execution on this judgment being returned
unsatisfied, a bill was filed on behalf of the bank to obtain a discovery
of his property and the appointment of a receiver, to which F., and the
maker of the notes, and K.. with others, were made defendants. P., the
assignee of H. & Co., was, on his own application, subsequently made a
defendant. An injunction issued, restraining each of the defendants
from disposing of any notes in his possession due to F. Subsequently
to these proceedings, F. assigned to R. the two notes which H. & Co. had
transferred to the bank. P., as assignee of H. & Co., filed a cross-bill in
the equity suit, showing that the judgment in favor of the bank was
in excess of the balance due the bank by H. & Co. R. filed an answer and
a cross-bill in that suit, setting up his claim to the said notes, and maintaining that the judgment in favor of the bank was invalid, as being
in conflict with the statutes of Illinois. Held, (1) that the liability of
F. upon the guaranty was, as between the bank and him, fixed by the
judgment in the action at law; (2) that all the bank could equitably
claim in this suit was the amount actually due it from H. &. Co., which
was considerably less than the amount of the face of the notes; (3) that
the transfer and guaranty of the notes to H. &. Co. were void under the
Illinois statutes, and passed no title to them or their assignee; (4) that
R. was the equitable owner of the notes, and was entitled to receive
them on payment to the bank of the amount of the indebtedness of H. &
Co. to it; (5) that the assignment to R. having been made in good faith
and for a valuable consideration, he was a person interested in the object
to be attained by the proceedings withinr the intent of the statute. When,
by filing a replication to a plea in equitj , issue is taken upon the plea, the
facts, if proven, will avail the defendant only so far as in law and equity
they ought to avail him. Pearce v. Rice, Ij3 U. S., 2S.
14. A national bank went into voluntary liquidation in September, 1873.
Before that it had become liable to a State bank as guarantor on sundry
notes made by a third person, and which were discounted for it by the
State bank. In August, 1874, transactions took place between the maker
of the notes and the State bank and the person who acted as the president
of the national bank whereby the maker was released from farther liability on the notes, but such acting president attempted to continue by
agreement the liability of the national bank as guarantor. In a suit
begun in October, 1876, a judgment on the guaranty was obtained in May,
1880, by the State bank against the national bank. In a suit brought by
a creditor against the national bank and its stockholders to enforce thenstatutory liability for its debts, the court, on an application made in June,
1887, enquired into the liability of the stockholders to have the claim of
the State bank enforced as against them in view of the transactions of
August, 1874, and disallowed that claim. Held, (1) it was proper to
reexamine the claim; (2) the judgment against the bank was not binding
on the stockholders, in the sense that it could not be reexamined; (3) the
guaranty of the bank was released as to the stockholders by the release
of the maker of the notes; (4) the rights of the stockholders could not be
affected by the acts of the president done after the bank had gone into
liquidation. Schrader v. Manitfacturers' Xational Bank of Chicago, 133
U. S., Jan. 20, 1890, page 67.
15. A written promise and guaranty of the payment of a promissory note,
''with all legal or other expenses of or for collection," executed by the
indorser before the maturity of the note, covers reasonable attorney's
fees incurred in the collection of the debt. McGhee v. Importers and
Traders' National Bank, 03 Ala., 10 J.
REPORT OF THE COMPTROLLER OF THE CURRENCY.
187
G u AR AN TY—Continued.
16. When a, promissory note is indorsed to A. B. with the word ' • cashier" added,
it is presumptively the property of the bank of which he is the cashier,
as shown by parol evidence, and the bank may sue on it without indorsement by him and without making him a party. Ib.
17. The act of Congress authorizing the organization of national banks confers upon them no authority, either in express terms or by implication,
to guaranty the payment of debts contracted by a third person, and
solely for his benefit; and acts of this nature, whether executed by the
cashier or the board of directors, are necessarily ultra vires. Commercial National Bank et al. v. Pirie et al., 82 Fed. Rep., 790.
18. The presentation by a merchant seeking to purchase goods of a written
guaranty, by a national bank, of payment for any goods he may purchase, even if it implies a representation that the bank is financially
sound, is not of itself a fraudulent representation, such as will justify a
rescission, since the seller is chargeable with knowledge that in law such
a guaranty by a national bank is ultra vires and void. Ib.
19. Whether goods are bought with a preconceived fraudulent intent not to
pay for them is a question for the jury if there is evidence tending to
show such an intent, but not of so conclusive a character as to convince
all reasonable minds that such must have been his purpose. Ib.
20. To vest a mortgagee of chattels with the rights of an innocent purchaser.
a preexisting debt alone is not sufficient, but, if any considerable sum of
money is paid at the time of the execution of the mortgage, and as part
of its consideration, then the mortgagee may be an innocent purchaser
as to the full amount of his loan. Ib.
21. An action for wrongful conversion against one who has sold goods in his
possession is not maintainable where defendant had a valid lien upon
the property: so that his refusal to surrender it upon demand was not a
tort, Ib.
22. An agreement by a national bank to guaranty the payment of a debt of
a third party solely for his benefit is ultra vires. Boireu v. Needles
National Bank, S7 Fed. Rep., 4.30.
23. A promise by a bank to pay any checks that may be drawn upon it by a
certain person is not a certification of such checks but a guaranty. Ib.
INCREASE OF CAPITAL STOCK.
Sec Capital stock.
INDICTMENT: See False entries.
1. An indictment under act of July 12, 1882, amending sec. 5208, making it a
misdemeanor to "certify any check" drawn by a person not then having
on deposit sufficient money to meet same, need not allege delivery of
check by bank after certification. United States v. Potter, 5G Fed.
Rep., 83"
2. When indictment alleges certification as accomplished, authentication will
not be presumed as an essential part thereof, and hence it is unnecessary
to allege absence of required credit or deposit at time of authentication.
Ib.
3. The indictment in charging, in the language of sec. 5203, that the drawer
of the check had not on deposit, at the time it was certified, " an amount
of money equal to that specified " in the check is sufficient. Ib.
4. The indictment does not charge two offenses in the same count, because it
alleges therein that the check was certified "before the amount thereof
had been entered to the credit of the drawer on the books of the bank,*'
and also at a time when the drawer did not "have on deposit an amount
of money equal to " the amount of the check. Ib.
5. An indictment against the president for >k aiding and abetting" cashier in
certifying check under prohibition can not be sustained. Ib.
6. An indictment charging defendants with aiding and abetting a director in
a willful misapplication of the money of an association must state facts
to show that there has been such misapplication committed by the
director. United States v. Warner, 26 Fed. Rep., GIG.
7. An indictment against the president of a national bank alleging that he
" unlawfully ai)d willfully and with intent to injure and defraud the
said association for the use, benefit, and advantage of himself did misapply certain of the money and funds of the association which he * * ":"
then* and there, with the Intent aforesaid, paid and caused to be paid"
188
REPORT OF THE COMPTROLLER OF THE CURRENCY.
See False entries—Continued.
to certain persons named, was bad for failure to allege the fact that
made such payment unlawful or criminal. United States v. Eno. 56
INDICTMENT:
Fed, Rep., 218.
K It is not essential that such indictment should allege that the acts charged
were done without the knowledge and assent of the directors of the
association. Ib.
0. In indictment under Rev. St., sec. 5209, for willfully misapplying the funds
of a national bank, it is not necessary to charge that the funds had been
previously intrusted to defendant, since such act may be done by an
officer or agent of the association without his having previously received
the funds into his manual possession, . United States y, Northivav, 129
U. S., 327.
10. In indictment charging president of a bank with aiding and abetting its
cashier in the misapplication of its funds, it is not necessary to aver that
he then and there knew that the person so aided and abetted was the
cashier. Ib.
11. A form of indictment which sufficiently describes and identifies the crime
of abstracting the funds of a national bank created by Rev., St. sec. 5209,
sufficiently states the character and capacity of the bank. Ib,
12. An indictment for willfully misapplying funds of a national bank (Rev.
St., sec. 5209), charging in general words fraudulent misapplication and
intent to defraud the bank, and describing specifically funds misapplied
and the manner of misapplication, need not negative every possible
theory consistent with an honest purpose in the disposition of the funds
specified. Evans v. United States, 14 S. Ct., 934; Ib.. 039.
13. An indictment charging directors of a national banking association with
making false entries in a report of condition to the Comptroller of the
Currency can not be sustained under sec. 5209. United, States v. Potter,
56 Fed. Rep., 83.
14. The use in an indictment, under sec. 5209, of the words ' ; then and there,''
in alleging that the defendant was president or director of such bank
and made alleged false entries, is not uncertain or repugnant merely
because in one place they may refer to the whole of a day and in another
to only one instant of the day. Ib.
15. The omission of the signs for dollars and cents in the recital of alleged
false entries in reports and misnomer of reports are immaterial where
reports are set out by their tenor in the indictment. Ib.
10. It is not necessary to allege specifically in such indictment that the reports
were transmitted to the Comptroller of the Currency or that they were
Xmblished. Ib.
17. Allegations that the false entries were made with intent to "injure and
defraud the said association and certain persons to the grand jurors
unknown " are sufficient. Ib.
IS. An indictment against the president of a national bank, under sec. 5209,
for making false entries in the books of the bank, charging that it was
done "with intent to defraud said association and certain persons to the
grand jurors unknown," is sufficient so far as concerns the allegations
of intent. United States v. Potter, 56 Fed. Rep., 97.
19. When indictment alleges that the false entries indicated that there was
then in the paying teller's department of the bank certain amount in
gold, legal tenders, and gold certificates, when in fact such amount was
not there, it is not necessary that it should further allege that such
amount was not then in other departments of the bank. Ib.
20. In addition to the entries themselves, the indictment need set out the
context only when it so modifies the entries as to be in presumption of
law a part of them. Ib.
21. The fact that the note teller's and paying teller's books, in which the
president is charged with making the false entries, are usually kept by
those officers without interference by the president does not invalidate
indictment thereon. Ib.
22. Counts charging false entries by the president in reports of condition of
the bank, which allege that reports were made in conformity to the law,
and then set them out by their tenor, are bad for their failure to allege
specifically that the reports were verified and attested by the cashier. Ib.
23. Where the entry whose tenor is set forth contains the words " See schedule,*' it is not a valid objection to the indictment that these words are
not explained. United States v. French et al., 57 Fed. Rep., 382.
REPORT OF THE COMPTROLLER OF THE CURRENCY.
189
INDICTMENT: See False entries—Continued.
24. It is sufficient if the indictment allege the substance of the reports in
question without setting them out in full. Ib.
25. An-allegation in an indictment under sec. 5209 that defendant " did make
a, certain false entry in a certain report of the association " will not be
construed to mean that the entry was made after the report was completed and was, in fact, an alteration. Ib.
20. The preparation and completion of the report, the making of the false
entry therein, its verification, attestation, and delivery to the Comptroller may be considered as simultaneous, and there is no repugnance
in failing to allege that any or all of these things occurred in consecutive
order. Ib.
27. Though the counts in an indictment under this section for aiding and abetting
the cashier in making such false entries described defendant as
41
being then and there a director" of the bank in question, it can not
be held that they charge him in aiding and abetting in his official
capacity. I b.
28. Counts in such indictment which charge defendants with procuring and
counseling the false entry before the fact are valid, for such acts are
covered by the clause of the section extending the penalty to anyone who
" abets " an officer or agent in the acts prohibited. Ib,
29. Indictment against president for false entry on books, held sufficient in
form and averments. United States v. Brition, 107 U. S., 655.
30. Indictment against president for fraudulent purchase of stock of the bank
is bad if it fails to state for whose use purchase was made, or if it states
that it was for use of the bank, or if it does not aver that it was not
made to prevent loss on previous debt. Ib.
31. Indictment for perjury against officer for false statement under sec. 5211,
Rev. St., is bad if, prior to act of 1881, chapter 82, his oath verifying
report was taken before notary appointed by a State. United States v.
Curtis, 107 U. 8.9 671.
32. An indictment of persons for aiding and abetting a president of a national
bank in misapplying its funds and making false entries in its books,
with intent to defraud it, in violation of Rev. St., sec. 5209, need not
specifically set out the act or acts by which the aiding and abetting were
consummated. Coffin v. United States, 15 S. Ct., 394.
33. An indictment of H. and other persons for violation of Rev. St., sec. 5209,
averred that '' said H., then and there being president" of a certain
national bank, " b y virtue of his said office" as president, aforesaid,"
" misapplied the funds," with intent to defraud, etc., and that such other
persons did unlawfully, feloniously, ' ; knowingly," and with intent to
defraud, aid and abet the " said H., as aforesaid." Held, that the indictment averred that the aiders and abettors knew that H. was president
of the bank at the time it is averred the acts were committed. Ib.
34. Such indictment charged that H. did misapply the moneys of the bank
with intent to convert a certain sum to the use of a specified company
by causing it to be paid out of the moneys of the bank on a check drawn
on the bank by such company, which check was then and there cashed
and paid out of the bank's funds, which sum, and no part thereof, was
such company entitled to withdraw from the bank, because it had no
funds therein, and that said company was then and there insolvent, as
H. well knew, whereby said sum became lost to the bank. Held, that
the indictment averred the actual conversion of the sum misapplied. Ib.
35. Where an indictment under Rev. St., sec. 5209, against a president of a
national bank and others, for misapplying the funds of the bank, avers
that such funds were misapplied with'intent to convert the same to the
use of a certain company, " a n d to other persons to the grand jury
unknown," the Government need not prove want of knowledge in the
grand jury as to such persons; and, in the absence of evidence on the
subject, the verity of the averment will be presumed. Ib.
36. No person, other than a witness undergoing examination and the Government attorney, can be present at the sessions of a grand jury; and an
indictment should be quashed where an expert witness remained in the
jury room while another witness was being examined and put questions
to him. United States v. Edgerton, 80 Fed. Rejx, 87J/.
37. An indictment should be quashed when it appears that defendant was compelled by subpoena to attend before the grand jury, and give material
testimony, without knowing that his own conduct was under investigation, "ib.
190
REPORT OF THE COMPTROLLER OF THE CURRENCY.
INJUNCTION:
1. Section 5242, Rev. St., providing that no injunctions shall issue from a
State court against a national bank before final judgment, does not
deprive the Federal court of power to issue such injunction or to continue after removal of the case an injunction previously granted by a
State court. Hoiverv. Weiss Malt ing and Elevator Co. et al., 55 Fed.
Rep., 356.
2. State courts have no power to grant before final judgment an injunction
prohibiting a national bank from disposing of securities in its possession. Freeman Manufacturing Company v. National Bank of Republic,
35N.E.,8G5.
3. The provisions of the national-bank act, forbidding such injunctions, were
not repealed by St. U. S. 1882, c. 290, sec. 4, or St. U. S. 1887, c. 373, see.
4, or St. U. S. 1888, c. 866, sec. 4. Ib.
4. A bill which seeks to restrain the sale by a bank of property pledged as
collateral security to a note discounted by it, on the ground that the
president of the bank secretly agreed that*he would see to the payment
of the note without sale of the collateral, does not state a case for equitable relief, since such agreement, being against the interest of the bank,
should not be enforced for the benefit of a party to it. Breyfogle et al.
v. Walsh et al., 71 Fed. Rep., 808.
5. A decree dismissing an injunction because
wrongfully sued out is conclusive as to the wrongful suing out wThen offered in evidence in an action
for damages against the surety on a bond, the undertaking of which is
that the principal will pay all damages which may be adjudged by reason of the injunction, although the surety may not have been a party to
the injunction and there may have been no damages adjudged against
the principal. Bunt v. Rheum, 3 N. W., 667; 52Iowa, 619, distinguished.
Shenandoah National Bank v. Read {Iowa), 53 N. W.y 96.
6. A prayer for injunction to preserve properly from sale pending litigation can not be made a ground of equity jurisdiction when the property
had been sold when the bill was filed, which fact complainants knew,
or might have known. Cecil National Bank v. Thurber (C. C. A.), 50
F., 913.
7. A bank recovered judgment at law by default on a note made by a wife to
the order of her husband, and subsequently the wife obtained an order
opening the judgment, with unrestricted leave to plead. She pleaded
that she occupied the position of surety on the note and was a married
woman, and also that it was a contract made with her husband and
therefore void at law. The bank then filed a bill in equity for an injunction against setting up these defenses at law. On the trial of the issues
thus raised the defense of suretyship was not sustained. Held, that the
bank was in effect compelled to come into equity by defendant pleading
that the contract was between husband and wife, and that, having established its case there on the merits, defendant should not be permitted to
litigate it again in the law courts. Hackettstoicn National Bank v. Ming
{N. J. Ch.), 27 A., 920.
8. When a valid judgment has been obtained in a State court against a
national bank and the lien thereof has attached to its property', before
the appointnient of a receiver, Rev. St., §720, applies to'prohibit the
issue of an injunction by a Federal court, at the suit of thevreceiver., to
restrain the enforcement of such judgment. Baker v. Aitlt et ah, 7S
Feb. Rep., 39J,.
9. A Federal court will enjoin a sale of the real estate of a national bank to
enforce payment of taxes illegally assessed against its capital stock, under
a law which would make the sale a cloud on its title though the State
law gives an action at law to recover back taxes illegally exacted. Brown
v. French, 80 Fed. Rep., 166.
10. On injunction to restrain the enforcement of a judgment on a note against
the maker, it appeared that the payee, before maturity, transferred it to
a bank as collateral; that the maker, in ignorance of the fact, paid it to
the payee, without receiving the note, upon his representation that he
had forgotten to bring it. After maturity, the bank, pursuant to an
agreement with a person who knew that it was up as collateral, obtained
jndgment on it, and assigned the judgment and all other collateral
paper to him on his paying the principal debt. Among the collaterals
were notes, on which this person was a surety for a greater amount than
the principal debt. Held, that equity required the bank to resort first
REPORT OF THE COMPTROLLER OF THE CURRENCY.
191
INJUNCTION—Continued.
to the other collaterals which it held, and this equity was not changed
by reducing the note to judgment, and that the assignee got no greater
• rights than the bank had, and therefore could not collect the judgment,
whether the transaction be considered as a purchase by him or as a
part payment of his own obligation. Barhorst et vx. v. Armstrong et
ah, 42 Fed. Rep., 2.
INSOLVENT BANKS: See Preferred claims; Receiver.
1. A return of nulla bona upon an execution issued against the property of a
national bank is proof of its insolvency. Wlieelock y. Kost, 77 III., 206.
2. The creditors of an insolvent national banking association in the hands
of a receiver are entitled to interest on their claims during the period1
of administration. National Bank of Commonwealth v. Mechanics
National Bank, 9.i U. S., 437; White v. Knox, 111 U. S., 784.
3. A subscriber who has made payments on his subscription to the proposed
increase, believing that the statutory requirements would be complied
with, is entitled to have the amount thereof allowed as a claim against
the assets of the bank in the receiver's hands. Armstrong v. Stanage,
87 Fed. Rep., 568.
4. The directors of a national bank voted to increase ihe capital stock " t o
§1,000,000,' and that the stockholders "have the right to take new stock
at par to an equal amount to that then held by them." No subscription
books were opened, and the plaintiff did not subscribe for any of the
new stock, but paid the bank a sum equal to the amount of stock then
held by her, taking a receipt therefor '' on account of subscription to
new stock.*' The new stock subscribed for and paid in did not amount
to enough to make the capital stock $1,000,000, and the directors then
voted that the capital stock be increased by the sum paid in. The
Comptroller of the Currency was notified that the capital stock of the
bank had been increased to that extent, and he issued a certificate
authorizing the bank to carry on business with that amount of capital
stock. The amount paid in, as above, was used by the bank in its general business, and lost within a month after the certificate was issued,
the bank having suspended. The plaintiff demanded back the amount
paid in by her. Held, that she was entitled to recover it, with interest
from the date of her demand. Eaton v. Pacific National Bank, 144
Mass., 260; 8 N B. C., 483.
5. A national bank determined to increase its capital stock from $300,000 to
$500,000. The new stock subscriptions amounted to only $130,060. The
bank advertised an increase to $430,080. This was never authorized by
vote of the stockholders, nor certified to or approved by the Comptroller
of the Currency. The plaintiff subscribed and paid $2,000 for so much
of the originally proposed increase. Held, that plaintiff did not become
a stockholder, "and when the bank became insolvent was entitled to
judgment against the receiver for the amount so paid. Schierenberg v.
Stephens, 32 Mo. App., 314; 3 N. B. C., 528.
6. Rev. St., sees. 5234 and 5239, prescribing the method of enforcing the
liability of the directors of national banks for violation of the banking
law, are exclusive of other remedies, and a creditor of an insolvent
bank, for which a receiver has been appointed, can not sue its directors
for the purpose of making them personally liable for the mismanagement of the bank. National Exchange BanJev. Peters et ah, 44 Fed.
Rep., 13.
7. A national bank does not lose its corporate existence by mere default in
paying its notes and the appointment of a receiver. Bank of Bethel v.
Paliquioque Bank, 14 Wall., 383.
8. Such associations may be sued, though a receiver has been appointed and
is administering its concerns. Ib.
9. A creditor of an insolvent national bank, who establishes his debt by suit
and judgment after refusal of Comptroller to allow it, is entitled to
share in dividends on debt and interest so established as of day of failure
of bank, not for subsequent interest. White y. Knox, 111 U. S., 784*
10. The personal property of an insolvent bank in hands of a receiver is
exempt from State taxation. Rosenblatt v. Johnston, 104 U. S., 462.
11. A creditor of a national bank is entitled to interest on the amount of his
dividend from the time it was declared by a receiver of the bank until
paid. Armstrong v. American Exchange National Bank, 138 U. S., 433.
192
REPORT OF THE COMPTROLLER OF THE CURRENCY.
INSOLVENT BANKS: See Preferred claims; Receiver—Continued.
12. In estimating the dividends to be paid out of the assets of an insolvent
association, the value of the claims at the time when the insolvency is
declared is to be taken as the basis of distribution. White v. Knox, ill
U. 8., 7S4.
13. A creditor will not have a lien upon the funds of the association because
checks given in settlement of balances were fraudulent and were given
at a time when the bank was hopelessly insolvent and its officers were
contemplating flight. Citizens' National Bank v. Dowd, 35 Fed.
Rep., 340.
14. A suit against a national bank to enforce the collection of a demand is
abated by a decree dissolving the corporation and forfeiting its rights
and franchises. National Bank v. Colby, 21 Wall., 609; 1 N. B. C.^IOO.
15. The claims of depositors in a suspended national bank are, when proved to
the satisfaction of the Comptroller of the Currency, on the same footing
as if they were reduced to judgments. National Bank of Commonwealth
v. Mechanic's National Bank, 94 U. S. 437; 1 N. B. C. 133.
16. National banks are not subject to the bankrupt act, and bankruptcy courts
have no jurisdiction as against such associations. If insolvent, they can
be wound up only in the mode provided by the national banking act.
In re Manufacturers' National Bank, 5 Bissell, 499; 1 N. B. C, 192.
17. The plaintiff, a citizen of New York, claiming title by assignment to the
bonds deposited with the Treasurer of the United States to secure the circulation of a national bank, filed a bill setting forth that the Comptroller
of the Currency and the Treasurer refused to recognize his right to the
bonds or their proceeds; that the Comptroller had appointed one K., a
citizen of New York, receiver of the said bank, and intended to sell the
said bonds and to pay the proceeds, after redeeming the circulation of
the bank, to the general creditors of the bank, or to K. as such receiver,
and that K. claimed as such receiver an interest adverse to the plaintiff:
in said bonds. The bill made the Comptroller, the Treasurer, and K.
parties defendant, and prayed a decree establishing the plaintiff's title
and requiring the Comptroller and the Treasurer to deliver to the plaintiff the surplus of the bonds after redeeming the notes of the bank, and
annulling the appointment of K. as receiver. K. demurred to the bill
for lack of equity. Held, that the demurrer must be sustained. Van
Antwerjy v. Hulburd, 8 Blatchford, 2S2; 1 N. B. C., 219.
18. Per Woodruff, J. (1) The plaintiff could not question the validity of K.'s
appointment as receiver; (2) that, as the court could not grant the relief
as to the Comptroller and Treasurer, it could not as to K.; (3) that, as
under the national banking act the proceeds of the bonds could never
come into the possession of K., he had no concern in the suit; (4) that
the allegation that plaintiff was informed and believed that K. claimed
an interest in the bonds adverse to the plaintiff was not sufficient to
sustain the bill. Ib.
19. Per Hall, J. The residuary interest of the bank in the bonds was a part
of the assets of the bank, to which K., as receiver, was entitled, unless
the plaintiff's claim thereto was good, and that therefore the bill presented a question of property between plaintiff and K., but that, as
plaintiff and K. were residents of the same State, the circuit court had
not jurisdiction. Ib.
20. Where a national bank is declared in default by the Comptroller of the
Currency, and a receiver is appointed, and a sufficient fund is realized
from its assets to pay all claims against it and leave a surplus, the Comptroller should allow interest on the claims during the period of administration before appropriating the surplus to the stockholders of the
bank. Chemical National Bank v. Bailey, 12 Blatchford. 48O; 1. N. B. C.,
260.
21. An action of assumpsit to recover such interest will not lie against the
Comptroller of the Currency or the receiver of the bank, but will lie
against the bank. Ib.
22. Where a bank has by reason of its own default been placed in the hands
of a receiver, a demand of payment by a depositor is no longer a necessary condition precedent to a right of action for the deposit, and the
deposit bears interest from the time of such default. Ib.
23. The receiver of a national bank holds the same title to the assets of the
bank that the bank itself held; and he has no greater rights in enforcing their recovery than the bank itself would have had. Casey v. La
Societe de Credit Mobilier dc Paris, 2 Woods, 77; 1 N. B. C, 285.
REPORT OF THE COMPTROLLER OF THE CURRENCY.
193
INSOLVENT BANKS: See Preferred claims; Receiver—Continued.
24. Insolvent debtors of an insolvent national bank assign, giving preferences
in favor of the bank. Quaere, whether the debt preferred shall carry
interest. Held, that where there is nothing in the language of the assignment, or in the circumstances under which the debt was created, to
negative the presumption that the debt should bear interest, and. nothing
in the conduct of the receiver of the national bank to estop him from
claiming interest, in such a case interest must be paid. Bain et ah
v. Peters, 44 Fed. Rep., 307.
25. The question whether a savings bank should be paid in full by an insolvent
national bank, pursuant to the State law (Laws N. Y. 1882, chap. 409,
sec. 282; Bank' v. Davis, 26 N. Y. Supp., 200; 73 Hun., 857), or pro rata,
as provided by the Rev. St., sees. 5236, 5242. Held, upon a motion to
remand, to be a controversy "arising under the laws of the United
States." Auburn Savings Bank v. Hayes, 61 Fed. Rep., 911.
26. The receipt by a bank of the proceeds of a fraudulent sale of stock belonging to it, and the subsequent appointment of a receiver, give its creditors no such right in the proceeds as will prevent the purchaser from
rescinding the sale and requiring restitution. Merrill v. Florida Land
and Improvement Co., 60 Fed. Rep., 17
27. When a bank has become hopelessly insolvent, and its president knows
that it is so, it is a fraud to receive deposits of checks from an innocent
depositor, ignorant of its condition, and he can reclaim them or their
proceeds; and the pleadings in this case are so framed as to give the
plaintiff in error the benefit of this principle. St. Louis and San Francisco Railway Co. v. Johnston, 133 U. S., 566.
28. Sureties on indebtedness of insolvent bank are not entitled to prove any
claim against it by reason of the enforcement of their liability as such.
Stewart y. Armstrong, 56 Fed. Rep., 167.
29. Where an indorser pays a note to a bank and takes a receipt containing an
order for a surrender of the note on return of the receipt, the relation
between the bank and the indorser is not that of debtor and creditor,
bat is a fiduciary relation, entitling the indorser, on the bank "becoming
insolvent without applying the money on the note or procuring its surrender, to have the assets in the hands of its receiver applied in payment
thereof. 3Iassey v. Fisher, 62 Fed. Rep., 958.
30. The fact that the money was not marked, and by a mingling with other funds
of the bank lost its identity, does not affect the right to recovery in full, if
it can be traced to the vaults of the bank and it appears that a sum equivalent to it remained continuously therein until removed by the receiver. 1 b.
31. The appointment of a receiver for an insolvent national bank under act of
Congress of June 30,1876, sec. 1, which authorizes the Comptroller, when
satisfied of the insolvency of a banking association, to appoint a receiver r
" w h o shall proceed to close up such association and enforce the personal
liability of the shareholders," does not dissolve the corporation. Chemical National Bank. v. Hartford, Deposit Company {III. Sup.), 41N. E., 225.
32. One induced to subscribe for certificates alleged to represent an increase
of the capital stock of a national bank at a time when no increase had
been authorized, on false representations of the cashier as to the bank's
condition, it being in fact insolvent at the time, is entitled to a judgment
against the bank and its receiver for the purchase money paid. Newbegin v. Newton National Bank (C. C. A.), 66 Fed. Rep., 701.
33. A contract between two national banks that the proceeds of paper, discounted by one for the other, should not be drawn on in advance of the
maturity of such paper, is not affected by the subsequent fraud of the
bank obtaining the discount in reporting such proceeds to the Comptroller of the Currency as part of its cash reserve. Fisher v. Tradesmen's
National Bank (C. C. A.), 64 Fed. Rep., 706.
34. A contract by which one bank pledges any of its property in the hands of
another bank, as collateral to notes discounted for and guaranteed by it,
authorizes the discounting bank to hold a deposit balance, standing to
the credit of the borrowing bank at the time of its insolvency, as collateral to any liability, then or at maturity of the discounted notes, until
the amount of the lien has been ascertained. Fisher v. Continental
National Bank (O, C. A.), 64 Fed. Rep., 707.
35. A statement by the president of a bank, for the purpose of procuring from
another bank a discount of paper, that such former bank is in good conCUR 08
13
194
REPORT OF THE COMPTROLLER OF THE CURRENCY.
INSOLVENT BANKS: See Preferred claims; Receiver—Continued.
dition, when in fact it is hopelessly insolvent in consequence of the president's own malversation, is a fraud, and entitles the discounting bank to
recover back the proceeds of the discount. Fisher v. United States
National Bank (C. C. A.), 64 Fed. Rep., 710.
36. The fact that an insolvent national bank has gone into voluntary liquidation does not absolve it from liability to be garnished.
Birmingham
National Bank v. Mayer (Ala.), 16 So., 520.
37. Rev. Stat., sec. 5242, which invalidates all transfers of the notes, bonds, or
bills of exchange of a national bank after the commission of an act of
insolvency with a view to the preference of one creditor over another,
does not prohibit a bank which has in good faith accepted the draft of a
national bank the day before the latter's insolvency, and afterwards
paid the same, from applying the proceeds of collections made by it on
paper in its hands belonging to the insolvent bank to the payment of
the draft, since its lien on such collection runs from the date of the
acceptance. In re Armstrong, 41 Fed. Rep., 381.
38. Sections 5151 and 5239, Revised Statutes, exclude banking associations from
none of the remedies for the collection of debts, claims, and dues for the
bank or its creditors provided by the general rules and principles of law
and equity, but they impose upon shareholders and directors additional
liabilities and subject them to proper remedies for their enforcement.
Hayden v. Thompson, 67 Fed, Rep., 273.
39. In the State of Nebraska a suit to recover from an innocent shareholder of
an insolvent national bank an unearned dividend which he has received
in good faith without notice of any fact that would lead a reasonably
prudent man to learn that the dividend was not earned is barred in four
years from its receipt. Ib.
40. The fact that trustees holding lands in trust for a national bank formally
and regularly execute a deed thereof to a third party itself raises a presumption that the deed was made pursuant to a regular resolution of
the bank's board of directors, and the deed must be held sufficient to convey the legal title where there is nothing to rebut the presumptipn.
Butler et al., v. Cockrill, 73 Fed. Rep., 9^5.
41. A bank for which certain mill property was held in trust caused the same
to be conveyed to a corporation, organized among its own officers and
directors, with a view to loaning to such corporation money wherewith
to repair and operate the mills and make them salable. The bank directors who subscribed for stock in the mill corporation had a secret agreement with the bank that, after a sale of the property was effected, the
proceeds should be first applied to repay the amount of their subscriptions. The money was loaned accordingly, the bank taking- the mill
company's notes, and discounting them with innocent third parties. No
sate was effected, and the bank and mill comuany failed, and all their
property went into the hands of the bank's receiver. Thereafter the mill
company gave to such subscribers its own notes, secured by mortgage,
for the amounts paid on the stock, and the notes were then transferred
to alleged innocent purchasers. Held, that these notes were without
consideration, that this was a futile attempt to divert the property of an
insolvent corporation from its creditors to its stockholders, and that the
proceeds of the receiver's sale of the mill property must be equally distributed among the holders of the notes given by it to the bank for the
borrowed money, the receiver taking for the bank's creditors the proportion applicable to such of the notes as were retained by the bank. Ib.
42. A depositor who receives an ordinary certificate of deposit, and whose
money is mingled with the other funds of a bank, is not entitled, on the
insolvency of the bank, to any preference over other creditors, even
though the banker promised him to keep his money separate from the
other funds. Bay or v. American Trust and Savings Bank (III. Sup.), 41
N.E.,622.
43. On the insolvency of a bank which has collected notes sent to it for collection, and failed to remit the proceeds, a trust will be imposed on the
assets of the bank in favor of the person sending them, as against the
general creditors of the bank, if it is proven that the moneys collected
were deposited in the bank and commingled with other funds of the
bank, or if they went into property represented by the assets in the
hands of the assignee of the bank. Winstandley v. Second National
Bank (hid. App.), 41 N. E., 056.
REPORT OF THE COMPTROLLER OF THE CURRENCY.
195
INSOLVENT BANKS: See Preferred claims; Receiver—Continued.
44. The California' * Bank Commissioners' Act" (St. 1877-78, p. 740, as amended
by St. 1886-87, p. 90) provides in section 11 that if the commissioners
shall find that any bank has violated its charter or law, or is conducting
business in an unsafe manner, they shall require it to discontinue such
practices; and in case of refusal, or whenever it shall appear to the
commissioners unsafe for the bank to continue business, they shall notify
the attorney-general, who may commence suit to enjoin the transaction
of business by such bank; and, upon the hearing of such suit, the court
may issue the injunction, and direct the commissioners to take such proceedings against the bank as may be decided on by its creditors. The
section also empowers the commissioners to supervise the affairs of banks
in process of liquidation, limit the number of their officers and employees,
and requires reports to the commissioners by such banks. Held, that a
court in which proceedings are instituted by the attorney-general against
a bank pursuant to such statute has no jurisdiction to appoint a receiver
of the property of the bank in such proceedings, though the bank commissioners and the creditors of the bank consent, and though there are
provisions in the Code of Civil Procedure authorizing the appointment
of receivers in other proceedings. Murray v. American Surety Co. of
New York (C. C. A*), 70 Fed, Bep., 341.
45. Where plaintiff sent a note and mortgage to a bank with directions to collect the same and "forward draft" for the amount, less its collection fee,
the money received by the bank in payment thereof was not impressed
with a trust in plaintiff's favor so as to entitle her to recover the whole
amount as a preferred claim from a receiver appointed for the bank after
the collection was made, though said bank was insolvent at the time it
received said note and mortgage, and though payment was made by the
mortgagor with a check drawn on the bank. Sayles v. Cox (Tenn.), 82
8. W., 626.
46. Where, between suspension by a bank and commencement of an action
for and resulting in its dissolution and appointment of a receiver, one
liable to it as indorser on notes takes assignments of deposit accounts,
he may offset them against his liability, in an action by the receiver.
unless it be shown that the bank was insolvent at the time of the assignment of the accounts; and this is not shown by the recital in an agreed
statement of facts that, at the commencement of the action to dissolve,
the bank " w a s insolvent, having suspended its business " on a certain
daj-. Higginsv. Worthington (Sup.), 35 N. Y. S., 815.
47. Where a check payable to two persons as Government officers is indorsed
by one of them for both, by indorsement showing their official character,
and deposited in a bank to be credited to his individual account, and
thereby becomes mingled with the funds of the bank, the fact that the
check was intrusted to them as officers can not be urged by the payees
to charge the proceeds as a trust fund in the hands of an assignee in
insolvency of the bank, in an action to which the Government is not
party* and in which the authority of the depositing payee to act for his
copayee is not denied. Meldrtim v. Henderson (Colo. App) ,43 P., 14S.
48. A creditor of an insolvent national bank is entitled to prove the whole
amount of the claims against it held by him, without reference to the
collateral held to secure such claims. ~Armstrong v. Bank, S C. C. A.,
155; 59 Fed. Bep., 372; 16 U. S. App., 465, followed. Merrill v. National
Bank of Jacksonville, 75 Fed. Bep., 14s.
49. It seems that an accounting of the assets which have come to the hands
of the receiver in an insolvent national bank can not be decreed in a
suit to which the Comptroller of the Currency is not a party. Ib.
50. In a suit against a receiver of an insolvent national bank to establish the
claim of a creditor and his right to a dividend, the decree should not
direct the payment of a dividend by the receiver, since the assets of such
bank are, under the statutes, entirely within the control and disposition
of the Comptroller of the Currency, but such decree should direct that
the claim of the creditor, as established, be certified to the Comptroller,
to be paid in due course of administration. Ib.
51. Where a railroad company is in the hands of a receiver, though at the
instance of the holders of a mortgage, the court has no power to appropriate the corpus of the property to the payment of claims for operating
expenses in preference to the prior mortgage debts, in the absence of a
statute, at the time the mortgage was executed, giving such claims a
196
REPORT OF THE COMPTROLLER OF THE CURRENCY.
INSOLVENT BANKS: See Preferred claims; Receiver—Continued.
prior lien on the corpus of the property. Fanners and Merchants'
National Bank v. Waco Electric Railway and Light Co. {Tex. Civ.
App.), 36 S, IF., 131; Metropolitan Trust Co, v. Farmers and Merchants'
National Bank,'ib.
52. While the N. Bank was in embarrassed circumstances, plaintiff was induced,
by the fraudulent misrepresentations of its cashier, to subscribe, in May,
1890, for 62 shares of a proposed increase of its capital stock, and to pay
in a large sum of money therefor. In the following November the
bank failed, and the plaintiff, who lived at a distance, in another State,
receiving then his first intimation that anything was wrong, proceeded
to make inquiries, and. as a result, instituted proceedings before the
Comptroller of the Currency to have the stock standing in his name
declared void, and himself not a stockholder. These proceedings failing, he took steps in May, 1891, to have a bill filed to rescind his subscription. At the request, however, of parties who were trying to reorganize the bank, he consented to withdraw such suit, and surrender his
stock to be canceled, upon an express agreement that it should be without prejudice to his right to sue the bank for the fraud by which he had
been induced to subscribe and pay his money therefor. Plaintiff did
not participate in the reorganization, and consistently maintained that
he was not a stockholder, and that the bank was liable to him for the
money paid. Upon the reorganization the creditors of the bank accepted
in settlement a payment in cash and certain certificates of indebtedness.
In November, 1891, plaintiff brought this action against the bank to
recover the money paid by him, as a deposit. In December, 1892, the
bank failed again. Held, that the occurrence of the insolvency of the
bank before the commencement of plaintiff's action did not preclude
him from, rescinding his subscription and recovering back the money
paid for his stock. Newton National Bank v. Newbegin (C. C. A.). 74
Fed. Rep., 135.
53. In an action for an alleged balance, it appeared that defendants McG. and
W. illegally undertook to corner the lard market; that McGL was a
partner in the firm through whom the transactions were carried on, but
that W. was not; that the deal ruined the firm, and that the receiver
for it undertook to effect a settlement; that defendants were personally
liable for a part of the indebtedness by their indorsements on the firm's
notes, and that at the receiver's solicitation they agreed to contribute a
certain sum each on consideration of a release from all creditors; that
the receiver thereupon submitted the firm's proposition to pay 50 per cent
of the indebtedness, in full settlement of all unsecured claims, stating
that the affairs of the firm were in great confusion and that unless the
compromise were effected the matter would * * only terminate after long,
vexatious, and fruitless litigation;" that all of the creditors accepted
the payment and signed a release in full. Held, that the transaction
was a valid compromise. (Winslow and Pinney. J J . , dissenting.)
Continental National Bank v. McGeoch (Wis.)< 66 N. IF., 606.
54. Where, on the issue of a fraudulent preference of a creditor, the verdict
and findings cover all the material, controverted, and issuable facts, a
party can not urge, on appeal, certain transactions in evidence from
which a preference might have been found, where there was no request
for the trial court to submit them to the jury for determination. Ib.
55. Where a corporation borrowed money, and directed its officers to pay over
the same to another creditor, the "authority of the officers to pay over
said money terminated by the appointment of a receiver for said corporation. First National Bank v. Dovetail Body and Gear Company (Ind.
Sap.), A? N. E., 924.
56. Remittances made by a national bank to its correspondents, in the ordinary course of business, before the commission of any act of insolvency,
are not void under Rev. St., § 5242, though the bank is in fact insolvent
at the time, and is closed by the bank examiner before the remittances
are actually received by the correspondent banks. Hayden v. Chemical
National Bank, 80 Fed. Rep., 587.
57. The Third National Bank in New York was the correspondent of the Albion
bank, a country bank. W., during part of the time in which the transactions in controversy took place, was cashier, and during the remainder
was president of the Albion bank. During all the time W. practically
managed that bank, and his codirectors and other officers had little or
REPORT OF THE COMPTROLLER OF THE CURRENCY.
197
INSOLVENT BANKS: See Preferred claims; Receiver—Continued.
no oversight of its affairs. He was engaged in stock speculations on his
own account in New York, and drew from time to time for his own purposes in favor of K. & Co., his brokers, on the bank balance with the
Third National Bank. K. & Co. from time to time returned to that bank
sums to be credited to the Albion bank. The latter bank eventually
became insolvent, being ruined by fraudulent operations of W., who
disappeared, and was put in the hands of a receiver, who brought suit
against K. & Co. to recover the sums so paid to them by W. out of the
balance to the credit of the bank with the Third National. K. & Co.
claimed to offset the return payments made by them to the Third
National, but the trial court ruled that they were not entitled to do it,
and no question in respect of them was submitted to the jury. Held,
that the defendants were entitled to have it subinitted to "the jury
whether the other directors and officers of the Albion bank might not
in the exercise of proper and reasonable care have ascertained that
these moneys had been deposited to the credit of the Albion bank, and
whether they would or would not have accepted such deposits as the
return of the moneys to the bank. Kissam v. Anderson, 145 U. S,, 435.
58. The time of commencement of judicial proceedings to avoid a statute bar
may be shown by parol. Witters. Receiver, v. Soivlcs and others, assignees, 32 Fed. Rep., 765.
59. A case will not be reopened for the introduction of newly discovered evidence where such evidence is merely cumulative and its sources were
well known to the parties at the first hearing. Ib.
60. Proceedings upon a decree will be stayed for the purpose of allowing parties to take and file testimony newly discovered, when such testimony
appears to be material and its materiality was not so direct and apparent that the failure to discover and produce ifc on the first hearing
amounted to laches. 1b.
61. Defendant was heavily indebted to the bank of which he was cashier, and
within four months of the filing of a petition by a creditor to have him
declared an insolvent (under Rev. Laws Vt.. sec. 1870) transferred certain securities to the bank with a view to preferring it over his other
creditors. Held, that knowledge on the part of defendant of his insolvency affected the bank of which he was cashier with such knowledge
and made the transfer of such securities void, under Rev. Laws Vt.,
sec. 1860, which provides that a conveyance made by an insolvent, or
one in contemplation of insolvency, within four months before the
filing of a petition of insolvency by or against him, with a view to
giving a preference to certain of his creditors, the latter having knowledge of his insolvency, is void. Witters v. Sowles and others, 3:2 Fed.
Rep., 76;?.
62. Other securities were deposited by the cashier with his bank and an equal
amount of his own paper withdrawn. Held, that title to the securities
immediately vested in the bank, and, such deposit taking place more
than four months before the filing of the petition in insolvency, the
transfer did not come within the purview of the statute. Ib.
63. Defendant, being indebted to the bank of which he was cashier, transferred to it on the books of another bank the stock which he held in the
Jatter, but did not deposit the certificates for such stock in his own bank
and take up his paper held by it until some time later. Held, that the
title of defendant's bank to the stock transferred dated from the deposit
of the certificates with it and not from the transfer on the books of the
other bank. Ib.
64. A national-bank examiner is not an officer or agent of the bank and has
no authority as such to act for the bank and can not bind it by any act
done in its behalf. Ib.
65. In an action against the receiver of a bank for dividends upon a debt for
a deposit in the name of "S., trustee.*' the mere general statement of S.
that the money deposited was his daughter's, in connection with evidence that she owned property of which he had the management and
from which the fund deposited might have been derived, it not being
shown that it was derived therefrom, is not sufficient to enable the
daughter to recover. Sowles et ah v. Witters, 35 Fed. Rep., 463.
66. Where a bank, knowing its insolvency, receives from a customer as cash
a check on a foreign bank and sends, the paper to its correspondent, who
credits the check to it as cash, and subsequently pays the proceeds thereof
198
REPORT OF THE COMPTROLLER OF THE CURRENCY,
INSOLVENT BANKS: See Preferred claims; Receiver—Continued.
to a receiver appointed for it in the meantime, it is presumed, in an action
by the depositor against the receiver to recover the j>roceeds, that the
correspondent credited the check to the bank before its failure. Friberg
v. Cose {Tenn. Sup,), 37 8. W., 283.
67. The burden is on one who transferred a draft to a bank prior to its failure,
and who seeks to follow and reclaim the proceeds as against a receiver,
to show that they were not received and mingled with the other funds
of the bank before the failure; and, where they were placed to its credit
by a correspondent on the same day the receiver was appointed, in the
absence of further proof as to the exact time it will be presumed that
the credit was given before the receiver was appointed. Klepper v. Cox
(Tenn. Sup.), 37 S. W., 284.
68. Money received by a bank and entered to the depositor's general credit as
cash can not be reclaimed after the insolvency of the bank on the ground
that the bank officials had knowledge of the insolvency when they
received the deposit, there being no means of identifying and separating it from the funds on hand when the receiver took charge. Bruner v.
First National Bank {Tenn. Sup.), 37 S.W., 28G.
69. Where a bank, knowing its insolvency, receives a check, which it credits to
the depositor as cash, and then sends to a correspondent, who, after the
failure of said bank, but without notice thereof, credits the check to it
as cash, and subsequently pays over the proceeds to the receiver, the
depositor may recover such proceeds as a preferred claim. Ib.
70. The president of a bank, having embezzled funds of the bank on deposit
with its reserve agent, replaced such funds with money borrowed by
him on the bank's note without the director's knowledge, and such
borrowed money was thereafter drawn out to pay the bank's lawful
debts. Held, that the bank having received the benefit of the loan
through its president, it was affected with his knowledge of the loan,
and hence was liable to the lender as for money had and received to
its use. Ditty v. Dominion National Bank of Bristol Va. (C. C. A.)f 75
Fed. Rep., 769.
71. The president of a bank has authority by virtue of his office to make a
valid assignment of a judgment in favor of the bank. Guernsey v.
Black Diamond Coal and Mining Co. (Iowa), 68 N. W., 777.
72. Where a depositor in a bank obtains from it two drafts upon another
bank, paying therefor by checks aganst his deposit, the relation between
the bank and the depositor with respect to such drafts remains that of
debtor and creditor, and is not changed to a fiduciary relation, entitling
the depositor, upon the bank becoming insolvent before the drafts are
paid, to have the assets in the hands of its receiver applied by preference to the payment of such drafts in full, Jewett et al. v. Yardley, SI
Fed. Rep., 920.
78. A stockholder in a national bank is liable to the receiver thereof on a note
given to the bank for capital stock. Hepburn v. Kincannon (Miss.),
21 So., 569.
INTEREST: See Usury; Insolvent banks.
1. The provision in sec. 30 of the act of 1864, " t h a t where, by the law of any
State, a different rate is limited for banks of issue organized under State
laws, the rate so limited shall be allowed for associations organized in
any such State under the act," is enabling, and not restrictive; and,
therefore, a national banking association in any State may stipulate for
as high a rate of interest as by the laws of such State a natural person
may, although State banks of issue are restricted to a less rate. Tiffany
v. National Bank of the State of Missouri, 18 Wall., 409.
2. Bank may take the rate of interest allowed by the State to natural persons
generally, and a higher rate where State banks of issue can take it. Ib.
3. But it is not to be inferred, from Tiffany v. National Bank of Missouri, that
whatever by the laws of the State is lawful for natural persons in acquiring title to negotiable paper by discount is lawful for national banks.
National Bankv. Johnson, 104 U. S.r 271.
4. May charge rate of interest allowed to natural persons in the State or Territory where bank is located, but can not take more, even on discount of
paper for third party, without it being usury. Ib.
5. The interest which a national banking association may charge is limited to
the rate allowed to the banks of the State generally; and the fact that
a few of the State banks are specially authorized to take a higher rate is
REPORT OF THE COMPTROLLER OF THE CURRENCY.
199
INTEREST: See Usury; Insolvent banks—Continued.
not a warrant for a national banking association to do so. Duncan v.
First National Bank of Mount Pleasant, 11 Bank Mag., 787; 1N. B. C,
360; First National Bank v. Gruber, S7 Penn. St., 468.
6. Where the State law does not limit the rate of interest which may be
charged on loans to corporations, a national banking association located
in that State can not charge more than 7 per cent interest on such loans.
In re Wild, 11 Blatch., 243.
7. Where by the statutes of the State parties are authorized to contract for
any rate of interest, national banking associations in that State may
likewise contract for any rate, and are not limited to 7 per cent. Hines
v. Marmolejo, 60 CaL, 229.
8. Under Rev. St., sec. 5197, authorizing national banks to charge any rate of
interest allowed by the law of the State wherein such bank is organized,
and the statute fixing a legal rate of interest, a national bank in Colorado may charge interest at any agreed rate. Rockwell v. Farmers'
National Bank, 36 P.. 905.
9. As act of 1873 (70 Ohio Laws, 178) repeals the statute fixing the rate of
interest for banks of issue, a national bank may charge interest at 8
per cant under Rev. St., sec. 3181. La Dow v. First National Bank. 37
N.E.<1L
10. The decisions of the United States Supreme Court teach that the statute
referred to is to be liberally construed in favor of national banks, and
even when the language of the statute would restrict them to a less rate
of interest than is allowed to individuals the intendment of the law must
be presumed to have been otherwise. Tiffany v. National Bank of Missouri held that the intent of the law was to put national banks on an
equal footing with State banks; to allow the State banks to charge any
amount of interest and national banks only 8 per cent would violate that
intention; to say that national banks could only charge 7 per cent would
be to say that the State had prescribed no rate of interest. National
Bank of Jefferson v. Brulin & Williams, 64 Tex., 571.
11. Where drafts are from time to time deposited in a bank, some of them
being payable on demand and some on time, an agreement between the
bank and the depositor that credit shall be given for such drafts on the
day after their deposit, the depositor being charged the full legal rate
for any overdraft, does not constitute usury when such agreement is
made in good faith in order to save involved calculations. Timberlake
el al. v. First National Bank, 43 Fed. Rep., 231.
12. Charging a depositor, by agreement, at the end of each month, with interest at the full legal rate on his overdraft, and adding such charge to the
overdraft, does not constitute usury. Ib.
13. Under Code Miss., 1880, which only allows interest on the amount of money
actually lent, a national bank in that State can not deduct interest in
advance. Ib.
14. Under the national banking act, any national bank in Pennsylvania can
charge and take the same rate of interest as any State bank of issue is
authorized to charge. First National Bank of Mount Pleasant v. Tinstman, 36 Legal Intelligence, 228; 2 JV. B. C;, 182.
15. Interest on dividends should not be allowed in favor of one who voluntarily
delayed presenting his claim until long after the dividends were declared,
although the delay was due to a mistaken belief that he had a right to
pay his claim in full from collaterals in his hands. C/iemical National
Bank v. Armstrong, 59 Fed, Rep., 372.
16. The refusal of a creditor to accept the receiver's offer to allow part of a
claim without prejudice to a suit for allowance of the remainder, or to
the receiver's right to still further reduce the claim if the court should
hold such reduction proper, bars the creditor's right to interest on subsequent dividends on the part offered to be allowed, although it is subsequently adjudged that the whole of his claim should have been allowed;
but he is entitled to interest on the dividends on the part rejected. Ib.
17. In case of book accounts in favor of depositors, interest begins to run
against an association in liquidation from the date of the suspension of
business. Richmond v. Irons, 121 U. S., 27.
18. There is an established rate of interest in Washington (10 per cent), and
the fact that by special contracts different rates may be collected does
not affect the question, and therefore a national bank may charge that
rate. Yakima National Bank v. Knipe, 33 P,, S3h; 6 JVash., 3J<S.
200
REPORT OF THE COMPTROLLER OF THE CURRENCY.
INTEREST: Sec Usury; Insolvent banks—Continued.
19. The fact that there are several entries in the books of a bank and in the
pass book of a depositor of allowance of interest on his account is not
sufficient to prove a contract by the bank to pay interest while the deposit
should remain, where it is proven that after the entries were made the
officers of the bank, on several occasions, told the depositor that it was
against their rules to pay interest, and that they would not pay it, and
that he apparently acquiesced. McLoghlin v. National 3Io7iawk Valley
Bank, 139 N. Y. St., 514; 34 N. E., 1095.
20. Rev. St. U. S., sec. 5197, authorizes national banks to take interest at the
rate allowed in the State where the bank is located, and, when no rate
is fixed by the laws of such State, they are authorized to take interest
at a rate not exceeding 7 per cent. Held, that since 1 Hill's Code, sec.
2796, and Sess. Laws 1893, page 29, allow individuals and State banks to
take any rate of interest agreed to in writing by the parties to the contract, national banks have the same privilege. Wolverton v. Exchange
National Bank (Wash.), 39 P., 247.
21. A stockholder in a bank is not entitled to interest from the bank, either
on ordinary dividends declared or on money due him from a reduction
of capital stock, for a period during which the bank was prevented from
paying him the same by attachments of his stock in suits of other parties,
though the money thus belonging to him was during such time mingled
by the bank with its general assets, the bank being ready and willing to
pay over the same but for the attachments. Mustard v. Union National
Bank, '29 A., 977; 86 Me., 177.
JURISDICTION: See Actions.
1. In an action against a national bank in a circuit court of the United States,
if all the parties are citizens of the district in which the bank is situated,
and the action does not come under sec. 5209 or sec. 5239, Rev. St., the
circuit court has no jurisdiction. W7iittemore v. Amoskeag National
Bank, 134 U. S., 527.
2. The Federal courts have .-jurisdiction of an action between a national bank
located in one State and a citizen of another State. First National Bank
v. Forest, 40 Fed. Rep., 705
3. State courts have jurisdiction of suits by and against national banking
associations. Bank of BetJiel v. Paliquioque Bank, 14 Wall., 383; Ordway v. Central National Bank. 47 Md.. 217. and Claflin v. Houseman, 93
U. S., 130.
4. Where a national banking association is sued in a State court, the suit
must be brought in the city or county in which the bank is located.
Cadle v. Tracy, 11 Blatch., 101.
5. But in a State where the holder may sue without respect to the ownership,
an association may bring suit upon paper so acquired. National Pernberton Bank v. Porter, 125 Mass., 333; Atlas National Bank v. Savery,
127 Mass., 75.
0. The words of restriction to the place where said association is situated
apply to the county and municipal courts, and not to the State courts.
In the State courts of general jurisdiction a national banking association
can be sued whenever an individual can be for the same cause. Talmage
v. Third National Bank, 27 Hun., 61.
7. A State court can entertain an action brought to recover of a national
banking association the penalty for taking usury. Ordway v. The Central National Bank, 47 Md.,217; Hade v. McVay, 31 Ohio St., 231; Bletz
v. Columbia National Bank, 87 Penn. St., 87.
8. State courts have no jurisdiction of the case of an embezzlement of the
funds of the association by one of its officers. Commonwealth v. Felton,
101 Mass., 204; Comma mcealtli ex rel. Torrey v. Ketner, 92 Penn. St.,372.
9. The defense of usury may be set up in action brought in a State court.
National Bank of Winter set v. Eyre, 52 Iowa, 114.
10. A national banking association is for jurisdictional purposes a citizen of
the State in which it is located. Davis v. Cook, 9 Nev., 134.
11. The offense of making false entries in the books of a bank, for which an
officer of the bank is liable to punishment under sec. 5209, Rev. St.,
since it is not a crime of which the State courts have concurrent jurisdiction, under sec. 5328, Rev. St., is exclusively cognizable by the Federal courts. In re Eno, 54 Fed. Rep., 000.
HEPORT OF THE COMPTROLLER OF THE CURRENCY.
201
JURISDICTION: See Actions—Continued.
12. Under the provisions of the act of August 13, 1888, national banks are
deemed to be, for jurisdictional purposes, citizens of the State wherein
they are located, and they no longer possess the right of removal on the
ground that they are Federal corporations. Burnham et al. v. First
National Bank of Leoti, 53 Fed. Rep., 163.
13. An action for money against a national bank whose corporate existence is
admitted is not a suit arising under the laws of the United States.
Ulster County Savings Institution v. Fourth National Bank, 8 N. Y., 16,?.
14. The provision that the Federal courts shall not have jurisdiction of an
action on a promissory note or other chose in action by an assignee
thereof, unless the action might have been maintained in such courts it'
no assignment or transfer had been made (act August 13,1888) does not
apply to the indorsement and transfer of the payee of notes which were
made to him merely that he might as agent of the maker raise money
for it bv negotiating them with third persons. Wachusett National
Bank v." Sioux City Stove Works, 56 Fed. Rep., 321.
15. A suit on the official bond of the cashier of a national bank, conditioned
for a faithful performance of the duties thereof, "according to law and
the by-laws" of the bank, involves a Federal question and Is maintainable in a Federal court irrespective of the citizenship of the parties.
Walker et ah y. Windsor National Bank, 56 Fed. Rep., 70.
16. In a suit which is properly brought in a Federal court, because it involves
a Federal question, the court has full .-jurisdiction of the defendant,
who, though a resident of another district, waives his personal privilege
of being sued in his district by voluntarily appearing. Ib.
17. The exemption of national banks from suits in State courts in other than
their own county or city, by act of February 18, 1875 (18 St., 310, chap.
80) was a personal privilege which could be waived by appearing to
such suit and not claiming the immunity. First National Bank v. 3forgan, 132 U. S., 1//1.
18. The provision in act of July 1.2,1882 (22 St., 163, chap 290, sec. 4), respecting
suits by or against national banks, refers only to suits brought after the
passage of that act. Ib.
19. This court has jurisdiction to review a judgment in State courts involving
the question whether a national bank is exempted from liability to
account for bonds purchased by it on condition of selling back on demand.
Logan County National Bank v. Townsend, 139 U. #., 67.
20. When transaction of transfer of national-bank shares does not present a
case arising under national banking act, no Federal question is involved.
Le Sassier v. Kennedy, 123 U. S., 521.
21. State courts have no jurisdiction of actions to recover penalties imposed by
the national banking act. Missouri River Telegraph Company v. First
National Bank of Sioux City, 74 III, 217; 1 N. B. C, tf)l.
22. When a State bank acting under a statute of the State calls in its circulation issued under State laws, and becomes a national bank under the laws
of the United States, and a judgment is recovered in a court of a State
against the national bank upon such outstanding circulation, the defense
of the State statute of limitations having been set up, a Federal question
arises which may give this court jurisdiction in error. Metropolitan
National Bank v. Claggeit, 141 U. S., 520.
23. The act of Congress of July 12, 1882, repealing inconsistent acts and providing that the jurisdiction of suits in which a national bank should be
a party should be the same as if it were a State bank at the same place,
prevents the removal of a cause in which a national bank is a party from
a State to a Federal court on the mere ground that it is a national bank.
Leather Manufacturers' National Banky. Cooper, jr.. 120 U. S., 77S: 3
NB.C.,208. "
24. Under St. U. S., 1888, chap. 866, sec. 4, providing that in actions against
national banks the Federal courts " shall not have jurisdiction other than
such as they would have in cases between individual citizens of the same
State," an action to compel the directors of a national bank to declare a
dividend may be maintained in a State court. Hiscock v. Lacy (Sup.).
SO N. Y.S., 860; 9 Misc. Rep., 578.
25. The object of this proviso was to deprive the United States courts of jurisdiction of suits by or against national banking associations in all casefwhere banks organized under State laws could not likewise sue or be
sued in such courts. Ib.
202
REPORT OF THE COMPTROLLER OF THE CURRENCY.
JURISDICTION: See Actions—Continued.
26. But the proviso does not affect the right of the receiver of an insolvent
association to sue in a Federal court, Hendee v. Connecticut and P. R. R*
Co., 20 Fed. Rep., 677.
27. Nor would the act of July 13,1882, take from the circuit court jurisdiction
of a suit brought against a director for negligent performance of his
duties; for, as such suits rest upon the requirements of the United States
laws and by-laws made pursuant thereto, it is a case arising under the
laws of the United States. Witters v. Foster, 28 Fed, Rep., 737.
28. An action between a receiver of an insolvent national bank and a depositor
does not present a Federal question under Rev. St., sec. 5242, avoiding
preferences to creditors of such an insolvent bank. Telian v. First
National Bank et ah, 39 Fed. Rep., 577.
29. A receiver of an insolvent national bank is an officer of the United States
within the meaning of sec. 563, Rev. St., which gives the district courts
jurisdiction of " a l l suits at common law brought by the United States,
or any officer thereof authorized by law to sue." Stephens v. Bernays,
U Fed. Rep., 401.
30. The United States district court has jurisdiction of an action at law brought
by the receiver of a national bank to recover an assessment made upon a
stockholder, and the action may be maintained in such event against
the executor of a deceased stockholder. 1b.
31. The State courts have jurisdiction of an action brought by a shareholder
on behalf of himself and other shareholders to recover of the directors of
an insolvent association damages for injuries resulting from their negligence and misconduct. Brinckerhoffv. Bostwick, 88 N. Y., 52.
32. A State court has no power to make an order directing the receiver of a
national bank who has been appointed by the Comptroller of the Currency to pay a judgment obtained against the bank before the receiver
was appointed. Ocean National Bank v. Carll, 7 Hun., 237.
33. Neither the Comptroller nor the receiver by putting in an appearance to a
suit c.m subject the United States to the jurisdiction of a court. Case
v. Terrell, 11 Wall, 199.
34. The Federal courts have jurisdiction of suits by receivers of national
banks to collect the assets thereof without regard to the citizenship of
the piaintiff. Fisher v. Yoder, 53 Fed. Rep., 565.
35. A Federal court is not deprived of jurisdiction otherwise vested in it of a
suit against the executors of an estate by the fact that the estate is in
the possession of a State probate court for purposes of administration,
and the Federal court has jurisdiction to adjudge whether a liability
exists, but can not issue execution to enforce the same. Wickham v.
Hull ct cd., 60 Fed. Rep., 326.
36. A suit against the receiver of a national bank to compel him to pay out of
the funds in his hands as receiver moneys claimed by the complainant
is a suit arising under the laws of the United States, and can be removed
into the Federal court. Hot Springs Independent School District, etc.,
v. First National Bank of Hot Springs, 61 Fed. Rep., 417.
37. The tenth subdivision of sec. 629, Rev. St., which confers upon the circuit
court of the United States jurisdiction of all suits by or against any
national banking association established in the district for which the
court is held, has been repealed by the "oroviso to sec. 4 of the act of
July 13, 1882. National Bank of Jefferson v. Fare et ah. 25 Fed. Rep.,
200.
38. A Federal court has jurisdiction of an action brought by the receiver of
an insolvent national bank in the name of the bank, to realize its assets.
irresuective of the citizenship of the parties. Linn County National
Bank v. Crawford (C. C ) , 69 F., 532.
39. A suit against a receiver appointed by a Federal court for a cause arising
out of his management of the \3roperty committed to his charge is one
arising under the laws of the United States and may be removed from
a State to a Federal court without regard to the citizenship of the parties or the nature of the controversy. Jewett v. Whitcomb etah, 69 Fed.
Rcp.,4lS.
40. It seems that where a State statute creates a right in favor of creditors,
and provides a remedy for the enforcement thereof, this remedy, whether
at IMW or in equity, must be adopted by the Federal courts. If the
Sta to statute does not create the right, but only redeclares a right existing iu the absence of statute, then the form of remedy in the Federal
EEPORT OF THE COMPTROLLER OF THE CURRENCY.
203
JURISDICTION: See Actions—Continued.
courts is determined by principles which differentiate legal and equitable
jurisdiction. First National Bank of Sioux City v. Peavy, 69 Fed. Re}).,
41. The California " Bank Commissioners' Act" (St. 1877-78, p. 740, as amended
by St. 1886-87, p. 90) provides in section 11 that if the commissioners shall
find that any bank has violated its charter or law, or is conducting business in an unsafe manner, they shall require it to discontinue such
practices; and in case of refusal, or whenever it shall appear to the commissioners unsafe for the bank to continue business, they shall notify the
attorney-general, who may commence suit to enjoin the transaction of
business by such bank; and, upon the hearing of such suit, the court may
issue the injunction and direct the commissioners to take such proceedings
against the bank as may be decided on by its creditors. The section also
empowers the commissioners to supervise the affairs of banks in process
of liquidation, limit the number of their officers and employees, and
require reports to the commissioners by such banks. Held, that a court
in which proceedings are instituted by the attorney-general against a
bank, pursuant to such statute, has no jurisdiction to appoint a receiver
of the property of the bank in such proceedings, though the bank commissioners and the creditors of the bank consent, and though there are
provisions in the Code of Civil Procedure authorizing the appointment
of receivers in other proceedings. Murray v. American Surety Co. of
New York, 70 Fed. Rep., 841.
42. The exercise by a court, in purely statutory proceedings, of a power not
authorized by the statute, is null and void, and may be collaterally
attacked. Ib.
43. The Federal courts have jurisdiction of actions brought by the receiver
of an insolvent national bank to realize its assets, irrespective of the citizenship of the parties; and it is immaterial to such jurisdiction whether
the action is brought in the receiver's own name, as receiver, or by him
in the name of the bank. Linn County National Bank v. Crate ford, 69
Fed. Rep., 532.
44. A suit brought in a State court can be removed to a Federal court on the
ground of diverse citizenship only when the defendant is a nonresident
of the State in which it is brought. Thurber v. Miller, 14 C. C. A., 43,?,
67 Fed. Rep., 371, followed. Wichita National Bank et al. v. Smith, 72
Fed. Rep., 568.
45. A national bank can not remove a suit upon the ground that it is a Federal
corporation. Ib.
46. A cause can not be removed upon the ground that it involves a Federal
question unless that fact appears from the plaintiff's complaint. Ib.
47. Where a judgment recovered in a State court against a county is assigned
to a citizen of another State, the assignee may sue thereon in the proper
Federal court, although the original judgment is still in force. The
assignee has a right to have judicially determined its right to enforce
payment of the indebtedness, and the action is not to be considered as
brought merely to vex defendant. First National Bank of Buchanan
County v. Duel County, 74 Fed. Rep., 373.
48. The United States circuit court has jurisdiction of a suit brought by the
statutory receiver of a national bank, without reference to the citizenship of the parties. Short et al. v. Hepburn, 75 Fed. Rep., 113.
49. It is within the discretion of the court to have the jury retire during arguments as to the admissibility of evidence. Birmingham National Bank
v. Bradley (Ala.), 19 So., 791.
50. The fact that the State supreme court, in affirming a judgment decided
against an immunity from liability expressly claimed under the laws of
the United States, does not give jurisdiction to the Federal Supreme
Court, if such immunity was not claimed in the trial court. Chemical
National Bank v. City Bank, 16 S. Ct., 417.
51. A receiver of a national bank, appointed by the Comptroller of the Currency, is an officer of the United States, and entitled to sue in the Federarc'onrts. by virtue of Rev. St., § 029. Thompson v. Pool (C. C), 70
F, 725.
52. The circuit court of appeals has no jurisdiction to review a judgment rendered before act March 3,1891, creating that court, was passed. United
States v. National Exchange Bank (C. C. A.), 53 F.. 9.
58. Held, that the plantiff, a national bank, had the right to bring suit, in the
204
REPORT OF THE COMPTROLLER OP THE CURRENCY.
JURISDICTION: See Actions—Continued.
51.
55.
56.
57.
58.
59.
60.
61.
62.
63.
64.
65.
66.
67.
United States circuit court of the district where the bank was located,
upon two notes indorsed to it by the payee, who was also a citizen of the
State and resident of the
district. Commercial Bank of Cleveland v.
Simmons, 1 N. i?. C, 29.rh
That a national bank does not sue by virtue of any right conferred by the
judiciary act, but by virtue of the right conferred upon it by the act of
1864, authorizing and creating it, and which constitutes its charter; that,
having no right to sue under the judiciary act, the limitation in the 11th
section as to suits on indorsed notes and choses in action does not apply.
Ib.
The circuit court has no jurisdiction of a suit by a private person to
restrain, interfere with, or control the Treasurer of the United States or
the Comptroller of the Currency in the discharge of their duties in respect
to bonds deposited with the Treasurer to secure the redemption of circulating notes of a national bank. The provisions of sections 56 and 57
of the national banking act explained. Van Antwerp v. Hidburd, 7
Blatchford, 426.
State courts have jurisdiction of suits brought by national banks, it not
having been taken away by section 57 -of the national banking act.
First National Bank of Montpelier v. Hiibbard and others, .f9 Vermont, 1.
A national bank can not be sued in the Federal court outside of the district where it is located. Service on the cashier when found within
another district does not give jurisdiction. Main, Assignee, v. Second
National Bank of Chicago, 6 Bissell, 26.
National banks may, by reason of their character as such, sue in the
Federal courts. First National Bank of Omaha v. County of Dour/las,
IN. B.C., 267.
A district court of the United States may order the receiver of a national
bank to compromise doubtful debts under section 50 of the national
banking act (13 Stat. at Large, 115), which authorizes receivers to compromise such debts "on the order of a court of record of competent
jurisdiction."' Petition of Platt, 1 Benedict, 53/+.
A banking association organized under act of Congress of 1864, chapter
106, can be sued in a State court only in the city or county where it is
located. Crocker v. Marine National Bank of New York, 101 Massachusetts, 240; 1 N. B. C, 575.
National banks, like any other corporations, and the receivers of them,
may sue and be sued in the State courts of their domicile. Adams v.
Daunts, 29 La. Ann., 315; 1 N.B. C, 510.
The receiver of a national bank is amenable to the jurisdiction of a State
court in a parish other than that in which the bank was located and in
which he has his domicile. Ib.
In an action by a national bank of New York against a national bank of
West Virginia, held, that the defendant was not deprived of the right
to demand a removal of the cause from the State court to a Federal
court. National banks are''citizens''of the State in which they are
organized and located. Chatham National Bank of New York v. Merchants' National Bank of West Virginia, appellant. 4 Thompson & Cook,
196; 1 N. B.C., 769.
Defendant served a notice of appearance on December 15, but did not
file a petition for the removal of the cause from a State to the Federal
court until January 7. the petition stating that defendant then entered
its appearance and had not done so before. Held, a valid compliance
with the Federal statute requiring the defendant " a t the time of
entering his appearance in the State court" to file his petition. Ib.
Section 7 of the act creating the circuit court of appeals (26 Stat., 838)
gives no jurisdiction of an appeal from an interlocutory order dismissing a restraining order and denying an injunction. Robinson v. City of
Wilmington et ah, 60 Fed. Rep., A69.
The act of July 12, 1882, to enable national banks to extend their corporate existence, placed national and other banks, as to their right to
sue in the Federal courts, on the same footing, and consequently a
national bank can not, in virtue of a mere corporate right, sue in such
courts. Union National Bank of Cincinnati v. Miller, Treasurer of
Hamilton County, Ohio, 15 Fed. Rep., 703.
But national banks may, like other banks and citizens, sue in such courts,
whenever the subject-matter of litigation involves some element of
REPORT OF THE COMPTROLLER OF THE CURRENCY.
205
JURISDICTION: Sec Actions—Continued.
G8.
69.
70.
71.
72.
73.
74.
75.
70.
77.
78.
79.
80.
81.
Federal jurisdiction. Thus a suit by a national bank against a county
treasurer to enjoin the collection of a personal tax upon his property,
alleged to be made in violation of the act of Congress permitting the
State to tax national banks, presents a case arising under'a law of Congress, and is, therefore, maintainable in a Federal court. Ib.
The power given the Federal courts to order the production of books and
papers (Rev. St.,^ sec. 724) includes power to grant an inspection before
trial, with permission to make copies. Exchange National Bank of
Atchison v. Washita Cattle Co., 61 Fed. Hep., 190.
A national bank is not authorized to sue in any circuit court of the United
States without regard to citizenship. It is to be regarded, for the purpose of jurisdiction, as a citizen of the State in which it is established
or located. St. Louis National Bank v. Allen el al., 5 Fed. Rep., 551.
An action to enfore a right conferred by section 5219 of the Revised
Statutes, regarding the taxation of property in the shares of national
banking associations, is a suit arising "under the laws of the United
States " within the meaning of the act of March 8, 1875. Stanley v.
Board of Supervisors of Albany Co., 6 Fed. Rep,, 561.
A suit by or against a corporation created by an act of Congress is a suit
arising under the laws of the United States within the meaning of section 2 of the removal act of 1875, and may be removed from a State
court. Cruikshank v. Fourth National Bank, 16 Fed. Rep., 888.
State courts have jurisdiction of suits against national banks to recover
monev paid as usury. Dow v. Irasburgh National Bank of Orleans, 50
Vt, 112; 28 Am. Rep., 493; 2 NmB. C, 421.
To give this court jurisdiction on appeal from a State supreme court under
the national banking act, the "title, right, privilege, or immunity
specially set up or claimed " must be claimed by the plaintiff in error
for himself, and not for a third person, in whose title he has no interest.
Miller v. National Bank of Lancaster, 'lOG U. 3., 542; 3 N. B. C, 52.
Defendant, a bookkeeper in a national bank, without authority filled a
draft signed in blank by the assistant cashier, issued it, and fraudulently
changed his book entries to cover the crime. Held, on an indictment
for forgery, that the crime was within the jurisdiction of the State
courts. Hoke v. People, 122 III, 511; 3 N. B. C, SI2.
A State court has jurisdiction of an action on contract brought by a resident of the State against a national bank located in another State, and
except as against a national bank which has committed or is contemplating an act of insolvency. Robinson v. National Bank of New Berne.
58 How. Pr., 300; 2 N. B. C, 309.
An attachment can issue against a national bank from a State court. Ib.
In an action of debt on sec. 5198, U. S. Rev. Stat., to recover twice the
amount of interest, at the rate of 9 per cent, received by a national bank
in Pennsylvania, upon the discount of notes, where plaintiffs had judgment for $2,150.38, held, that this amount was insufficient to give jurisdiction to the Supreme Court of the United States.
Williamsporl
National Bank v. Knapp, 119 U. S., 357; 3 N. B. C, 184.
A Federal court has jurisdiction of a creditor's bill between citizens of different States, though based upon the judgment of a State court, and
notwithstanding the existence of statutory legal remedies in the State
courts. First National Bank of ChicagoY. Steinwayetal.i77 Fed. Rep.,661.
Under the provision
in the judiciary act of 1887-88, that " t h e provisions
of this section5' shall not affect the jurisdiction of the circuit courts in
cases for "winding up the affairs" of any national bank, the circuit
courts have at least concurrent jurisdiction (whether exclusive or not
is not decided) with the State courts in cases of that kind, without
regard to the citizenship of the parties. Lake National Bank v. Wolfeborough Savings Bank et ah, 78 Fed. Rep., 517.
A State' court appointed a receiver of a national bank, but he never
obtained possession of its property. The original complainant discontinued, and the defendant filed a motion to dismiss, but no formal order
of dismissal was entered. Held, that the pendency of the suit in that
condition was no bar to a subsequent suit between the same parties in
a Federal court for the appointment of a receiver, etc. Ib.
A national bank, sued in a State court, can not enforce the removal of the
cause to the Federal court on the ground that the latter has exclusive
jurisdiction. Pettilon v. Noble, 7 Biss., 449; 2 N. B. C , 120.
206
REPORT OF THE COMPTROLLER OF THE CURRENCY.
JURISDICTION: See Actions—Continued.
82. The district court of the United States has jurisdiction of a bill in equity
filed by a national bank. Fifth National Bank of Pittsburgh v. Pittsburgh and Castle Shannon Railroad Company > 1 Fed. Rep,, 190; 2
N. B. C, 190.
83. Stockholders have no standing in court to interfere for the protection of
their company until the board of directors of the company have neglected or refused an application to take the proper steps to protect the
interests of the company. Ib.
84. The Federal courts have jurisdiction over all suits by and against national
banks, irrespective of subject-matter. Joining merely nominal or personal parties has no effect either to confer or exclude the jurisdiction;
but trustees, executors, and the like are not formal parties, within the
meaning of the rule, where in fact interested in the litigation. Accordingly, where two or three persons claiming a certain fund which was in
the custody of a national bank, brought their bill in equity against the
bank and a third claimant, and the bank exhibited its cross-bill, praying
that the parties might interplead, held, to confer jurisdiction. Foss v.
First National Bank of Denver, 3 Fed, Rep., 185; 2 N. B. C , 104.
85. Banks organized under the acts of Congress as national banks are not
entitled by force of such acts to have any suit or proceeding in the
State court wherein they are parties defendant removed to the Federal
court. Wilder v. Union National Bank, 12 Chicago Legal News, 84;
2 N. B. C., 124.
86. To authorize a removal on the ground that the controversy involves a
question arising under Constitution and laws of the United States, it
must fully appear from all the record that a Federal question is presented. So, where, in a petition for removal to the Federal court, the
defendant states that certain laws of the State of Illinois infringe upon
or violate the tenth section of Article Two of the Constitution of the
United States, but fails to state in what respect, or how the rights>
either of the plaintiff or defendants, are affected by the operation of
those laws, the record does not show sufficiently that it is a case coming
within the Federal jurisdiction. Ib.
87. If the record presents a Federal question, that a right of action or defense
arising under the Constitution and laws of the United States, the citizenship of the parties has nothing to do with it. Ib.
88. National banks are not authorized to institute suits in the Federal courts
out of the districts where they are established when the amount in controversy does not exceed $500. St. Louis National Bank v. Brinkman,
1 Fed. Rep., 45; 2 N. B. C , 141.
89. State courts have no jurisdiction of the offense of embezzlement of the
funds of a national bank. People v. Fonda, 62 Mich., 401; 3 N. B. C., 501.
90. A Federal court has jurisdiction of a suit to enjoin State taxing officers
from enforcing collection of a tax upon shares of stock in a national
bank where the protection sought is based upon the ground that the
State statute under which such officers are proceeding in making their
assessment is in violation of the fourteenth amendment to the Constitution and of Rev. St., § 5219. Third National Bank of Pittsburg v. Mylin,
Auditor-General, et at, 76 Fed. Rep.. 385.
91. A receiver of a national bank, appointed by the Comptroller of the Currency, when sued in a State court on a claim of less than $500, has no
power to remove the case to a Federal court. Hallam v. Tillinghast,
75 Fed. Rep., 849.
92. A national bank located in one State may bring suit against a citizen of
another State in the circuit court of the United States for the district
wherein the defendant resides, by reason alone of diverse citizenship.
Petri v. Commercial National Bank of Chicago, 142 U. S., 644.
93. This court has jurisdiction of an appeal from a decree of a circuit court
requiring stockholders in an insolvent national bank to pay a given percentage on their stock which the Comptroller of the Currency had ordered
collected and such further sums as may be necessary to pay the debts of
the bank. Germania National Bankv. Case, 131 U. S., CXLIV App.
94. A bill in equity was filed in a State court by a creditor of a partnership to
reach its entire property. The prayer of the bill was that judgments
confessed by the firm in favor of various defendants, some of whom
were citizens of the same State with the plaintiff, might be set aside for
fraud. On the allegations of the bill there was but a single controversy,
REPORT OF THE COMPTROLLER OF THE CURRENCY,
207
JURISDICTION: See Actions—Continued.
95.
98.
97.
98.
99.
100.
101.
102.
103.
104.
as to all of the defendants. One of the defendants, who was a citizen of
a different State froin the plaintiff, removed the entire cause into a circuit court of the United States. After a final decree for the plaintiff,
and on an appeal therefrom, this court held that the case was not removable under section 2 of the act of March 3,1875,18 Stat., 470, and reversed
the decree and remanded the case to the circuit court with a direction to
remand it to the State court, the costs of this court to he paid by the
petitioner for removal. Graves v. Corbin; First National Bank of Chicago v. Corbin, 132 U. S., 571.
The E. Co., being indebted to the plaintiff, executed to it three promissory
notes, and pledged certain chattels to secure their payment. Subsequently the E. Co. confessed judgment in a State court in favor of the
S. bank, then in the hands of a receiver. The receiver caused an execution issued from the State court to be levied on the same chattels which
had been pledged to plaintiff. Plaintiff then filed a bill in equity in the
State court against the bank and its receiver, tlie E. Co., and the sheriff,
to restrain the sale of the chattels and determine the rights of the parties. The receiver applied to remove this suit to the Federal court.
Held, that the subject-matter of the controversy, the pledged chattels,
was within the jurisdiction and control of the State court, and therefore
beyond the jurisdiction of the Federal court, either original or by
removal. Kelly, Mans & Co. Y. Sioux National Bank et ah. Si Fed.
Rep,, 3,
The Federal courts have no jurisdiction of a suit in equity against a
national-bank receiver, appointed by the Comptroller, unless the amount
in controversy exceeds §2.000. Smithson v. Hubbell et ah. 81 Fed Rep.,
593.
In a suit by a creditor of an insolvent national bank, in behalf of himself
and all other creditors, to enjoin the receiver and the Comptroller from
paying dividends on an alleged fraudulent claim which has been allowed
by" them, the jurisdictional amount is to be determined solely by the
amount of complainant's own claim, and not by the aggregate of all the
claims of those whom he assumes to represent or by the amount of the
dividends, payment of which is sought to be enjoined. Ib.
Under section 4 of the act of Congress of July 12,1882, a national bank can
not remove a suit against it from the State court upon the sole ground
that it is a corporation organized under a law of the United States, and
that therefore the suit is one arising under the laws of the United States.
Cooper v. Leather Manufacturers* National Bank, Z9 Fed, Rep.* 1G1.
When a complainant invokes the protection of a law of the United States
the Federal courts have jurisdiction when it is apparent that the case
depends upon a construction of that law. Richa rds et al. v. Incorporated
Town of Rock Bajrids, 31 Fed, Rep., 505.
A partly does not waive the right of removal by remaining in the State
court and contesting the case on the merits, if the State court, upon due
application, wrongfully refused to order a removal of the cause. Fb.
The right of removal is not defeated or lost if the petition therefor is filed
in the State court after motion made, the decision of which does not
affect the merits of the controversy. Ib.
Section 5219, Rev. St. IT. S., provides that shares in the national banks may
be subjected to the imposition of a State tax, but the same shall not be
at a greater rate than is assessed upon other moneyed capital in the hands
of individual citizens of such State. Under this section, before the assessment of the shares in a national bank can be held invalid, it must be
shown that there is in fact a higher burden of taxation imposed upon
money thus invested than is imposed upon other moneyed capital, and it
is insufficient to show merely that the State laws provide a different mode
or manner of taxing moneyed capital invested in saving banks or other
corporations. Ib.
Sections 818-820, Code. Iowa, providing for the taxation of the shares of
national banks, and chapter 60 of the Laws of 1874, providing for the
organization of savings-banks, and enacting that the shares of stock
therein are taxable, but that deposits are not, are not in contravention
of section 5219, Revised Statutes of the United States, there being no discrimination against national banks or the capital therein invested. Ib.
The owners of shares in national banks are. under section 5219, Rev, St.
U. S,, entitled to the right of deduction given to taxpayers under section
208
REPORT OF THE COMPTROLLER. OF THE CURRENCY.
JURISDICTION: See Actions—Continued.
105.
106.
107.
108.
100.
110.
111.
112.
113.
114.
115.
814 of the Code of Iowa, which provides that from the gross amount of
money and credits held by one liable to taxation may be deducted all
debts due and owing. Tb.
Act Con., March 3, 1887, sec. 4, declares that national-banking associations are, for the purpose of all actions by or against them, at law or
in equity, to be deemed citizens of the States in "which they are respectively located, but " t h e provisions of this section shall not be held to
affect the jurisdiction of the courts of the United States in cases commenced by the United States or by direction of any officer thereof, or
cases for winding up the affairs of any such bank.'' Held, that a
receiver of a national bank may still maintain a suit in the United
States circuit court, without reference to the citizenship of the parties
or to the amount involved, to recover a claim due the bank.
Armstrong
v. Trautman et ah, 86 Fed, Rep., 275.
This court has jurisdiction to review a judgment of the highest court of a
State holding a national bank liable, under statute of the State, as a
shareholder in a State savings bank, when the answer sets up that the
stock of the savings bank was issued to it without authority of law and
the motion for a new trial and the specifications of error, which were
the basis of appeal from the trial court to the supreme court of the State,
assert such want of power under the laws of the United States. California Bank v. Kennedy, 167 U. S., 362.
A'suit to recover property acquired by the removing defendant, as receiver
of a national bank, by authority of the laws of the United States, arises
under the laws of the United States, within the meaning of the removal
act of 1888 (25 St. U. S., 434). Bowles v. Witters et ah, 43 Fed. Rep., 700.
Said act provides that the petition for removal shall be filed at or before
the time the defendant is required to plead. A rule of the chancery
court provided that the subpoena should require defendant's appearance
on the first day of a stated term, and that he should answer within forty
days from the return-day or the day fixed for entering appearance. A
subpoena required the defendant to answer on the first day of the April
term, but the suit was not entered until the last day of court. The next
stated term began on the second Tuesday in September. Held, that a
petition for removal filed September 4 wTas in apt time. Ib.
The State courts have jurisdiction of an action brought against the officers
of a national bank to recover damages on account of alleged deceit practiced by such officers in making a false report of the condition of the
bank. Barnes v. Swift (Super. Ct. Sin.), 3 Ohio N. R, 291.
The assets of an insolvent national bank are not brought under the control or protection of the Federal courts by being taken into custody by a
receiver appointed by the Comptroller of the Currency, nor by their
transfer from the receiver to an agent of the shareholders appointed pursuant to the act of Congress to wind up the affairs of the bank. Snohomish County v. Puget Sound National Bank (C. C.),81 Fed. Rep., 518.
Unless it voluntarily appears, a foreign corporation can not be made a
party defendant to a suit in a Federal court by one of its creditors, who
seeks the appointment of a receiver, an accounting, and to enforce the
individual liability of stockholders who are within the jurisdiction of
the court. Elkhart National Bank v. Northwestern Guaranty Loan Company et al., 87 Fed. Rep., 252.
The corporation and all its stockholders are necessary parties defendant to
a creditor's suit for the appointment of a receiver, an accounting, and
to enforce the personal liability of stockholders, and, if the corporation
can not be brought in, the suit must be dismissed. 1b.
A receiver of an insolvent national bank, appointed by the Comptroller of
the Currency, against whom an action is brought in a State court to
recover less than $2,000, has no right to remove the same to a Federal
court. Follett v. Tillinghast, 82 Fed. Rep., 241.
A suit by a national bank against its former managing officers to charge
them with losses sustained by reason of their having made loans to one
individual in excess of 10 per cent of the capital stock, and other loans
without personal security, in violation of the national banking statutes,
the right of recovery being claimed under Rev. St., § 5239, is one arising
under the laws of the United States. National Bank of Commerce of
Tacoma, Wash., v. Wade et al., 84 Fed. Rep., 10.
A national bank mav maintain a suit against its directors to enforce their
REPORT OP THE COMPTROLLER OF THE CURRENCY.
209
JURISDICTION: See Actions —Continued.
$16.
117.
118.
119.
120.
121.
122.
123.
124.
125.
126.
liability tinder Rev. St., § 5239, for losses resulting from a violation of
the statutory requirements in conducting the business of the bank. A
suit by the Comptroller for dissolution of the association and an adjudication of such violations is not <i condition precedent to the enforcement
of such liability. Ib.
A suit by a national bank against its former officers and directors, under
Rev. St., § 5239, to recover for losses resulting from their mismanagement in violation of the provisions of the national banking lav/, is cognizable in equity, where the transactions involved are complicated, and
the conversion of securities into money is required before the extent of
the liability can be ascertained, and when, therefore, the remedy at law
is not complete or adequate. Ib.
The fact that a suit by the Comptroller for the forfeiture of the charter of
a national bank for violations of the banking statutes is barred by limitation does not operate to bar a suit by the bank against its officers and
directors, under Rev. St., § 5239, to charge them with losses resulting
from such violations. Ib.
The statute does not commence to run against a suit by a national bank
against its managing officers to enforce their liability under Rev. St.,
g 5239, for losses resulting from acts in violation of the national bankinglaw, until such officers have surrendered control of the bank to their
successors. Ib.
The rule that, in order to warrant the removal of a cause to the circuit
court on the ground that it arises under the laws of the United States,
that fact must be shown in the plaintiff's pleading, does not operate to
prevent a removal, where the original pleading alleges that defendant
is a national banking association, and where a receiver thereof, appointed
by the Comptroller of the Currency, is subsequently made a defendant
and petitions for removal. Speclmvt et ah v. German National Bank
ct al, 85 Fed. Rep., 12.
A receiver of an insolvent national bank is an officer of the United
States. Ib.
In a suit in a State court against an insolvent national bank and others,
charging a-conspiracy to defraud, and seeking the recovery from the
bank of moneys alleged to have been thus obtained, a subsequently
appointed receiver of the bank is a proper party defendant. Ib.
It seems that in such a suit, in a State court, the receiver of the national
bank is not a necessary party. Ib.
Such an action falls within the description of ''cases for winding-up the
affairs " of a national bank, under section 4 of the judiciary act of 1875,
as amended in 1887 and 1888 (25 Stat., 433), which preserves in such
cases the jurisdiction of the Federal courts, and the receiver of the bank,
intervening as such, is entitled to have the cause removed. Ib.
It seems that a State court is a "court of competent jurisdiction" to adjudicate upon disputed claims against insolvent national banks. Ib.
The rule requiring that, where the ground for removing a cause to the
Federal court is diverse citizenship, that ground must exist, not only at
the time of removal, but also when the suit was commenced, has no
application where a receiver of an insolvent national bank intervenes
as such and seeks the removal of a case which is under the head of
" winding up the affairs" of the bank. Ib.
Circuit courts have jurisdiction of actions by receivers of national banks
to collect assessments made by the Comptroller, without regard to the
amount involved. Brown v. Smith. SS Fed. Rep., 5^5.
LEASE:
1. Where a national bank takes a lease for a long term, its insolvency and dissolution soon afterwards, and the appointment of a receiver who refuses
to take possession of the leased premises, do not entitle the lessor to
damages out of the assets, the rent having been paid for the time during
which the bank was in possession. Fidelity Safe Deposit and Trust Co.
v. Armstrong, 85 Fed. Rep., 567.
2. A national bank which, when a receiver is appointed for it, is in arrears for
rent under an existing lease may be afterwards sued for damages caused
by its failure to carry out the provisions of the lease. Chemical National
Bank v . Hartford
CUR 08
14
Deposit Company
(III.),
.jt N. F., 225.
210
REPORT OF THE COMPTROLLER OF THE CURRENCY.
LEASE—Continued.
3. In a suit against a national bank in arrears for rent under an existing
lease at the time a receiver was appointed for it, for damages for failure
to carry out the lease, the receiver need not be made a party. Ib.
4. A claim for rent which was due nine days before the suspension of the
bank is an existing demand which is entitled to be proven up for participation in the distribution of the assets. Chemical National Bank v.
Hartford Deposit Co., 16 S. Ct.. 439.
5. In a suit against a national bank in arrears for rent under an existing
lease at the time a receiver was appointed for it, for damages for failure
to carry out the lease, the receiver need not be made a party. Chemical
National Bank v. Hartford Deposit Co. (III. Sup.), 41 N. E., 225.
6. The legal existence of a corporation is not cut short by its insolvency and
the consequent appointment of a receiver; and there is nothing in the
statutes relating to national banks which takes them out of the operation of this general rule. Chemical National Bank v. Hartford Deposit
Company, 161 U. S., 1.
7. After passing into the hands
@FedFRASER