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Dates of Regular Meetings of Legislatures
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Federal Reserve Bank of St. Louis
f Alabama, Second Tuesday in May, 1943, and every odd year.
Alaska, A Territory—_ January _
Every odd year.
Arizona
__ January _______________..Every odd year.
Arkansas
__ January__ _________ ..Every odd year.
California. . .
_ -January___
____ _. Every odd year.
Colorado ____________i__ January_
___ ___ -Every odd year.
Connecticut
_January
-Every odd year.
Delaware. __ ______ _ January
__
Every odd year.
District of Columbia
Congress of the U. S.
.Third day of Janu
each year.
Florida. ___ _
__ April__
_ _
.
. ..Every odd year.
*Georgia_____________. _- January or July _______ -Every odd year.
Hawaii
___ _February____ __________ .Every odd year.
Idaho
— January______ _______ .Every odd year.
Illinois__ ________
_ January
-Every odd year.
Indiana___ ______
L January_____
__ __ Every odd year.
Iowa____ __ __ _____ _ January
___ _ -Every odd year.
Kansas________ _____ _ January
-Every odd year.
Kentucky__
________ January__________ ___ .Every even year.
Louisiana__ _______ __ May__________ :____ __ -Every even year.
Maine __ _________ ___ January—___________ -Every odd year.
___ -Every odd year.
Maryland __ ________ January
Massachusetts______ __ January
-Every odd year.
Michigan
__ January_____ _____ ___ -Every odd year.
Minnesota
_ January______________ -Every odd year.
Mississippi-.____ ____,i__ January ______________ -Every even year.
Missouri
January
...... ... ..Every odd year.
Montana__
_______ January
-Every odd year.
Nebraska____
__ January____
____ -Every odd year.
N evada_____ ______ __ January
__ _____ -Every odd year.
— January
New Hampshire.
-Every odd year.
January
__ Every year.
New Jersey___ ______
New Mexico
__ January______________ -Every odd year.
New Y o r k __ ______ __ January____
____ -Every year.
January
North Carolina __
-Every odd year.
North Dakota
_ _ January
-Every odd year.
O hio_______ ________
January
.Every odd year.
Oklahoma
_
___ __January
-Every odd year.
Oregon
January
Every odd year.
Pennsylvania________ . .January___ ________ . Every odd year.
Philippine Islands____ January
.Every year.
Rhode Island ______ . . . January__ _________
Every year.
South Carolina____ __ __January____
_
__ -Every year.
South Dakota __
___ January
-Every odd year.
Tennessee___ _____
January__ __
-Every odd year.
Texas___ __________ __January__ _____ _____ .Every odd year.
Utah___ __
______
January
-Every odd year.
Vermont
___ _. January ....... ..........
Every odd ypar,
Virginia____ __
__ __January
____ *4____ _ Every even year.
Washington_____ .. January ____ _
-Every odd year.
West Virginia, 2nd Wednesday in January
.Every odd year.
W isconsin_____ ____
January
-Every odd year.
W yom ing_________ _ January
1 __ -Every odd year.
* N o te .*■ Organization session lim ited to ten days beginning secon d M o n d a y in January. 'R eg u la r
sessionss lim ite d to six ty
| days
_ beginning
I
_ th e secon d M o n d aJHJ
____ to_____________
y after ____
July 4 or ^
prior
that tim e : if the
Legislature at th e organization session so votes. In b o th 1933 and 1935, th e "Legislature v o te d 'to hold
the regular session o f sixty days im m ed ia tely follow ing orga nization session.
t Organization session seco n d Tuesdayi n January n ex t succeeding th e election o f legislators n o t
longer than ten days, n o o th er business.
1964
Awothe/i
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§ M fV
For the g rea ter convenience o f D irectory users,
the List o f Bank Recom m ended A ttorneys is bound
separately/ and a copy m ailed to all subscribers
shortly after delivery o f the D irectory.
We
are
constantly
en deavoring
to
make
the
BLUE BO O K o f g rea ter service and convenience
to users and, we be/zeve, this new arrangem ent
o f the A ttorney Section will make the D irectory
less bulky and therefore ea sier to handle and use.
W e also believe that users o f the A ttorney List
will find that, com piled in a separate b ook, it will
be more convenient, efficient and serviceable.
INTEREST RATES, GRACE ON SIGHT DRAFTS, AND STATUTES OF LIMITATION
For further information see also “ Laws” of each State, indexed in back of this Volume
STATES
AND
TERRITORIES.
INTEREST RATES—NOTES AND ACCEPTANCES-GRACE
Notes and
Acceptances
Holidays
Due on
falling on
Notes..
Sight
Sunday
Holi
Half
are
days. Days.
Bills.
Drafts.
observed
Are payable
the day—
Per ct. Per cent. and protestable
the day—
Rate
Legal
by
Rate o f
interest Contract
Alabama_____________ ______ _______—--------
6
6
Arizona___________ _____________________ —
Arkansas_________________________________
C aliforn ia_______________________________
Colorado_________________________________
Connecticut------------------------------- --------------
«
District o f Colombia--------------------------------Florida_____ ___ — ---------------- S---------------Georgia___________________________________
Idaño ____________________________________
Illinois__________
—
Indiana______________________ _____________
Iowa_________________________________— —
Kentucky__________________.------------ --------Louisiana__________________
—
Maine____________________________________
Maryland____________________— a-------------Massachusetts____________ ________________
Michigan-------------------------------------------------Minnesota_______________________ i-----------Mississippi--------------------- ------------------------Missouri____ ¿ ____________________________
Montana_________________
—
Nebraska_________________________________
Nevada____________________ l____________
New Hampshire._______________ 1__________
New Jersey_______________________________
New Mexico--------------------------------------------New Y ork -----------------------------------------------North Carolina__________________________
North Dakota___ _ _______________________
Ohio________—----------------------------------- ——
Oklahoma.1_______________________________
Oregon---------------------------------------------------- Pennsylvania_____ ________________________
Philippine Islands________________________
Puerto Rico________________ :--------------------Rhode Island_____________________________
South Carolina_____________________ ____. ..
South Dakota ____________________________
Tennessee_______________________________
T e x a s.---------------------------------------------------U tah ---------- ------ ---------------- ----------------- —
Vermont_________________________________
Virginia__________________________________
Washington______________________________
West Virginia-------------- --------------------------- Wyoming_________________________________
Alberta __________________________________
British Columbia__________________________
Manitoba_________________________________
New Brunswick_______________ ___________
Nova Scotia______________________________
Ontario___________________________________
Prince Edward Island------------- — ,
Quebec __________________________________
Saskatchewan____________________________
6
6
6
6
6
8
7
6
5
6
5
6
6
5
6
6
6
5
6
6
16
6
6
7
6
6
6
6
6
4
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
7
5
5
5
5
5
, 5
5
5
5
8
8
8
10
10
Any rate!
12
6N
8
10
8F
12
8
7(m)
8
7(m)
10
6®
8X
Any rate
6(e) (M)
After
After
After
After
After
After
After
*
After
After After
After After Z
After After
After After
After After
After
After
After
A fter
After
A fter
A fter
A fter
After
A
fie r l
Any ratal
A fter
7
A
fter
8
A fter
8
A
fter
8
After
10
9(k) After
After
12
Any rate H After
After
6B
A fter
12
61B 1 After
After
6
7
After
8
After
10
After
10
After
6U
After
♦
After
12
A fter
V
7
A fter
After
8
60
After
10
Aft eri
After
10P
After
6
6R1 After
After
12
After
6A
A fter
10
After
10
Any ratei After
Any rate! After
Any rate! After
Any ratei After
Any ratei After
Any ratei After
Any rate After
Any ratei After
Any rate! After
After
After
A fter
A fter
d
On
A fter
A fter
After z
A derii
A fter Z
After Z
A d erì
After
A fter
A fter
A fter
A fter
A fter
After
After
After
A fter
A fter
After
A ft e r l
After
A fter
(C)
After
A fter
After
A fter
After
A fter
A fter Z
After
After
After
A fter
A fter
A fter
A fter
After
After
After
A fter(f ) A fter (h )
After
After
After
A fter
A fter
A fter
After
After
After
After
After*
After
After
A fter
After
After
A fter
A fter
A fter
After
A fter
A fter
After
A fter
A fter
A fter
A fter
After
After
After
A fter
A fter
After
A fter
A fter
After
After
Notes
Open
and
Judg
Ac
Written ments.
counts.
Con
tracts.
Sealed
Instru
ments
wit
nessed.
Years.
Years.
Years.
No grace
No grace
No grace
No grace
No grace
No grace
3
6
3
3
4
6
6
3
3
3
4
6
6
6
5
4
6
6
6
3
5
6
Ño grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
Nograce
Grace
No grace
No grace
Grace
No grace
No grace
No grace
No grace
Grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
4
5
6
5
3
5
3
6
3
6
6
6
3
5
5
4
4
6
6
4
6
3
6
6
3
6
6
6
5
10
10a
10
5
5-15
5-10
6-20
3-12
6TT
6
6
6
10P
8
5
6
8
6
6
6
3
6
15
5
6
6
10
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
Grace
Grace
Grace
Graee
Grace
Grace
Grace
Grace
Grace
Grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
Grace
Grace
Grace
Grace
Grace
Grace
Grace
Grace
Grace
6
6
6
6
2
4
6
3
3
5
6
8
6
6
6
6
6
6
6
6
6
6
4
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
No grace
Nograce
No grace
No grace
(c)No grace
6
5
6
5
6-14
5
6
10
6
10
6
6
6
6
6
6
6
5
6K
Years.
20
10
5
3-10
51
6-201
201
10E
12
20
7
10
10
6
5
6
17
20 8.
12
20W
20
6
5
7L
10
20
20
20(n)
10
5
5
15
IB
10
10
20
20
12(b)
12
201
20
10
10
10
_
_
7
6
10G
10
10
S
5-101
6
6
20
20
20
16
________
7
20
20
10
10
10
6
26x
15
5
5
10
10
20T
20J
101
10
20
20
10-201
. 10
10
8
8
10
6
10E
10-20
5
6
20
10
20
20
20
20
30
10
20
6-20
201
10
4
$
8-15(j)
10
6D
10
10-20
10
6R
20
(K
20
20
20
20
5-30
6
(A) Corporations not entitled to set up defense of usury. Under Small Loan Act
($300 maximum) interest rate is 3)4 % per month on the first $150. or remaining
balance, and 2)4 % per month on rest.
(B) A corporation cannot plead usury. Under small loan act ($300 minimum)
interest rate is 2)4% per month.
CBl) A corporation can not plead usuary.
(C) Generally the day following but there is no legal provision for this.
(D) If it constitutes a contract.
(E) Must be revived every 10 years to continue as lien on real estate.
(F) Under Small lo a n Act, as amended 1935 session, interest on loans up to
$300 may be charged at the rate of 1)4% per month.
(G) Must be renewed every three years to continue as a lien on real estate.
(H) Under small loan act as amended 1933 interest on loans up to $300 may be
charged at rate of 2% per month.
(I) The Bank Act limits the rate charged by incorporated banks to 7% , and the
Moneylenders’ Act limits the rate to be charged by moneylenders to 12%.
Under The Small Loans Act ($500.00 maximum) on amount actually ad
vanced and monthly balances rate 2% per month for loan for fifteen months
or less and 1% per month plus such proportion of 1 % per month as fifteen
is of the period of the loan expressed in months for a longer period.
(J) Rebuttable presumption of payment.
(K) Limitations for charges on land is ten years.
(L) Judgments must be revived every 7 years, maximum 20 years.
(M ) Licensed loan brokers may charge 3)4 % per month on loans up to $300.00.
(N) On collateral demand loans of $5,000 and over, any rate of interest agreed
upon in writing is legal. Licensed loan brokers may charge 6% on loans
not exceeding $500 with an additional investigation fee not to exceed 2% .
(O ) Licensed Small Loan Company maximum $300.00 may charge up to 1% per
month for necessary expenses of closing loan plus 6% interest annually or
1)4% per month.
(P) Under Small Loans Act ($300 maximum) interest of 3% a month may b*
contracted.
:cept charges on land when it is ten years.
(R )
o statute: common law presumption of payment applied.
(S )
ust be revived every five years after entry, to retain lien on real estate.
(T)
lall loan Licensees 3% per month up to $150.00; and 2% per month upon balance
(U )
ar $150.00. Loan period 18 months, interest at 6% on unpaid balances after 18
inths. Loan not enforceable if Act is violated.
sensees under Small Loan Act may loan up to $300.00 and charge interest.
(V)
6in advance, at 3% per month on unpaid principal balance. Loans made
violation of interest statutes are usurious and can not be collected,
ite under seal does not have to be witnessed to be good for twenty1 t r o a r o
(W)
(*) Saturday is a half holiday only during June, July and August in cities of 25,000.
Where it is a half holiday, presentation for acceptance may be given on the
next secular or business day.
(t) Any rate agreed upon in writing is legal on collateral demand loans of $5,000
and over.
(^) See laws, indexed in back of this volume.
(© ) Section 883-1-14 of the Kentucky Statutes provide that a petty loan company,
properly licensed may lend not exceeding $300.00 on an interest rate of 3)4%
per month on any part of the unpaid principal balance not in excess of $150.00
and 254% per month on the remainder.
( + ) 12% when there is security: 14% when there is no security.
(•) Texas “ instruments falling due Saturday are to be presented for payment on
the next succeeding business day. except that instruments payable on demand
may. at the option of the holder, be presented for payment before 12 o ’clock
noon on Saturday, when that entire day is not a holiday.”
(a) Debts charged on land although by sealed instruments are outlawed in ten
years.
(a) Notes: 1 0 years. Contracts in writing other than for payment o f money: 20 years.
(b) No limitations on Judgments obtained in this state against foreign corporations.
(e) 3 days of Grace allowed on Drafts or Bills of Exchange made separate within
this State at sight, unless there is an express stipulation to the contrary. (Dec.
2741. Code 1930.)
(d) N o provision except banks may pay checks and drafts on Saturday afternoon
or legal holiday.
(e) A corporation may agree to pay any rate of interest and may not plead usury.
(f) When Saturday is not otherwise a holiday presentment for acceptance may be
' made before 12:00 o’clock noon on that day.
(g) Licenses under Small Loan Act ($300.00 maximum). State Banking Depart
ment determines and fixes rates but cannot exceed 3)4 % per month on unpaid
principal balance of $100.00 or less or 2)4 % in excess of $100.00.
(h) January 1. February 22, July 4, December 25 are the only holidays falling on
Sunday to be observed the day following.
(J) 8 years on specialties: 15 years on actions ofCovenantof seisin. (Statutes of
Limitation).
(k) See “ Chattel Loans” under Nebraska Laws.
(m) Under the Small Loan Act licensees may charge interest at not to exceed 3%
per month upon any unpaid balance of the principal of the loan not exceeding
$150 and 2% per month on any part of the loan in excess of $150 and not
exceeding $300.
_
' . :
(n) A judgment of a court of record is a lien on real estate for ten years after
the rendition thereof.
(p) All actions on contracts, other than on written contracts for payment of
money or property or on convenants of warranty or seisin contained in a
deed, must be commenced within five years.
(x) Becomes dormant five years after rendition of the Judgment, or the issuance
of the last execution, or the filing of the last certificate of Judgment with the
Clerk of Courts in any county, whichever date may be later, and may be
revived within twenty-one years after becoming dormant.
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Federal Reserve Bank of St. Louis
A fter
After
After
A fter
After
After
After
A fter
After
A fter
After
STATUTES OF LIMITATIONS
(X ) Under small money lenders act, interest on loans up to $300.00 may be
charged at the rate of 2)4% per month.
Act No. 108 of 1940.
(Z) Demand instrument may, at option of holder, be presented before 12 o ’clock
noon on Saturday unless such Saturday be a whole holiday.
1966
DIGEST OF BANKING AND COMMERCIAL LAWS
COMPILED EXPRESSLY FOR EACH EDITION OF THE RAND McNALLY BANKERS DIRECTORY
by prominent Attorneys in each State of the United States and each province of Canada, the name
of the compiler appearing at the head of each State. The Laws are entered alphabetically
according to States. Provinces of Canada are listed last.
IMPORTANT;
The states in which the Uniform Negotiable Instruments Law is in effect are listed on page
2137.
For Tabulated Information, for quick reference in regard to Interest Rates, Days of Grace,
and Statutes of Limitations, see page opposite.
of payment is given to one or more creditors, shall enure to the benefit
o f all the creditors equally, but this section shall not apply to mort
gages, pledges, or pawns given to secure a debt contracted contem
poraneously with the execution o f the mortgage. All assignments by
a debtor made with intent to hinder, delay, or defraud creditors are
void. All deeds of assignment for the benefit o f creditors shall, as
soon as executed, be filed and recorded in the office of the judge of
probate of the county in which the property is situated. Every
judgment confessed, attachment procured by the debtor, or other dis
position of property by which a debtor conveys all, or substantially
all, of his property which is subject to execution in payment or as
security for a debt shall be deemed a general assignment.
i
A ttach m en t process will issue upon affidavit by the creditor or hit
agent of the amount due and that the debtor absconds, or resides,
out of the State, or secretes himself so that process cannot be served
upon him, or is about to remove out of the State, or has or is about to
fraudulently dispose o f his property, or fraudulently withholds money,
chattels, or effects which are liable to the satisfaction of his debts;
plaintiff must give bond in double the amount claimed. Attachments
will issue for the following demands: 1. T o enforce the collection of
a debt, whether it be due or not, at the time the attachment Is taken
out. 2. For any moneyed demand, the amount o f which can be
certainly ascertained. 3 T o recover damages for a breach o fc o n tract when the damages are not certain or liquidated. 4. When
the action sounds in damages merely in following cases, viz.: 1. Where
defendant is a non-resident. 2. When the defendant has absconded.
3. When defendant has secreted\ himself. 4. When defendant is
about to remove from the State. 5. When defendant is about to
remove his property from State. 6. When defendant is about to or
has fraudulently disposed o f his property or fraudulently withholds
same. One non-resident may sue out an attachment against another
non-resident by making oath that the defendant has not sufficient
property within the State of his residence wherefrom to satisfy the
debt. Attachments may be sued out in aid o f a pending suit when
any of the above grounds exist by making affidavit and executing
bond. Garnishment process will issue in aid o f attachment In all
such cases. Garnishment may be dissolved by giving bond. In an
cases of attachments sued out by a resident solely upon the ground
that the defendant is a non-resident, the attachment may issue with
out giving bond, but if defendant appears and pleads, bond mupt be
giveD or the attachment dismissed
Banks. State Banks of discount and deposit may be established
by individuals or corporations, but before organization must obtain
permit from Superintendent of Banks. Before issuing permit Super
intendent of Banks must investigate as to public necessity of bank in
community where same is proposed and the fitness and character of
individuals proposing to organize bank, or if corporation, the character
and fitness of stockholders proposing to incorporate bank. Appeal
from Superintendent’s refusal to issue permit may be taken to State
Banking Board.
Paid capital stock o f state banks shall be not less than 25.000 in
cities of less than 3,000 population; in cities of 3,000 to 6,000 popu
lation, 50,000; in cities of 6,000 to 50,000 population, 100,000; in
cities of over 50,000 population, 200.000.
, SJ .
Reserves. Cash reserve of 15% o f demand deposits required to be
maintained; three-fifths of which amount may consist of balances
due by banks and bankers.
. . .
Reserve of 10% of net earnings required to be set aside annually
until surplus equals 20% of capital stock. Dividends in excess o f
90% of net earnings prohibited until such surplus equals 20% o f
the capital stock.
....................t.
_
_
There is no stockholder s liability in Alabama, other than amount
subscribed to capital stock: in other words, if the subscriber has paid
for his capital stock, there is no liability.
. . .
Subject to the foregoing, banks are incorporated under the general
banking incorporation laws of the State.
. . .
There is no provision of law for the establishment of banks o f issue.
Open depositors and savings depositors are on equal footing in the
event of insolvency.
i
,,
i
, ,,
Banks are prohibited from receiving, directly or indirectly, a greater
rate of interest than 8% .
£
l , ._
. . . j
State Banks are under the jurisdiction and control of Superintendent
of Banks, subject to review by State Banking Board.
Examinations and Reports. Examination of bank by superintendent
required to be made at least twice each year provided, however, only
one annual examination required of bank, deposits in which are
insured by Federal Deposit Insurance Corporation. All banks
required to make reports on call of superintendent at least twice a year.
Loan Limitations. Loans to officers and employees prohibited
without approval of Board of Directors o f Loan Committee; and in
no event to be in excess of 20% of capital surplus and undivided
SYNOPSIS OF
T H E L A W S OF ALABAM A
RELATING TO
BANKING AND COMMERCIAL USAGES.
Revised by B a l l a r d & B a l l a r d , Attorneys at Law, First National
Bank Bldg., Montgomery, Ala.
Acknowledgments or proof o f real estate instruments may be
taken before one o f tbe following officers: 1st. Within this State,
Judges o f the supreme court, court of appeals and circuit courts and
the clerks o f such courts, chancellors, registers in chancery, judges of
the courts o f probate, justices o f the peace, and notaries public. The
official should certify that the person signing the conveyance is known
to him and acknowledges that “ being informed o f the contents of the
conveyance he executed the same voluntarily on the day the same
bears date.” 2d. Outside of State— Judges and clerks of any federal
court, judges and clerks o f any court of record in any state, notaries
public, or commissioners appointed by the governor of this State or
commissioners o f deeds for the state wherein the acknowledgment is
taken beyond the limits o f the United States, by the judges of any
court o f record, mayor or chief magistrate of any city, town or borough,
or county, notaries public, or by any diplomatic, consular, or com
mercial agent o f the United States. Foreign officers must attach
official seal which fact must appear in certificate. For forms of
deeds see “ Conveyances.”
A ction s. All ordinary suits at law are commenced by suing out
a summons which must be accompanied by a complaint stating the
cause o f action. Non-resident plaintiffs are required to give security
for costs. When two or more persons are jointly bound by judgment,
bond, or agreement, the obligation is several as well as joint.
A ction s on A cco u n t. Suits upon open accounts may be accom
panied by Itemized, verified statement o f the account, which when
filed with the summons and complaint may be admissible in evidence
to prove the account unless its correctness is denied under oath by
defendant within the time allowed for pleading. Such statements
must be sworn to by a person having knowledge o f the correctness
of the account and must show that the amount is due and unpaid
after allowing all offsets and counter claims and when sworn to out
side State, must bear official seal of officer
A cceptance. Unconditional promise in writing to accept a bill
before or after drawn is good in favor o f all who take it upon faith
thereof for value. The bolder may decline a qualified acceptance and
treat the bill as dishonored; if he takes qualified acceptance drawer
and endorsers are discharged.
A C heck is a bill of exchange on a bank payable on demand;
must be presented within reasonable time after issue and if dishonored,
notice must be given or drawer is discharged to the extent of loss
caused by delay does not operate to assign any part of drawer’s funds
In bank and bank is not liable unless it accepts or certifies. If holder
has check certified the drawer and endorsers are discharged. The
making uttering, drawing, or delivery of a check, draft, or order
upon which payment is refused upon due presentation because of
lack of funds shall be deemed prima facie evidence o f intent to de
fraud and party may be convicted o f a misdemeanor.
The present negotiable instrument law of Alabama, consisting or
198 sections went into force August 26, 1909 (Acts 1909, page 156).
Its provisions do not apply to instruments made prior thereto, and
is substantially uniform negotiable Instruments Act. The act so
materially changes the law in this State as to suggest the propriety
of special examination in any doubtful case.
A d m inistration o f estates is had in the probate courts of dece
dents’ residence. All claims must be presented by filing a verified
statement thereof In the office o f the Judge of Probate in which
letters are granted within six months after granting o f letters testamentary or of administration. Administration of intestate is granted,
1st: T o the husband or widow; 2d: The next o f kin entitled to share
In the distribution of the estate; 3d: The largest creditor of the intestate
residing within this State; 4th: The County or general administrator;
5th: Such other person as the judge of probate may appoint. There
can be no appointment until after expiration o f five (5) days from
date of death. Preference must be exercised within forty days or
rights relinquished. If several entitled to administer, men are pre
ferred to women and whole blood to half blood. Nonresident execu
tors and administrators may sue in this State by recording in probate
judge’s office copy o f letters and giving bond to faithfully administer
property. A nonresident may be appointed administrator or executor
of a deceased resident’s estate. Administrations may be removed
to court o f equity.
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Affidavits may be taken within the State before every judge or
clerk o f any court, justices o f the peace, and notaries public or any
other person Invested by law with judicial functions. Outside the
State and within the United States may be taken before any judge or
clerk of federal court, judge o f any court o f record in any state,
notaries public and commissioners appointed by the governor. For
eign officer taking affidavit must attach seal which fact must be
recited In the jurat.
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_,
Allens. “ Foreigners who are, or may hereafter become, bona fide
residents of this State, shall enjoy the same rights in respect to the
possession, enjoyment, and Inheritance o f property as native-born
Citizens.” — Sec. 34, Const.
A lterations. When a negotiable instrument Is materially altered
without the assent of all. the parties liable thereon, it is voided
except as against a party who has himself made, authorized, or
assented to the alteration and subsequent endorsers. But when an
instrument has been materially altered and is in the hands o f a holder
In due course, not a party to the alteration, he may
thereof according to its original tenor Material alterations consist
of any changes in date; sum payable interest on principal; time or
place o f payment; number and relation o f parties: medium or currency
In which payment is to be made.
A ssignm ents and Insolvency. Every general alignm ent mide
by a debtor, or conveyance by a debtor o f substantially all of his
property In payment o f a prior debt, by which a perference or priority
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^ “Loans in excess of 20% of capital unimpaired surplus and undivided
profits to any one person, firm or corporation prohibited. Loans
exceeding 10% of capital surplus and undivided profits must be amply
secured. Loan limitations do not apply to bona fide loans made on
security of agricultural, manufactured, industrial products, livestock
or other liquid securities having a market value and for which there
is a ready sale in open market, title to which by appropriate transfer
is taken in the name of the bank, in which event not more than 80%
o f market value shall be loaned thereon.
Limitations do not apply to bonds of the United States, or this
state or the several counties, districts of municipalities thereof.
Loans on stock of own bank prohibited.
,
,
Branch Banking. Recent Act permits banks having capital and
surplus in excess of one million dollars and in comities in excess^ of
250 000 inhabitants to establish branch banks in such counties.
According to present population this applies only to Jefferson County.
Bills o l L ading. Uniform bill of lading act in force. Bills to
specified person non-negotiable. Bills to order of are negotiable.
Blue Sky Law. It is unlawful to sell or offer for sale in this
State any speculative securities without first obtaining permit from
the State Securities Commission.
C ollaterals. Receipt must be given if demanded. Pledges or col
laterals not transferable without transfer o f the debt; after two days
notice in writing collaterals may be sold, by advertising for five days
at public outcry.
B ' ,
H .
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C on d ition al Sales are good between the parties, but void where
personal property delivered to vendee as against purchasers for a
valuable consideration, mortgages, judgments creditors, and land
lords with liens without notice, unless in writing and recorded In the
office of the probate judge.
1967
1968
BANKING AND COMMERCIAL LAWS— ALABAMA
Conditional contracts o f sales must be recorded in office o f the
Judge o f Probate o f the cou nty in which the property is located,
to be valid against subsequent purchasers, judgm ent creditors, or
m ortgagees without notice, except in counties having a population
o f m ore than 80,000 when contract is for a less am ount than $200.00.
I f the property is rem oved to another cou n ty, con tract m ust be
recorded in latter cou n ty within three m onths after rem oval.
C o n v e y a n ce s . All persons o f the age o f tw enty-one years, not
laboring under some legal disability, m ay con vey their real estate or
any interest therein b y instrument in writing signed b y the grantor
or his agent duly authorized in writing, and attested b y one witness, or
If the grantor cannot write, b y tw o witnesses who are able to write,
and who sign their names as witnesses. I f the grantor is not able to
sign his name it m ust be written for him, and the words “ his m ark”
written over or against it. T he person writing his name m ust sign
as a witness. A parol lease for less than one,year is Valid. A married
wom an over eighteen years o f age m ay con vey dow er in her husband’s
lands, and has generally the same rights as married women over twentyone years o f age. T he husband m ust join in any conveyance o f the
wife’s separate estate. C onveyances, to operate as notice, m ust be
acknowledged and recorded. General acknow ledgm ent must be
signed to make instrum ent self-proving. M arried women must
acknowledge twice in the event the hom estead is con veyed . Form
of general acknow ledgm ent is as follow s:
The State o f Alabam a.......................... C ounty
I ......................................................................................... a (style o f officer),
hereby certify th a t........... ........................................... whose name is signed
to the foregoing conveyance and who is know n to me, acknowledged
before me on this day, that, being inform ed o f the contents o f the
conveyance, he executed the same voluntarily on the d ay the same
bears d a te.’ Given under m y hand and seal, th is.................... day of
.................... A . D
(Seal"»
....................
N ota ry P ublic
N o time is required within which conveyances shall be recorded.
T hey operate as notices from date o f delivery to probate judge for
record. (See A cknow ledgm ents.) T h ey m ay be used as evidence
w ithout further p r o o f o f execution. Leases lim ited to 99 years, b u t
lease for m ore than 20 years void as to excess unless acknow ledged and
approved as real estate conveyances and recorded in one year after
execution. A m arried w om an m ust m ake the follow ing acknow ledg
m ent to a con veyan ce o f a hom estead:
State o f ......................C ounty o f ......................
I ............................judge o f ................ (or other officer) d o hereby certify
that, on t h e ....................d ay o f ........................... 1 9 ...........cam e before me
the within n a m ed ..............................................know n to me (or made
known to me) to be the wife o f the within darned...................................
who, being examined separate and apart from her husband touching
her signature to the w ith in ..................... acknowledged that she signed
the same o f her own free will and accord, and without fear, constraint,
or threats on the part o f her husband.
In witness whereof, I hereto set m y hand and official seal this
........................ day o f ......................... 1 9 . . . .
(Official Character.)
C orporation to make follow ing acknow ledgm ent:
........... ....................................... t h a t ............................................... .................
whose name a s ....................................... o f the said corporation, is signed
to the foregoing conveyance, and who is known to me, acknowledged
before m e on this d ay that, being inform ed o f the contents o f the
conveyance, he, as such officer, and with full authority, executed the
same voluntarily for and as the act o f said corporation.
C o r p o r a t io n s . A ll corporations are form ed under the general
state law ; creation under a special act is not perm itted. Thrée or
m ore persons m ay incorporate and articles o f incorporation are filed
in the office o f the Judge o f Probate in the cou n ty in which the cor
poration has its principal place o f business. Certificate o f incorporation
must contain a verified statem ent showing the am ount o f capital stock
paid in, which shall not be less than 2 0% o f the total subscription.
Stockholders are liable to creditors for unpaid subscriptions to the
capital stock. C orporations m ay be sued in any cou nty in which
it does business b y agent,
D a y s o f G r a c e are abolished. (See N egotiable Instrum ents.)
D e p o s itio n s . In cases at law, depositions m ay be taken o f w it
nesses who cannot be present at the trial In the follow ing cases:
W hen the witness is a fem ale; when the witness is too sick to attend
cou rt: when the witness resides m ore than 100 miles from the place o f
trial, or is absent from the State; when the witness is about to leave
the State, and not return in tim e for the trial; when the witness is the
sole witness o f the fa cts: when the witness is one o f the officers desig
nated in C od e section 7744, C od e o f 1923 (last cod e). A ffidavit m ust
be m adè o f one o f the a bov e facts, and o f the m ateriality o f the witness.
M a y be taken on interrogatories b y a com m issioner appointed b y the
cou rt for that purpose. T h e com m issioner m ay be any suitable person,
need n ot b e an officer. In equity suits, where witnesses live within
100 m iles o f the place o f trial, depositions m ay b e taken b y oral
exam ination before the register, or a special examiner, or com m issioner
appointed for the purpose.
* D e s ce n t a n d D is t r ib u t io n . T h e real estate o f persons dying
intestate, in .this State, descends, subject to the paym ent o f debts and
the w idow 's dow er as follow s: First to the children o f the intestate
or their descendants per Stirpes in equal parts. N ext, to the parents,
if they survive, in equal parts. I f only one parent survives, then
one-half to such parent and one-half to the brothers and sisters o f the
deceased or their descendants, and if there be no brothers and sisters
and their descendants, then the whole estate shall go to the surviving
parent. I f there are no children or their descendants, and no father
or mother, then to the brothers and sisters o f the intestate, or their
descendants, in equal parts. I f there are none o f the above to take,
then the whole to the husband o r w ife o f the intestate, and i f there be
no husband or wife or none o f the foregoing living, then to the next
o f kin in equal degree in equal parts. I f there are no next o f kin
It escheats to the State. T he personal estate is distributed the same
as the real estate, except that if there are no children the w idow is
entitled t o all o f the personal estate. I f but one child she takes onehalf. I f not m ore than four children to a child's part and if more
than four to one-fifth. Posthum ous children take as others. Illegiti
mate children inherit from their m other. T he husband upon the
death o f the wife is entitled to ha lf o f her personal estate absolutely,
and to the use o f all o f her real estate for life, unless he has been divested
o f all control over her estate b y a degree o f the chancery cou rt.
Damages recovered b y personal representative for death o f deceased
are distributed according' to statute o f distribution and are exem pt
from paym ent o f debts.
D is co v e r y . E ither party to a suit at law or in equity m ay examine
bis adversary b y filing written interrogatories and m aking affidavit
that answers will be material evidence for him.
D ow er. Unless the wife has relinquished her right o f dow er in the
manner p rovided b y statute she is. upon the death o f the husband,
entit led to dow er in all lands o f which the husband was seized in fee
during the marriage, or o f which another was seized to his use or to
which he had a perfect equity, having paid all the purchase m oney
therefor. T h e dow er interest is one-h alf when the husband leaves no
lineal descendants, and one-third when the estate is insolvent or the
husband leaves children or their descendants. I f the wife has at the
death o f the husband a separate estate equal in value to her dow er
interest, she shall n ot have dower, and if o f less value is only entitled
to such amounts as with her estate will make the full value o f the dower.
E x e cu tio n s . Property subject to: . 1st: On real property to
which the defendant has a legal title or a perfect equity, having paid
the purchase m oney, or in which he has vested interest, in possession.
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reversion, or remainder, whether he has the entire estate, or is entitled
to it in com m on with others. 2d : On personal property o f the defen
dant (except things in a ctio n ), whether he has the absolute title there
to, or the right only to the possession thereof for his own life, the life
o f another, or a less period. 3d : On an equity o f redem ption in either
land or personal property, when any interest less than the absolute
title is sold. The purchaser is subrogated to all the rights o f the
defendant, and subject to all his disabilities. W rit o f fieri facias is a
lien only within the cou n ty in which it is received by the officer, on
lands and personalty o f defendant su bject to levy and sale, from the
time only that the writ is received b y such officer and continues as
long as writ is regularly delivered to the sheriff w ithout the lapse o f an
entire term . A statem ent o f a judgm ent certified b y the clerk o f the
court m ay be filed in the office o f the judge o f probate, which makes
the judgm ent a lien within the cou nty in which it is filed for ten years
thereafter. E xecution m ay be issued on such judgm ent at any time.
Executions issued b y justices are liens on the property o f the defen
dant, on which they are levied, from the tim e o f the levy. An order
must be obtained from the circuit court for the sale o f lands levied on
under execution from a justice’s court. N o stay o f execution in circuit
court except b y appeal, and supersedeas bond which delays collection
until affirmance b y supreme court, and entails 10 per cent damages,
with legal interest and costs. In justice's cou rt stay is granted on
good security, below $20, thirty days over $20, sixty days.
E x e m p tio n s . H om estead not exceeding 160 acres and $2,000 In
value.
Personal property to the am ount o f $1,000. Exem ptions o f personal
property m ay be waived b y instrum ent in writing except as to certain
household furniture and provisions and wages to am ount o f $25.00
per m onth.
F o r e ig n C o r p o r a t io n s . Before engaging in business in the State,
corporations are required to file in the office o f the Secretary o f State
a certified co p y o f its charter and designate a know n place o f business
in the State and an authorized agent residing in the State upon whom
service o f process m ay be had. Foreign corporations failing to com ply
with foreign corporation laws becom e liable for p enalty o f $1,000.00
fo r each act which constitutes doing business in the State. Agents
o f such corporations w ho have not com plied with foreign corporation
laws are also liable for penalty o f $500.00 for each act, and all contracts
o f foreign corporations w ho have not com plied with A labam a laws are
void. Foreign corporations are required to p ay license fees ranging
from $25.00 upwards according to the am ount o f capital invested in
the State and to procure a perm it on the first o f each year from the
Secretary o f State. Charge fo r this perm it is $10.00 per year.
F r a u d s . S t a t u t e o f . In the follow ing cases, every agreem ent; or
note or m em o thereof, expressing the consideration, is in writing and
signed b y the party to be charged: 1st. E very agreem ent which by
its terms is not to be perform ed within one year from the making
thereof. 2d. E very special prom ise b y an executor or administrator
to answer damages ou t o f his ow n estate. 3d. E very special promise
to answer for the debt, default, or miscarriage o f another. 4th. E very
agreement, prom ise, or undertaking, m ade upon consideration of
marriage, excèpt mutual prom ises to m arry. 5th. E very contract
for tbe sale o f lands, tenem ents, or hereditaments, or o f any interest
therein, except leases for a term o f not longer than one year, unless
the purchase m oney, or a portion thereof, be paid and the purchaser
be put in possession b y the seller.
G a r n is h m e n t m ay issue in any case after suit com m enced upon
affidavit o f necessity and bond as in attachm ent cases, or after ju d g
ment. w ithout bond.
H o lid a y s . T he follow ing are the legal holidays: Sundays; Janu
ary 1 (N ew Y e a r’s D a y ); January 19 (R o b e rt È . L ee’S b irth d ay);
February 22 (W ashington’s b irth d ay ); M ardi Gras D ay, which is
T uesday before Ash W ednesday; A pril 13 (Jefferson’s b irth d ay);
A pril 26 (C onfederate M em orial D a y ) ; June 3 (Jefferson Davis*
b irth d ay ); July 4 (Independence D a y ); first M on d a y in September
(L abor D a y ); O ctober 12 (C olum bus Fraternal D a y ). W here
O ctober 12th falls on Sunday there is no provision that the follow ing
M o n d a y is a holiday. E xtra Session 1933, page 183-4. N ovem ber 11
(Arm istice D a y ) ; T hanksgiving D a y ; D ecem ber 25 (Christmas D a y).
I f a holiday falls on Sunday, the follow ing M on da y is a holiday.
H u s b a n d a n d W ife . T h e wife has full legal capacity to contract
as if she were sole, except that she can not alienate or encum ber her
real estate without the husband join in g in the conveyance, unless the
husband be insane or has abandoned her, or is a non-resident, or is
imprisoned under a con viction for crim e for a period o f tw o years or
m ore, in which cases tbe wife m ay co n v e y it as if she were sole.
Husband and wife m ay con tract with each other, but the wife can
not be surety for the husband. A ll o f the p roperty and the earnings
o f the wife are her separate estate, and are not liable for the debts of
the husband. T he wife must sue and be sued alone for all matters
relating to her separate estate or contracts, and for all torts to her
person, or property. D ivorce bars dow er and hu sband's courtesy.
I n t e r e s t. Legal rate 6 % ; 8 % perm itted b y contract.
J u d g m e n t s o f courts o f record are proved by a certified transcript.
Judgm ent not a lien, but when a ceritfled statement thereof, made by
the clerk o f the court is filed in the office o f the probate judge. It
becom es a lien on all property o f the defendant therein in the county,
which is subject to execution fo r ten years, to enforce which execution
m ay issue at any tim e within that period. Execution received by
sheriff during life o f defendant m ay be levied after his decease or alias
execution issued and levied if there has not been lapse o f entire term
s o as to destroy lien originally created. A bov e applies to executions
from circuit and chancery courts. A n execution issued by a justice
o f the peace is a lien only from time o f its levy. All agreem ents to
confess judgm ent, or to authorize another to confess judgm ent, made
before the com m encem ent o f the suit in which such judgm ents are
so confirm ed are void.
L ie n fo r R e n t . T he landlords o f any store house, dwelling house,
or other building, shall have a lien on the goods, furniture and effects
belonging to the tenant, and sub-tenant for his rent, which shall be
superior to all other liens, except those for taxes, also on crops grown
on rented premises fo r rent and advances.
L im it a t io n s . N otes and stated accounts, six years; open accounts,
three years; sealed instruments, real actions, and m otions against
officers, ten years; judgm ents, tw enty years; actions on the case, one
year. Bar created b y statute can only be rem oved by a partial p a y
ment, m ade on the con tract before the bar is com plete, or by an uncon
ditional prom ise in writing. I f anyone entitled to bring an action,
or m ake an entry on land, or defense founded on title to real estate,
be at the tim e such right accrues, within the age o f tw enty-one years,
or insane or im prisoned on a criminal charge for a term less than life,
he shall have three years, or the period allowed by law. for bringing
such action, if the period allow ed b y law be less than three years, after
the term ination o f such disability to bring such suit, etc., but no action
can be com m enced after tw enty years. Statutes o f limitation apply
to married w om en’s separate estates. A ctions founded on a promise
in writing not under seal, or for trespass to person or property, must
be brought witbin six years. Statutes o f limitation are made appli
cable to equitable as well as legal demands, but d o not run against direct
trusts. A n y agreem ent or stipulation to shorten the period prescribed
b y law for the bringing o f any action is void. A ctions sëeking relief
on the ground o f fraud where the statute created a bar the cause of
action begins to run upon d iscovery o f the fraud b y aggrieved party.
N o promise or acknow ledgm ent is sufficient to refnove the bar to a
suit, except a partial paym ent made upon the contract b y the párty
sought to be charged before the bar is com plete.-or an' unconditional
promise in writing, signed by the party to be charged thereby.
M a rr ie d W o m e n . (See Husband and W ife.)
M e c h a n ic s '
L ie n .
C ontractors,
including
subcontractors
BANKING AND COMMERCIAL LAWS— ALASKA
mechanics, material men, and laborers have a lien oh houses built
and the ground on which they stand upon com plying with the law.
M o r tg a g e s are executed and acknowledged in the same manner aa
deeds. M a y be foreclosed b y bill in equity, or if there be a provision
to that effect, b y sale under power, upon such default as authorized
a sale. All mortgages are void against creditors or purchasers without
notice, unless recorded. M ortgages operate as notice from day o f
delivery to probate judge for record. There is no fixed time within
which they shall be recorded. Homestead realty cannot be m ort
gaged or otherwise aliened without the voluntary signature and assent
of wife, evidenced b y acknowledgm ent, upon private examination
separate and apart from the husband, and certified. All mortgages
must be in writing, signed b y the mortgagor. Paym ent o f mortgage
debt made before or after m aturity o f debt, revests in the m ortgagor,
or his assigns, the title to the real or personal property m ortgaged, if
made in the lifetim e o f the m ortgagor; if made after his death, such
payment revests title to personal property in the personal representa
tive, and title to realty in the heirs, devises, or legatees o f the m ortga
gor. C hattel m ortgages m ust be in writing. W hen the m ortgagor
Is sued b y the m ortgagee for possession o f the m ortgaged property,
he m ay defend b y showing paym ent o f the debt, or part paym ent and
a tender o f the balance, or m ay pay it after judgm ent.
N e g o tia b le I n s t r u m e n t s . Uniform N egotiable Instruments A ct
effective January 1, 1908. See fu ll text o f the law follow ing “ Digest
o f Banking & C om m ercial Law s.”
P a r t itio n . Partition o f real or personal property m ay be m ade,
upon application o f any tenant in com m on in either Courts o f Probate
or Courts o f E qu ity, and m ay be sold for division if it can not be
equitably divided.
P ow ers o f A tt o r n e y . Powers o f attorney or other instruments
conferring authority to con vey property must be proved or acknow l
edged in the same manner and must be received as evidence to the
same extent as conveyances (see C onveyances), and must be executed
as conveyances. A pow er o f attorney to relinquish dow er must be
executed b y husband and wife jointly. Her signature must be
acknowledged as required for conveyances o f land.
P r e s e n t m e n t . Is not necessary to charge one prim arily liable
except in case o f bank notes; if payable at special, place ability and
willingness to p ay it there at m aturity is equivalent to a tender: if
not on dem and it must be presented on day it falls due, if on demand
then within a reasonable tim e after its issue, except a bill o f exchange
must be presented within reasonable tim e after its last negotiation.
P ro b a te L a w . A court o f probate, consisting o f one judge, is
established for each cou nty in the State. This court has jurisdiction
of the probate o f wills, o f granting letters testamentary and o f admin
istration, and the repeal or revocation o f the same; o f the settlements
of accounts o f executors and administrators, o f the sale and disposition
o f the real and personal property belonging to, and the distribution of.
Intestates’ estates. Also o f the appointm ent, rem oval, and settlements
o f guardians for minors and persons o f unsound mind, the binding out
of apprentices, the allotm ent o f dower, and the partition o f land belong
ing to join t owners. A court o f probate must be held at the court
house o f each cou nty on the second M onday o f each month, and the
judge m ay hold special or adjourned terms whenever necessary, but
such court must at all times be considered open, except on Sundays.
It also keeps a record o f deeds, mortgages, and instruments entitled
to record.
P r o m is s o r y N o te .
P r o t e s t.
(See N egotiable Instruments.)
(See N egotiable Instrum ents.)
P r o te s t o f F o r e ig n B ills .
(See N egotiable Instruments.)
R e p le v in . W rit o f replevin lies to recover property in custody o f
an officer o f the law, and is lim ited to this. The action o f detinue
lies to recover personal property in all other instances.
S ales.
U niform sales act in force.
Sales in B u lk . Sales o f all or substantially all o f stock o f m er
chandise except in regular course o f trade is prima facie fraudulent
and void against creditors unless they are notified in writing prior to
the sale in manner prescribed by statute.
T axes becom e due O ctober 1st, and delinquent on the 31st o f
December o f the year for which they are levied and lands m ay be
sold by proceedings had in the Probate Court com m enced in the
month o f M arch follow ing the due date o f taxes provided the personal
property is insufficient to pay taxes. The rate o f taxation is 6 J mills
or sixty-five cents on each $100.00 on amounts assessed. This is for
State purposes only. M unicipalities m ay levy taxes at the rate o f
fifty cents on each $100.00 except that certain named municipalities
of the larger class m ay levy a larger amount b y special constitutional
provision. Counties m ay levy similar am ount to the municipalities
except that certain special taxes varying in different counties are
levied in addition. Assessments based on 60% o f the valuation of
the property. Counties m ay vote additional levies for specific
purposes and m ay secure the same b y bonds. The purchaser o f lands
sold for taxes receives from the tax collector a certificate o f purchase
showing a description o f the property, the date and am ount o f assess
ment, the taxes, costs, and fees, etc., and after the expiration o f three
years from the date o f sale, the purchaser may get a deed from the
Judge o f Probate. T h e delinquent tax payer has three years from
date ol sale in which to redeem. A fter purchaser goes into possession
under a deed and keeps possession for three years recitals in the deed
are held to be true and cannot be disproved. On redem ption, the
person redeeming pays the am ount o f taxes for which the land sold,
costs o f sale, with interest at 8 % per annum and all taxes paid sub
sequent to the sale by the purchaser with interest thereon at 8 % per
annum. W henever land is sold, for state or cou nty taxes, and from
any cause such sale is invalid to pass title to purchaser, sale operates
as transfer to purchaser o f lien o f state or county, on the property for
payment o f taxes for which sold. A ll cotton factories or cotton mills
and certain other industries which shall be constructed in this State
shall be exem pt from taxation for a period o f 5 years.
W ills. All wills o f real or personal property must be in writing
signed b y the testator and declared his last will and testament in the
presence o f tw o witnesses who must sign as witnesses in the presence
of testator. Unwritten will o f personal property valid only when
the property does not exceed $500 in value, and m ust be made dur
ing last sickness by testator at his hom e. Persons present must
be called on to witness that it is testator’s will and must be re
duced to writing b y one o f the witnesses within six days. M inor
over eighteen m ay make a will o f personal property. N o will effective
until probated. M a y be contested in probate or chancery court, ,1
W idow m ay within six m onths dissent and take dower.
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1969
SYNOPSIS OF
TH E L A W S OF ALASKA
RELATING TO
BANKING AND COMMERCIAL USAGES
Revised b y M . E . M o n a g l e , 206 Seward B ldg., Juneau, Alaska
(See card in A ttorneys List)
A c k n o w le d g m e n t s . (See D eeds.)
A c t io n s . T he distinction between actions at law and suits it
equity and all form s o f pleading heretofore existing in actions at law
and suits in equity are abolished, and there is but one form o f action,
denom inated a civil action, for the enforcem ent or protection o f pri
vate rights and the redress or prevention o f private wrongs. Every
action must be prosecuted in the name o f the real party in Interest,
except that an administrator or executor, a trustee o f an express trust,
or a person expressly authorized b y statute m ay sue without joining
with him the person for whose benefit the action is prosecuted; but
thé assignment o f a thing in action not arising out o f contract is not
authorized.
A ffid a v its. An affidavit or deposition taken out o f Alaska, other
wise than upon commission, must be authenticated as follow s: 1
It must be certified b y a com m issioner appointed by the governor of
Alaska to take affidavits and depositions in the state, territory, district
or country where taken; or, 2, it must be certified b y a judge o f a
court o f record having a clerk and a seal to have been taken and sub
scribed before him at a tim e and place therein specified, and the
existence o f the court, the fa ct that such judge is a m em ber thereof
and the genuineness o f his signature must be certified b y the clerk
o f the court, under the seal thereof. In all affidavits or depositions
witness should speak in the first person.
A lle n s. A ny alien who is a bona fide resident o f the United States,
or who has declared his intention to becom e a citizen, o r whose rights
are secured b y treaty,.m ay acquire and hold lands upon the same terms
as a citizen. A ny alien m ay acquire lands b y inheritance or in the
ordinary course o f justice in the collection o f debts, and m ay acquire
and enforce liens upon lands, but such lands must be sold within ten
years. A ny alien m ay also acquire and hold lots or parcels o f land
in any incorporated or platted city, town, or village, or in any mine
or mining claim, but is not authorized to acquire title from the United
States to any o f the public lands.
A s so cia tio n s. A non-profit O o-operative Association m ay be form ed
b y fifty or m ore persons, a m ajority o f w hom are residents o f the Terri
tory, engaged in the production o f agricultural or aquatic products.
T he corporation m ay be organized with or without capital stock.
Articles must be subscribed b y incorporators and acknowledged
b y 'a t least one o f them and filed in the maimer o f any corporation
in the Territory.
M eetings, other than those p rovided for in the by-laws, m ay be
called b y a petition o f 4 0 % o f the members.
M arketing contracts are p rovided for, but are n o t binding for a
period exceeding ten years.
A t t a c h m e n t . T he plaintiff, at the tim e o f Issuing the summons
or afterwards, m ay have the property o f defendant? attached in an
action upon a contract, express or im plied, for the direct paym ent o f
m oney, and, 1, which is n ot secured b y m ortgage, lien, or pledge upon
real or personal property, or if so secured, when the security has been
rendered nugatory b y the act o f the defendant; or, 2, against a non
resident defendant. T he writ issues whenever the plaintiff, or any
one in his behalf, files an affidavit showing that defendant is indebted
to plaintiff (specifying the am ount o f indebtedness over and above all
legal set-offs or counter-claim s) upon a contract, express or implied,
for the direct paym ent o f m oney; that the paym ent has not been
secured b y m ortgage, lien, or pledge upon real or personal property:
and that the sum for which attachm ent is asked is an actual, bona fide
existing d ebt due and owing from plaintiff to defendant; and that the
attachm ent is not sought nor the action prosecuted to hinder, delay,
or defraud any creditor o f the defendant. Plaintiff must also file an
undertaking, with one or m ore sureties, in a sum not less than $100,
and equal to the am ount for which he dem ands judgm ent, conditioned
that plaintiff will pay all costs adjudged and all damages sustained
b y reason o f the attachm ent if the same be wrongful or without suffi
cient cause, not exceeding the am ount specified.
B a n k s a n d B a n k in g . T h e banking business is regulated b y the
Territorial B anking Board. B oard m ay declare Banking H oliday at
any tim e it sees fit. E very bank whether incorporated or private is
required to m ake quarterly reports and also special reports to the
Banking Board.
Paid in capital stock o f an incorporated bank m ust be not less than
$25,000, except in towns that have a population o f not to exceed 1,000
people within a five-m ile radius thereof, the pâid in capital stock m ay
be not less than $15,000, providing the consent o f the Banking Board
is first obtained. Individuals and partnerships have the same require
ments as to capital actually invested. H owever, with the permission
o f Banking B oard a bank m ay reduce its capital stock, to $15,000
where its deposits have not exceeded $100,000 at any tim e during past
fifteen m onths. On the other hand Banking Board m ay require bank
to increase capital stock to $25,000 where deposits have exceeded
$150,000 for a period o f nine m onths. (Laws 1917, c. 7, amending
1913, c. 48.)
Three or m ore persons m ay incorporate to carry on the banking
business, but one o f said persons m ust be resident Territory. N o
bank incorporated within T erritory is authorized to carry on their
business until it meets the requirements covering paid up stock nor
until said stock is paid in full. T he list o f subscribers to the Capital
stock o f an incorporated bank m ust be filed with Banking B oard and
give name, residence and am ount subscribed b y each stockholder.
There are special corporate laws regulating the procedure o f incor
porating banks.
N o bank is allowed to m ake loans greater than the sum o f $1,000
to any person without such loan having been approved b y the Board
o f D irectors; or a loan exceeding 35% o f its com bined capital and
surplus in any case. Banks m ay not give preference except to Terri
tory to secure Territorial funds and to the United States; but bank
is allowed to borrow not to exceed its paid up capital, and m ay pledge
not to exceed 50% o f am ount borrow ed as collateral security. A
reserve o f 2 0% o f its dem and liabilities m ust be kept on hand at all
times b y every bank in the territory. C h. 31 Laws 1915. Any
authorized bank can postpone paym ent o f deposits.
B a n k C o lle c t io n C o d e . N one in effect in Alaska.
B ills a n d N o te s . T he uniform N egotiable Instrum ent act has
been adopted.
C h a tte l M o r tg a g e s . A n y Interest In personal property, capable
o f being transferred, m ay be m ortgaged ; but the m ortgage is void as
against creditors and subsequent purchasers and incumbrancers in
good faith and for value, unless possession o f the property be delivered
to and retained b y the m ortgager or the m ortgage provide that the
property m ay remain in the possession o f the m ortgagor and be ac
com panied b y the affidavit o f all the parties thereto that the same is
made in good faith to secure the am ount named therein, and without
design to hinder,, delay, or defraud creditors, and be acknowledged
and filed. T he m ortgage must be acknowledged b y the m ortgagor
as a conveyance o f real property -is and be filed in the office o f the
recorder o f the precinct where the- m ortgagor resides and o f the pre
cinct where the property is. W ithin thirty days next preceding the
expiration o f one year from the date upon which such indebtedness
becam e due a verified statem ent o f the interest o f the m ortgagee in the
property at the tim e the sam e is-renewed, m ust be filed in the office
where the original was filed, and the lien is thereby extended another
1970
BANKING AND COMMERCIAL LAWS— ALASKA
year. C hattel m ortgages are foreclosed in the sam e manner as m ort
gages and liens upon real property, b ut a clause m ay be inserted in a
m ortgage authorizing the marshal to execute the pow er o f sale therein
granted to the m ortgagee.
^
...
C o r p o r a t io n s . D om estic C orporations. Three or m ore adult
persons m ay form a stock corporation for any lawful purpose, whose
ch ief business shall be in the Territory, except for the purposes o f
brokerage, or loan, trust and guaranty associations. A t least one
director m ust be a resident o f Alaska.
Shares o f stock are not assessable unless original or amended
Articles o f Incorporation expressly con fer authority to le vy assess
m ent, or unless stock certificates provide for assessments, except
Insurance and Banking shares, which are assessable to certain limits
b y operation o f law.
:
,
A ll corporations once qualified to d o business m ust thereafter file
a co p y o f any change in its articles or capital structure within sixty
days o f such change.
F o re ig n C o r p o r a t io n s . E very corporation or joint stock com pany
organized under the laws o f the United States or any state or territory
shall, before doing business within the district, file in the office o f the
auditor o f the district and in the office o f the clei*k o f the district
court for the division wherein it intends to carry on business a duly
authenticated cop y o f its charter or articles o f incorporation, and o f
any amendments thereto, and also a financial statem ent, giving
certain statutory inform ation, verified b y the oath o f Its president
and secretary and attested b y a m ajority o f its board o f directors.
Thereafter such statem ent m ust also be so filed within sixty days after
January first o f each year. T he corporation must also file in the same
offices the appointm ent o f a resident o f Alaska upon whom service
o f statutory service or process m ay be m ade. T he consent o f the
statutory agent is no longer required b y statute, but since there is no
cost for filing the consent it is better procedure to file same.
D eed s. A con veyan ce o f lands, or o f any estate or interest therein,
m ay be m ade b y deed, signed and sealed b y the person from whom
the estate or interest Is Intended to pass, and acknowledged or proved,
and recorded, without any other a ct or cerem ony, provided, how ever,
that in all deeds or conveyances o f the fam ily hom e or hom estead
m ade b y a married m an, or a wom an, the husband and wife shall
join in such deeds or conveyances. A quit-claim deed passes all the
estate which the grantor cou ld con vey b y deed o f bargain and sale.
N o covenants are im plied in any con veyan ce. T h e term
heirs,
or other words o f inheritance are not necessary to create or con vey
an estate in fee sim ple. W ife m ay con vey her lands without joinder
o f husband. W ithin the district deeds must be executed in the
presence o f tw o witnesses, w ho shall subscribe their names as such;
and the person executing a deed m ay acknow ledge the execution
before a judge, clerk o f the district court, notary public, or com
missioner within the district, and the officer taking the acknow ledg
ment m ust indorse thereon a certificate o f acknow ledgm ent and the
true date o f making the same under his hand.
D e p o s itio n s . T h e testim ony o f a witness, in the district, m ay be
taken b y deposition, in an action, at any tim e after the service o f
the sum mons or the appearance o f the defendant, and in a special
proceeding after a question o f fact has arisen, when, 1, the witness is
a party to the action or proceeding, b y the opposite p a rty; 2, the
witness's residence is m ore than one hundred miles from the place o f
trial: 3, the witness is abou t to go m ore than one hundred miles beyond
the place o f trial; 4, the witness is too infirm to attend the trial; or, 5,
the testim ony is required upon a m otion, or in any other case where
the oral exam ination o f the witness Is not required.
T he testim ony o f a witness, ou t o f the district, m ay be taken by
deposition, b y com m ission issued, upon eight days' notice to the other
party, by the clerk o f the court, or justice o f the peace in a cause in his
own court, to a person agreed upon by the parties, or, if they d o not
agree, to a judge, justice o f the peace, notary public, or clerk o f a
court selected b y the officer issuing the com m ission.
T h e am ount o f the com m issioner’s fees should be indorsed upon the
deposition.
D e s ce n t a n d D is tr ib u t io n . T h e real property o f an Intestate
descends in equal share to children and to the issue o f any deceased
by right o f representation; and if there be no child o f intestate Jiving
at the tim e o f his or her death, to all his or her other lineal descendants;
and If all such descendants are in the same degree o f kindred to the
Intestate, they take equally; otherwise, by representation. 2. I f
Intestate leave no lineal descendants,' to his wife; or if intestate be
a married wom an, to her husband; and if intestate leave no wife nor
husband, to the parents equally or the survivor. 3. if intestate
leave no lineal descendants, neither husband nor wife, nor parents,
such real property descends in equal shares to his brothers and sisters,
and to the issue o f any deceased brother or sister by right o f repre
sentation. 4. If Intestate leave no lineal descendants, nor father,
brother, nor sister, living at tim e o f his or her death then real property
descends to m other, to exclusion o f issue o f any deceased brothers
or sisters. 6. If intestate leave no lineal descendants, neither hus
band nor wife, nor father, m other, brother, nor sister, such real
property descends to his next o f kin in equal degree, excepting that
when there are tw o or m ore collateral kindred In equal degree but
claiming through different ancestors, those who claim through the
nearest ancestor are preferred
6. I f Intestate leave one or m ore
children, and the issue o f one or m ore deceased children, and any
o f such surviving children due under age without having been mar
ried, all such real property that cam e to such deceased child by
inheritance from such intestate descends In equal shares to the other
Children o f such Intestate and to the issue o f any other children who
have died, by right o f representation
But if all the other children
o f Intestate be dead, and any o f them have left issue, such real prop
erty so Inherited b y such deceased child descends to all the Issue o f
such other children o f the intestate in equal shares, if they are in the
same degree o f kindred to such deceased ch ild ; otherwise, they
take by right o f representation. 7. If intestate leave no lineal
descendants or kindred, such real property escheats to the territory
o f Alaska
Personal property sam e as real property except (1) apparel
and ornam ents to widow (2) paym ent o f debts (3) sam e as real prop
erty except (a) if husband and issue, half to husband; if no issue,
all to husband; (b) If.w id ow and issue, half to w idow ; if no issue,
all to w idow ; (5) if no husband, w idow or kindred, all escheats to
territory.
.
P roperty escheated to the T erritory m ay be recovered b y bringing
petition for said recovery within seven years after judgm ent entered
In escheat proceedings.
D o w e r a n d C u rte s y . T he widow o f every deceased person is
entitled to dower, or the use during her natural life o f one-third part
In value o f all the lands w hereof her husband died seized o f an estate
o f inheritance. Estates b y C urtesy are abolished.
E v id en ce. N o person m ay be excluded as a witness on account o f
being a party or interested in the event o f an action or proceedings,
having been con victed o f a crim e, or his opinions on matters o f religious
belief. Persons o f unsound mind and children under ten years o f age
who appear incapable o f receiving just impressions o f the fact respect
ing which they are exam ined or. o f relating them truly m ay not be
witnesses. An attorney m ay n o t ,’ without his client’s consent, be
exam ined as to com m unications m ade b y his client to him or his advice
thereon. A priest m ay not, w ithout the consent o f the person making
the confession, be examined as to any confession m ade to him in his
professional capacity, in the course o f discipline enjoined by the church
to which be belongs. A physician or surgeon m ay not, against the
objection o f his patient, be exam ined, in a civil action, or proceeding,
as to Information acquired in attending the patient which was neces
sary to enable him to prescribe or act.
E x e c u tio n s . (See Judgm ent and E xecution.)
E x e cu to r s a n d A d m in is t r a t o r s . Non-residents and infants can
not be appointed or act as executor or administrator, b u t a married
wom an if a resident, m ay act as either executor or administrator.
W hen a will is proven letters testam entary are issued to the persons
therein named as executors, or to such o f them as give notice o f their
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acceptance o f the trust and are qualified. Administration is gra fte d
as follow s: 1. T o the w idow or next o f kin, or both, in the discretion
o f the cou rt; 2. T o one or m ore o f the principal creditors; or, 3, to any
person com petent and qualified whom the cou rt m ay select. If
deceased were a married wom an administration shall in any case be
granted to the husband; if qualified, and he a pply therefor within
thirty days. Claim s are paid in the follow ing order: 1. Funeral
charges. 2. Taxes due the U nited States. 3. Expenses o f last
sickness. 4. A ll other taxes. 5. D ebts preferred b y the laws o f the
U nited States. 6. D ebts which at the death o f the deceased were a
lien upon his p roperty, in the order o f the priority o f the liens. 7.
D ebts due for wages earned within ninety days imm ediately preceding
death o f decedent. 8 . A ll other claims.
E x e m p tio n s . 1. Earnings to am ount o f $100 o f judgm ent debtor,
for personal services rendered withifi thirty days next preceding the
levy o f execution or attachm ent, when necessary for the use o f his
fam ily supported in whole or in part b y his labor. 2. B ooks, pictures,
and musical instruments owned b y any person, to the value o f $75.
3 . Necessary wearing apparel owned b y any person for the use of
him self or fam ily, but watches or jew elry exceeding $100 in value
are not exem pt. 4. T h e tools, implem ents, apparatus, team, vehicle,
harness, or library necessary to enable any person to carry on the
trade, occupation, or profession b y which such person habitually
earns his living, to the value o f $500; also sufficient quantity o f food
to support such team, if any, for six m onths; the word “ team " being
construed to include not m ore than one yoke o f oxen, or a span of
horses or mules, or tw o reindeer, or six dogs. 5. T he follow ing prop
erty, if owned b y the head o f a fam ily and in actual use or kept for
use b y and for his fam ily, or when being rem oved from one habitation
to another on a change o f residence: Ten sheep, with one year’s fleece
or the yarn or cloth m anufactured therefrom ; tw o cow s and five
swine; household goods, furniture, and utensils to the value o f $300;
also food sufficient to support such animals, if any, for six months,
and provisions actually provided for fam ily use and necessary fo r the
support o f such person and fam ily fo r six months. 6. T he seat or
pew occupied b y the head o f a fam ily or his fam ily in a place o f public
worship. 7. All property o f any public or municipal corporation.
N o article, or the proceeds derived from its sale or exchange, is exem pt
from execution on a judgm ent recovered for its price. Life Insurance
policies and reserves or present value thereof are exem pt.
G a r n is h m e n t .
(See Attachm ent
H o lid a y s . T h e legal holidays are Sundays; January 1 (N ew Y ea r s
D a y ); February 12 (L in coln ’s b irth d ay ); February 22 (W ash in gton s
b irth d a y ); M arch 30 (Sewards D a y in com m em oration o f the signing
Of the T reaty ceding Alaska to the U nited S ta tes); M a y 30 (M em orial
D a y ); July 4 (Independence D a y ); the first M on da y in Septem ber
(L abor D a y ); O ctober 18 (Alaska D a y ); N ovem ber 11 (Arm istice
D a y ); Decem ber 2 5 , (Christm as D a y ), and any d ay designated b y
pu blic proclam ation b y the President o f the U nited States or the
G overnor o f the T erritory o f Alaska, as a legal holiday, or as a. day
o f T hanksgiving; the d ay know n and observed as M em orial or D ecora
tion D a y and the d ay on which a general election is held throughout
the T erritory o f Alaska.
H o m e s t e a d . T he hom estead o f any fam ily, or the proceeds
thereof, is exem pt. Such hom estead must be the actual abode of,
and owned by, such fam ily or some m em ber thereof, and not exceed
$2.500 in value nor exceed 160 acres in extent, if n ot located in a town
or city laid off into blocks or lots; o r if located in any such tow n or
city, one-fourth o f an acre. This exem ption does not apply to decrees
for the foreclosure o f any m ortgage property executed; but if the
owners o f such hom estead be married, the m ortgage must be executed
b y husband and wife.
I n t e r e s t. T he legal rate o f interest is 6 per cent, but on con tract
interest at the rate o f 8 % per cent m ay be charged b.v express agree
m ent o f the parties. .Judgments bear interest at 6 % . I f usurious
interest has been received or collected the party paying the same, or
his legal representatives, m ay, b y action brought within tw o years,
recover d ouble the am ount o f such interest. I f it is ascertained in
any action upon contract that an unauthorized rate o f interest has
been contracted for, judgm ent m ust be rendered against the defendant
for the am ount due, without interest, and against the plaintiff for
costs. I f the rate contracted for is 8 per cent or less, the debtor m ay
also agree to p ay the taxes upon the debt, credit, or m ortgage.
J u d g m e n t a n d E x e c u tio n . A judgm ent is docketed im m e
diately after entry
A t any tim e thereafter while execution m ay
Issue a certified transcript o f the d ock et m ay be filed in the office
o f the recorder o f any recording district, and from the date o f d ock et
ing a judgm ent or transcript thereof the judgm ent is a lien upon
all the real property o f the defendant within the recording district
or districts where docketed, or which he may afterwards acquire
therein during the tim e an execution m ay issue. I f no execution
Issues within ten years the lien expires, but is renewed if afterwards
leave is given to issue execution and a transcript o f the d ocket of
the order docketed with the recorder.
Execution m ay issue at any tim e within five years from the entry
o f the judgm ent, and thereafter on order o f the court made on m otion
o f the party in whose favor the judgm ent was given. Such m otion
must be subscribed and verified as a com plaint, and sum mons must
be served upon the judgm ent debtor or his representatives, to which
he or they m ay dem ur or answer. T he order made must be d ock
eted as a judgm ent. Execution m ay be against the property o f the
judgm ent debtor, his person, or for the delivery o f the possession
o f real or personal property, or such delivery with damages. E xecu
tion from the district cou rt is returnable within sixty days; from the
com m issioner’s court within thirty days. Until a levy property is
not affected b y the execution.
L ice n s e s . (See Taxes.)
L ie n s . E very mechanic, artisan, m achinist, builder, contractor,
lumber m erchant, laborer, teamster, draym an, and other person
perform ing labor upon or furnishing m aterial o f any kind to be used
in the construction, developm ent, alteration, or repair, either in whole
or in part, o f any building, wharf, bridge, flume, ditch, mine, tunnel,
fence, m achinery, or aqueduct, or any structure or superstructure,
has a lien upon the same for the work or labor done or material fur
nished at the instance o f the owner o f the building or other im prove
ment or his agent; and every contractor, sub-contractor, architect,
builder, or other person having charge o f the work, in whole or In
part. is. for this purpose, deem ed the agent o f the owner.
S tatutory liens given t o : (a) person w ho makes, alters, repairs, or
bestows labor on any article o f personalty at request o f owner or lawful
possessor; (b) person who is a com m on carrier or who shall, at request
o f owner or lawful possessor, carry, con vey, or transport personalty
from one place to another; (c) any person w ho shall safely keep or
store any grain, wares, merchandise, and personalty at request o f
owner or lawful possessor; (d) any person who shall pasture or feed
any horses, cattle, hogs, sheep or other live stock, or bestow any labor,
care or attention upon them , at request o f owner or lawful possession;
(e) laborers and loggers for labor on or in assisting to obtain any sawlogs, spars, piles, cordw ood , fuelw ood, shingle bolts, or other tim er;
(f) laborers, material men and contractors for work, labor and materials
for the construction altering, digging, drilling, boring, operating,
com pleting or repairing o f gas wells, oil wells, or other wells, gas pipe
lines or oil pipe lines; (g) laborers and material men for labor or
materials furnished that con tribute to the preparation o f fish or
aquatic animals for fo o d , fish meal, fertilizer, oil or other article of
com m erce; (h) laborers, miners and watchm en for labor and work in,
on or abou t mines and m ining property.
L im it a t io n s . C ivil actions m ust be com m enced within the
follow ing periods after the cause o f action accrued: W ithin ten
years— action for the recovery o f real p roperty, or the possession
• thereof; upon a judgm ent or decree o f any cou rt o f the United States,
or o f any state or territory within the U nited States; upon a sealed
Instrument. W ithin six years— action upon a contract or liability,
express or im plied, except judgm ent o r sealed instrum ent; upon a
1971
BANKING AND COMMERCIAL LAWS— ARIZONA
liability created b y statute, other than a penalty or forfeiture: for
waste or trespass upon real prop erty; for taking, detaining, or Injuring
personal property, including an action for the specific recovery thereof
on a m utual, open and current account. W ithin three years—
action against a marshal, coroner, or constable, upon a liability
Incurred b y the doing o f an act in his official capacity or in virtue
o f his office, or b y the omission o f an official du ty, including the
non-payment o f m oney collected upon execution, but not an action
for an escape: action upon a statute for penalty or forfeiture, where
the action is given to the party aggrieved, or to such party and the
United States, except the statute prescribe a different limitation
W ithin tw o years— action for libel, slander, assault, battery, seduc
tion, false im prisonm ent, or for any injury to the person or rights
o f another not arising on con tract; upon a statute for a forfeiture o f penalty to the U nited States. W ithin one year— action against
the marshal or other officer for the escape o f a person arrested or
Imprisoned on civil process; upon a statute for the penalty given
In whole or in part to the person who will prosecute, but if not com
menced within one year b y private party m ay be within tw o years
b y the U nited States.
N o acknow ledgm ent or prom ise is sufficient to take the case out o f
the operation o f the statute unless some memorandum is m ade in
writing and signed b y the party to be charged or some paym ent made
on principal or interest. I f case is with reference to realty the instru
ment signed b y the party to be charged must be acknow ledged and
recorded in the office where original instrument or contract filed or
recorded. Statute does n ot run while party out o f the T erritory
or concealed therein.
M a rr ie d W o m e n .' T he property and pecuniary rights o f every
married wom an at the tim e o f marriage, or afterwards acquired
by gift, devise, o r inheritance, or b y her own labor, are not subject
to the debts or contracts o f her husband, and she m ay manage, sell,
convey, or devise the same b y will to the same extent and in the
same manner that her husband can property belonging to him. For
civil Injuries damages m ay be recovered from a married wom an
alone, and her husband is not responsible therefor. Contracts m ay
be made b y a wife, and liabilities incurred, and the same enforced
b y or against her to the same extent and Id the same manner as if
she were unmarried. A ll laws which impose or recognize civil disa
bilities upon a wife which d o not exist as to the husband are repealed.
W ife m ay -record list o f her personal property and such list is prima
facie evidence o f her separate ownership, and property not so registered
Is deem ed prim a facie the property o f the husband. N either husband
nor wife is liable for the debts or liabilities o f the other incurred
before marriage. Husband and wife m ay make conveyances and
transfers and create liens between themselves, and either m ay con
stitute the other his o r her attorney in fact. A woman becom es o f
age at tw enty-one or upon being married according to law.
M o r tg a g e s . M ortgages are executed, acknowledged, and recorded
In the samé manner as deeds. N o covenant is implied for the p ay
ment o f the sum intended to be secured. R ecord o f assignment is
not notice to the m ortgagor, his heirs, or personal representatives.
M ortgage m ay be discharged b y entry id margin o f record signed by
mortgagee or his personal representative or assignee and witnessed
b y the com m issioner or deputy, or b y certificate executed and ac
knowledged as other conveyances. Foreclosure is b y action o f an
equitable nature in which a deficiency judgm ent m ay be had.
B ut judgm ent o f foreclosure does not bar equity o f redem ption and
property m ay be redeem ed in the same manner and effect as real
property sold on an execution issued upon a judgm ent for paym ent
o f an unsecured debt. N o m ortgage m oratorium on foreclosure has
been enacted.
N e g o t ia b le I n s t r u m e n t s . U niform N egotiable Instrum ents A ct
(adopted A pril 28, 1913). (See com plete text follow ing “ Digest o f
Banking and C om m ercial Law s.” )
R e c o r d s . An unrecorded conveyance o f real property is void
as against any subsequent innocent purchaser in good faitb and for
a valuable consideration whose conveyance is first duly recorded.
A com m issioner is ex-officio recorder o f a recording district, the
boundaries o f which are fixed b y the court. Conveyances o f lands
not in any recording district are recorded with the clerk o f that divi
sion o f the district cou rt within the limits o f which such lands are
situated.
R e p le v in . T he plaintiff, at any time after the com m encem ent
o f an action to recover the possession o f personal property and before
Judgment, m ay claim the immediate delivery o f such property upon
filing an affidavit showing that he is the owner o f the same or entitled
to the possession thereof; that the property is unlawfully detained
by defendant; the alleged cause o f detention; that the same has not
been taken for a tax assessment or fine, pursuant to a statute, or
seized under an execution or attachm ent against the property o f
the plaintiff; or. If so seized that it is exem pt- and the actual value
o f the property and b y delivering an undertaking in tw ice the value
o f the property to be replevined to the M arshal or officer retaking
the property.
S erv ice.
(See A ctions.)
S u p p le m e n t a r y P r o c e e d in g s .
(See Judgm ent and E xecu tion.)
T a x es. N o general property tax except in M unicipal corporations,
but both the United States and the territory levy and collect license
taxes upon occupations and businesses, the amount o f which diners
on the several different occupations and businesses. Profit taxes on
sale, where lien continues in favor o f T erritory for six m onths after
report o f taxes due said Territory.
U n ifo r m la w ss N egotiable instruments a ct; bills o f lading a ct;
air licensing a ct; general partnership a ct; limited partnership a ct;
foreign acknowledgem ents a c t ; sales a c t : stock transfer a c t ; warehouse
receipt a c t ; conditional sales a c t ; desertion and non -support; federal
tax lien registration a ct; foreign depositions a ct; foreign executed
wills; extradition o f persons o f unsound m ind; tax on transfer o f
personal property o f non-resident; p roof o f statutes.
W ills . E very person o f tw enty-one years o f age, o f sound niind,
m ay dispose o f all his or her property b y will saving a w idow s dower.
W ill must be in writing, signed b y the testator, or under his direction,
in his presence, and attested b y tw o or m ore com petent witnesses sub
scribing their names in the presence o f the testator provided that
olographic wills, with or without attestation, shall be adm itted to pro
bate the same as other wills and proved the same as other private
writings. “ W ill” includes “ C odicils.” A will b y an unmarried per
son is revoked b y his subsequent marriage. Children or descendants o f
children not nam ed or p rovided for in the will take as if testator had
died intestate. A mariner at sea or soldier in m ilitary service m ay dis
pose o f his personal property as at com m on law. P roof o f nuncupative
will must be made within six months, and the words or their substance
reduced to writing within thirty days after they are spoken. A person
owning property in, but not an inhabitant of, the district m ay devise
or bequeath the same according to the laws o f his dom icile. I f such
will be probated w ithout the district, copies o f the w illan d the probate
thereof, certified by the clerk o f the court in which it was probated,
with the seal o f the cou rt affixed thereto, if-there be a seal together
with a certificate o f the ch ief judge or presiding magistrate, that the
certificate is in due form , and made by the clerk or other person having
the legal custody o f the record, m ay be recorded, admitted In evidence,
or contested and annulled as i f executed and proved within the district.
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SYNOPSIS OF
TH E L A W S OF ARIZONA
RELATING TO
BANKING AND COMMERCIAL USAGES
Revised b y W i l s o n , C o m p t o n a n d W i l s o n , A ttorneys at Law, Flag
staff, Arizona.
(See Card in A ttorneys List)
A c c o u n t s . W hen stated draw interest; when action is upon open
account and affidavit o f party, his agent or attorney, is attached,
stating that such “ account is within affiant’s knowledge, just and true,
that it is dub, and that all just and lawful offsets, paym ents and credits
have been allowed,” is prim a facie evidence, unless at least one day
before trial, defendant files written denial o f any item under oath.
A c k n o w le d g m e n t s . T he form o f an ordinary certificate o f ac
knowledgm ent shall be substantially as follow s:
“ State o f Arizona,
I bb
C ounty o f ........................................................... •••...............» .
This Instrument was acknowledged before m e th is................day
o f ....................A. D ........................ b y (if b y a natural person or persons
here Insert name or names; if b y a person acting In a representative
or official capacity, or as attorney in fact, then insert name o f person
as executor, attorney in fact, or other capacity; if b y an officer or
officers o f a corporation, then insert name or names o f such officer
or officers as the president or other officer o f such corporation, naming
It).
A ............... i ____ ______, . B ..........................................
Notary Public.
(Or other officer)
(M y com m ission expires...................... ............... ) ”
E very instrument affecting real property In this state executed,
acknowledged and certified in any other state or territory in accord
ance with the laws o f such state or territory, shall be valid and en
titled to record as if executed in accordance with the laws o f this
state.
,
■ . .
A c t io n s . D istinction in form s between law and equity are a bol
ished. Pleadings are: Com plaint and answer, and in some cases a
^ A d m in istra tion o f E sta te s . Lie in Superior C ourt. N o public
administrator. W here person dies intestate letters shall issue.
A ffid a v its. M a y be taken before any officer authorized to take
A lie n s. Unless rights are secured b y treaty cannot hold land in
the state, m ay acquire b y inheritance, or in ordinary course o f jus
tice in the collection o f debts; m ay acquire liens on real estate, m ay
lend m oney and secure same on real estate, but title so acquired must
be sold within five years; m ay acquire patented mines and hold
stock in dom estic corporation owning unpatented mines.
T he laws provide that the laws o f the state pertaining to aliens
shall not be construed as to conflict in any manner with any rights
existing under and b y virtue o f any treaty o f the United States with
any other country.
A p p e a ls.
Appeals are allowed from justice o f peace t o superior
court in certain cases and from superior court to suprem e court,
except in actions o f forcible entry and detainer where rental value
o f property is less than $300 per year.
A rre s t. Abolished in civil cases, debtor fraudulently rem oving
P roperty out o f territory or concealing it m ay be prosecuted crim inally.
A t t a c h m e n t . W rit will issue on affidavit showing: 1. T h a t de
fendant is indebted to plaintiff upon a con tract, express or im plied;
for the direct paym ent o f m oney and that such con tract was made
or is payable in this State, and that the paym ent o f same has not
been rally secured b y mortgage or lien upon real or personal property,
or pledge o f personal property, or if originally so secured, that such
security bas, without any a ct o f plaintiff or the person to whom the
security was given, becom e valueless, and shall specify the character
o f the indebtedness, that the same is due to the plaintiff over and
a bove all legal set-offs or counter-claim s, and that dem and has been
made for the paym ent o f am ount d u e : or 2 T h a t defendant is indebted
to plaintiff, stating am ount and character o f d eb t; that same is due
and payable over and a bove all legal set-offs and counter-claim s, and
that defendant is a non-resident o f this State or Is a foreign corporation
doing business in this State; or 3. T h a t the action is brought upon a
judgm ent o f another State or territory o f the United States, or o f the
D istrict o f C olum bia; or 4. T h a t an action is pending between the
parties, and that defendant is abou t to rem ove his property beyond the
jurisdiction o f the cou rt to avoid paym ent o f judgm ent; and 5. That
the attachm ent is not sought fo r a wrongful o r m alicious purpose, and
that the action is not prosecuted to hinder or delay any creditor of
defendant. N o such attachm ent shall issue until suit has been duly
instituted, but it m ay be issued in a proper case either at the co m
m encem ent o f the suit or at any tim e during its progress. T he writ
m ay issue, although plaintiff’s debt or dem and be not due and under
specified facts o f intent to defraud; no final judgm ent shall be rendered
until such d ebt or dem and shall becom e due. W rit may issue at or
after action begun upon plaintiff or som e one in his behalf filing the
affidavit, and upon filing a bond with tw o sureties in an am ount equal
to am ount sued for. Sureties can be com pelled to justify upon
notice. W hen m ore than one attachm ent is levied on same property
writs take priority according to time o f levy. (See Liens, Garnish
m ent.)
B a n k s a n d B a n k in g . A ll state banks are under the supervision
o f the State Banking Departm ent under the management o f the
Superintendent o f Banks. In addition to com plying with the general
corporation laws, banks m ust procure permit from Superintendent o f
Banks before transacting business. T erm “ b a n k " includes com
m ercial banks, savings banks and trust com panies. P riv ate or
partnership banks are prohibited. Incorporators are governed b y
general corporation laws but shall be investigated as to character
and integrity. W here bank is located in city o f 20,000 or less inhabi- •
tants, the directors m ust own at least 8200.00 par value o f the stock
and at least $500.00 where located in city o f m ore than 20,000 inhabi
tants. N otice o f personnel o f directors m ust be posted. Officers
m ust give bonds. E very bank other than mutual savings banks
must have capital stock o f not less than $25,000, and in cities o f from
5.000 to 15,000 inhabitants n ot less than $100,000, in cities o f over
50.000 not less than $200.000. Certificate o f incorporation will issue
only after it appears, b y affidavit o f not less than three o f the incor
porators, that the required am ount o f capital stock has been paid
in, and certificate o f am endm ent to articles o f incorporation only
after it appears b y affidavit that all o f the increased capital has been
paid in cash. N o banking corporation is required to have m ore than
$2,000,000 capital. O f fun ds available for dividends not less than
2 5% o f net profits shall first be carried to a surplus or reserve fund until
such fun d shall equal the capital stock. C om m ercial banks m ust main
tain as a reserve an am ount equal to 15% o f the aggregate am ou nt o f
their deposits and dem and liabilities, and in cities o f over 50,000 a
2 0 % reserve shall be m aintained. Savings banks m ust m aintain a
legal reserve equal to 10% o f their deposit liabilities. P rovision is
m ade requiring every bank to m ake not less than three verified
reports each year showing the financial condition, which reports must
b e published in a newspaper. T h e com m ercial banks m ust be exam
ined at least tw ice a year and all other institutions receiving deposits
at least once a year. T he total liability to any bank o f any person
for m oney borrow ed shall at no tim e exceed 15% o f the am ount o f
the capital stock paid in and o f the surplus earned and set aside;
provided that loans m ay be m ade up to 25% when secured b y readily
m arketable non-perishable, staple com m odities in warehouse or in
transit. Loans to officer or director shall not exceed 10% and total
loans to officers shall not exceed 2 5 % . Stockholders o f banks are
liable fo r all contracts, debts or engagements to extent o f par value
1972
BANKING AND COMMERCIAL LAWS— ARIZONA
o f their stock, in addition t o am ount invested in stock. Liability
m ust be enforced within three years after closing o f bank and m ay be
enforced im m ediately if in judgm ent o f superintendent o f banks or
receiver assets are insufficient to m eet liabilities. Banks m ay open
branch offices b y permission from Superintendent o f Banks if they
have a paid in capital and surplus o f n ot less than $50,000 plus $15,000
o f additional capital and surplus for each branch so authorized.
Industrial banks are su b ject to the same laws o f organization and
supervision as other banks, and are authorized to.a ccep t deposits and
issue investm ent certificates for the same. Industrial bank loans or
discounts to any one person, firm or corporation shall not exceed
$1,000.00, and interest is allow ed up to 10% . M inim um capital in
cities o f less than 15,000 inhabitants is $15,000.00, in cities o f 15,000 to
50,000 inhabitants is $50,000.00, and in cities o f m ore than 50,000
inhabitants is $100,000.00. Industrial banks shall not carry co m
m ercial or dem and banking accounts nor accept trust or act as trustee,
nor deposit its funds with any banking corporation except such is
m ay be designated b y v ote o f m ajority o f directors at a' m eeting duly
called at which a quorum is in attendance. T h ey shall purchase and
hold so m uch o f the stock and assume and discharge such obligations
as shall be required for m aintaining deposit insurance in the Federal
D eposit Insurance C orporation. Stockholders liability same as other
banks. R egulation, exam ination and taxation same as com m ercial
banks. Same legal reserve as savings banks.
A n y banking institution, upon authority o f a m ajority o f its board
o f directors, m ay d o anything necessary to take advantage o f pro
visions o f section 12B o f federal reserve act as amended, acquire
securities o f the federal corporation, and com p ly with regulations and
requirem ents thereof. (See Interest.)
A n y bank which receives trust fun ds m ust pledge its assets to secure
such fun ds in com pliance with requirem ents o f federal reserve bank
if a m em ber, or, if n ot a m em ber, in accordance with rules and regu
lations prescribed b y superintendent o f banks.
Banks or trust com panies qualified to act as fiduciaries m ay establish
com m on trust funds to furnish investm ents to itself as fiduciary or
itself and others as cofiduciaries, and m ay invest fun ds therein if not
prohibited b y the creation o f the fiduciary relationship. N o court
accounting necessary unless specifically required b y court.
B ills a n d N otes. The negotiable instrum ent code adopted b y the
American Bar Association is in force. Joint obligor m ay be released
without releasing others. (See Holdings.)
B o n d s . A ny standard surety com pany, organized under laws of
United States or o f any state, m ay execute bonds in judicial proceed
ings within the state when they have com plied with license laws.
(See Guaranty Com panies.)
C h a tt e l M o r tg a g e . T o be valid against others than the parties
thereto, chattel, m ortgage m ust set out the residence o f the m ortgagor
and the mortgagee, the sum to be secured, the rate o f interest to be
paid and tim e and place o f paym ent o f the debt secured, and be
accom panied b y the affidavit o f b oth m ortgagor and m ortgagee that
the m ortgage is bona fide and m ade Without design to defraud or
delay creditors. V oid as against creditors o f m ortgagor and subse
quent purchasers, m ortgagees or lien holders in good faith unless
imm ediate delivery o f the m ortgaged property is m ade to the m ort
gagee and the change o f possession is actual and continued, unless the
m ortgage or a true co p y thereof shall be forthw ith deposited and filed
In the office o f the recorder o f the cou n ty where the property shall
then be situated and in the cou n ty o f residence o f m ortgagor, if a
resident o f Arizona, except in the case o f a m ortgage on autom obiles,
in which case it m ust be filed w ith the state m otor V ehicle Division
and a new certificate o f title issued showing the lien. R em oval, sale, or
other disposition o f m ortgaged property w ithout consent o f m ortgagee
entitles m ortgagee to im m ediate possession o f it, and such rem oval,
transfer, or sale, or subsequent encum brance is felony. I f m ortgagee
perm its m ortgaged property to be rem oved to another cou nty, he shall
within one m onth record his m ortgage in such other cou nty. C hattel
m ortgage m ay be foreclosed b y notice and sale or b y proceedings in
superior cou rt. M ortgagee m ay obtain possession o f p rop erty1on
default and sell after notice which m ust be served on owner. After
notice m ortgagor m ay contest as to am ount due and right to foreclose
and have proceedings transferred to superior court. U pon stock o f
goods, wares and m erchandise with continued possession in m ort
gagor, void. I f cop y is filed with recorder, original must be acknow l
edged, and co p y certified to b y cou n ty recorder.
C la im a n d D eliv ery . (See R eplevin.;
C o lla te r a ls . N o statutory provisions— com m on iaw prevails.
C o m m u n it y P r o p e r t y . (See C onveyances.)
C o n d it io n a l S ales. Where title remains in vendor until purchase
price is paid, void as to persons not parties thereto, and persons
without notice, unless subscribed, and filed with cou nty recorder.
C o n t r a c t s . (See Bills and N otes.) One or m ore obligors on a
join t or join t and several instrument m ay be released without releasing
the others, and m ay be sued separately under certain conditions with
ou t releasing the others. M arried wom en m ay con tract as i f sole,
as to their separate property.
C o n v e y a n c e s . C onveyances o f estate in lands for term m ore than
one year shall be b y instrument in writing subscribed by party making
It, or his agent, duly authorized thereto b y writing. A conveyance is
not effectual against creditors or bona fide purchasers unless recorded
in recorder’s office in cou n ty where land is situate. A conveyance
purporting to con vey a greater estate than the grantor has passes only
the estate that he actually has. A general grant or devise passes the
fee unless expressly limited to a less estate. All deeds to com m unity
realty m ust be signed b y both husband and wife except as to un
patented mining claims. Deeds must be signed and must he ac
knowledged before som e officer authorized to take acknow ledgm ent,
and properly certified b y him to entitle same to registration. T h e use
o f the word “ gran t” or “ c o n v e y ” implies the following covenants and
none other
1. T h a t previous to the tim e o f the execution o f the
conveyance the grantor has not con veyed the same estate, or any
right, title or interest therein, to any person other than the grantee.
2. T hat such estate is at the tim e o f the execution o f such conveyance
free from incumbrances. M arried wom en 21 years o f age and upward
m ay con vey their own lands without being joined b y their husbands.
(See Acknow ledgm ent, Dow er, Husband and W ife, H om estead.)
C o r p o r a t io n C o m m is s io n , organized under Chapter 90, First
Session, Laws 1912. Has general supervision o f corporations.
C o r p o r a t io n s in G e n e r a l. A n y number o f persons m ay becom e
incorporated for the transaction o f any lawful business. Before com
mencing any business, they m ust adopt articles o f incorporation
which shall be signed and acknowledged b y them as deeds and be
filed in the office o f the C orporation com m ission at the State C apital
and a certified co p y thereof filed in the office o f the C ounty R ecorder
in each cou nty in the state in which they transact business. T he
articles o f incorporation m ust con tain: 1. T he name, residence and
Post Office address o f incorporators, the name o f the corporation,
which name shall indicate the character o f business to be conducted,
and its principal place o f transacting business. 2. The general
nature o f the business proposed to be transacted. 3. The am ount o f
capital stock authorized and the times when and conditions upon
which it is to be paid in. Stock without par value m ay be issued. 4.
T h e tim e o f the com m encem ent and term ination o f the corporation.
5. B y what officers or persons the affairs o f the corporation are to be
con du cted, and the times at which they are to be elected. 6. T he
highest am ount o f indebtedness or liability to which the corporation
is at any tim e t o subject itself, which must not exceed tw o-thirds of
its capital stock. In case no par value stock indebtedness shall be
com puted b y rules and regulations o f C orporation Com m ission.
Provided such lim itation shall not ap p ly to indebtedness authorized
by three quarters o f the votes cast with respect thereto, in conform ity
with provisions o f A rticles o f Incorporation and by-law s o f any such
corporation, at a law ful m eeting o f the stockholders thereof, and
approved b y the C orporation C om m ission: the rediscounting o f
securities representing law fully m ade loans, or the pledging or guaran
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Federal Reserve Bank of St. Louis
teeing o f said securities, with the Federal Interm ediate Credit Bank,
the Regional Agricultural C redit Corporation, or any other Federal
A gency or any Bank or Banking institution, if authorized by Articles o f
Incorporation, and approved b y the C orporation C om m ission, shall
not be construed as a creation o f indebtedness within the meaning o f
this section. 7. W hether p rivate prop erty is to be exem pt from
corporate debts. Unless so exem pted stockholders are liable for the
debts o f the corporation in the proportion which their stock bears to
the w h ole capital stock. M ust be published for six tim es in some
newspaper in the co u n ty where the principal business is located.
P ro o f o f publication must be filed with the C orporation Comm ission.
C orporations to endure for tw enty-five years. C orporation must file
in office o f C orporation Com m ission an appointm ent o f agent who is
a bona-fide resident o f this state for three years prior thereto, on
whom all notices and process including sum m ons, m ay be served and
constitutes personal service. C orporation em pow ered b y articies to
a ct m ay be sta tu tory agent, -s N o pu blic officer o f state m ay a ct ex
cep t m embers o f legislature or co u n ty officials, other than judicial.
S tatutory agent m ay resign up on th irty days written notice filed with
corporation com m ission. Charges for incorporation. R ecord er’s
fees, 20 cents folio. Recorders fees, certified co p y , 20 cents folio.
R ecorder’s fees certificate to co p y , 75 cents. C orporation C om m is
sion ’s fees, filing cost co p y , $10. Certificate o f filing Articles o f In
corporation $5.00. Certificate o f incorporation $10.00. C orporation
C om m ission’s fees, filing appointm ent o f agent, $5.00. Filing resigna
tion o f agent, $1.00. A nnual registration fee, $15.00. W here chatter
provides assessments m ay be levied on shares to par value.
C o r p o r a t io n s , F o r e ig n . B efore it can transact business it must
file certified and duly authenticated co p y o f Articles with C orporation
Com m ission, and also an appointm ent o f agent upon whom a service
personal to the corporation m ay be m ade in each cou n ty in which it
transacts business. Publish its Articles o f Incorporation and file
affidavit th ereof as required o f dom estic corporations. P ay license
fee o f $15.00.
A fter com pliance with laws to transact business has sam e rights
and privileges as dom estic corporation except that it cannot act as
executor, adm inistrator, trustee, guardian o f estate o f m inor or
incom petent, or in any other fiduciary ca p a city except as testamen
tary trustee. Alien corporation cannot own or hold land in state.
C o r p o r a t io n s , in s u r a n c e . M a y be organized under provision
peculiarly applicable to insurance com panies.
1 C o r p o r a t io n s , R a ilr o a d . Are organized under a statute espe
cially providing for them .
C o r p o r a t io n s . S a v in gs a n d L o a n ., (See Banks and Banking.)
C o r p o r a t io n S to c k , T r a n s fe r o f . Transfer o f stock shall n ot be
valid, except as between the parties thereto, until the same is regularly
entered upon the books o f the com pany, so as to show the names o f the
person b y whom and to whom the transfer is m ade; the num ber o f their
designation o f the shares, and the date o f the transfer.
C o s ts . Plaintiffs who are non-residents, or those who own no
property upon which execution m ay be levied, are required to give
security for, within ten days after order m ade; bonds for, must
authorize judgm ent to be entered against sureties.
C o u r t s . Are the Supreme C ourt o f the State, the U. S. district court
for the D istrict o f Arizona; one superior court tor each C ounty, except
in counties having over certain population in which event tw o or m ore
superior courts, justices o f the peace, police courts, recorders ,of cities.
T h e superior cou rt o f the several counties is a cou rt o f general juris
diction, b oth civ il and crim inal. I t has b oth original and appellate
jurisdiction. Its original jurisdiction extends to all civil cases where
the am ount in volved exceeds $200 exclusive o f interest, and in all cases
involving the title to or possession o f real estate. Justice courts have
general jurisdiction when am ount in con troversy does not exceed
$200.00, except when title to real estate is involved. Police courts in
incorporated towns or cities have jurisdiction o f cases arising under
city ordinances and concurrent jurisdiction with justice courts over
violations o f law com m itted within c it y lim its. (See Jurisdiction.)
D a y s o f G r a c e . N one.
D e p o s itio n s . M a y now be taken either upon oral exam ination,
and cross-examination or upon written interrogatories and cross
interrogatories, as is generally provided.
D e s c e n t a n d D is t r ib u t io n . T h e law o f com m unity property
prevails. U pon the death o f husband or w ife intestate, one-h alf of
the com m unity p roperty goes to the survivor and the other half
goes to his or her descendants. In the absence o f such descendants
the entire com m unity estate goes t o the survivor.
T he interest o f
either spouse in the com m unity is subject t o testim entary disposition.
T h e entire com m unity estate is charged with debts against it.
T h e separate estate o f intestate shall descend as follow s; P e rs o n a l
P r o p e r t y : one-third to the surviving spouse and the remaining tw othirds to descendants. In absence o f such descendants the entire
personal estate goes to surviving spouse.
R e a l E s ta te . E state for life in one-third to surviving spouse with
rem ainder to descendants. I f no descendants one-h alf to surviving
spouse and the other one-h alf shall pass according to rule o f descent and
distribution; p rovided that if the intestate leaves neither father nor
m other, then the surviving spouse shall be entitled to the whole of
such real estate. I f no husband or w ife survive intestate, all separate
prop erty shall pass as follow s: 1. to children o f intestate and his or her
descendants. 2. I f no such children or descendants then to father and
m other in equal proportions. I f only one parent survives, then oneha lf will pass to such parent and the other ha lf to brothers and sisters o f
intestate and their descendants. I f no brothers or sisters, then the
w hole estate shall pass to the surviving parent.
I f no brothers or
sisters or parents then the inheritance shall divide into m oites, one
o f which shall go to the paternal grand parents and their descendants
and the other to the maternal grand parents and their descendants
(See D ow er, H usband and W ife, H om estead).
D o w e r. D ow er is abolished.
E v id e n ce . T he com m on law rules have not been codified. Parties
m ay be exam ined and the other side not concluded thereby. Statutes
o f other states and territories purporting to be printed under authority
m ay be read. N o one is incom petent to testify because o f religious
belief. Certified copies o f all records in state m ay be read. Certi
fied copies o f records o f all notaries m ay be read. C ourt m ay order
inspection or co p y o f docum ents.
E x e c u tio n s . Upon a judgm ent o f superior court, executions may
be issued to any cou nty. Lien o f dates from levy, and If on real p rop
erty, the description Is endorsed on execution and filed with county
recorder. A range levy m ay be m ade upon all o f stock under a certain
brand in same manner as upon real estate. (See Judgm ent, Liens.)
P roceedings supplem ental to execution— when returned unsatisfied
creditor is entitled to an order requiring d ebtor to answer concerning
his property, but not elsewhere than in the cou nty o f his residence.
T hird parties m ay, upon affidavit, be required to surrender property.
C ourt or judge m ay order suit brought to determ ine the denial of
owning or o f having property.
E x e m p tio n s . E very person who is the head o f a fam ily, and
whose fam ily resides within this state, m ay hold as a homestead,
exem pt from attachm ent, execution and forced sale, real property
to be selected b y him or her. which hom estead shall be in one com
pact bod y, not to exceed in value four thousand dollars. uDon filing
affidavit designating such hom estead in the Office o f the County
R ecorder in cou n ty where property is situated. Such homestead
exem pt from -date o f filing said affidavit. T he following property
shall be exem pt from execution, attachm ent, and sale on any Drocess
issued from any cou rt: 1, T he fam ily bible. 2. A seat or pew iD
any house or place o f public worship. 3. A lot in any burial ground.
4. N ecessary household, table and kitchen furniture, including viz;
6. T h e tools or implem ents o f a m echanic or artisan necessary to
carry on his trade, etc. 6. T he sewing m achine and implements
o f a seamstress actually used in pursuing her vocation. 7. One
watch, one sewing m achine, one typew riting m achine, and one bi-
BANKING AND COMMERCIAL LA W S-A R IZ O N A
cycle. 7a. F ive milch cows. 8. The cam ping outfit o f every
prospector in this state» including his mining tools, saddles and burros.
9. The farming utensils and implements o f husbandry o f the debtor,
etc. 10. P oultry not exceeding in value twenty-five dollars. 11.
T w o horses and tw o mules and their harness; one cart or wagon;
one dray or truck; one cou pe; one hack or carriage for one or two
horses or one autom obile b y the use o f which a carman draym an
truckman, huckster, hackman, teamster, chauffeur, or other laborer
habitually earns his living, and one horse with vehicle or harness or
other equipm ent used b y a surgeon, physician, constable or clergyman
in the legitimate practice o f his profession, with food for such horses
or mules for one m onth. 12. Fuel necessary for the use o f the
debtor and his fa m ily for the period o f six months. 13. The presses,
stones, type, cases and other tools and implements used by any
person or copartnership in printing or publishing a newspaper or in
conducting any printing establishment or b y any person hired to use
them; not exceeding tw o thousand dollars in value; together with
stock in trade not exceeding four hundred dollars in value. 14. The
library and philosophical and chemical or other apparatus belonging
to and used for the instruction o f youth in any university, college,
seminary o f learning or school. 15. All m oneys received b y or
payable to a surviving wife or child upon the life o f a deceased husband
or father, not exceeding ten thousand dollars. 16. All moneys
arising from fire or other insurance upon any property exem pt from
sale on execution. 17. All moneys, relief, or other benefits payable
to or to be rendered b y any police department association, fire
department association, beneficiary association, or fraternal benefit
association, and any person entitled to assistance therefrom, or to
jm y certificate holder thereof or beneficiary under such certificate.
18. A ny claim for damages recoverable b y any person b y reason
of any levy upon or sale under execution o f his exem pt personal
property or b y reason o f the wrongful taking or detention o f such
property b y any person, and any judgm ent recovered for such
damages. 19. T he earnings o f the minor child o f any debtor or
the proceeds thereof b y reason o f any liability o f such d ebtor not
contracted for the special benefit o f such minor child. 20. One
half o f the earnings o f the wages or salary o f any person for his per
sonal services rendered at any time within thirty days next pre
ceding the levy o f attachment, garnishment or execution when it
appears b y the affidavit o f the d ebtor or otherwise that such earnings
are necessary for the use o f the fam ily residing in this state, supported
in whole or in part b y him. 21. All arms, uniforms and accoutre
ments required b y law to be kept b y any person, ana also one gun
to be selected b y the debtor. 22. All fire engines..........o f any fire
department. 23. A ll courthouses, j'ails, etc. The property de
clared to be exem pt b y this chapter shall not be exem pt from at
tachment or sale in any action brought or judgm ent recovered for
the purchase price o f such property so long as such property remains
in the possession o f the original purchaser. (See Hom estead. Liens.)
F ra u d s a n d F r a u d u le n t C o n v e y a n ce s . Agreements must be in
writing and signed b y the parties to be charged: 1. B y an executor
or administrator to answer for the debt o f his testator or intestate out
o f his own estate. 2. B y a person to answer for the debt, default or
miscarriage o f another. 3. T o charge any person upon an agreement
made upon consideration o f marriage
4. For sale o f real estate or
lease thereof for a term longer than one year. 5. Those which are
not to be perform ed within the space o f one year after the making
thereof. 6. A contract to sell or a sale o f any goods or choses in
action, o f value o f $500.00, or upwards, unless buyer accept and
actually receive the same or give something in earnest to bind the
contract. 7. A n agreement authorizing or em ploying an agent or
broker to purchase or sell real estate, or mines, for com pensation or
commission. 8. An agreement which is not to be perform ed during
lifetime o f the prom isor, or an agreement to devise or bequeath any
property, or to make any provision for any person b y will. E very
gift, conveyance, or assignment, or transfer, or charge upon any
estate, real or personal; any suit com m enced on decree, judgm ent, or
executions suffered or obtained, or any bond or other writing given
with intent to delay, hinder, or defraud creditors, purchasers or
other persons, shall to such persons be void. All bargains, sales,
and other conveyances o f lands, tenements, and hereditaments,
deeds o f settlement o f marriage, deeds o f trust, and mortgages, are
void as to creditors and subsequent purchasers, without notice,
unless properly recorded. The creditor must be a judgm ent creditor,
and notice must be prior to date o f judgm ent lien. A judgm ent
creditor m ay be an innocent purchaser. E very gift, conveyance,
assignment, transfer or charge made b y a debtor, which is not upon
consideration deemed valuable in law shall be void as to prior credi
tors, if d ebtor had not, then other property in the State sufficient
to pay all his indebtedness. N o t on that account, however, void
as to subsequent creditors. N o gift o f any goods and chattels shall
be valid unless duly acknowledged,, or proven and recorded, or b y
will, or unless actual possession shall have com e to and remained
with the donee or som e one claiming under him. Fraudulent intent
Is a question o f fa ct and not o f law. C onveyance shall not be adjudged
fraudulent m erely because not for valuable consideration. I f any
person shall d o or transact business as a merchant or trader, with the
addition o f the words agent, factor, com pany, or & C o., or words o f
like significance or im port, and shall fail to disclose the name o f his
principal, or partner, or other person who m ay be interested in such
business b y a sign in letters easy to read, placed conspicuously at the
lace where such business is transacted, or if any person shall transact
usiness in his own name, without any such addition, all the property,
stock, m oney and choses in action used or acquired in such business
except such property as m ay be exempt from execution, shall, as to
the creditors o f any such person, be liable for his debts, and be, in all
respects, treated in fa vor o f his creditors as his property. Criminal
prosecution for fraud is provided. (See Conditional Sale.)
G a r n is h m e n t . W rit m ay issue: 1. Where writ o f attachm ent
has issued. 2. U pon affidavit that the d ebt is just due, and unpaid,
and that defendant has not, within affiant’s knowledge, property in
his possession subject to execution sufficient to satisfy such debt, and
that the writ is not sued out to injure either the defendant or garnishee.
3. Upon judgm ent, when affiant makes affidavit that the defendant
has not, within his knowledge, property In his possession within this
State sufficient to satisfy said judgm ent. Proceedings under sub
division 2 requires a bond in the am ount o f the debt, conditioned
that plaintiff will prosecute the suit to effect, and p ay all damages
and costs that m ay be adjudged against him for wrongfully suing
out the garnishment. T h e proceedings are docketed and judgm ent
rendered jts if in an independent proceeding. Salaries o f all public
officers o f the State o f Arizona or any o f its political subdivisions are
subject to garnishment. (See A ttachm ent.)
H o lid a y s. T h e follow ing days áre legal holidays: Sundays;
January 1 (New Y ea r’s D a y ); February 14 (Admission D a y— state
hood); February 22 (W ashington’s b irth d ay ); second Sunday in M a y,
known as M oth er’s D a y ; M a y 30 (M em orial D a y ); July 4 (Inde
pendence D a y ); first M on d a y in Septem ber (Labor D a y ); O ctober 12
(Colum bus D a y ); general election d a y; N ovem ber 11 (Arm istice
D a y ); Thanksgiving D a y ; Decem ber 25 (Christm as D a y ); and
Arbor D ay, which is Friday follow ing April 1 in Apache, N a va jo,
Coconino, M oh av e and Y avapai counties, and Friday follow ing
February 1, in all other counties. A ny prom issory note, bank check,
bill o f exchange, acceptance, or other negotiable instrum ent, m ade
payable at any future period, which falls due on any o f these days
mentioned, shall be considered due and collectible on the d ay follow ing,
and when any holiday, except M oth er’s D a y, shall fall upon Sunday,
then the M on d a y follow ing shall be considered as a legal holiday.
Writs o f injunctions, attachm ents, replevin, and prohibition m ay be
issued and served on.
_
H o m e s te a d . D eed to, must be signed b y husband and wife. (See
Exem ptions.)
H u s b a n d a n d W ife . All property, both real and personal, o f
the husband or wife, owned or claim ed b y him or her before mar
riage, and that acquired afterward b y gift, devise, or descent, as also
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1973
the increase, rents, issues, and profits o f the same, shall be his or her
separate property. T he earnings and accumulations o f the wife and her
minor children in her custody while she has lived or m ay live separate
and apart from her husband, shall also be the separate property o f the
wife. All property acquired b y either husband or wife during the
marriage, except that which is acquired b y gift, devise, or descent, or
earned b y the w ife and her m inor children while she has lived or may
live separate and apart from her husband, shall be deem ed the com m on
property o f the husband and wife, and during the coverture persona)
property m ay be disposed o f b y the husband only
M arried women
o f the age o f tw enty-one years and upwards shall have the same legal
rights as men o f the age o f tw enty-one years and upwards, except the
right to make contracts binding the com m on property o f the husband
and w ife; and shall be subject to the same legal liabilities. (See
Dow er. Conveyance.)
I n ju n c t i o n . Is issued, where party is entitled to relief And
restraint, is required o f some prejudicial a ct; where, pending litiga
tion, an act is done which tends to render judgm ent ineffectual, and
when applicant is entitled under principles o f equity. Under certain
conditions m ay be granted ex parte at cham bers or b y consent.
Bond m ay be fixed b y judge and approved b y clerk, except to restrain
collection o f m oney judgm ent, when it m ust be double the am ount of
such judgm ent.
I n ju r ie s — P e rs o n a l. W orkm en’s Com pensation A ct in force.
I n s u r a n c e . (See special chapter pertaining to Insurance.)
I n te r e s t. M a y contract, in writing, for any rate of, not exceeding
8 per cent per annum. A ny rate exceeding this is usurious. W hen
no express contract, on bond, bill, note, or instrument o f writing,
or judgm ent, for m oney lent, or due on settlem ent o f accounts from
date o f ascertained balance, and m oney received for use o f another.
Interest is com puted at 6 per cent per annum.
Person, partnership, corporation, bank or trust com pany, national
bank doing business in state m ay m ake installment loans n ot to
exceed $1,000 with total interest or discount o f 8 % added to principal
calculated from date o f indebtedness.Any additional sums charged
except recording fees and fees fo r acknowledgm ent constitute usury.
J u d g m e n t s . Judgments o f superior courts becom e a lien upon ail
real estate o f judgm ent debtor in the cou n ty as soon as entered and
docketed. U pon filing with the clerk o f the superior court a transcript
o f judgm ent from justice court or o f superior court o f another county,
the same becom es a lien on all real.estate o f judgm ent debtor in the
county. N o execution can be issued on any judgm ent after the
expiration o f five years from the date o f its rendition and entry, unless
such judgm ent be revived b y scire facias or action for d eb t be brought
thereon within such five years.
J u d icia l B o n d s . (See Bonds.)
L evy . (See Executions.)
L ice n s e s. F or gam bling prohibited.
L ie n s . A ll persons w ho m ay labor or furnish materials in the con
struction or repairing o f any building, superstructure, canals, dams,
mines, or other im provem ent, or cuts cordw ood. shall have a lien on
the same, and in case o f buildings and superstructures, on the lot o f
la,nd whereon the same is situate and connected therewith. T o fix
and secure the lien, the person perform ing labor or furnishing material
m u s t, within sixty days after the com pletion o f such labor or the fur
nishing o f materials, file his contract in the office o f the cou nty recorder
where the property is situate. I f the contract be verbal, a duplicate
co p y o f the bill o f particulars should be m ade, under oath, and one
delivered to the recorder and filed for record and the other furnished
the party owing the debt, or his agent. Laborers’ and like liens are
preferred to all subsequent liens, m ortgages, and incumbrances, and
such as lien claimant had no notice. Suit to foreclose such liens must
be com m enced within six m onths after filing the same in the recorder’s
office. In case o f the levy o f writ o f attachm ent or execution, clerks,
laborers, and em ployes o f debtors have a preference claim for wages
for service perform ed sixty days before levy o f writ, not exceeding
$200. upon filing notice o f claim unpaid with creditor, d ebtor, and
officer executing writ. Proprietors o f hotels, boarding houses, and
lodging houses have special lien on all property or baggage deposited
with them b y guests for price o f guests’ entertainment. Agister and
liverym an, garagemen, have lien b y statute. (See Judgm ent, M o rt
gage.)
L im it a t io n s . T o recover realty against person in peaceable and
adverse possession under color o f title, three years; against such posses
sion where person pays taxes and has deed recorded, five years, other
wise ten years; to recover lots in city or village against person having
recorded deed, and pays taxes, five years; where party in possession
claim s b y right o f possession only, tw o years as against one seeking to
recover possession and showing no better right. Personal A ctions—
One year: M alicious prosecution, false imprisonment, libel, slander,
seduction, breach o f promise. A ction on liability created b y statute,
other than a penalty or forfeiture must be brought within one year
from discovery o f fraud. T w o years: Personal injuries, trespass to
property, detention or conversion o f personal property to own use,
taking and carrying away goods and chattels: and injuries to person
wnere death ensues,to accrue from date o f death. Three years:
A ctions for d eb t not in writing; on stated or open accounts other
than m utual between m erchants or their factors and agents: all
accounts, except as between merchants and factors and agents, limi
tations run from date o f each item o f delivery. A ction s for relief
on ground o f fraud or mistake. F our years: F or penalties or dam
ages on any boind to con vey real estate; between partners for settle
ment o f partnership accounts; on m utual or current accounts between
merchants, their factors or agents, to accrue from cessation o f deal
ings; upon judgm ent or instrument without the State; bonds o f
executors, administrators, or guardian, after death, rem oval, etc.;
specific perform ance; to contest will after discovery o f fraud; and
where no provision is otherwise m ade. F ive years: On dom estic
judgm ent where execution has been issued within ,one year after
rendition. Six years: d ebt evidenced b y writing within the state.
A ction to foreclose lien o f m echanic or materialman m ust be brought
within six m onths after filing for record.
M in e s uupatented are real estate for the purpose o f inheritance and
conveyance. T hose being com m unity p roperty m ay be con veyed b y
spouse having title or right o f possession without other spouse join
ing. Location requires sbven m onum ents, three at each end, and
one at discovery, in which notice is to be placed on discovery; title
work consisting o f a shaft 4 x 6 x 8 feet deep, or its equivalent in
an open cu t so that mineral in p lace is discovered 8 feet from the
surface must be done and notice recorded within three months, and
annual assessment work am ounting to $100, m aintained each year
thereafter, until patent is ordered.
M o r tg a g e s . A ll mortgages o f real property and all deeds o f trust
In the nature o f mortgages shall, notwithstanding any provision in the
m ortgage or deed o f trust, be foreclosed b y action in a cou rt o f com
petent jurisdiction. Failure o f m ortgagee to law fully release a
satisfied m ortgage for ten days after dem and for the release, subjects
him to liability for $100 and actual damages. M ortgages on real
estate are executed, acknowledged and recorded as conveyances of
real estate. (See C onveyances, Chattel M ortgage, Acknow ledgm ents,
R edem ption.)
N e g o t ia b le I n s t r u m e n t s . U niform N egotiable Instrum ents A ct
adopted. See com plete text follow ing “ D igest o f B anking & C om
mercial Law s.”
N e ta ry P u b lic . In all certificates and acknowledgm ents the date
o f expiration o f com m ission m ust be stated, as “ com m ission expires” .
N otary m ust reside in cou nty for which appointed and has no juris
diction outside o f said county.
N o te s a n d B ills o f E x c h a n g e . (See Bills and N otes).
P a r tn e r s h ip s using fictitious names m ust file with C ounty R ecorder
certificate showing names o f partners and their residences, which
must be signed and acknowledged b y all partners.
P o w e rs o f A tt o r n e y . N o special statutory provisions relative to.
BANKING AN D COMMERCIAL LAWS— ARKANSAS
1974
T o confess judgm ent m ust be executed subsequent to m aturity o f debt
confessed, and must be acknow ledged. T o con v ey lands or release
m ortgages should be acknow ledged as deeds, and recorded.
P r o b a te L a w . (See Savings Banks and Administration o f Estates.)
P r o t e s t. Liability o f drawer or indorser o f bill or note m ay be
fixed b y regular protest and notice, etc., according to the negotiable
instrum ents code. (See Bills and N otes.)
R e c o r d s . T he superior courts o f each cou n ty are courts o f record.
T he recorder’s office in each cou nty relates to titles o f real estate
and personal property, and probate record instrum ent therein Is
notice. T he minutes o f the Sanitary L ive Stock B oard are notice o f
all brands and marks o f live stock.
R e d e m p t io n s . From Sheriff or judicial sales, six m onths, b y
Judgment debtor, or successors in interest. Senior creditor subsequent
to judgm ent having a lien on the premises sold, m ay redeem within
five days after expiration o f said six m onths, and each subsequent
lien holder, according to priority o f lien, within five days after tim e
allowed gthe prior lienholder, b y filing with C ounty R ecorder statutory
notices o f intention to redeem. The same rule applies to foreclosure
o f m ortgages and trust deeds. R edem ption from tax sales 5 years,
b u t suit m ay be brought b y holder o f certificate o f purchase to fore
close right o f redem ption after 3 years.
Replevin. For possession o f specific personal property which has
not been seized under any process, execution or attachment against
the property o f the plaintiff.
S a les. T he “ uniform sales la w ” Is In force.
S ea ls. A ddition o r om ission o f seals or scrolls to instruments o f
writing in no way- affect the force and validity o f the instrum ent.
Instrum ents executed b y corporations must have a corporate seal
attached.
S e rv ice . All sum mons upon persons shall be personal, or by leaving
a co p y with co p y o f com plaint at the usual place o f residence o f
defendant, w ith som e person o f suitable age and discretion then
residing therein, or t o an agent authorized b y appointm ent or b y
law ; up on a dom estic or foreign corporation or partnership or other
unincorporated association su b ject to suit under a com m on name,
b y delivering to an officer, a m anaging or general agent, or any other
agent authorized b y appoin tm ent or b y law, and, if agent is one
authorized b y statute and the statute so requires, b y also m ailing to
defendant, upon the state or a m unicipal corporation or other govern
m ental organization thereof su b ject to suit, b y delivering to ch ief
executive officer or the secretary, clerk or recording officer thereof.
S u its . (See A ction s.)
Taxes. Aside from those levied by legislative enactment for
specific Durposes, as for the construction and maintenance of DUbllc
institutions, etc. State taxes are levied by the State Board of Equal
ization; county taxes by the boards o f supervisors o f the several
counties, and city taxes by the common councils o f the various cities.
Railroads are valued for the purpose o f taxation by the State Board of
Equalization. Other property Is valued by county assessors. The
assessing o f value begins in January of each vear. The lien attaches
on the first Monday o f January o f each year. One-half of taxes be
come due and payable on first Monday in September and become
delinquent on the first Monday in November next thereafter. Re
maining one-half become due and payable on first Monday in March
and become delinquent on first Monday in M ay next thereafter.
The penalty for delinquency is 4 per cent added thereto and interest
from date o f delinquency until paid at rate o f 10 per cent per annum.
County Treasurer shall advertise property for sale for delinquent
taxes and sell same not earlier than the first o f October nor later than
the first day o f November.
T r a n s fe r o f C o r p o r a t io n S to c k s . (See Corporations.)
W a r e h o u s e s . Personal p roperty in, m ay be sold for unpaid
W ills . W ills must be In writing, signed b y the testator, or b y som e
one for him , in his presence and b y his direction, and must be attested
by tw o or m ore credible witnesses abov e the age o f fourteen years, in
the presence o f each other and the testator.
W hen the will Is wholly
written b y the testator, no witnesses are necessary. N un-cupative
wills m ay be m ade when property willed does n ot exceed in value
$50, unless it be proved b y three credible witnesses that the testator
called on som e person to take notice and bear testim ony that such Is
his will, and that the testim ony, or the substance thereof, was com
m itted to writing within six days after the making o f such will; In
such case the am ount willed is not lim ited. W ills are revocable b y
subsequent will, codicil, or declaration in writing, executed with like
form alities as in execution o f will, o r b y testator destroying, canceling,
or obliterating the same, or causing it to be done In his presence, or
by subsequent marriage, and no provision is m ade for wife. Foreign
wills, the probate w hereof is duly authenticated, m ay be probated
here. Contests o f wills can not be initiated after one year from date
o f probating.
SYNOPSIS OF
T H E L A W S OF ARKAN SAS
R E L A T IN G TO
BANKING AND COMMERCIAL USAGES.
R evised b y S y d n e y S. T a y l o r , A ttorn ey at Law, Arkansas N ational
Bank B ldg., H ot Springs N ational Park, Ark.
A c c o u n t s . In suits upon accounts the A ffidavit o f the plaintiff
that the accou nt is ju st and correct shall be sufficient to establish
the same unless the defendant shall under oath deny the correctness
o f the account, either in w hole or in part; in which even t the plaintiff
shall be held to p rov e such part o f his account as is thus denied b y
other evidence.
A c k n o w le d g m e n t s ' m ay be taken within the State before the
supreme o r circuit cou rt, or a judge thereof, cou n ty and probate
court, or b y cou nty o r probate judge, or clerk o f any cou rt o f record,
or i f acknow ledgm ent is taken before a Justice o f Peace it should be
a Justice o f Peace o f its cou n ty where real estate is located, or notary
p u b lic; elsewhere in the United States before any court having a seal,
o r clerk o f such cou rt, notary public, unless taken out o f state, com
missioner o f Arkansas; without the U nited States before any court
having a seal, m ayor o f a city having a Seal, U nited States consul,
or any officer authorized b y the laws o f such cou ntry t o p robate
conveyances o f real estate, provided he has a seal.
A d m in is t r a t io n o f E s ta te s . E xecutors and administrators must
•he residents o f the State and m ust give bond in double the value o f
the personal p roperty. Claim s are classified as follow s: First,
funeral expenses and o f last illness, wages o f servants and medical,
m edicine, and hospital bills; Second, judgm ents rendered against the
deceased in his lifetim e which are liens on the lands o f the deceased;
T hird, all dem ands w ithout regard to quality which are exhibited
to the administrator within six m onths after the granting o f the
letters; Fourth, all dem ands as m ay be exhibited after six m onths
and within one year after the granting o f the letters o f administra
tion . AH dem ands not presented within one year are barred b y
lim itation. Dem ands m ust be authenticated b y an affidavit to the
effect that nothing has been paid or delivered toward their satisfac
tion except what is credited thereon, and that the sum dem anded,
nam ing it, is ju stly due. Dem ands m ust first be presented to the
executors or administrators for action and if disallowed b y him m ay
be presented to the probate court for allowance. N otes and debts
secured b y m ortgages m ust be probated as any other claim i f it is
desired to hold the estate responsible.
A ffid a v its In this State are made before a judge, justice o f the
peace, notary public, or clerk o f the cou rt; w ithout the State before
a judge, m ayor, notary public, justice o f the peace or com m issioner
for this State.
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A s s ig n m e n t s f o r t h e B e n e fit o f C r e d ito r s , are a v ery popular
m ethod o f winding up insolvent concerns where there is a prospect
o f a reasonably good dividend: A s soon as the assignment is made
it is the d u ty o f the assignee t o take imm ediate possession o f the
p roperty, m ake a detailed inventory o f sam e and file the deed with
the chancery cou rt together with the bond in d ouble the am ount o f
the value o f the property. T h e sale and distribution o f the assets
and the entire administration o f the estate is handled under the direc
tion o f the chancery cou rt. Releases m ay be exacted as the condition
for participating in the assignment.
A t t a c h m e n t s m ay be sued out where the defendant Is a foreign
corporation or non-resident, or being insolvent has been absent from
the State four m onths, or has left the State with intent to defraud his
creditors, or has left the cou n ty o f his residence to avoid the service o f
sum m ons, or conceals him self so that sum m ons can not be served on
him. Is or a bou t to rem ove or has rem oved a material part o f his prop
erty out o f the State, not leaving enough t o satisfy his creditors, or has
sold, con veyed or otherwise disposed or his property, or suffered it to be
sold with the fraudulent intent to cheat, hinder, or delay his creditors,
or is about so to d o. It is obtained b y filing an affidavit stating the
nature o f the plaintiff’s claim, that it is just, its am ount and the exist
ence o f the ground, and b y giving bond conditioned to pay all damages
the defendant m ay sustain if the attachm ent is wrongfully sued out.
T he d efendant is allowed to traverse the attachm ent, and the affidavit
and traverse then stand as pleadings upon which the issue is tried.
I f the attachm ent Is dissolved, the d efendant m ay have an assessment
o f damages upon the bond in the same suit. Persons claim ing the
attached property m ay interplead in the sam e action. Attachm ents
m ay be sued out before the d eb t is due where the defendant has sold,'
con veyed , or otherwise disposed o f his p roperty, o r perm itted it to be
sold with the fradulent intent to cheat, hinder or delay his creditors,
or Is so to do, or is abou t to rem ove his property, or a material phrt
thereof, out o f the State with the intent o f cheating, hindering or delay
ing his creditors.
B a n k s . T he banking business is controlled b y a State Bank
Departm ent under the direction o f a bank com m issioner and a state
bank board. T h e State Bank B oard is com posed o f five m embers,
all o f w hom m ust be residents o f this State o f the age o f thirty-five
years or over, tw o o f w hom shall be a ctive bankers, at least one o f
whom shall in n o event be an officer or director o f any bank or trust
com p a n y o f the State o f Arkansas and all o f w hom shall be appointed
b y the Governor.
A ll applications fo r charters fo r the new banks and fo r approval
o f am endm ents o f the charters o f existing banks shall, imm ediately
upon their filing with the State Bank Comm issioner, be subm itted to
the board for investigation and fo r approval or disapproval b y it.
I f the application be a pproved, the B ank Comm issioner m ay, in the
event that he also shall approve the application, grant the charter
therein requested or approve the proposed charter am endm ent. N o
bank or trust com p a n y shall change or rem ove the location o f its
banking house, office or place o f business from one tow n or city to
another save b y charter am endm ent first approved b y the Bank C om
missioner and the State Banking Board.
In the event o f great financial stress or other em ergency any city,
cou n ty or regional clearing house association o f banks or trust com
panies in this state m ay, with the approval o f the bank com m issioner
and the G overnor, restrict the right o f any bank or trust com panies
whose banking houses or places o f business shall be located within the
territorial boundaries o f such clearing house t o p a y checks or other
orders drawn upon or against deposits fo r such tim e, to such extent
and in such m anner as shall to it appear necessary or desirable for
the p rotection o f depositors and other creditors.
E very bank shall, a t all times, have on hand as a reserve an am ount
equal to at least fifteen per cent o f the aggregate sum o f its deposits.
A part o f said fifteen per cent shall be in cash in the vaults and the
rem ainder thereof m ay be held on deposit su b ject to check with any
other bank which m ay have been approved b y the Com m issioner as
reserve agents.
A n y five or m ore qualified natural persons, a m ajority o f whom
shall be bona fide residents o f Arkansas, w h o m ay desire to associate
them selves b y articles o f agreement for the purpose o f establishing
any bank or trust com pany, m ay a p p ly to the Com m issioner to be
incorporated and shall subm it their proposed articles o f agreem ent in
duplicate.
. .
T h e stock o f every bank shall be deem ed personal prop erty and in
case o f sale shall be transferred only on the books o f the bank. W hen
ever any stockholder m ay wish to transfer his stock, certificates in
duplicate o f such transfer, signed b y the President and Cashier or
Secretary, and setting forth the name and residence o f the transferror
and transferee, shall first be sent to the Bank Com m issioner. T he
Com m issioner shall thereupon endorse upon said duplicate certificate
his approval or disapproval o f the'transfer showing the date thereof.
A fter m aking such endorsem ent, the Com m issioner shall, within 30
days from the receipt o f such certificate, forward the original co p y
o f the certificate to the Bank. T h e Bank m ay then file the certificate
w ith the Clerk o f the C ou n ty in which the bank is located. N o trans
fer o f bank stock shall be valid as against creditors o f the transferror
unless a certificate o f such transfer is filed with C ounty Clerk.
T h e affairs and business o f any incorporated bank shall be m an
aged and controlled b y a board o f directors o f not less than three w ho
shall be selected from the stockholders at such tim es in such manner
as m ay be provided b y its by-laws. N o person shall be eligible to
serve as-a director o f any bank unless he shall be a bona fide owner o f
stock fu lly paid up and not hypothecated o f the par value o f $500.
N o bank shall engage directly or indirectly in trade or com m erce
b y buying or selling goods, chattels and m erchandise nor m ay it
purchase or hold its own capital stock unless such purchase shall
be necessary to prevent loss upon a d ebt previously contracted in
good faith; and stock so purchased or acquired shall, within tw elve
m onths o f its purchase, be sold or disposed o f at private sale. A
bank m ay hold and sell all kinds o f prop erty that m ay com e in to its
possession as collateral security for loans or any ordinary collection
or debts b u t m ust dispose o f it as soon as possible and within tw elve
m onths. Banks can n ot lend m oney on their ow n stock.
N o stockholder o f any bank whose deposits are insured b y the
F. D . I. C . shall be su bject to any assessment or liability im posed
b y any law o f this State upon stockholders o f banks. U pon the date
o f procuring such insurance the stockholder o f said Bank shall be
released and relieved from all liability im posed b y any law o f this
State upon any bank stockholders. T h e purpose and intent o f this
statute are to m ake the stockholders o f banks whose deposits are
insured b y the F. D . I. C . liable to the same extent as stockholders
o f ordinary business corporations but no further.
W henever a state or national bank whose deposits are insured b y
the F. D . I. C . shall be appointed as an executor or administrator or
guardian and the m oneys to com e into its hands d o not exceed Five
T housand Dollars. It is n ot necessary that the said bank execute
a bond. I f the am ount exceeds Five Thousand Dollars the bank or
trust com p any is required on ly to give bond and security for the
excess.
I f a ch eck is presented for paym ent m ore than six m onths after
its date the bank m ay at its option refuse paym ent unless expressly
instructed b y the drawer at or prior to such presentation to pay same.
A cts required on a holiday m ay be d one upon the next succeeding
business day.
Real estate acquired through the collection o f debts previously
con tracted in the due course o f business shall not be held b y the
bank as an asset for a longer period than five years. Interest on
deposits in excess o f four per cent is prohibited.
A bank m ay not loan over tw enty per cent o f its capital stock to
any one person.
BANKING AND COMMERCIAL LAWS— ARKANSAS
B ills a n d N o te s . . W ith a few minor variations the Arkansas A ct
is a literal cop y o f the Uniform Negotiable Instruments Law. Bills
and notes given for any patented machines, instruments or implements
o f any kind to a citizen o f this State are not com m ercial paper unless
it shall be executed on a printed form and show that it is executed
in consideration o f a patented machine, etc. and no person should
be considered an innocent holder o f same though he m ay have given
value for same before m aturity and the maker m ay m ake any defense
to the collection o f same in the hands o f any holder. All such notes
not showing on the face for what they shall be given are void. This
does not a p p ly to merchants or dealers who sell patented things in the
usual course o f business. N o note given for premiums on insurance
in this State shall be negotiable until the policy for which the said
note was given as paym ent for premium thereon shall have been
issued and delivered to the maker o f the note and all notes so given
shall set forth what purpose they were given. The following damages
are allowed where a bill is protested for non-acceptance or non-pay
ment. I f the bill is drawn on any place in this State, 2 per cen t; if
the bill is drawn on any person in payable in Alabama, Louisiana,
Mississippi, Tennessee, K entucky, Ohio, Indiana, Illinois, or M is
souri, or any point on the Ohio River, 4 per cent; if drawn on any
other place in the U nited States, 5 per cent; if beyond the limits o f
the United States, 10 per cent. For a non-paym ent after acceptance
within this State, 2 per cen t; without the State, 6 per cen t; foreign
countries, 10 per cent.
B ills o f L a d in g . (See W arehouse Receipts and Bills o f Lading.)
B lu e S k y L a w . T he State Banking Departm ent has fiull authority
to permit or prohibit the sale o f contracts, stocks, bonds and other
securities in Arkansas. An application must be made and permission
obtained before said securities can be offered for sale. Suits m ay be
com m enced against every foreign or dom estic com pany holding per«
mits issued b y the Arkansas Bank Commissioner for any cause o f
action arising out o f the sale or offer for sale o f any o f its securities
and process m ay be served on the Bank Commissioner.
C o lla te ra ls are governed b y the law merchant.
C o n t r a c t s touching com m ercial matters are governed b y the law
merchant.
C o n v e y a n ce s . A married wom an m ay con vey her separate real
estate b y deed o f conveyance executed b y herself the same as i f she
were a fem e sole. A married wom an must join in the Deed o f her
husband to relinquish her dower and homestead rights and m ust
acknowledge same in the proper manner. A ll acknowledgments should
be in the proper statutory form . The legislature from tim e to tim e
enacts curative acts.
C o r p o r a t io n s . Three or m ore persons o f fu ll age m ay form a
corporation for any law ful purpose b y filing in the office o f the Secre
tary o f State articles in duplicate originals showing the name o f the
proposed corporation, which m ust end with the abbreviation “ inc. ”
or must include the w ord corporation. The Articles m ust state
the purpose o f the corporation; the duration m ay be perpetual or
lim ited; it m ust state the name o f the county and the city in which
its principal place o f business is located and the name o f its resident
agent and the total numbers o f shares o f stock which the corporation
shall have authority t o issue mentioning the par value o f each share
or stating that they are to be w ithout par value. T he amount o f
paid-in capital with which the corporation will begin business shall
not be less than $300.00. T he name and address o f the incorporators
and the num ber o f shares subscribed for b y each and any general
provision for regulation o f the corporation. The following are
excluded from this form o f incorporation; banks, trust companies,
railroad com panies, corporative marketing association, fraternal
benefit societies, fairs or expositions. The later are all covered b y
special acts. Upon filing with the Secretary o f State, the duplicate
copy bearing the file mark o f the Secretary should be filed with the
County Clerk in the C ounty in which the corporation has its place
o f business. E very holder o f shares o f stock not fully paid shall be
personally liable for any d ebt o f the corporation to an amount equal
to the unpaid balance. Transfer o f stock is guided b y the Uniform
Stock Transfer A ct. A n y foreign corporation seeking permission
to d o business in this State m ust file with the Secretary o f State a
cop y o f its articles o f incorporation together with a statement o f its
assets and liabilities and the am ount o f capital em ployed in this
State and shall also designate its general office or place o f business
in this State and shall name an agent upon whom process m ay be
served.
C o sts. A plaintiff w h o is a nonresident o f this State, or a'corpora
tion other than a bank created b y the laws o f this State can be required
on notice to file a bond for the paym ent o f all costs which m ight accrue
in the action which it has brought.
C o u rts . T he supreme court is held at Little R ock and has juris
diction o f appeals from the circuit and chancery courts. This State
has separate chancery courts which handle all equity matters including
divorces and foreclosures o f liens. The Circuit C ourt shall have juris
diction in all civil and criminal cases, the exclusive jurisdiction o f
which m ay not be vested in som e other court. .In other words, the
circuit court is the general trial court o f all cases.' The probate
court has jurisdiction o f all probate matters b u t is presided over b y
the chancellor. H owever, this court is entirely separate from the
chancery court. Justice courts and municipal courts have exclusive
jurisdiction in all m atters o f contract where the amount in con tro
versy does not exceed the sum o f $100.00 and concurrent jurisdiction
in matters o f contract, where the amount in controversy does not
exceed the sum o f $300.00 exclusive o f interest, and has concurrent
jurisdiction for the recovery o f personal property where the value
does not exceed the sum o f $300.00. M ost o f the cities have abolished
justice courts and have municipal courts exclusively.
C o u r te s y . U pon the death o f a married woman intestate, her
husband shall be entitled to one-third o f her real property for life, and
one-third o f her personal property in fee, where she leaves descendants;
but the rights o f the husband shall be limited to such proportionate
share after the paym ent o f all her debts.
D eed s, (dee Acknow ledgm ents and C onveyances.)
D e p o s itio n s m ay be taken in the State before any judge or clerk o f
a court o f record, justice o f the peace, m ayor, or notary p ublic; out
o f the State before a com m issioner for this State, judge, justice o f the
peace, mayor, notary public, or person com m issioned b y the court or
by consent o f parties.
D e s ce n ts a n d D is tr ib u t io n s . Property descends to children and
their descendants in equal parts; if no children, then to father, then to
mother, then to brothers and sisters and their descendants in equal
arts, and in default o f such to the nearest lineal ancestor or his
escendants in equal parts per stirpes. Illegitimate children inherit
and transmit an inheritance from the m other in the same manner as
If legitimate. I f the parents o f illegitimate children subsequently
Intermarry and the father recognizes them as his, they shall be deem ed
legitimate
In default o f heirs the whole property goes to husband
or wife, and In their default to the State. If cue estate is ancestral It
goes to the blood o f the ancestor from whom it was derived. Rela
tions o f the half-blood inherit equally. Heirs take as tenants in
com m on.
D iv o rce . It is necessary that a person be a resident o f the State
for at least 2 m onths prior to the filing o f the Com plaint in the d ivorce
action and a final decree cannot be had unless he has been a resident
at least 3 m onths in the State at the tim e the decree is entered.
Divorces are granted b y the Chancery C ourt and in H ot Springs the
court is in session all o f the tim e and all p roof is subm itted on deposi
tions, it not being necessary for the plaintiff to appear in. the court
room in person. T h e grounds for divorce are: W here either party,
at the tim e o f the con tract, was or is im potent; desertion for the period
o f «one yea r; where he or she had a form er wife or husband living at the
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tim e o f the marriage sought to be set aside; where either party shall be
convicted o f a felony; where either party shall pe addicted to habitua
drunkenness for' the period o f one year, or shall be guilty o f such
cruel and barbarous treatm ent as to endanger the life o f the other,
or shall offer such indignities to the person o f the other as to render
the condition intolerable; where either party shall have com m itted
adultery subsequent to such marriage; separation for three years
w ithout cohabitation.
D ow er. Where there are children the wife takes one-third o f the
husband’s personal estate absolutely and one-third o f the real estate
o f which he was seized at any tim e during the marriage, for life. W here
there are no children she takes in a new acquisition one-half o f the real
and personal estate absolutely as against heirs, or one-third absolutely
as against creditors. I f it is an ancestral estate, she takes one-half for
life against heirs and one-third for life against creditors, Husband
takes same interest in wife’s property b y courtesy after death o f wife.
I f wife kills husband or husband kills w ife and is convicted o f murder
In first or second degree for such hom icide their dower and curtesy
rights are forfeited.
E x e cu tio n s from the circuit court are returnable In sixty days,
those from justices’ courts within thirty. T hey m ay be stayed for
six m onths b y giving bond. T hey are a lien on the personal prop
erty o f the defendant in the cou nty from the tim e they com e to the
officers’ hands. T he officer before levying on personal property, the
title to which is dou b tfu l, m ay require tne plaintiff to give him an
indem nifying bond, and then suit must be brought b y the claimant
upon the bond. T he defendant and other judgm ent creditors have
one year in which to redeem from the sale o f real estate. In case the
writ is returned nulla bona the plaintiff m ay proceed b y bill o f dis
covery against the defendant and examine him on oath, and enforce
a surrender o f concealed property b y imprisonment.
E x e m p tio n s . Unmarried persons are entitled to $200 and married
persons and heads o f families to $500 in selected articles o f personal
property as exem pt against debts b y contract. N o personal property
exempt as to tort judgm ents but hom estead is so exem pt. Persons who
are married or heads o f families are entitled to a homestead as against
all debts, except the purchase-m oney, specific liens, laborers, and
m echanics’ liens, taxes and claims for trust funds converted. T he
homestead in the country is not to exceed 160 acres, and in tow n not
to exceed one acre, nor to be worth m ore than $2,500, but the country
homestead is not to be reduced to less than 80 acres nor the tow n
homestead to less than one-fourth o f an acre, regardless o f value.
T h e homestead goes to the widow and minor children after the hus
ban d’s death. T h e homestead can on ly be con veyed b y deed In
which the wife joins and which is acknowledged b y her, and if the
husband neglects to claim the hom estead the wife m ay d o so.
F r a u d . Statute o f Frauds has been re-enacted in this State and
a Standard B ulk Sales Law.
G a r n is h m e n t s m ay be sued ou t pending suit upon giving bond
in double the amount garnished, or after judgm ent without b o n d .
Garnishment m ay be discharged and funds or property in hands o f
garnishee released b y filing bond fo r double the am ount o f sum
garnished. U pon judgm ent being rendered against defendant sum
m ary judgm ent m ay be rendered against sureties on bond. A ct 177
Of A cts 1925.
H o lid a y s . T h e legal holidays are: Sundays; January 1 (New
Y ea r’s D a y ); January 19* (R obt. E. L ee’s b irth d ay ); February 22
(W ashington’s b irth d a y ); M a y 30 (D ecoration D a y ) ; June 3* (Jeffer
son D avis’ b irth d a y ); July 4 (Independence D a y ) ; first M o n d a y in
Septem ber (L abor D a y ); O ctober 12* (Colurhbus D a y ); general
election d a y ; N ovem ber 11 (Arm istice D a y ); Thanksgiving D a y ;
A rbor D ay* (first Saturday in D ecem ber, a special d a y ); and D e
cem ber 25 (Christmas D a y ). W hen bills becom e due on any o f
these days, they are payable the next business day. O ctober 12th
is C olum bus D ay* (a pu blic holiday, b u t not affecting com m ercial
paper, or the execution o f written instruments, nor interfering with
judicial proceedings).
♦These days are n ot generally observed. Banks are open.
H u s b a n d a n d W ife . (See M arried W om en.)
I n ju n c t i o n s m ay be issued b y circuit judges, chancellors, or the
jud ge o f any court In which suit is brought. T he person applying
for the injunction m ust give bond as the court or ju d ge m ay direct in
absence o f b oth circuit and chancery judges, cou n ty jud ge m ay issue
injunction.
I n s o lv e n c y . T he Supreme C ourt has held that the Federal Bank
ru ptcy A ct has suspended the State insolvency laws.
I n t e r e s t. T h e legal rate o f interest is 6 per cent, but parties m ay
contract in writing for not exceeding 10 per cent. Interest exacted in
excess o f 10 per cent forfeits the debt. In com puting the interest
com m issions paid to the agent o f the lender are counted {is interest.
W here usury is charged the borrow er m ay go into equity and have the
d ebt and securities cancelled without tendering the amount lawfully
due. Judgments bear the same rate o f interest as the obligation sued
on. Judgments against counties bear no interest.
J u d g m e n t s . A judgm ent o f a court o f record shall be a lien on the
real estate owned b y the defendant in the cou nty in which the judg
m ent was rendered from the date o f its rendition fo r a period o f three
years b u t it is not a lien on the land o f a defendant in other counties
unless a transcript o f the judgm ent is filed in the office o f the clerk
o f each county in which the real estate is situated. Judgm ents o f the
U nited States Courts can be m ade liens on the real estate b y filing a
transcript in the office o f the circuit clerk. A judgm ent o f lower
courts m ay be abstracted and filed in the office o f the circuit clerk
whereupon it becom es lien on real estate for a period o f three years.
C ircuit C ourt liens m ay be continued in force b y reviver. A judg
m ent o f the circuit or chancery cou rt is good for ten years and can
be revived any tim e during that period, m aking it good for another
ten years. Judgm ents o f M unicipal and J. P . C ourts are only good
for five years.
J u r is d ic t io n . (See C ourts.)
L ie n s . M echanics, builders, artisans laborers, and others doing
any work upon or furnishing any material fo r any building or erection
under any contract with the owner or his agent, contractor or sub
contractor shall have for such work or material furnished a lien o n
the building or im provem ent together with the land on which it stands
to the extent o f one acre if in the cou n try; if in a city the lot or land
upon which the erection is situated. H otel keepers have lien on
baggage and personal effects o f guests. Liverym en have lien on all
stock and property le ft in their care.
L im it a tio n s . Suits for the possession o f real estate must be
brought within seven years, saving to minors and lunatics three
years after their disabilities are rem oved. Actions for recovery of
lands sold at judicial sales must be brought within five years, saving
to minors and lunatics three years after rem oval o f disabilities.
Actions for the recovery o f lands held under tax title must be brought
In tw o years. Actions for forcible entry and detainer, on contracts
not in writing, for trespass and for libel, within three years. Actions
for criminal conversation, assault and battery, false imprisonment,
and slander, within one year. Actions on written instruments, within
five years; on judgm ents, within ten years; on bonds o f executors
and administrators, within eight years. In all cases, except actions
for the recovery o f lands, minors and lunatics have, after rem oval
o f their disability, the statutory period in which to sue. Verbal
promises or acknowledgm ents d o not take a claim out o f the statute.
One year is allowed after dismissal o f a suit in which to begin a new
action. N o person can avail him self o f a disability which did not
exist at the tim e the right o f action accrued. N o endorsem ent o f pay
ment made b y the payee or on his behalf is sufficient p ro o f to take
the case out o f the statute.
BANKING AND COMMERCIAL LAWS— CALIFORNIA
1976
M a rr ie d W o m e n . The property, real and personal, o f married
wom en remains their separate estate as long as they choose, and m ay
be devised or con veyed without the husband’s assent, and is not
subject to his debts. I f she dies w ithout making any disposition of
her real estate, he is entitled to curtesy if they have or have had issue
born alive. She m ay carry on any business or perform any services
on her ow n account, and her earnings are hers, and she m ay sue alone
in respect o f her separate property. She can bind herself b y contract
only in reference to her separate estate or business. She can not
enter in to partnership with her husband. I f she does not file a
schedule o f her personal property, the burden o f p roof is on her to
show that it is hers.
M o r tg a g e s . Deeds o f trust should be properly acknow ledged and
filed for record, otherwise are not such liens as w ould effect the title
o f the third person. M ortgages o f real estate should be recorded
in the cou n ty where the land lies. M ortgages are barred five years
after the m aturity o f the obligation which it secures unless a notation
is m ade on the margin o f the record showing paym ent o f interest
or part o f the principal. M ortgages are foreclosed in the chancery
cou rt and sold b y com m issioner appointed b y the court. Chattel
m ortgages m ay be filed as other m ortgages or m ay be filed b u t not
recorded. T h ey should be filed in the cou nty in which the property
is located.
C hattel M ortgages m ay be acknow ledged and filed as other, m ort
gages, or they m ay be endorsed “ This instrum ent is to be filed but not
recorded,” signed b y the m ortgagee, and m ay then he filed in the
recorder’s office with the same effect as though recorded. M ortgages
o f personal property reserving in the m ortgagor the pow er o f disposi
tion are fraudulent.
M o r tg a g e s a n d D eed s o f T r u s t m ay be enforced b y foreclosure
at any tim e within the period prescribed b y'la w for foreclosing m ort
gage or deed o f trust so far as the property m entioned and described
in such m ortgage or deed o f trust is concerned, b u t no claim or debt
against the estate o f a deceased person shall be probated against
such estate whether secured b y m ortgage or deed o f trust or not
except within the tim e prescribed b y law for probating claims against
said estate.
/
N e g o t ia b le I n s t r u m e n t s . T h e U niform N egotiable Instrum ents
A ct adopted. (See com plete text follow ing “ D igest o f B anking and
C om m ercial Law s.”
P r o b a te L a w . (See A dm inistration Of Estates.)
P r o t e s ts .
(See Bills o f E xchange and Prom issory N otes.)
R e c o r d s . (See Acknow ledgm ents,
C onveyances,
C hattel M ortgages, and Powers o f A ttorn ey.)
M ortgages.
R e d e m p t i o n . Owners o f real estate sold for taxes m ay redeem
from such sales, within tw o years after sale.
R e p le v in . T he plaintiff in replevin m ay file an affidavit describing
the property, stating its value and the am ount o f damages he expects
to recover, his title, that the property is wrongfully detained b y the
defendant, that it has not been taken for a tax or under process against
plaintiff, and that his cause o f action has accrued within three years,
and upon giving bond in double its value, the property shall be taken
from the defendant and given to the plaintiff pending the suit, unless
the defendant within tw o days after it is taken gives a cross-bond.
R e v is io n .
T h e last revision o f the statutes was in 1937.
S a les. C onditional sales contracts d o not have to be recorded.
Upon breach b y the vendee the vendor m ay either repossess the
property or sue for its value.
T a x e s . All property should be assessed for taxes between the
first M on d a y in January and tbe 10th d ay o f A pril, in the cou n ty in
which the property is located. T he State T ax Com m ission has
general supervision and con trol o f the tax m atter. Taxes m ay be
paid in three installments, the first quarter being payable between
the first M on d a y in January and the 10th o f A pril, the second being
payable before the 10th o f July and the balance being payable before
O ctober first. I f taxes are n ot paid b y that date all delinquent
property is sold b y the collector under proper notice for the. taxes.
T h e taxes are a first lien upon all real and personal property.
T e s t im o n y .
(See E vidence.)
T r a n s fe r o f C o r p o r a t io n S t o c k .
(See C orporations.)
T r u s t C o m p a n ie s must have a paid-up capital o f $50,000, and
In counties with a population exceeding 50,000, they must have a sub
scribed capital o f not less than $100,000. T h ey m ay exercise all the
powers com m only conferred on such com panies.
W a r e h o u s e R e c e ip t s a n d B ills o f L a d in g shall not be given
except where the com m odities m entioned are received on the premises,
and are' under the control o f the warehouseman at the time o f Its
issuance. N o warehouseman shall sell, encum ber, ship, or rem ove
any such com m od ity for which a receipt has been given without the
written assent o f the. holder o f the receipt. T he same provisions cover
owners and agents o f boats and vessels. All warehouse receipts and
bills o f lading are m ade negotiable b y written endorsement and
delivering the same as bills o f exchange and prom issory notes, and no
printed or written conditions, clauses, or provisions inserted in oi
attached to them shall in any w ay lim it their negotiability or impair
the rights and duties o f the parties thereto, or persons interested
therein, or such conditions shall be void . W arehouse receipts given
b y any warehouseman or other person for goods and other com
m odities deposited, and all bills o f lading given by any carrier, boat,
vessel, railroad, transportation, or transfer com pany m ay be trans
ferred b y endorsem ent and delivery; and the transferee shall be
deem ed to be the owner o f such com m odities so far as to give validity
to any pledge, lien, or transfer given, m ade, or created thereby; and
no property so stored or deposited shall be delivered except on sur
render and cancellation o f such receipts and bills o f lading, unless
such receipts and bills o f lading have the words “ not negotia b le"
plainly written or stam ped on their face, a carrier m ay however
deliver to shipper or consignee goods w ithout presentation o f bill of
lading upon receiving from such shipper or consignee bond In double
the value o f the goods conditioned for delivery to the carrier there
after the original bill o f lading (acts 1907). Penalties are denounced
against any warehouseman or other person who shall violate any of
the prpvisions o f this statute. So m uch o f the act as forbids the
delivery o f property except the surrender a n d , cancellation o f the
original receipt or bill o f lading shall not apply to property replevined
or rem oved b y operation o f law.
W ills . A will m ust be subscribed b y the testator or b y some person
for him at his request in the presence o f tw o attesting witnesses, and he
must acknowledge it to be his will to each o f them . He must declare
at the tim e o f his subscription or acknow ledgm ent to the witnesses
that the Instrument is his will and testam ent. The witnesses must
sign their names at the end o f the will as witnesses at the request of
the testator. If, how ever, the entire will is in the hand-writing o f the
testator, it need not be attested, but m ay be p roved by three witnesses
familiar with the hand-writing. Such will, how ever, can not be
pleaded in bar o f an attested will. W ills are revoked b y marriage and
birth o f issue, unless provision for such issue is m ade b y settlement,
or is provided for in the will. T h e will o f an unmarried wom an Is
revoked b y her marriage. A fterborn children, not m entioned in the
will, take their regular distributive share. I f the testator fails to
m ention in his will any child, or its legal representatives, living at the
tim e o f executing the will, he shall, as to such child, or its represent
atives, be deem ed to have died intestate, and such child, or its rep
resentatives, is entitled to its regular share.
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Federal Reserve Bank of St. Louis
SYNOPSIS OF
TH E L A W S OF CALIFORNIA
RELATING TO
BANKING AND COMMERCIAL USAGES.
R evised b y T a n n e r . O d e l l & T a f t ,
A ttorneys at L aw , Suite 524 V a n N u y s Building.
Los Angeles.
(See C ard in A ttorn eys’ List.)
A ccou n ts. An account is assignable, and the assignee m ay m ain
tain an action thereon, although the account is assigned m erely for
collection. An action to recover a balance due upon a mutual current
and open account or upon an open book account is barred after four
years. T h e cause o f action on an open account is deemed to have
accrued from the date o f the last item . In the case o f a b ook account
consisting o f a single item it becom es outlawed four years after its
date. (See A ctions and Lim itations.)
A c k n o w le d g m e n t s . B efore an instrum ent can be recorded, Its
•execution must be acknow ledged b y the person executing it, or if
executed b y a corporation, b y its president or secretary, or other
person executing the sam e on behalf o f the corporation, or if a part
nership b y a member thereof (to be so identified in the acknow ledge
ment) or proved b y a subscribing witness, or b y judgm ent in an
action brought for the purpose. T h e p ro o f or acknowledgm ent of
an instrument may be m ade at any place within the State before
a justice or clerk o f the supreme court, and within the city , cou nty
or township for which the officer was appointed or elected, before
either: (1) A clerk o f a court o f record; (2) a cou n ty recorder; (3) a
court com m issioner: (4) a notary pub lic: (5) a justice o f the peace.
Officers taking and certifying acknowledgm ents or p ro o f o f instruments
for record m ust authenticate their certificates b y affixing thereto their
signatures, also their seals o f office, if b y the laws o f the State or coun
try where the acknow ledgm ent or p ro o f is taken, or b y authority o f
which they are acting, they are required to. have official seals. Acknow l
edgments taken out o f this State but within the United States, to be
used within this State, m ay b e taken before a notary public, a com
missioner appointed b y the governor o f this State, a judge, or clerk o f
a cou rt o f record, or in foreign countries a minister, counsul, viceconsul, or consular agent o f the U nited States, or a ju d ge o f a court
o f record or a notary public.
A c t io n s . A ll civil actions are com m enced b y filing a com plaint
upon which plaintiff m ay, at any tim e within one year thereafter,
have a sum mons issued. There is but one form o f action and the only
pleadings allowed are: 1. T h e com plaint. 2. T h e demurrer.
3. T he answer. 4. T he demurrer to the answer. 5. T he cross
com plaint. 6. T h e demurrer to the cross-com plaint. 7. The
answer to the cross-com plaint. 8. T h e demurrer to the answer.
M otions to strike and to m ake m ore certain m ay be m ade. Bill o f
particulars m ay be dem anded.
A d m in is t r a t io n o f E s ta te s . Estates are adm inistered in a
departm ent o f the Superior C ourt under a P robate C ode. F or
intestates letters o f adm inistration are issued upon petition. For
wills the nom inated executor takes out letters testam entary, or some
one eligible petitions for letters o f administration with the wili annexed.
R ights to letters begin with surviving spouse and proceed through
ten classifications, preference being given those o f the w hole blood
over those o f the half. Adm inistrators m ust give a bond as fixed b y
the cou rt, b u t executors m ay be relieved o f b on d b y the term s o f the
will.
Six m onths is given after the first publication o f notice to creditors
for presentation o f claims. R ejected claim s m ust be sued upon
within three m onths after notice o f such rejection. Claim s are m ar
shalled qnder nine preference provisions. Estates o f $2500 or less
aré subject to sum m ary disposition.
A ffid a v its. An affidavit to be used before any court, judge, or
officer o f this State m ay be taken before any officer authorized to
administer oaths. In this State every court, every judge or clerk o f
any court, every justice and every notary public, and every officer or
person authorized to take testim ony in any action or proceeding, or
decide upon evidence, has pow er to adm inister oaths and affirmations
An affidavit taken in another State o f the United States to be used
in this State, m ay be taken before a com m issioner appointed b y the
governor o f this State to take affidavits and depositions in such other
State, or before any notary public in another State, or before any
judge or clerk o f a cou rt o f record having a seal. An affidavit taken
In a foreign cou ntry to be used in this State, m ay be taken before an
ambassador, minister, consul, vice-consul, or consular agent o f the
United States, or before any judge o f a cou rt o f record having a seal.
In such foreign country.
A lie n s . 1. All aliens eligible to citizenship m ay take, hold and
dispose o f o ro Derty.*real and personal, within this State.
2. All aliens not eligible to citizenship m ay acquire and possess land
In accordance with the terms o f any existing treaty with any foreign
cou ntry o f which such alien is a citizen, and not otherwise. N or can
such be guardian o f any estate consisting in part or whole o f real estate.
N o non-resident alien can take b y succession unless he appear
and claim within 5 years a ft«" death o f decedent. N o alien m ay be
em ployed upon any public work except in cases o f extraordinary
em ergency. N o alien shall be em ployed in any departm ent o f the
state, cou n ty or city . N o alien m ay own or possess or have under his
con trol any firearms capable o f concealm ent.
Arrest. In an action for the recovery o f m oney, upon a contract,
express or im plied, the defendant m ay be arrested if about to depart
from the State with intent to defraud his creditors, upon order of
court based upon affidavit therefor, also in an action for m oney or
other property em bezzled or fraudulently misapplied b y a public
officer, officer o f a corporation, or an attorney, factor, broker, agent,
or clerk in the course o f his em ploym ent, or b y any person in a fidu
ciary ca p a city ; also in actions to recover the possession o f persona)
property where it has been concealed or rem oved or disposed o f to
prevent its being foun d; also in cases where the defendant has been
guilty o f a fraud in contracting the d eb t or obligation fo r which action
Is brought: or in concealing or disposing o f prop erty; also when the
defendant has rem oved or disposed o f his property or Is about to do
so with intent to defraud creditors. Bail given upon arrest is liable
upon judgm ent secured.
A s s ig n m e n t s f o r t h e B e n e fit o f C r e d ito r s . There are statutory
provisions for assignments but they are so seldom resorted to that
their place in the state’s com m ercial cod e is negligible.
A t t a c h m e n t s m ay be issued at the tim e o f or any tim e after
Issuing the sum m ons, and prior to judgm ent, where amount sued for
is not less than $15.00 (no attachm ent issues from small claims cou rt)
as is hereinafter provided. A ll property not exem pt from execution
m ay be attached, i f attachm ent is to recover for necessaries the
affidavit m ust so state including the character or nature constituting
the alleged necessaries. An attachm ent lien upon real property
continues for three years and m ay be extended for tw o years m ore
and thereafter from tim e to tim e. On personal property an attach
ment continues three years. A ttachm ent issues upon affidavit alleging
(1) indebtedness m ade and payable in this state and not secured; or
(2) defendant is non-resident or cannot be fou n d; or (3) that cause o f
action is damages, fraud or w rongful act o f defendant; (4) that attach
ment is not sought to delay or defraud creditors.
B ond m ust be filed with the clerk before w rit issues, to protect de
fendant if plaintiff fails to recover.
BANKING AND COMMERCIAL LAWS— CALIFORNIA
B a n k s. C annot p ay interest on demand deposits. T he business
o f banking m ay be carried on only b y corporations organized for such
purpose under the California Bank A ct ana N ational Banks. B ut
three classifications are perm itted: Comm ercial banks, savings banks,
trust com panies. Banking corporations m ay be organized b y not
less than three persons. W here banks have com plied with the pro
visions o f recent legislation the stockholders are no longer liable
for the debts o f the bank. D irectors m ust each own stock o f the
par value o f n ot less than $500. Provisions are m ade for branch
banks; also for issuing and retiring preferred stock. A bank or
ganized under the laws o f another state m ust com p ly with all the
requirements o f the California Bank A ct. A banker has a gen
eral lien dependent upon possession o f all property in his hands
belonging to a custom er for balance due from custom er in the course
o f business. E very bank m ust designate the character o f its business.
B y virtue o f the existing California Bank A ct all banks, foreign and
dom estic except N ational Banks, are under the supervision o f the
State Superintendent o f Banks and m ust obtain a certificate o f
authority to d o a banking business. T he A ct sets forth the m inimum
requirements regarding capital and surplus, such requirements being
identical for b oth com m ercial and savings banks, as follow s: $50,000
in cities o f less than 25,000 inhabitants; $100,000 in cities o f from
2 5 .0 0 0 to 100,000 inhabitants; $200,000 in cities o f from 100,000
200.000 inhabitants; $300,000 in cities o f over 200,000 inhabitants.
Comm ercial and savings banks m ust have a surplus o f 25 per cent o f
capital stock. C apital and surplus m ust be at least 10 per cent o f
deposit liabilities up to $1,000,000— 5 per cent o f any am ount in
excess o f $1,000,000. F or savings banks a decreasing per cent on
larger amounts. Special reserves against unsecured deposits are
required o f com m ercial banks, unless they are members o f the Reserve
bank. A m ount o f reserve is regulated b y statute. Bank officers
cannot be borrow ers from their bank. A ll state banks are eligible to
become m embers o f the Federal Reserve Bank. A ny bank to becom e
member o f the Federal H om e Loan Bank m ust have the previous
written consent o f the superintendent o f banks. Trust com panies
likewise operate under the supervision o f State Superintendent o f
Banks, and m ust deposit cash or securities with State Treasurer to
insure faithful perform ance o f trusts. T he minimum deposit required
is $ 1 0 0 ,0 0 0 , and the am ount varies according to population and
amount o f the res. A ny savings bank m ay discount or purchase
bankers’ acceptances eligible for discount b y the Federal reserve bank,
and m ay purchase, hold or sell real or personal property, as follow s: (1)
The real estate, furniture, fixtures, etc., in which its business m ay be
conducted, such real estate, fete., not to be carried on the books o f such
bank as an asset to an am ount exceeding one-half its paid-up capital
and surplus except with the written consent o f the Superintendent o f
Banks. C om m ercial banks are restricted to one-half such amount.
2) Such as m ay have been m ortgaged, pledged or con veyed to it in
(trust for its benefit in good faith, or m oney loan in regular course o f
business. (3) Such as m ay have been purchased at sales under
pledge, m ortgage or deed o f trust m ade for its benefit or m oney loaned
and such as m ay b e con veyed to it b y borrowers in satisfaction and
discharge o f loans. (4) G old and silver bullion, and United States
M int Certificates. (5) B onds and other securities o f certain classes
as are Set forth in Section 61 o f California Bank A ct. Savings banks
may not m ake loans for longer periods than ten years. There are
many other m inor restrictions on loans. W ith some exceptions
no com m ercial bank can lend m ore than 10 per cent o f its capital
stock on unsecured loan, or 15 per cent, in addition to the amount
that m ay be loaned w ithout security, upon security worth at least
15 per cent m ore than the am ount loaned so secured, provided the
total am ount ca n n ot exceed 25 per cent in all and separate note
must be taken for the unsecured and the secured loan, or 25 per cent
upon security worth at least 15 per cent m ore than the amount o f the
loan so secured, or 40 per cent upon commercial or business paper
actually owned b y the person negotiating same to the bank and are
endorsed b y such persons without limitation. But com m ercial banks
may accept drafts or bills o f exchange having not m ore than six months
sight to run growing out o f transactions involving im portation or
exportation o f goods or involving dom estic shipment o f goods providing
shipping docum ents are attached as security or are secured b y ware
house receipts or other munim ent o f title. N o bank shall hold as
security for loans m ore than 25 per cent o f the capital stock o f
another bank, nor loan In excess o f 10 per cent o f its assets upon the
security o f capital stock o f any corporation. A bank organized or
doing business in this state m ay refuse paym ent o f check or d raft,
except cashier’s check or bank draft, if presented for paym ent m ore
than six m onths from its date unless expressly instructed to pay B y
drawer or maker, and no liability shall attach to drawer or maker
by such non-paym ent. T o stop paym ent on a check the notice
therefor in writing m ust be delivered to the particular branch upon
which it is drawn.
A ny bank m ay purchase Class A stock in the Federal Bank Deposit
Insurance C orporation and with the approval o f the superintendent
o f banks m ay becom e a m em ber o f the Tem porary Federal D eposit
Insurance Fund.
In addition to all other holidays banks are perm itted to close all
day on Saturday. General practice, how ever, continues to be to
close on Saturday afternoon only.
B ills a n d N o te s . T he U niform N egotiable Instruments Law Is
In force. Statutes o f 1917. Chapter 751.
B re a ch o f P r o m is e . Breach o f prom ise to m arry, or for aliena
tion o f affections, are n o longer bases for action for damages; neither
is seduction o f a fem ale over the age o f consent a basis for action.
B u lk S a les.
(See Fraudulent Sales and Conveyances.)
C h a tte l M o r tg a g e s m ay b e m ade upon all personal property.
Including growing crops, except such as is not capable o f manual
delivery, articles o f wearing apparel and stock in trade o f merchandise.
Recording m ust be m ade o f growing crops in the C ounty where the
land is situated; if o f anim ate personal property other than growing
crops in the C ou n ty where the m ortgagor resides at tim e o f the m ort
gage, or if he is a non-resident then in the C ounty where the property
is at date o f m ortgage; o f all other personal property in the C ounty
where the m ortgagor resides at the date o f the m ortgage and also m
the C ounty where the property is located at that date, and to which it
m ay be thereafter rem oved. A s notice to third parties it continues
for four years on ly unless re-recorded. This provision does n ot a pply
to chattel m ortgage executed to secure paym ent o f order or decree o f
a court o f record, or o f indebtedness perm itted to be incurred b y the
Commissioner o f C orporations or that is m ade b y a public utility under
the Public U tility act. On a m otor vehicle the instrument m ust be
deposited with the state m otor vehicle department in lieu o f recording.
M oratorium on foreclosure under conditions has been extended
to July 1, 1941.
C o d e s. California laws have been codified under sixteen titles:
civil procedure, probate, civil, penal, political, agricultural, business
and professional, fish and game, harbors and navigation, insurance,
labor, m ilitary and veterans, school, streets and highways, vehicle,
welfare and institutions; and until codified they m ake a volu m e o f
general laws.
C o lla te ra ls . A re governed b y the law relating to pledges o f per
sonal property. D elivery o f the thing pledged is essential to the
validity o f the bailm ent. B efore the property can be sold the pledgee
must demand perform ance from the debtor, if he can be found, and
must give actual notice to the pledgor o f the tim e a n d p la c e at which
the property pledged will be sold, at such a reasonable tim e before
the sale as will enable the pledgor to attend, but notice o f the sale
may be waived b y the pledgor at any time. T he sale m ust be b y
public auction. T he pledgee, or a pledgeholder, m ay purchase the
property pledged when the same is sold a fp u b lic auction. A pledgee
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Federal Reserve Bank of St. Louis
1977
can not sell any evidence o f d ebt (collateral) pledged to him, except
the obligations o f governm ents, states, or corporations; but he m ay
collect the same when due.
C o n t r a c t s . Certain contracts are invalid unless the same or
some note or memorandum thereof is in writing. (See Statute of
Frauds.) A contract for personal services cannot be enforced specifi
cally but its breach m ay be com pensated b y damages.
C o n v e y a n ce s . An estate in real property, other than an estate at
will, or for a term not exceeding one year, can be created or transferred
only b y operation o f law, or b y an instrument in writing, subscribed b y
the party disposing o f the same, or b y his agent thereunto authorized in
writing. ' Leases o f agricultural land for a lo n g e r period than fifteen
years and o f city property for a longer period than ninety-nine years are
Void with some exceptions. A fee sim ple title is presumed to be in
tended to pass b y a grant o f real property, unless it appears from the
face o f the grant that a lesser estate was intended. A grant o f real
property m ay be m ade in the follow ing form : “ I, A . B ., grant to
C . D . all that real property situated in (insert nam e o f county) county.
State o f California, bounded (or described) as follow s: (H ere insert
description, or if the land sought to be con veyed has a well-established
descriptive name it m ay b e described b y such as for Instance: ‘ The
N orris Ranch. ’) W itness m y hand this (insert) d ay o f (insert m on th ).
19— A . B .” “ G ran t” implies present ownership in grantor, free from
incumbrances m ade or suffered b y grantor. Subsequently acquired
title passes to grantee, instrum ents entitled thereto m ust be recorded
in the cou nty where the property is situated. A n instrum ent o f
later date, acquired for a valuable consideration in fu ll faith, takes
precedence o f one o f earlier date b u t subsequently recorded. Joint
tenancies m ay be created b y the owner or owners b y w ritten and
recorded conveyance b y and to them selves.
C o r p o r a t io n s . Private corporations m ay now b e form ed b y three
or m ore persons. T he form er provisions holding each stockholder
liable for a pro rata o f debts have been repealed. A ll original papers
for organization are now filed with the secretary o f state. Certified
co p y o f articles m ust be filed with C ounty Clerk in C ou n ty where its
principal place o f business is. C apital stock o f a corporation organ
ized for pecuniary profit can on ly b e issued under authority o f the
State Comm issioner o f Corporations.
C o u r t s . Each cou nty has a Superior C ourt, with from one up to
fifty judges. Several o f the larger cities have M unicipal C ourts with
jurisdiction in law cases to $2,000. Such cities also have police
courts, and there are also ju stice’s courts in tw o classes according to
lim it o f jurisdiction. Trial courts are, in contem plation o f law, in
continuous session, holidays excepted.
Between the Supreme C ourt o f seven judges and the trial courts
there are D istrict Courts o f Appeal, o f which there are five divisions
o f three judges each. T he bulk o f appeals goes first t o these inter
mediaries, from whose decisions the Supreme C ourt m ay, in its dis
cretion, grant a further hearing before itself. Criminal cases involving
capital punishment and cases in equity and cases involving title o f
real estate or taxes are appealed directly to the Supreme Court.
A ll appellate courts have original jurisdiction for writs o f m andamus,
habeas corpus, etc.
D e p o s itio n s . T he deposition o f a witness out o f this State may\
be taken upon a com m ission issued from the court under the seal of
the court, upon an order o f the court, or a judge or justice thereof, on
the application o f either party, upon five days’ previous notice to the
other, plus one d a y’s additional notice for each one hundred miles
o f travel betw een residence o f witness and place o f deposition or by
stipulation o f the parties w ithout an order o f C ourt. I f the court be a
ju stice’s court, the com m ission shall have attached to it a certificate
under seal b y the clerk o f the superior court o f the cou n ty t o the effect
that the person issuing the same was an acting ju stice o f the peace at
the date o f the com m ission. I f issued to any place within the Um ted
States, it m ay be directed to a person agreed upon b y the parties, or if
they d o not agree, to any notary public, jud ge or justice o f the peace or
com m issioner selected b y the court, or judge, or justice issuing it. If
issued to any country out o f the U nited States, it m ay be directed to a
minister, ambassador, consul, vice-consul, or consular agent o f the
U nited States in such country, or to any person agreed upon b y the
parties or judge o f a court o f record in such country. D epositions must
be taken in the form o f question and answer. T h e words o f the witness
m ust be written dow n, in the presence o f the witness, b y the officer
taking the deposition or b y som e indifferent person appointed b y him.
I t m ay be taken down in short hand in which case it m ust be tran
scribed to long hand b y the person who took it down. W hen com
pleted, it m ust be carefully read to or b y the witness and corrected b y
him in any particular, if desired, b y writing, or causing his corrections
to *be written at the b ottom o f the deposition, and m ust then be sub
scribed by the witness. Corrections m ust be initialed b y officer before
whom deposition is taken. I f the parties agree in writing to any other
m ode, the m ode so agreed m ust be follow ed.
Depositions in this State. T he testim ony o f the witness in this
State m ay be taken b y depositions in an action at any time after the
service o f summons or the appearance o f defendant, and in a special
proceeding after a question o f fact has arisen therein. Id certain
enumerated cases. D eposition o f a party to the action m ay be taken
under a cross-examining statute.
Depositions for use out o f the State. A n y p a rty to an action or
special proceeding in a court or before a judge o f a sister state, m ay
obtain the testim ony o f a witness residing in this State, to be used in
such action or proceeding, in the cases m entioned follow ing: I f a
commission to take such testim ony has been issued from the court,
or a judge hereof, before which such action or proceeding is pend
ing. on producing the Commission to the Clerk o f the Superior C ourt
o f the cou nty in which such witness is to be exam ined, with an affi
davit satisfactory to him o f the m ateriality o f the testim ony, he
m ay issue a subpoena to the witness, requiring him t o appear and
testify before the com m issioner nam ed in the com m ission, at a specified
tim e and place.
D e s c e n t a n d D is t r ib u t io n o f P r o p e r t y . There is no dower
right, but all property acquired during continuance o f the marriage
relation (except b y gift, devise or inheritance) is com m unity property,
one-h alf o f which goes to the surviving spouse, and in absence o f
testam entary disposition the survivor takes all. A widow, however,
m ay have the whole estate, if less than $2,500, set off to her. A ll
property not com m unity is separate, and if not disposed o f b y will is
distributable; first to the surviving spouse and children. I f no sur
viving spouse then all to child or children. I f surviving spouse and
onq child, half to each; if m ore than one child one-third to surviving
spouse,: remainder to issue; in absence o f children one-h alf to the sur
vivin g spouse remainder to lineal descendants o f decedent or their
children. T hose next entitled to inherit are, in their order: father
and m other, or if neither, then brothers and sisters; if there are none
o f any o f these the surviving spouse takes all. I f there be no sur
vivin g spouse then the next o f kin take in equal degree. Illegitim ate
children inherit from the m other, and from the father where parentage
has been acknowledged in writing. W here w idow or w idow er dies
intestate, and there has been no issue, com m unity property goes half
and half to the lineal descendants o f each spouse. N o assignm ent o f
an interest, power o f attorney to act nor con tract for com pensation
o f an agent is o f any force until approved b y the court.
E x e m p tio n s . E xem ptions from attachm ent, judgm ent and forced
sale are very liberal, and the list is gradually increasing to include
som e o f the later inventions and im plem ents o f labor and production.
A n autom obile is now exem pt i f o f value o f $100 or less. U nem ploy
m ent and several other benefits under recent legislation are also
exem pt.
F r a u d . (F or Fraudulent Debtors, see Arrest.) In certain actions
involving m oney where fraud is charged, the debtor is subject to
arrest. These include actual fraud, always a question o f fact, and
promises m ade w ithout any intention o f perform ing; m isdirecting a
prospective hotel guest is a misdemeanor, as is also any false repre
sentations m ade for the purpose o f procuring pu blic relief.
1978
BANKING AND COMMERCIAL LAWS— CALIFORNIA
F r a u d u le n t S ales a n d C o n v e y a n c e s . Sale, transfer, or assign
m ent o f a substantial part o f stock in trade, except in ordinary course
o f business, and sale, transfer, assignm ent, or m ortgage o f fixtures or
equipm ent o f m erchant is void as to existing creditors unless seven
days prior thereto seller or purchaser record with C ou n ty Recorder a
notice o f such intended sale, transfer, etc. T h e notice m ust conform
t o certain statutory requirements.
H o lid a y s . T h e legal holidays are: Saturdays after 12 noon for all
pu blic business (banks m ay claim the entire d a y ); Sundays; January
1 (N ew Y ea r’s D a y ); February 12 (L incoln’s b irth d ay ): February 22
(W ashington’s b irth d ay ); M a y 30 (M em orial d a y ); July 4 (Inde
pendence D a y ); first M on d a y in Septem ber (Labor D a y ) ; Septem ber
9 (Admission D a y ); O ctober 12 (C olum bus D a y ); general election
d a y ; M a y and A ugust prim ary election da ys; N ovem ber 11 (Arm istice
D a y ) ; Thanksgiving D a y ; and D ecem ber 25 (Christmas D a y ). M o n
d ay is holiday i f holiday falls on Sunday. Injunctions and writs o f
prohibitions m ay be issued and served on any day. C ontracts m ade
on a holiday are valid. In the larger counties a designated ju d ge o f
the superior cou rt is available nights and every d ay in the year for
issuing and approving bail, original writs and issuance o f release for
a person’s property or title thereto.
H o m e s t e a d . T he homestead consists in the Interest o f the claim
ant, divided or undivided, in the dwelling house in which the claim ant
resides, and in the land on which the same is situated, selected, if the
claim ant be married, from com m unity property, or the separate
property o f the husband, or. with the consent o f the wife from her
separate property. T h e hom estead can n ot be selected from the
separate property o f the w ife w ithout her consent, shown b y her m aking
or join in g the declaration o f hom estead. T h e hom estead is exem pt
from execution or forced sale, except in satisfaction o f judgm ents
obtained. 1. B efore the declaration o f hom estead was filed for
record, and which constitutes liens upon the premises. 2. On debts
secured b y m ortgage or trust deed, o f date prior to declaration, or
proper execution subsequent. H om esteads m ay b e selected and
claim ed: 1. I f not exceeding $5,000 in value b y any head o f a fam ily.
2. I f not exceeding $1,000 in value, b y another person. U pon death
o f either spouse, if hom estead is selected from com m unity property
or from separate property o f spouse joining therein, title thereto vests
in survivor, otherw ise the heirs or devises o f the person whose p rop erty
was selected.
H u s b a n d a n d W ife . T h e husband is the head o f the fam ily.
H e m ay choose any reasonable place or m ode o f living, and the w ife
m ust con form thereto. In other respects their interests are separate
except as to com m unity property. N either husband nor w ife has
any interest in the separate p rop erty o f the other, and either m ay
enter in to any engagem ent with the other, or with any other person,
respecting separate prop erty, which either m ight if unmarried. A ll
p rop erty o f either, ow ned b y him or her before marriage, and that
acquired afterward b y gift, bequest, devise or descent, is the separate
p rop erty o f such person. A ll other p rop erty acquired after m ar
riage b y either husband or w ife or both , is com m unity prop erty,
excep t that a m arried wom an m ay acquire and hold shares in build
ing and loan associations as her separate p rop erty; m ay transfer
shares o f corporate stock generally as if unmarried. P rop erty con
v ey ed to a m arried w om an b y an instrum ent in w riting is presum ed
to b e her separate prop erty. P rop erty con veyed to husband and
w ife as such is presum ed to be com m unity property. A m arried
wcgnan m ay becom e a sole trader b y authority o f cou rt, thus con
vertin g a lim ited am ount o f com m unity p rop erty in to her separate
estate. T h e husband has the m anagem ent and con trol o f the com
m unity prop erty, with absolute pow er o f disposal other than testameritary, p rovided that he cannot m ake a gift o f the same or co n v e y
the same without valuable consideration, unless the w ife consents in
writing, either personally or b y her authorized agent, and p rovided
that in the execution o f any instrum ent b y which com m unity real
property, or any interest therein is leased for a longer period than one
year, or is sold, con veyed , or encum bered, the w ife and husband m ust
jo in in the execution o f any such instrum ent. T h e com m unity
p rop erty except earnings o f the w ife is not liable for the contracts
o f the w ife m ade before or after marriage, unless seem ed b y a pledge
or m ortgage thereof executed b y the husband. E xcept for the
necessaries o f life the husband is not liable for damages or torts com
m itted b y wife except in a case where he w ou ld be join tly liable with
her if the marriage did not exist. N either the separate property o f the
husband nor his earnings after marriage is liable for the debts o f the
w ife contracted before marriage, and the separate property o f the wife
is n ot liable for the debts o f her husband, nor for debts secured b y
m ortgage or other hypothecation o f com m unity prop erty unless ex
pressly assented to b y her in writing, b u t is liable for her own deists
contracted before or after marriage. C om m un ity property is not
liable for contracts o f the w ife m ade after marriage unless secured b y
pledge or m ortgage executed b y the husband. A husband and wife
m ay hold property as join t tenants, tenants in com m on, or as com
m unity p roperty. U pon death o f husband or wife intestate, the
entire com m unity prop erty goes to the survivor. Either the husband
or the w ife m ay subject one-h alf o f the com m unity prop erty to testa
m entary disposition b y will, the w ife’s right so to d o being subject
to special statutory conditions.
I n t e r e s t. T he legal rate o f interest is 7 per cent and is due upon
judgm ents after rendition and upon other obligations unless there is an
express con tract in writing fixing a different rate, which, how ever, is
limited to 10 per cent with severe penalties for any agreement or
subterfuge b y which the lender profits abov e that rate. On loans
o f $300 or less, secured b y pledge or ch attel m ortgage or assignment
o f wages, 10% annual interest m ay be agreed upon. A ll other charges
against the borrow er shall not exceed: on am ounts o f $100 or under,
2 M % per m on th ; on am ounts in excess o f $100. 2 % per m onth.
J u d g m e n t s . Judgm ents, including those o f inferior courts i f an
abstract be recorded with the cou nty recorder, are a lien on real
property for five years, and m ay be renewed b y an action, or still
enforced b y order o f cou rt. T he lien expires, how ever, unless the
judgm ent is renewed. (R ecording is required for all judgm ents
t o con stitu te a lien).
L ie n s . M echanics, material-men, contractors, sub-contractors,
artisans, architects, machinists, builders, miners, teamsters, dray
men and all persons and laborers o f every class perform ing labor
upon or furnishing material to be used in or furnishing appliances,
teams ana power contributing to the construction, alteration, or
repair o f any building, wharf, bridge, ditch, flume, aqueduct, well,
tunnel fence, machinery, railroad, wagon road, or other structure,
have liens upon the property upon which they have worked o r fur
nished material, and any person perform ing labor in a mining claim
has a lien upon the same, and the works ow ned and used by the owners
for reducing the ores from such mining claim, for the work or labor
done. T h e com m on carrier has a lien upon the luggage o f a passenger
for the paym ent o f his fare. One who sells real property has a ven
d or’s lien thereon. Im provers o f personal property, depositaries for
hire, veterinary surgeons, garages, livery stable keepers and persons
pasturing horses or stock, have a special lien, dependent upon posses
sion. Factors, warehousemen, banks, and laundry proprietors have
a general lien, dependent on possession, on any personal property in
their hands. Seamen have general liens independent o f possession.
Owners o f animals used for propagating purposes have a lien for the
agreed price upon the offspring. Loggers rendering services upon
logs, bolts and other tim ber have a lien thereon for the am ount due
for their personal services. A personal judgm ent m ay b e had against
the debtors with or without attachm ent for security, w ithout infringing
the right to a m echanic’s lien when legally established. Landlords and
innkeepers have liens on the personal p roperty o f guests.
Every person perform ing work or labor in, with, about, o r upon any
threshing machine or engine, horse-power, wagon, or other appliance
thereof, while engaged in threshing has a lien thereon to the extent
o f the value o f his services, for ten days after ceasing work or labor,
provided, within that tim e, an action is brought to recover the amount
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Federal Reserve Bank of St. Louis
o f the claim, persons repairing or altering any personal p roperty have
a lien for the reasonable value o f such service. Pest destruction in
orchards b y authority o f statute creates a lien against the realty
in v olv ed in fa vor o f the cou n ty causing such destruction. T h e lien
o f a garage m an fo r work on a vehicle (dependent upon possession) is
valid up to $100 if the w ork is d one on the order o f other than the
ow ner; b u t n ot fo r m ore unless the owner had previous notice o f the
w ork to be done.
L im it a t io n s . I f real estate Is held adversely for five years, such
adverse possession ripens into title if claim ant pays taxes for five years,
except against infants and persons under disability. T he periods pre
scribed for the com m encem ent o f actions other than for the recovery
o f real p roperty, are as follow s: W ithin six years, upon certain corpora
tion bonds and notes. W ithin five years: (1) An action upon
a judgm ent or decree o f any cou rt o f the U nited States, or o f any
State within the U nited States. (2) A n action for mesne profits
o f real property. (3) A ction b y heir unknown at tim e an escheat
estate is distributed, counting from date o f decree. W ithin four years:
(1) A n action upon any contract, obligation or liability founded upon
an instrum ent in writing, executed in this State. (2) An action to
recover a balance due upon a m utual open and current cou nt or upon
an open book account. W ithin three years: (1) An action up on a
liability created b y statute, other than a penalty or forfeiture. (2)
An action for trespass upon real property. (3) An action for taking
detaining or injuring any goods or chattels, including actions for the
specific recovery o f personal p roperty. (4) A n action for relief on the
ground o f fraud or mistake, the cause o f action in such case n ot t o be
deem ed to have accrued until the discovery b y the aggrieved party o f
the facts constituting fraud or m istake: W ithin tw o years: (1) An
action upon a contract, obligation or liability not founded upon an
instrum ent o f writing, (2) A n action on a debt, liability or obligation
evidenced b y an abstract, guarantee or certificate o f title; and such
action shall not be deem ed to have accrued until the discovery o f the
loss or damage. (3) A n action for foreclosure o f a lien securing an
assessment against real p rop erty fo r street im provem ent: b u t tim e
does not com m ence to run until the last installment becom es due. (4)
An action against a sheriff, coroner, or constable, upon a liability in
curred b y the doing o f an act in his official capacity, and in virtue o f his
office, or b y the om ission o f an official duty, including the non-pay
m ent o f m oney collected upon an execution; but this subdivision doe*
not ap p ly to an action for an escape. W ithin one yea r: (1) An action
upon a statute for a penalty or forfeiture, when the action Is given to
an individual or to an individual and the State, except when the
statute im posing it prescribes a different lim itation. (2) An action
upon a statute, or upon an undertaking in a crim inal action, for a
forfeiture or penalty to the people o f this State. (3) An action fo r
libel, slander, assault- battery, false imprisonment, or seduction, or
for Injury to or for the death o f one caused b y the wrongful act or
neglect o f another, or b y a depositor against a bank for the paym ent
o f a forged or raised check, or a check that, bears a forged or unauthor
ized endorsem ent. (4) A n action against a sheriff, or other officer for
the escape o f a prisoner arrested or imprisoned on civil process.
(5) An action against a m unicipal corporation for damages or injuries
to p roperty caused b y a m ob or riot. W ith in six m onths. (1) An
action t o recover property seized b y tax collector. (2) T o recover
corporation stock soid fo r delinquent assessment. N in ety' d ays for
recovery o f or conversion o f personal prop erty, bags, trunks, etc.,
le ft in hotel, lod ging house, etc. T o actions brought to recover
m on ey or other p rop erty deposited w ith any bank, banker, trust
com p any, or savings and loan society , there is n o lim itation. I f
when the cause o f action accrues against a person, he is out o f the
State, the action m ay be com m enced within the term herein limited,
after his return to the State, and if, after the cause o f action accrues,
he departs from the State, the tim e o f his absence is not part o f the
tim e limited for the com m encem ent o f the action. And if the person
entitled to bring the action be, at the tim e the action accrued, either
a m inor, insane, imprisoned for a term less than life, or a married
wom an, and her husband is a necessary party with her in com m encing
such action, the tim e o f such disability is n ot a part o f the tim e lim ited
for the com m encem ent o f the action . N o acknow ledgm ent or prom
ise is sufficient to take a case out o f the operation o f the statute o f
lim itations, unless the same is in writing, signed b y the party t o be
.charged. P art paym ent will not take the case out o f the statute o f
lim itations. W here a cause o f action has arisen in another State,
and w ould be barred b y the statute o f lim itations o f that State, an
action cannot b e m aintained here, except in favor o f one w ho has
been a citizen o f this State and has held the cause o f action from the
tim e it accrued. There is no lim itation upon actions to recover m oney
or property with banks or trust com panies. (See A ccounts.)
There are now in force various m oratorium acts concerning m ortgage
foreclosures, tax redem ptions, building and loan operations and similar
matters, which for the present m od ify form er statutes o f lim itation,
which are o f a tem porary character, and changed with each session of
the legislature. A c t o f 1941 further extends tim e t o July 1, 1943.
M a rr ie d W o m e n . A married woman m ay be sued without her
husband being joined as a party and m ay sue without her husband
being join ed as a party in all actions, including those for injury to
her person, libel, slander, false im prisonm ent, or m alicious prosecution,
or for the recovery o f her earnings or concerning her right or claim to
the hom estead property. A married wom an m ay becom e a sole
trader by the judgm ent o f the superior cou rt o f the cou nty in which
she has resided for six m onths next preceding the application. The
husband o f the sole trader is not liable fo r any debts con tracted b y
er in the course o f her sole trader’s business unless contracted upon
his written consent. A married wom an m ay con vey her separate
property w ithout consent o f her husband, and is not liable for the debts
o f her husband, b ut is liable for her own debts contracted before or
after her marriage. She m ay contract as a fem m e sole so as to bind
her separate property. T h e wife m ay m ake a will o f her separate
property and under statutory conditions p f one-half the com m unity
property. T h e earnings o f the wife are not liable for the debts o f her
husband unless it be com m unity property, and are liable for her
contracts.
M e c h a n ic s ’ L ie n s . (See Liens.)
M o r tg a g e s . A ny interest in real property which is capable ol
being transferred m ay be m ortgaged. A m ortgage can be created,
renewed, or extended only by writing executed with the formalities
required in the case o f a grant o f real property. It requires the
signature o f the wife except as to property which is the separate
estate o f the husband, and in practice the w ife ’s signature should
always be required. E very transfer o f an interest in real property,
other than in trust, m ade only as the security for the perform ance
o f any act. is to be deem ed a m ortgage, and the fact that the transfer
was m ade subject to defeasance on a condition m ay, for the purpose
o f showing such transfer to be a m ortgage, be proved (except as against
the subsequent purchaser or encum brancer for value and without
notice) although the fact does not appear b y the terms o f the instru
m ent. A m ortgage is a lien upon everything that passes by a grant
o f the property. A m ortgage does not entitle the m ortgagee to the
possession o f the property. T h e assignment o f a d ebt secured b y a
m ortgage carries with it the security. W hen a m ortgage is satisfied
or the m ortgage indebtedness paid, the m ortgagee must satisfy the
m ortgage oi record under penalty. A m ortgagee m ay foreclose the
right o f redem ption o f the m ortgagor. (See also Trust D eeds.)
T em porary m oratorium measures have been continued b y the 1941
legislature to July 1, 1943.
N e g o t ia b le I n s t r u m e n t s . T h e U niform N egotiable Instrum ents
A ct adopted. (See com plete text follow ing “ D igest o f Banking and
Com m ercial Laws.)
N o te s a n d B ills o f E x ch a n g e . (See Bills and N otes.)
P le d g e
(See Collaterals.)
P o w e r s o f A t t o r n e y . An attorn ey in fa ct m ay be appointed for
any purpose fo r which an agency can lawfully be created. Powers o f
BANKING AND COMMERCIAL LAWS— COLORADO
attorney can only be conferred b y an instrument in writing subscribed
by the principal which must particularly specify the powers con
ferred. If the instrument contains a power to con vey or execute
Instruments affecting real property. It must be duly acknowledged
and must be recorded in the cou nty within which the real property
to be con veyed or affected is situated. N o such instrument which has
been so recorded is revoked b y any act o f the party b y whom it was
executed, unless the instrument containing such revocation is also
acknowledged or proved, certified, and recorded in the sam e office
in which the instrument containing the power was recorded. When
an attorney in fact executes an instrument transferring an estate
In real property, he must subscribe the name o f his principal to it.
and his own name as attorney in fact.
P r o b a te L a w . T h e superior court has jurisdiction o f proceedings in
probate, which m ust be instituted (1) In the cou nty in which the
decedent was a resident; (2) in the county in which he m ay have died,
leaving estate therein, he not being a resident o f the State; (3) in the
county in which any part o f the estate m ay be, if the decedent died out
o f the State and was not a resident. (4) In any cou nty in which any
part o f the estate m ay be, or the decedent not being a resident o f the
State nor leaving an estate in the cou nty o f death. (5) In other cases
where application is first made. A n y person interested m ay petition
for probate o f a will or m ay contest such probate before letters issue
or thereafter within six months. I f no homestead has been previously
selected, the cou rt m ust select, designate and set apart and cause
to be recorded a hom estead for the use o f the surviving husband
or wife, or o f the m inor children, or if there be no surviving hus
band or wife, then for the use o f the m inor children out o f the com m on
property, or out o f the real estate owned in com m on b y the decedent
and the person or persons to whom the homestead is set apart, or
if there be no com m on property and no such join tly owned property,
then out o f the real estate belonging to the decedent as his own separate
property. P roperty so set apart is not subject to further adm in
istration. I f upon the return o f the inventory it appears that the
value o f the whole estate does not exceed $2,500. the court m ay set
apart the whole o f the estate for the use and support o f the widow
o f the deceased, and if there be no widow, then to the minor children
o f deceased. W here an entire estate is o f personal p roperty o f less
than $1,000 value no cou rt proceedings are necessary. Sales encum
brances and im portant leases m ust be sanctioned b y cou rt order.
(See Administration o f Estates, Claim s against Estates, D escent and
Distribution.)
P r o t e s t. (See Bills and N otes.)
R e p le v in . There is no action o f replevin in this State, but the
action o f claim and delivery is a substitute and very similar in its
provisions.
S ale o f S to c k S h a re s. Perm it must be obtained from State C or
poration Com m issioner on all original issues o f stock o f corporations
organized for pecuniary profit. W e have an elaborate “ Blue S k y ”
Law.
S ta t u t e o f F r a u d s . A will must be In writing, except a nun
cupative will. (See W ills.) An agreement not to be performed
within a year from making it must be in writing; also a special prom
ise to answer for the debt, default, or miscarriage o f another with
certain statutory exception which in the State are similar to those in
m ost other jurisdictions; also agreements made In consideration o f
marriage other than a m utual promise to m arry; also an agreement
for the sale o f goods and chattels or things in action at a price not
less than $500, unless the buyer accept and receive part o f the same
or pay any part o f the consideration. G oods manufactured especially
for the buyer, not suitable for general sale, are excepted from this
rule. *No estate in land will pass other than leases not to exceed one
year, unless in writing. An agreement authorizing or em ploying an
agent or broker to purchase or sell real estate for com pensation or
for a com m ission; an agreement b y its terms not to be performed in
the lifetime o f the prom isor or to make, devise or bequeath or m ake
any provisions for any person by will, must be in writing. N o evi
dence is admissable to charge a person upon representations as to the
credit o f another, unless the representations be in writing. H owever,
where prom isor has received property to apply pursuant to promise
or a discharge o f an obligation in consideration o f the promise, or
where a creditor parts with value or where the new promise is sub
stituted for the old debt, or where levy or execution is released or
there is benefit m oving to promise from any party or where a factor
undertakes for a com m ission to guarantee a sale, contracts to answer
for the default o f another need not be in writing. Transfer o f personal
property capable o f manual delivery, except wine in cellars and tanks,
when not accom panied b y delivery and change o f possession are
deemed fraudulent as to third parties unless notice o f intention o f
sale is recorded seven days before transfer is m ade in accordance with
law.
S u p p le m e n t a r y P r o c e e d in g s . W hen an execution is returned
unsatisfied, the judgm ent creditor can obtain an order requiring the
judgm ent d eb tor to appear and answer concerning his property before
the judge or referee.
T a xes. On the fifth d a y o f Decem ber o f each year taxes becom e
delinquent, except the last half o f the real property taxes, and there
after 8 per cent is added for d elin q u en cy ;'p rovid ed , that if they
be not' paid before the 20th d ay o f April next succeeding, 5 per cent
Is added for delinquency. On the 20th day o f April, o f each year, all
the unpaid portion o f the remaining one-half o f the taxes on all real
property is delinquent, and thereafter 3 per cent is added for delin
quency: and provided further, that the entire tax on any real property
m ay be paid at the tim e the first installment as above provided is due
and payable; and provided further, that the taxes on all personal
property, unsecured b y real property, shall be due and payable
imm ediately after the assessment o f said personal property is made.
Legislation o f 1935 imposes incom e taxes o f practically 51 % o f those
provided b y Federal laws. There is also a sales tax o f 3 % except
on foods. B y m oratorium legislation in 1935 and 1937 interest and
penalties on tax delinquincies m ay be avoided under certain tem
porary conditions. Inheritance taxes are also levied on estates o f
deceased persons with exem ptions o f lim ited amounts.
T r u s t D eed s. Trust deeds as security are in general use, and are
usually preferred to mortgages b y banks and other lenders, as a right
o f redem ption does not exist after foreclosure o f trust deed b y trustee’s
sale. Also, the m ethod o f foreclosure is m ore sim ple. T o foreclose
the beneficiary must record with the C ounty R ecorder a three-months
notice o f his election to cause the property to be sold and thereafter
the trustee must give notice o f tim e and place o f sale by posting in
statutory manner and b y publishing cop y once a week for twenty
days in newspaper o f general circulation. Should such sale result in a
deficiency, judgm ent for same m ay he recovered in appropriate action,
but action therefor must be begun within three m onths after the
tim e o f sale. (See M ortgages.) T rust Deeds m ay also be foreclosed
b y an action in cou rt
>
A tem porary m oratorium act also modifies foreclosure proceedings
under trust deeds up to July I, 1943.
W ills . E very person over the age o f eighteen years, o f sound
mind, may, b y last will, dispose o f all his estate, real and personal.
A married woman m ay dispose o f all her separate estate b y will with
out the consent o f her husband, and m ay alter or revoke the will in like
manner as if she were single; she m ay also under certain conditions,
dispose o f b y will one-half o f the com m unity property. Her will must
be executed and proved in like manner as other wills. E very will
other than a nuncupative will must be in writing, and every will other
than an holographic will and a nuncupative will, must be executed and
attested as follow s: 1. It m ust b e subscribed b y the testator himself,
or some person in his presence, and by his direction must subscribe
his name thereto. 2. T h e subscription must be made in the presence
o f .the attesting witnesses, or acknowledged b y the testator to them
to have been m ade b y him o i b y his authority. 3. T h e testator
must, at the tim e o f subscribing or acknow ledging the same, declare
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1979
to the attesting witnesses that the instrument is his will, and 4. There
must be tw o attesting witnesses, each o f whom must sign his name
as a witness at the end o f the will, at the testator's request, and in
his presence. An holographic will is one that is entirely written, dated,
and signed b y the hand o f the testator himself. It is subject to no
other form , and m ay be m ade in or out o f this State, and need not be
witnessed. A nuncupative will m ay dispose o f personal property
only and o f value not exceeding $1.000. A witness to a will should
always write his name and residence. All devises or gifts to a sub
scribing witness are void unless there are tw o other com petent sub
scribing witnesses unless such witness is entitled to a sh a re, if there
had been no will. N o will m ade out o f this State is valid as a will
In this State, unless executed according to the provisions o f the code,
except that a will made in a State or country in which the testator
is dom iciled at the time o f his death, and valid as a will under the
laws o f such State or country is valid in this State as to personal prop
erty. W ills proven out o f state m ay be recorded in cou nty where
testator has left real estate. A ncillary administration is usually
necessary.
Bequests for charity are void unless m ade m ore than thirty days
before death and must in no case exceed m ore than one-third o f the
estate unless there are no legal heirs, except that bequests to the
State or a political subdivision or to educational institutions exem pt
from taxation, and other similar institutions, under certain conditions,
are not so limited. Also, bequests to charity b y will made six months
or m ore before death are not so restricted unless there are living
spouse, child, grandchild or parent, and these m ay in writing executed
at least six m onths before the testator’s death w aive the restriction.
W ills are revoked b y marriage! unless provision for the same or an
intention not to provide clearly appears.
SYNOPSIS OF
TH E L A W S OF COLORADO
RELATING TO
BANKING AND COMMERCIAL USAGES
R evised b y J. Frederick Schneider, Attorney, at Law ,
M a jestic .Bldg., D enver.
(See card in A ttorneys List)
A c k n o w le d g m e n t s . T h e statu tory form and m anner o f rea
estate acknowledgm ent are as follow s:
T he foregoing instrument was acknow ledged before m e th is ...........
day o f ........................ 1 9 . . . . , b y .............................................................(if by
natural person or persons here insert name or nam es; if b y person
acting in representative or official capacity or as attorney-in-fact,
then insert name o f person as executor, attorney-in-fact or other
capacity or description; if by officer o f corporation, then insert name
o f such officer or officers as the president or other officers o f such
corporation, naming it. I f acknow ledgm ent is taken by notary
public, the date o f expiration o f com m ission shall also appear on
the certificate.)
W IT N E S S m y hand and official seal. ( I f acknowledged before
notary, the date on which his com m ission expires must be here stated.)
T itle o f Officer.
F or chattel m ortgage form , see “ C hattel M ortgages.” T he
acknowledgm ent m ay be before the clerk o f any court o f record,
com m issioner o f deeds, or notary public, or certain other specified
officers.
A d m in is t r a t io n o f E sta te s . All dem ands not exhibited In six
m onths are barred, unless such creditor can find other estate o f the
deceased not inventoried. Claims are classified for paym ent, ordinary
debts being in the fifth class. Creditors having liens can foreclose
at any tim e by court action, but cannot foreclose without court
action within one year without permission o f court. Administration
is granted to surviving husband or widow, or next o f kin o f an intestate,
i f they will accept or are not disqualified: if no such relative appears
within twenty days after death o f intestate, administration may be
granted to a creditor; if no creditor appears in ten days after twenty
days from death o f intestate, or if next o f kin files written relinquish
m ent cou nty judge may select administrator. In counties having a
population o f m ore than 50.000 on default o f relatives administration
is made by public adm inistrator
An abbreviated form ot adminis
tration is provided for estates o f $2,000 or less, and where less than
$300, administration may be waived. (See W ills; H usband and W ife;
Descents and Distributors.)
A s s ig n m e n t s . Assignments for the benefit o f creditors are pro
vided for. Assignments o f wages not due at the tim e o f the assign
m ent, or o f other sums to becom e due to the assignor, are invalid unless
recorded with the recorder o f the cou nty where the wages are to be
earned, or the sums are to becom e due, within five days from the date
thereof. I f the assignor is a married man or wom an, residing with the
wife or husband, he or she must join in the assignment. There are also
provisions regulating assignments to wage-brokers and others.
A t t a c h m e n t s . In actions on contracts, express or im plied, or in
tort against a non-resident, the plaintiff m ay have the defendant’s
property attached, upon filing a bond in double the amount sued for,
with affidavit “ showing the existence o f statutory grounds, consisting,
in general, o f the defendant’s non-residence or fraud.” Garnishee pro
cess will issue in aid o f attachm ent when m oney or property o f the
debtor is found in possession o f third persons.
Banks. K inds Permitted. Banks o f Deposit and Discount, which
m ay have a savings department and a trust departm ent; Trust,
D eposit and Security Com panies; Trust com panies, which m ay
engage in general banking; Industrial Banks; Credit Unions. T he
discussion which follow s is necessarily lim ited to Banks o f D eposit
and D iscount.
Supervising Authority. T h e State Bank Comm issioner.
Incorporators. A n y number o f persons not less than three, s
Officers and Directors. T h e officers, usually a president, vicepresident and cashier, are elected annually b y the board o f directors.
T he directors m ay be from three to tw enty-one in number, must give
bond, must own a fixed amount o f stock free from indebtedness, and
must never have been convicted o f a felony or a violation o f banking
laws. T hey must attend meetings m onthly.
Capital Stock and Surplus Requirements. T h e minimum paid-up
cash capital required to com m ence business is $25,000 in cities or
towns o f 4,0 JO or less; $50,000 in cities o f from 4,000 to 50.000; $100,000
in cities o f m ore than 50.000; to which must be added, in each case,
a cash surplus o f 10% o f the capital stock. T h e capital and surplus
thereafter maintained must also equal 10% o f the average daily
deposits for the preceding calendar year*
1980
BANKING AND COMMERCIAL LAWS— COLORADO
Reserves. Reserves are required to b e m aintained in an am ount
equal to 15% o f all deposits
Examinations and Reports. Exam inations b y the State Bank
Comm issioner are m ade at least tw ice a year; directors m ust prepare
and file a detailed report at least tw ice a year, 5 m onths apart. T he
dates o f exam ination and reports are determ ined b y the State B ank
Comm issioner.
Loan Limitations. N o loans are perm itted on a bank’s own stock
or to its officers. Loans on real estate cannot exceed 2 5 % o f its
interest bearing securities except that up to 5 0 % o f its savings deposits
m ay be so invested. N o com m ercial loan can exceed 15% o f the
bank’s capital and surplus except that loans fully secured b y collat
erals o f definite value in excess o f the loan are not so limitedStockholders’ Liability. Shareholders are individually liable for
the corporations’ indebtedness to the extent o f double the am ount
o f their stock therein, at par, in addition to the am ount invested in
such shares. This liability is n o t subject to offsets on account o f
deposits.
Branch Banking is prohibited.
Federal D eposit Insurance C orporation authorized to act as liqu i
dator o f closed banks.
Federal D eposit Insurance. Banks authorized to m ake loans in
co-operation with N ational H ousing A ct. M ortgages insured b y the
Federal H ousing Adm inistrator eligible for investment.
Dividends. Before dividends are declared, tw enty-five per cent
o f net profit for the period p u t into surplus fu n d until surplus fun d
equals one hundred per cent o f capital o f bank.
B a n k s , M is c e lla n e o u s . Savings Banks, Trust C om panies, either
Independent or as a part o f a bank, Industrial Banks and Credit
Unions are all authorized and are regulated b y the State B ank C om
missioner.
*
B lu e S k y L a w . A ll corporations organized in C olorado who desire
to place on sale to the public, securities in certain classes m ust com p ly
with the “ Securities A c t ” or “ B lue Sky Law ” o f 1923 as amended
in 1931, which provides that tw o copies o f prospectus issued shall be
filed with the Secretary o f State setting forth certain inform ation
with reference to the com pany and the Secretary o f State shall charge
and collect a fee o f $10 for the filing o f such prospectus. Securities
salesmen must further register under the A ct o f 1931 with the Secre
tary o f State. In 19?3 an am endm ent was passed extending the
scope o f the form er acts, and em powering the Secretary o f State to
prohibit the sale o f securities b y insolvent, unlawful, fraudulent
or unsound issuers.
B u ild in g & L o a n A s s o c ia tio n s are authorized and are regulated
b y a Building and Loan D epartm ent under a com plete cod e adopted
and in effect June 8,1 9 33 , and am ended b y A ct o f Legislature, effective
M a y 17, 1939.
C h a tt e l M o r tg a g e s as between the parties are good until the
indebtedness is paid or barred b y lim itation. T o be valid as to third
persons they must state the amount and m aturity o f the debt, describe
the property, and be acknow ledged and filed or recorded, T he form
o f acknow ledgm ent is “ This m ortgage was acknow ledged before me
th is ................day o f ......................... . 1 9 .........b y ......................................
m ortga gor” ; if b v a corporation or partnership, the form is varied to
read “ b y .......................................... f o r . ........................................m ortga gor."
T h e notary m ust state when his com m ission expires. T h e lien
remains good until the m aturity o f the Indebtedness b u t not to exceed
tw o years if for not over $2,500, for five years if for from $2,500 to
$20.000, and for ten years if for over $20,000, but as to m ortgages for
over $2,500 a sworn statem ent m ust be filed every tw o years beginning
with the second anniversary showing good faith and the am ount
unpaid. Possession m ay be taken at any tim e within six m onths after
the m aturity named, or to which it m ay have been extended, and the
m ortgage m ay be extended or further extended b y filing or recording
a sworn statem ent showing total paym ents, am ount unpaid, that the
debt is due, and that it is extended to a definite stated tim e, not exceed
ing tw o years. D uring said six-m onth period the d ebt m ay be paid
and the lien discharged as at m aturity. M ortgages o f stocks o f
goods which reserve possession and pow er o f sale to m ortgagor, are
void as against creditors and bona fide purchasers. Disposing o f
m ortgaged property is larceny. C hattel mortgages upon household
goods used b y the fam ily, when m ade b y husband or wife residing
with the other, m ust be m ade b y husband and wife join tly.
C o lla t e r a ls . Shares o f stock m ay be validly pledged only b y
delivery o f the certificate properly indorsed. Persons holding stocks
in corporations as collateral security are not personally liable as stock
holders for corporate debts. A pledgee o f stock m ay represent same
at corporate meetings.
C o m m e r c ia l P a p e r is governed b y the uniform N egotiable Instru
ments A ct adopted in 1897. See com plete text o f uniform law else
where in this publication.
C o n d it io n a l S a les. C onditional sales contracts give the seller
no rights as against purchases for value w ithout notice from a buyer
in possession, and should never be used in this state, a chattel m ort
gage being the only satisfactory form o f security.
C o n v e y a n ce s . N o join t tenancy in real p roperty unless expressly
declared in the deed, except in certain particular cases. Unless
so declared grantees shall be deem ed tenants in com m on, Lands
not in possession m ay be con veyed. N ot necessary for wife to join
in deed except in a con veyan ce o f a m ortgage or a hom estead,
entered as such o f record. W itnesses are unnecessary. Seals are
not necessary excepting in the case o f corporations, but a printed or
ink seal is advisable. U nacknowledged deeds are deem ed notice from
the date o f filing but they can not be read in evidence unless subse
quently acknow ledged or proved, unless they are on record for over
tw enty years. (See Acknow ledgm ents; H usband and W ife.)
C o r p o r a t io n s . C olorado corporation laws are broad and flexible
Three or m ore residents or non-residents m ay form a C olorado corp
oration b y signing, acknow ledging and filing with the Secretary o f
State a certificate stating the name (containing “ A ssociation,” “ C om
p a n y,” “ C orp oration ,” “ C lu b ," “ Incorp orated .” “ L im ited.” “ So
ciety,” “ U nion,” “ S yndicate,” “ C o .,” “ In c.,” or “ L td .” ), objects,
term o f existence, which m ay be perpetual, the am ount o f stock which
m ay have any or n o par value and m ay be divided into classes with
respect to voting power, preferences, participation, etc., the number
o f directors, who m ay be classified according to term o f office, location
o f principal office, and whether cum ulative voting is allow ed, and,
If desired, special provisions lim iting or regulating powers o f the
com pany, directors, stockholders or any class thereof, orovidin g -for
com prom ises between the corporation and its creditors or stock
holders, giving the board o f directors power to sell or m ortgage, giving
to stockholders a preem ptive right to subscribe to additional stock
issues, requiring m ore than the legal proportion o f voting for cor
poration action, or perm itting the directors to m eet out o f the state
or to m ake by-laws. Filing fees are $20 plus 20c per thousand capital
in excess o f $50,000 capital or shares o f no par stock, plus $5.00 for
certificate. Stock m ay be issued full paid and non-assessible for prop
erty or services. Stockholders are liable for the am ount remaining
unpaid on stock. W hen fu lly paid a certificate thereof should be filed.
Stock is transferred only b y delivery o f the certificate, unless the b y
laws otherwise provide for. Unless the certificate o f incorporation
otherwise provides, m ining and m anufacturing com panies can encum
ber their property only b y authority o f a m ajority o f stockholders.
The certificate m ay be amended in ap y respect excepting to change its
original purpose. T h e term o f existence m ay be extended from tim e
to tim e and the corporation m ay be dissolved b y a vote o f two-thirds
o f the stockholders. Foreign corporations are prohibited under
penalty from transacting business until they file a cop y o f their charter
o f incorporation and a certificate identifying the act under which it
is organized and a certificate appointing an individual or corporate
agent for the service o f process and pay a fee o f $30 plus 30c on each
thousand dollars in excess o f $50,000 represented b y capital In C olo
rado, plus $5.00 for a certificate o f authority and $5.00 for designating
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agent. Foreign corporations cannot m ortgage property as against
citizens w ithout published notice. E very corporation foreign or
dom estic must on or before M arch 15th. or the next business day,
file an annual report as to its officers, stock and condition, on forms
furnished b y the Secretary o f State, paying a fee o f $5.00, unless the
capital is $10,000 or less when the fee is $1.00, and for w ilful con
cealment o f any material fact or failure to file such report the directors
and officers b ecom e liable for the debts contracted in the preceding
calendar year up to $1,000 each. An annual license tax o f $10.00
plus 10c per thousand dollars capital or shares o f no par stock above
$100,000 must be paid b y all foreign or dom estic corporations on or
before M a y 1st, failure to p ay resulting in forfeiture or right to do
business sublect to reinstatem ent within tw o years.
Special statutory provisions in addition to those governing general
business corporations ap p ly to title and guaranty, banking, insurance,
mining, telegraph, ditch and reservoir, flum e and pipe line, water
users, toll road, bridge and ferry, gas, cem etery, cooperative, religious
and for non-profit and other corporations.
Other provisions o f the R evenue bill, approved August 4, 1917,
and this act regarding annual reports, assessment o f tangible and
intangible property, etc., to o volum inous to be quoted, m ake It
advisable that care should be exercised b y both dom estic and for
eign corporations operating in the State to acquaint themselves fully
with its requirements.
D e p o s itio n s . T he deposition o f a witness o u t o f the State shall
be taken upon com m ission issued b y the clerk o f the cou rt where
the suit is pending on the application o f either party on five days'
previous notice to the other, which notice shall fcya accom panied
b y a co p y o f the interrogatories to be attached to tne com m ission.
It m ay be issued to a person agreed upon b y the parties or to any
judge or justice o f the peace, or to a com m issioner appointed b y the
governor o f the State to take affidavits and depositions in other States
and Territories, or to a notary public. T he adverse party m ay file
and have attached to the com m ission such cross-interrogatories as
he m ay desire. Parties m ay agree b y written stipulation to take
the deposition orally, or, upon proper cause shown, m ay obtain an
order o f court directing it to b e so taken. D epositions can be taken
at any tim e after starting suit. E ither p a rty m ay have a deposition
taken in this state at any tim e after com m encing suit and m ay therein
exam ine the adverse party as under cross-examination.
D e s c e n ts a n d D is tr ib u t io n s . T h e estate o f an Intestate descends
one-half to the surviving husband o r wife, and the residue to the
surviving children and descendants o f children, if a n y; if none,
then the whole descends to such surviving husband or wife. E xcept
as enumerated the estate o f every intestate descends: 1. T o his
children surviving, and the descendants o f his children who are dead,
the descendants collectively taking the share which their parents
would have taken if living. 2. I f no children nor their descendants,
then to his father and m other, share and share alike, and if one dead,
then to the other: if no father or m other, then to his brothers and
sisters, and to descendants o f brothers and sisters w ho are dead,
the descendants collectively, taking the share o f their imm ediate
ancestors in equal parts. 3. I f none o f the foregoing living, then to
the grandfather, grandmother, uncles, aunts and their descendants,
the descendants taking collectively the share o f their imm ediate
ancestors in equal parts. 4. I f none o f the relatives abov e enu
merated be living, then to the nearest lineal ancestor and their descend
ants, the descendants collectively taking the share o f their im m ediate
ancestors in equal parts. A ll posthum ous children or descendants
o f the intestate, inherit as if born in the lifetim e o f the intestate,
and all children o f the half blood and all legally adopted children
shall inherit as children o f the whole blood. Illegitim ate children
Inherit if parents subsequently interm arry.
C on victed M urderers
shall not inherit property o f victim .
D o w e r. C om m on Law D ow er and curtesy are abolished, as such,
but neither husband nor wife can b y will devise m ore than one-half
o f her estate away from the other without his consent.
E x e m p tio n s . T hese consist, in brief, o f a $2,000 hom estead, 60%
o f the wages o f the head o f a fam ily, and specified personal property
o f certain classes o f persons o f from $100,00 to $300,00 in value.
F ra u d s , S ta t u t e o f . T he follow ing m ust be in w riting: C on
tracts for leasing o f land fo r period longer than one year or for the
sale o f lands, or any interest in lands; every agreem ent which by
its terms is not to be perform ed within one year: every special
prom ise to answer fo r the debt, default or miscarriage o f another;
every agreement, prom ise, or undertaking m ade upon consideration
o f marriage, except mutual promises to m arry, and every contract
for tbe sale o f any goods, chattels, o r things in action, for the price
o f $50 or m ore, unless the buyer accepts and receives part o f such
goods or the evidence o f som e o f them , or the buyer at the time
pays part o f the purchase m oney.
G a r n is h m e n t . (See A ttachm ents.)
H o lid a y s . T h e legal holidays are: Sundays; January 1 (N ew
Y e a r’s D a y ); February 12 (L incoln's b irth d ay); February 22 (W ash
in g ton ’s b irth d ay); M a y 30 (M em orial D a y ); July 4 (Independence
D a y ); A ugust 1 (C olorado D a y ); first M on d a y in Septem ber (Labor
D a y ) ; O ctober 12 (C olum bus D a y ) ; general election d a y ; N ovem ber 11
(Arm istice D a y ); Thanksgiving D a y ; Decem ber 25 (Christm as D a y ).
I f any such holiday farlls on Sunday, the M on d a y follow ing or the
preceding Saturday in the case o f N ovem ber 11th are legal holidays
for all purposes including presentment o f com m ercial paper. T hird
F riday in April, second Friday in M a y , and O ctober 12th are holidays
not affecting business transactions. Saturday afternoon in cities o f
25,000 and over in June, July and A ugust, on which days com m ercial
paper m ay be presented in the forenoon or the follow ing M on day.
H u s b a n d a n d W ife retain their separate property, real, personal
and mixed owned at marriage, and any such property which shall
com e to either o f them by descent, devise, or bequest, or the gift
o f any person, for their own separate use. Such property o f the
wife is not liable for the husband's debts except as hereinafter stated.
W ife m ay carry on trade or business, sue and be sued, contract debts,
and execute prom issory notes, bonds, bills o f exchange, and other
instruments precisely as if sole and m ay con vey real estate without the
husband joining in the deed. A ny chattel m ortgage upon, or sale of,
the household goods used b y the fam ily, and any con veyan ce of, or
m ortgage upon, a hom estead, and any assignment o f future wages,
or sums to be com e due in the future, when m ade b y husband or wife
residing with the other, must be joined in by that other. A married
wom an m ay m ake a will, but neither husband nor wife shall devise or
bequeath m ore than half o f his or her property away from the other
w ithout the consent in writing o f the other, executed after death o f
the testator or o f testatrix. M arriage revokes a will previously made.
T h e husband is liable for the debts and liabilities o f the wife contracted
before marriage to the extent o f the real and personal property he
m ay receive with or through her. or derive from the sale or rent o f
her lands, and no further. T he expenses o f the fam ily and the edu
cation o f the children are chargeable upon the property o f b oth
husband and wife, and in relation thereto they m ay be sued jointly
or severally. Either husband or wife living together can separately
declare property o f record in the name o f the other “ A H om estead,
b y an entry o f record over his or her signature. N either can m ortgage
nor con vey homestead w ithout the signature o f the other.
I n t e r e s t. T he legal rate was 8 % from the organization o f the state
up to M arch 7. 1935 when it becam e 6 % . but any other rate m ay be
fixed b y agreem ent with the exception o f loans o f $300 or less m ade
b y m oney lenders upon which the m axim um rate is 10 per cent.
J u d g m e n t s . A transcript o f judgm ent may be tiled in the office
o f the cou nty clerk and recorder o f any cou n ty in the State, and
thereupon such judgm ent becom es a lien upon all real property
owned b y the judgm ent d eb tor in that county. T he Jieh holds for
six years from the date upon which filed, and successive transcripts
m ay be filed. Justice court judgm ents expire in six years; judgm ents
o f courts o f record in tw enty years, unless revived b y appropriate
proceedings. (See E xecutions.)
BANKING AND COMMERCIAL LAWS— CONNECTICUT
L im it a t io n s P e rs o n a l A c t io n s . A ll actions upon any con
tract or liability express or implied must be begun within six years
p e ^ t^ fte r the cause o f action accrues. In actions on account the
last item proved fixes the date. B ill o f relief in the case o f eauitable
trusts shall be filed within five years; personal actions on any contract
other than the a bov e and bills for relief on the ground o f fraud shall
be filed within three years after discovery, b y aggrieved party, o f
facts* and all actions based on implied or constructive fraud m ust be
commenced within 3 years after act com plained of. The doctrine o f
laches applies in equitable proceedings. Additional statutes govern
limitations in certain ^unusual proceedings. T he lim itation does not
apply to minOTS, married wom en or persons'insane, in prison or absent
from the United States; and legal representative o f a person under
disability has n ot less than 2 years after appointm ent to take action,
unless person under disability dies, in which case executor or admin
istrator has 1 year after death. Paym ent, new prom ise in writing
or absence from the state extend the period.
. , ,
wl 5 ? ? ^ A c t io n s . Actions to recover real property
must be brought within not m ore than 18 years after the right accrued
as defined b y extensive statutory provisions. I f the claim be against
an actual resident holding under fee or tax title, or against a person in
possession o f land under claim or color title or having color o f title to
vacant land, and having paid taxes for seven years, the action m ust be
brought within seven years after the right accrued.
M a rried W o m e n . (See Husband and W ife.;
M e c h a n ic s ’ L ie n s . M echanics, material-men, contractors, sub
contractors, builders, miners, and all persons o f every class perform ing
labor upon, or furnishing materials used in the construction or repair
of any building, or any other structure or improvem ent upon land,
also all who have rendered their professional, skilled service upon
such structure, have a lien upon the property, also those who work or
furnish materials or m achinery for the working o f a mining claim
or mineral deposit shall have a similar lien. Liens rank in the follow
ing order: 1. Laborers or mechanics working b y the day or piece,
without furnishing material. 2. Sub-contractors and material-men.
whose claims are either entirely or principally for materials, machinery
or other fixtures. 3. All principal contractors. Laborers are allowed
one month, m aterial men tw o months, and the original contractor
three months after the com pletion o f the structure, within which to
file claim o f lien. A ction to enforce such lien must be com m enced
within six m onths after com pletion o f the building upon which it is
claimed.
M o r tg a g e s. Ordinary m ortgages on realty are in com m on use;
also deeds o f trust to a public trustee and to private trustees. A
trust deed to private trustee is foreclosed as a m ortgage. In case
the public trustee is named, the property is sold by him as provided
In the deed, after advertisem ent in a newspaper designated ifa the
trust deed, and such advertisem ent shall not be less than four weeks.
Upon a sale b y the public trustee, a certificate o f sale is issued. Re
demption m ay be m ade b y the grantor within six months. W ithin
10 days thereafter, if notice o f intention to redeem has been filed within
six months, subsequent encumbrancers or lienors m ay redeem in order
o f priority .
N e g o tia b le I n s t r u m e n t s . Uniform Negotiable Instruments A ct
adopted 1897. (See com plete text follow ing “ Digest o f Banking and
Comm ercial Laws.)
P a r tn e r s h ip s . General partnerships are governed b y the rule*
o f the com m on law ordinarily applicable, without statutory change,
excepting that individuals or partners doing business under any
name other than their personal names must file an affidavit showing
the real persons represented, or m ay not bring suits upon debts due,
and m ay be con victed or fined. Limited partnerships are organized
under the uniform lim ited partnership act adopted in 1931. A
limited partnership is form ed by signing a certificate in statutory form .
A limited partner is not liable to creditors beyond the amounts stated
In such certificate unless he takes control o f the business. T he rights
of the partners, rights o f third persons, m ethod o f conducting the
partnership, its dissolution, etc., are minutely provided for.
P ow ers o f A tt o r n e y . Powers o f attorney for the conveyance
of lands must be acknow ledged in the same manner as deeds, and
must be recorded in the same cou nty wherein the real property to
be conveyed is situate.
Sales o f P e rs o n a l P ro p e rty . E very sale or assignment o f goodB
and chattels in the possession or under the control o f the vendor
Is void, as against creditors or subsequent purchasers in good faith,
unless accom panied by imm ediate delivery and followed b y actual
and continued change o f possession.' Sales o f any portion o f a stock
of merchandise otherwise than in the ordinary course o f trade are
prima facie fradulent and void against creditors, unless seller and
purchaser together, before sale, make inventory, showing quantity
and cost price o f the various articles; and unless purchaser makes
full Inquiry o f the seller as to names and addresses o f all creditors
of seller, and the am ount due to each, and obtains an answer; and
notifies each creditor o f the proposed sale, the cost price, and the
proposed selling price; and unless the purchaser retains the inventory
and written answer at least six months after the sale. This act
does not apply to sales by legal representatives o f public officers
conducting sales in their official capacity and there are some other
exception? to this law. CSee Rushand and W ife.)
S e cu ritie s A c t . See Blue Sky Law.
T a xes. A schedule o f taxable property In each cou nty with the
owner's valuations must be filed between April 1 and. M ay 20. Taxes
are assessed after a review o f valuations in August. Taxes levied
are a lien on real estate and personal property until paid, as also upon
stocks o f goods including new goods added thereto. Taxes m ay be
paid in tw o semi-annual installments; the first on or before the last
day o f February, and the residue on or before the last day o f July o f
the year follow ing the one in which they are assessed. T a x sales are
held in N ovem ber when tax certificates are given to purchasers on
which treasurer’s deed m ay issue after three years. Prior to sale de
linquent taxes bear interest at 6 per cent per annum from M arch 1 to ,
July 31 and at 8 per cent per annum from July 31 to date o f sale; plus
a 10 per cent penalty if the first half be n ot paid b y A pril 30; after sale
at 18 per cent per annum for the first six months, 12 per cent there
after. H ousehold goods to the value o f $200 belonging to a head o f a
fam ily are exem pt from taxation. A graduated sales tax law was
passed in 1935 to raise revenue for relief. In 1937 an incom e tax law
was enacted.
A 2 % tax on services passed in 1937 and was re-enacted in 1939
with minor changes requiring all persons including corporations, trusts,
estates, syndicates, etc., to p ay a tax on services rendered, except
medical, undertakers and religious. A ct terminates June 30, 1943.
U n cla im ed D o r m a n i B a n k D e p o s its . A list o f all deposits with
names and last known addresses o f depositors which have remained
unchanged except for credits for interests for ten years or m ore or
which have for ten years remained unclaimed shall be published in
one issue o f a newspaper o f general circulation in the city where the
deposit is located, sworn to by the cashier at any convenient day
during M arch in each year.
W ills. M ales o f the age o f twenty-one years, and females o f
the age o f twenty-one years, m ay dispose o f their real and personal
property by will but personal property m ay be disposed o f b y will
by any person o f the age o f seventeen years. For restrictions as to
married persons, see “ Husband and W ife.” All wills, whether o f
realty or personalty shall be in writing signed b y the testator or
some one for him in his presence and at his direction, and attested
In his presence and in the presence o f each other b y tw o or m ore
credible witnesses. Unless otherwise expressed in the will an afterborn child will share in the property. Devises and bequests to wit
nesses are null and void, unless the will be attested b y a sufficient
number o f witnesses exclusive o f such persons. N o will can be revoked
otherwise than b y the subsequent marriage o f the testator, or by
burning, tearing, or obliterating the same b y the testator, or in his
presence and b y his direction and consent, or b y another will or cod icil,
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1981
declaring the same, duly signed and witnessed. T h e property devised
by will must be administered b y the cou nty court, and all property
o f non-residents must generally be administered to clear title to real
property situated in this State. (See H usband and W ife. Descents
and Distributions. Adm inistration o f Estates.)
SYNOPSIS OF
TH E L A W S OF CONNECTICUT
RELATING TO
BANKING AND COMMERCIAL USAGES
R evised b y C a r l e t o n K . M
T erryville, Conn.
ath es,
A ttorn ey at Law,
(See Card in A ttorneys List)
A c c o u n ts . In all actions for a book debt, the entries o f the
.parties in their respective books shall be admissible in evidence.
(F or limitation o f actions on accounts, see Lim itations to Suits.)
A c k n o w le d g m e n t s .
(See Conveyances.)
A d m in is tr a t io n o f E sta te s . -The Drobate court has Jurisdic
tion o f deceased estates. B onds which' m ust be furnished b y the
administrators or executors, are usually m ade double the estimated
value o f the personal property. B onds o f surety com panies authorized
to d o business in the State m ay be accepted. N o t less than six m onths
are limited for the presentation o f claims against deceased estates.
Such claims are presented t o the administrator or executor i f the
estate is solvent, or to commissioners appointed b y the probate court
i f the estate is insolvent. Creditors n ot inhabitants o f this State
m ay exhibit their claims against any estate which has not been repre
sented insolvent, at any tim e within one y e a r. after order o f notice,
and if presented m ore than six m onths after order o f notice, shall be
entitled to paym ent on ly ou t o f the clear estate remaining after p ay
ment o f claims exhibited within tim e lim ited. T w elve m onths is the
usual time allowed for the settlement o f deceased estates
A ffid a vits. Civil actions d o not ordinarily have to be supported
b y affidavits. Affidavits have no weight as evidence, and are never
admitted as such.
A lie n s. A n y alien resident o f any o f the U nited States, and
any citizen o f France, so long as France shall accord the same right
to citizens o f the United States, m ay purchase, hold, inherit, or
transfer real estate in this State in as full a manner as native-born
citizens.
A r b itr a tio n . Parties to any controversy desiring to subm it the
same to arbitration under a rule o f court, and having signed and
sworn to an agreement to that effect, m ay, upon filing this agree
m ent in the court having jurisdiction o f the subject matter, have
this agreement entered o f record and obtain a rule o f court that
the said parties shall Submit to and be finally con clu d ed b y such
arbitration
A s s ig n m e n ts in I n s o lv e n c y . Operation o f this section sus
pended during continuance o f U . S. B ankruptcy A ct.
A tt a c h m e n t s . A ttachm ent m ay b e m ade upon the original
process, and is served b y attaching the goods or lands o f the defend
ant, or, if sufficient goods be not found, the person in actions where
there is fraud in contracting the d eb t or concealing property or re fu s-1
lng to pay an adm itted debt. A ttachm ents m ay be granted upon all
com plaints Containing a m oney dem and. Supplemental attachm ent
m ay be ordered b y the court upon application at any tim e during
the pendency o f the action. I f the plaintiff be a non-resident, he is
required to furnish a bond fo r prosecution from tw enty dollars to one
hundred and forty dollars, according to am ount attached. An attach
m ent .lien expires unless execution is levied within sixty days after
final judgm ent upon the attached personal property, or within four
months upon the attached real estate. (See Exem ptions.)
B a n k s S ta te a n d T r u s t C o m p a n ie s .
C apital S tock. $100,000.00 in cities o f less than 50,000 population;
$200,000.00 in cities o f over 50,000 population, par value not less than
$50.00. T he capital stock, together with a surplus o f at least 100%
o f the amount o f such capital stock- m ust be paid in cash.
C harter F e e . $1.00 for each $1,000.00 o f the capital stock.
R eserves. 12 % o f dem and and 5 % o f tim e deposits.
In co rp o ra to rs. N ine or m ore persons. •
Officers and D ir ecto r s. Usual officers— by-law s are subject to
approval b y the Bank Comm issioner. D irector must be a stockholder
and own at least $500.00 o f the capital stock.
S u p ervisin g
A u th o r ity . Bank
Comm issioner,
State C apitol,
H artford. C onn.
E x a m in a tio n s a nd R ep orts. A ll banks are exam ined annually or
oftener b y the Bank Comm issioner. Banks are required to make
not less than three reports annually within ten days after request
from the Bank Comm issioner.
L o a n L im itation s. N o one person, corporation or firm m ay borrow
m ore than 10% o f the am ount o f the capital stock. Paper o f executive
officers and clerks m ay not be discounted. N o director m ay be
obligated in an am ount exceeding 5 % o f the com bined capital and
surplus. P en a lty . $1,000.00 or not m ore th a n -o n e year or both.
S tockholders L ia b ility is lim ited to paym ent in cash for stock pur
chased. N o double liability.
Savings B a n k s. M a y p a y an order fo r not exceeding $500.00 not
withstanding death o f drawer if m ade within thirty days from death,
and at any tim e if Bank has n ot actual notice o f drawer.
L im ita tion on L o a n s by S avings. Loans on capital stock as collateral
security must be on stock which paid dividends not less than 4 %
during the tw o fiscal years o f the corporation preceding the date of
the loan; such loans lim ited to $10,000.00 or
o f one per cent o f the
bank deposits and the aggregate t o tw enty per cent o f its deposits and
surplus account com bined.
B ills o f E x ch a n g e . (See N otes and Bills.)
B ills o f L a d in g . Uniform Bills o f Lading A ct passed In 1911.
C h a tte l M o r tg a g e s . (See M ortgages, C onditional Sales, and
Interest.)
C o lla te ra l I n h e r ita n c e o r S u c c e s s io n T a x , (See Taxes.)
C o n d itio n a l S a le s. All contracts for the sale o f personal property,
conditioned that the title thereto shall remain in the vendor after
delivery, shall be in writing, describing the property and all conditions
o f such sale, and shall be acknow ledged before som e com petent
authority and filed within a reasonable tim e in the tow n clerk's office
in the tow n where the vendee resides; but the provisions o f this act
■hall not apply to household furniture, musical instruments, phono
graphs, phonograph supplise, radios, bicycles or property exem pt from
attachm ent and execution. I f not made as required, they are held to
be absolute sales, except as between the vendor and vendee or their
personal representatives. A crim e to conceal or con vey personal
property held on such conditional sale.
1982
BANKING AND COMMERCIAL LAWS— CONNECTICUT
C o n d it io n a l S ales C o n c e r n in g B u ild in g E q u ip m e n t . A ny
contract for the tale o f a portable garage or other portable building,
or electric light fixtures, or plum bing fixtures, or elevators, or building
materials, or any equipm ent used in any building and so placed as to
apparently form a part o f such building, conditioned that the title
thereto shall remain in the vendor after delivery, shall be In writing,
describing the property and all the conditions o f the sale, and shall
be acknow ledged before som e com petent authority, and filed within
a reasonable tim e in the office o f the town clerk in the town where
the real estate upon which such articles are placed is situated.
T h e vendor’s rights under such conditional sale contract shall not
be valid or enforcible against any bona fide purchaser or m ortgagee
o f the real estate upon which such property shall be placed unless and
until such con tract, together with a statement o f the name o f the
record owner o f such real estate.shall be filed in the land records of
the town in which such real estate is situated as provided for in sec
tion one hereof: and any bona fide interest in such real estate ac
quired for value after the date o f such contract and recorded in said
land records before such conditional sale contract shall be filed a^
provided in section one hereof shall be prior to and be protected against
the claims o f the vendor under such conditional sale contract.
C o n t r a c t s . Ordinary provisions o f Statute o f Frauds apply.
Courts o f probate having jurisdiction o f the settlem ent o f the estate
o f any deceased person may, concurrently with the courts o f equity,
authorize the executor or administrator to convey the title o f the
deceased in any real estate to any person entitled to it. by virtue
o f any contract o f such deceased person, and thé court o f probate
in which the guardian o f any minor has been appointed may, inUke manner, order such guardian to con vey the interest o f his ward
in any real estate which ought in equity to be con veyed to another
person. C ontracts for the con veyan ce o f lands or o f any interest
therein, m ay be recorded in the -records o f the town in which such
lands are; and such record shall be notice to all the world o f the
equitable interest thus created. Gam ing or wagering contracts
are void
Contract o f incanahie person pending appointm ent o f
conservator or applicant void when selectm en have filed in tow n
clerk’s office certified co p y o f application in case o f incapable person,
and con tract o f spendthrift void when selectm en have filed in tow n
clerk’s office certified notice o f proposed appointm ent in case o f
spendthrift. N o person who receives a valuable consideration for
a contract, express or implied, made on Sunday, shall defend any
action upon such contract on the ground that it was so made until
he restores such consideration. The Uniform Sales Act passed in
1907 covers contracts to sell. (See Sales b y Retail Dealers.)
C o n v e y a n c e s . All conveyances o f land m ust be In writing,
signed, sealed, and acknow ledged b y the grantor, and attested by
tw o subscribing witnesses. T he word “ seal” or the letters (L. S.)
m ay be used for a seal. T h e acknow ledgm ent is made by the grantor
before a jud ge o f a cou rt o f record o f this State or o f the United
States, a clerk o f the superior court, court o f com m on pleas, or dis
trict court, justice o f the pease, com m issioner o f the school fund,
com m issioner o f the superior court, notary public, tow n clerk, or
assistant town clerk, if in this State,' and if in any other State or
T erritory o f the United States, then before a com m issioner appointed
b y the governor o f this State and residing therein, or any officer
authorized to take the acknowledgem ent o f deeds in such State or
Territory, and if in a foreign country, before any consul o f the United
States, or notary public, or justice o f the peace in such foreign country.
Conveyances o f real estate situated in this State, executed and
acknowledged in any other State or Territory, in con form ity with the
laws o f £uch State or T erritory, are valid. I f the land con veyed
belongs to the wife, the husband should jo in in the conveyance, if
married before April 20, 1877. I f the land conveyed belongs to the
husband, the wife need not join in the conveyance. N o separate
examination o f a married woman is required in taking her acknow l
edgment. C onveyances, including leases for more than one year, to
be effectual against any other person than the grantor and his heirs
must be recorded on the tow n records o f the tow n in which the land
lies.
C o r p o r a t io n s . C orporations m ay be form ed under the general
laws by three or m ore persons for the transaction o f any lawful busi
ness except that o f bank, savings bank trust com pany, building
and loan association, insurance com pany, surety or indem nity
com pany, steam railroad or street railway com pany, telegraph com
pany. and gas and electric lighting, water com pany, or any com pany
which shall need to have the right o f em inent dom ain.
A certificate o f incorporation must be filed, signed, and sworn to
b y at least three o f the Incorporators, giving the name and location
o f the corporation, the nature o f the business, the amount o f authorized
capital stock, which must n ot be less than $2,000, number o f shares
and par value o f each, am ount o f capital stock with which it will
com m ence business, which shall not be less than $1,000. A certified
co p y m ust be filed in the tow n clerk’s office.
T h e organization fee m ust b e paid to the State, o f one dollar, on
every thousand o f its authorized capital stock up to five m illion, no
paym ent to be less than $50.
Stock m ay be paid ror either in cash or p roperty, but if in prop
erty, a m ajority o f the directors must m ake and sign upon a record
b ook a statem ent o f the am ount for which the property is received
and its actual value. In case o f fraud in such valuation, directors
personally liable.
Certificate o f organization must be signed and sworn to b y a m ajority
o f the directors and filed in the office o f the secretary o f state, setting
forth the am ount o f stock subscribed for am ount paid in cash and
In property, am ount paid on each share o f stock which is not paid
for in full, names and address o f subscribers with number o f shares
subscribed for, statement that the directors are officers have been
duly elected and by-laws adopted, names and addresses o f directors,
the location or the. principal office in the State with the name o f the
agent in charge.
There must b e air least three d irectors; vacancies in directors m ay
be filled b y remaining directors.
N o stock can be issued until it has been paid fo r in full. R eceipts
for partial paym ents o f stock m ay be issued by the treasurer. C er
tificates for fractional shares cannot be issued. T he corporation
has a lien on capital stock owned by any person for debts due to
capital stock with the approval o f stockholders owning three-fourths
o f its entire outstanding capital stock, given at a meeting called for
that purpose.
Stockholders’ m eetings m ust be held in this State.
Similar corporations m ay consolidate.
A corporation m ay be wound up b y voluntary agreem ent o f all
stockholders, signed and acknow ledged, directors acting as trustees
to wind up the business.
R eceiver may be appointed on application o f stockholders ow n
ing one-tenth o f the stock, in case o f fraud, mism anagem ent, or if
assets are in danger o f waste b y attachm ent, or when corporation
has abandoned its business.
Annual statem ents must be filed in the office o f the secretary o f
state and a certified cop y thereof in the town clerk’s office, either
on or before the 15th day o f February or August, giving the names
and addresses o f the officers and directors, amount o f outstanding
stock not paid for in full with the amount due thereon, the location
o f the principal office in this State with the name o f the agent in charge
on whom process may be served. For failure to file annual statem ent
the corporation m ay forfeit $25 to the State.
'
Stock o f no par value m ay be issued.
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Federal Reserve Bank of St. Louis
C o s ts . F or case before justice o f the peace, actual cash costs
not less than $5; before city cou rt from $10 to $50, according to
am ount in volved : before court o f com m on pleas or superior court,
not less than $25; before suprem e court o f errors, not less than $50.
A ttorn ey’s fees not included. A ttorn ey justified in asking deposit
o f $15 for case in ju stice’s cou rt and $50 in any other cou rt before
bringing suit. (See Insurance C om panies, Injunctions, etc.)
D ays o f G race.
(See N otes and Bills o f Exchange.)
D e e d s . (See C onveyances.)
D e p o s itio n s . M a y be' taken in a civil action b y a jud ge or clerk
o f any court, justice o f the peace, notary public, or com m issioner
o f the superior court, when witness lives out o f the State, or more
than tw enty miles from place o f trial, is over sixty years o f age and
unable to attend the trial, is going to sea, or out o f the State, or by
age and infirm ity is unable to travel to court, or is conflneo in jail.
Reasonable notice must be given to adverse party. Deponents must
be cautioned to speak the whole truth, ano carefully examined.
T hey must subscribe their depositions and make oath before the
authority taking the same wno shall attest the same and certify
that the adverse party or his agent was present (if so), or that he
was notified, and shall also certify the reason o f taking such depo
sition, seal it up, direct it to the court where it is to be used, and
deliever it, if desired, to the party at whose request it was taken.
D epositions m ay be taken in any other State or cou ntry b y a notary
public, com m issioner appointed b y the governor o f this State, or by
any magistrate having power to administer oaths, and they may
also be taken before a foreign minister, secretary o f legation, consul,
or vice-consul appointed by the United States, if taken out o f the
U nited States. A judge o f the superior, com m on pleas, or district
court can issue a “ com m ission” to take the deposition o f a person
residing ou t o f this State, to be used in a cause pending before such
court. T he superior court, upon petition, m ay allow depositions to
be taken to perpetuate testim ony concerning that which m ay there
after be the subject o f a suit. T he person taking depositions m ay
com pel attendance o f witnesses by subpoena and capias.
D e s c e n t a n d D is tr ib u t io n o f P r o p e r t y in I n t e s t a t e E s ta te s .
(As to the share o f a surviving husband or wife, see the title Husband
and W ife.) A fter the share o f the surviving husband or wife, the
residue o f the real or personal estate is distributed in equal propor
tions am ong the children and the legal representatives o f any o f
them who m ay be dead (children who have received estate b y advance
m ent o f the intestate in his lifetim e being charged with the same in
the distribution). I f there be no children or legal representatives
thereof, such residue shall be distributed to the parent or parents,
then equally to the brothers and sisters o f the intestate o f the whole
blood, and those who legally represent them ; and if there be no
such kindred, then equally to tne brothers and sisters o f the half
blood and those who legally represent them ; and if none, then equally
to the next o f kin in equal degree, kindred o f the whole blood to
take in preference to kindred o f the half blood, in equal degree, and
no representatives to be adm itted am ong collaterals after the repre
sentatives o f brothers and sisters.
D ow er.
(See H usband and W ife.)
E v id e n ce .
(See C ourts, Insurance C om pany, Cprporations.)
E x e c u tio n s . Issue on final judgm ent, and are returnable within
sixty days. N o execution issued in an action founded on contract
m erely can be levied on the b od y o f the debtor except for breach
o f promise o f marriage, m isconduct or neglect In office or profes
sional em ploym ent, or breach o f trust and cases where, the original
attachm ent is against the b od y. Any judgm ent d ebtor, an execution
against whom shall have been returned unsatiflsed in whole or in
part, m ay be exam ined on oath touching his property and means of
paying such judgm ent, and m ay be com m itted for contem pt. (See
Exem ptions.)
F o r e ig n A t t a c h m e n t s . G oods concealed in the hands o f agents
or debts due the defendant are reached by foreign attachm ent which
takes the place o f garnishment. N o assignment o f future earnings
will prevent their attachm ent when earned unless made to secure
a bona fide debt, due at the date o f such assignment, the am ount
o f which shall be stated therein as nearly as possible, nor unless
the term for which they are assigned shall be definitely limited in
the assignment, nor unless recorded before such attachm ent in the
town clerk's office in the town where the assignor resides, or if he
resides without the State, in the town where the em ployer resides, and
a co p y left with the em ployer. (See also Exem ptions.)
F o re ig n C o r p o r a t io n s . E very foreign corporation, except insur
ance and surety com panies and building and loan associations and
investm ent com panies (a corporation which has power to or does
sell or negotiate its own choses in action or sell, guarantee or negotiate
the choses in action o f other persons o r corporations as investm ents),
shall, before transacting business in this State, file in the office o f
the secretary o f the State a certified co p y o f its charter or certificate
o f incorporation, together with a statem ent, signed and sworn to
b y its president, treasurer, and a m ajority o f its directors show
ing the am ount o f its authorized capital stock and the am ount thereof
which has been paid in, and. if any part o f such paym ent has been
m ade otherwise than in cash, such statem ent shall set forth the
particulars thereof. Sec. 83.— E very foreign corporation with an
office or place o f business in this State, except insurance com panies,
surety com panies, and building and loan associations, shall, before
doing business in this State, appoint in writing the secterary o f the
State and nis successors in office to be its attorney, upon whom
all process in any action o r proceeding against it m ay be served;
and in such writing such corporation shall agree that any process
against it which is served on such secretary shall be o f the same
legal force and validity as if served on the corporation, and that
such appointm ent shall continue in force as long as any liability
remains outstanding against the corporation in this State
Such
written appointm ent shall be acknowledged before some officer
authorized to take acknow ledgm ents o f deeds and shall be filed In
the office o f said secretary, and copies certified b y him shall be suffi
cient evidence o f such appointm ent and agreement. Service upon
said attorney shall be sufficient service upon the principal, and may
be made b y leaving a duly attested co p y o f the process with the
secretary o f the State or at his office. E verv foreign corporation
doing business in this State shall, within thirty days after an increase
or reduction o f its capital stock file in the office o f the secretary
o f the State a certificate substantially like that required o f dom estic
corporations organized under the like conditions. T h e president and
treasurer o f every foreign corporation d o in g business in this State
which is not required b y law' to make other annual returns in this
State, shall, annually, on or before the fifteenth day o f February or
August, make, sign, and swear to and file in the office o f the secretary
o f the State a certificate similar to the certificate required o f dom es
tic corporations (See C orporations), except that such certificate
need not give the name o f the agent or person in charge o f its principal
office upon whom process against the corporation m ay be served.
T he secretary shall thereupon record such certificate in a book kept
b y him for that purpose and shall furnish a certified co p y to be re
corded in the office o f the tow n clerk o f the town in this State in
which such corporation has its principal office or place o f business
and said town clerk shall record the same in a book kept by him
for that purpose. On the thirtieth day o f M arch and September
the town clerks o f the several towns shall report to the secretary
o f the State the names o f all corporations whose annual reports have
been filed for record during the preceding six months, in accordance
with the provisions o f this section, and the secretary shall report
to the attorney-general every six m onths the nam es o f all corporations
BANKING AND COMMERCIAL LAWS—CONNECTICUT
which have failed to com p ly with the provisions o f this section, and
the attorney-general shall collect all forfeitures due under this sec
tion. E very corporation whose officers shall fail to com ply with
the requirements o f this section shall forfeit to the State $100 for
each failure. T he attorney-general m ay remit this fine.
F o re ig n J u d g m e n t s . N o t conclusive on question o f jurisdiction.
A foreign judgm ent when used b y w ay o f defence, is as conclusive
to every intent, as those o f our own courts. In an action on a judg
ment rendered in another State, evidence on the part o f the defend
ant that he had no legal notice o f the suit and did not appear, is
admissible, although the record o f the judgm ent stated that the
defendant appeared b y his attorney. W here the foreign court
has a peculiar and exclusive jurisdiction, its decree is binding upon
the judgm ent o f any other court, into which the same subject com es
Immediately into controversy. A judgm ent rendered b y a court
in one State has no efficacy when it is sought to be enforced in C on
necticut, unless such court had jurisdiction o f the person against
whom it is rendered, acquired either b y service upon him o f the
rocess in the suit, or actual notice to him o f the suit, or at least b y
is having appeared in it, and thus submitting to the jurisdiction
o f the court. Jurisdiction presumed to have been properly exercised.
If court once had jurisdiction. N otice presumed o f resum ption o f
jurisdiction if required b y practice o f foreign court. A judgm ent
recovered in a sister State is a bar to the further prosecution o f an
action pending at the tim e in this State between the same parties
on the same cause o f action. It makes no difference that the judg
ment o f the sister State has been appealed from , and that the appeal
Is still pending, where b y the laws o f that State, such appeal operates
only as a proceeding in error, and does not supersede the judgm ent.
Only such pleas are pleadable to a foreign judgm ent, as are pleadable
when rendered.
F ra u d . All fraudulent conveyances, suits, judgm ents, executions,
or contracts, m ade or contrived with intent to avoid any d eb t or
duty belonging to others, shall, notwithstanding any pretended con
sideration therefor, be void against those persons only, their heirs,
executors, administrators, or assigns, to whom such d ebt or duty
belongs.
G a r n is h m e n t . (See Foreign Attachm ents.)
G u a r a n ty C o m p a n ie s .' (See Surety Companies.)H o lid a y s . T h e legal h o lid a y s ‘ are: Sundays; January 1 (N ew
Year’s D a y ); February 12 (Lincoln’s b irth d ay ); February 22 (W ash
ington’s b irth d ay); M a y 30 (M em orial D a y ); July 4 (Independence
D a y ); first M on d a y in Septem ber (Labor D a y ); O ctober 12 (Colum bus
D a y ); N ovem ber 11 (Arm istice D a y ); Thanksgiving D a y ; D ecem
ber 25 (Christmas D a y ). T h e G overnor m ay declare a “ Bank
H oliday” or whenever any o f such days shall occur upon Sunday,
the M on day next follow ing such day, and any day appointed or recom
mended b y the governor o f this state or the president o f the United
States as a d a y o f thanksgiving, fasting or religious observance, shall
each be a legal holiday.
H u s b a n d a n d W ife . In all marriages contracted after A pril 19,
1877, neither husband nor w ife acquires b y force o f the marriage
any right to or interest in any property held b y the other before
the marriage o r acquired after the marriage, except as to the share
o f the survivor in the property o f the other as hereinafter stated.
W ife married subsequent to April 19, 1877, m ay hold and con vey
real estate separate from her husband. Separate earnings o f the
wife are her sole property. On the death o f the husband or wife
the survivor shall be entitled to the use for life o f one-third in value
of all the property, real or personal, owned b y the other at the tim e
of his or h er decease, after the paym ent o f all debts and charges
allowed against the estate. T he right to such third can not be defeated
by will. W here there is no will the survivor shall take such third
absolutely, and if there are no children, shall take all o f the estate
o f the decedent absolutely to the extent o f $2,000, and one-half
absolutely o f the remainder o f said estate, and if there are no children
o f the decedent or representatives o f children, and no parent, the
survivor shall take all o f the estate absolutely.
I n ju n c t io n s . A n y judge o f any cou rt o f equitable jurisdiction
may, on m otion, grant and enforce writs o f injunction, which shall
be o f force until the sitting o f such court and its further order therein,
unless sooner dissolved. Superior court judge m ay dissolve tem
porary injunction granted b y other court. I t shall be the duty o f the
court to continue said injunction until a final decision be rendered in
the supreme court o f errors.
I n s o lv e n c y . Suspended, owing to United States B ankruptcy A ct.
In t e r e s t. Legal rate, in absence o f express agreement, 6 per ce n t;
no |m ore than 6 p er cent can be recovered in either case after d ebt
becomes payable.
Express agreements in which 12 per cent is
charged are valid and any person making a greater charge is liable to
fine and imprisonm ent. There is no limit to the interest charge
which can be m ade b y any N ational Bank or any Bank or Trust
Company, incorporated under the laws o f this State nor is there any
limit to the Interest charge on a bona fide m ortgage o f real property
exceeding the sum o f five hundred dollars. Special law for pawn
brokers. Loan com panies licensed b y Bank Comm issioner m ay
loan not m ore than $300.00 and m ay charge not to exceed 36 per
cent per annum on that part o f the unpaid principal balance o f any
loan not in excess o f $100.00, and not to exceed 24 per cent, per annum
on any remainder o f such unpaid principal balance.
J u r is d ic tio n . (See Courts.)
L ie n s . (M echanics’ Liens.) A n y person having a claim for
materials furnished or services rendered^ exceeding the sum o f $10.00,
in the construction, erection, and repair o f any building, or in the
removal o f a building, m ay have a lien on such building, and the
land on which the same m ay stand, and said premises m ay be fore
closed, in the same manner as if held b y m ortgage. N o one other
than the original contractor, or a sub-contractor under a written
contract, assented to in writing b y owner, shall be entitled to claim
a lien unless, after starting and n ot later than 60 days after ceasing
to furnish labor or materials, he gives written notice to the owner
o f his intention to claim and such lien. A certificate,^ subscribed and
sworn to, describing the premises, the am ount claim ed as a lien
thereon, and the date o f the com m encem ent o f the claim, must b e
lodged with the tow n clerk o f the town in which such premises are
situated, within 60 days after the person perform ing such services or
furnishing such materials has ceased so to d o. M echanics’ liens m ay
be dissolved on substitution o f bond. Such lien continues only 2 years
after it is perfected unless foreclosure is com m enced. _ Vessels can be
subjected to a lien for m oneys due for w ork or materials furnished in
their construction, b y recording claim in town clerk’s office within
10 days after jo b is done. Persons keeping animals under contract
with owner have lien for their contract charge. M echanics’ liens, on
claims for materials furnished or services rendered, under any contract
with or approved b y a railroad corporation owning or managing the
railroad, are enforceable. T he lien, how ever m ust be lodged with the
Secretary o f State. B y Public A cts 1925, there is no priority among
M echanics’ lienors, unless som e other incumbrance intervenes, in
which case prior liens take precedence o f incumbrance on pro rata
basis as between themselves. Liens after the incum brance yield to
the incumbrance and as between themselves none has priority. T he
M echanics’ lien attach subject to apportionm ent on ly to the am ount
which owner agreed to p ay under the contract.
L im it a tio n s t o S u its . Open accounts and contracts not under
seal, six years; contracts under seal and prom issory notes not negoti
able, seventeen years. Usual exceptions in fa vor o f m arried women
minors, lunatics, and those im prisoned. T he tim e during which
the party against whom there m ay he such cause o f action shall be
without the State shall be excluded from the com putation. Title
to real estate b y adverse possession m ay be gained in fifteen years
There is no lim itation against judgm ents but the com m on law pre
sumption o f paym ent after tw enty years exists.
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1983
L im it e d P a rtn e rs h ip s . Such partnerships (except banking and
Insurance) shall consist o f one or m ore partners, join tly and severally
responsible, as in ordinary cases, to be called general partners: and
one or m ore partners, furnishing capital to the partnership stock,
whose liability shall not extend beyond the capital so furnished b y
them, to De called special partners. Such partnerships shall be
conducted under a com pany nam e, in which the name o f one or m ore
o f the general partners shall appear; and if any special partner’s
name shall be used in said com pany name, he shall be held liable
as a general partner« N o such partnership shall be deem ed to be
form ed until the persons form ing it shall make, and severally sign
and acknowledge before any officer authorized to take the acknowl
edgment o f deeds, a certificate stating the com pany name and names
and residences o f all the partners designating which are general
and which are special partners, and which o f the general partners
are authorized to transact the partnership business and sign the
firm name, and also the am ount o f capital furnished b y each special
partner and the tim e at which the partnership is to com m ence and
term inate; nor until such certificate, and also a certificate o f the
amount actually paid in b y each special partner, signed and sworn
to b y such o f the general partners as are authorized to transact the
partnership business, shall be filed and recorded in the office o f the
town clerk o f the tow n where the principal business o f the part
nership is to be carried o n ; and a co p y o f such certificate shall be
prima facie evidence o f the m atters therein contained; and the part
nership shall be responsible only for the acts o f the general partners
designated as specially authorized as aforesaid; and copies o f said
certificates shall, in like manner, be filed in every tow n where such
partnership m ay have a place o f business. Term s o f such partnership
must be published fo r six weeks in newspaper published in cou nty
where business is to be carried on. A n y such partnership m ay be
renewed b y filing at any tim e before its expiration, with the town
clerk, a sworn certificate o f the general partners, setting forth the
time for which said renewal is m ade, whether the special capital
has been reduced or impaired since the last certificate filed b y said
partnership, and if so, t o what am ount, and b y publishing not less
than once a week for tw o weeks in a newspaper published in cou nty,
the tim e at which the said renewed partnership is to com m ence and
terminate, signed b y the partners thereto, and specifying which are
general and which are special partners. I f the requirements con
cerning original certificate are n ot com plied with, or false certificate
be m ade, all special partners shall be liable as general partners. All
advancem ents to the capital stock b y the special partners shall
be in cash and no part o f the capital furnished b y them shall be with
drawn, either in the shape o f dividends, profits or otherwise, at any
■time while such partnership continues; except that any special part
ner m ay lawfully be paid from the assets o f such partnership, each
year during the continuance thereof, a sum not exceeding 10 per
centum upon the cash contributed b y him to the capital stock ; pro
vided that such paym ent shall only be m ade ou t o f the netf profits
actually earned b y such partnerships during the year for which such
paym ent is made. N o special partner shall under any circum
stances be considered a creditor, or allowed to claim as a creditor.
N o special partner shall be join ed as a party in any action b y or
against such partnership unless liable as a general partner
M a rr ie d W o m e n . (See Husband and W ife.) M o r tg a g e s o f real estate are executed, acknow ledged, and recorded
In the same manner as deeds, and are foreclosed b y strict foreclosure
or b y a decree o f sale. Chattel m ortgages to be good against third
parties, where the m ortgagor retains possession, must be executed,
acknowledged, and recorded as m ortgages o f land, and can only be
made o f the follow ing described personal p roperty— with or without
the real estate in which the same is situated or used— nam ely: m a
chinery, engines, o r imDlements situated and used in any m anu
facturing or mechanical establishm ent; m achinery, engines, im ple
ments, cases, types, cuts, or plates situated and used in any print
ing, publishing, or engraving establishm ent; household furniture in a
dwelling house used b y the owner therein in housekeeping; hay and
tobacco in the leaf in any building. Piano, organ, m elodeon, and
any musical instrument used b y an orchestra or band. Brick burned
or unbum ed, in any kiln or brickyard. H otel keepers m ay m ort
gage the furniture, fixtures, and other personal chattels contained
and used in the hotels occupied b y them or em ployed in connection
therewith. A n y one engaged in farm ing, oyster growing, etc., m ay
m ortgage to p roduction credit associations or governm ental agencies
live-stock, farm m achinery or equipm ent and crops, or oysters and
oyster planting or digging equipm ent and vessels used in oyster
business. C hattel m ortgages are foreclosed b y sale under order
o f court. In all chattel m ortgages there must be a particular descrip
tion o f each article o f personal property. Judgm ent for deficiency
after sale, perm itted.
N e g o t ia b le I n s t r u m e n t s A c t . A dopted. (See com plete text
follow ing “ D igest o f Banking and Com m ercial Laws.)
N o ta rie s P u b lic hold office for five years from first d ay o f Feb
ruary o f year in which com m issioned, unless com m ission is sooner
revoked b y governor. M a y exercise their function at any place in
State. M a y take acknowledgm ents, administer oath, take deposition,
subpoena witnesses to give deposition. T he authority and official
acts o f any notary m ay be certified to b y the clerk o f the superior
court o f the cou nty in which he resides, except in N ew London C ounty,
where the certification is m ade b y the clerk o f the court o f com m on
pleas.
P o w e rs o f A tt o r n e y . W here a deed Is executed b y a pow er o f
attorney it is recorded with the deed. Powers o f attorney to con vey
real estate must be executed and acknowledged in the manner required
for the execution and acknow ledgm ent o f the conveyance itself.
P riv a te B a n k s . (See end o f State Banks and Trust C om panies.)
P r o b a te L a w . (See Administration o f Estates, Appeals, Assign
ments and Insolvency, Collateral Inheritance T ax, C ourts, D escent
and D istribution o f Property, H usband and W ife, and W ills.)
P r o t e s t. (See N otes and Bills o f Exchange.)
R e c o r d s . W arranty, m ortgage, quitclaim deeds m ust be recorded
In office o f tow n clerk in tow n where land lies, also assignments o f
m ortgage, conditional bills o f sale, chattel m ortgages, assignments
o f future earnings. Certificate o f trade-mark to be filed for record
In office o f secretary o f State. Certificate o f unsatisfied judgm ent
to be filed for record in tow n clerk’s office. (See C onveyances, Insur
ance Companies, L im ited Partnerships, Judgments, etc.)
R e d e m p t io n . (See M ortgages.)
R e p le v y . R eplevin lies for goods wrongfully detained, in which
the plaintiff has a general or special property with right to imm ediate
possession.
. . . .
’
S ale o f R e ta il B u s in e ss . A n y person (including a person having
an interest in a barber shop, dental parlor, restaurant, shoe shining,
shoe repair or hat cleaning business), w h o makes it his business to buy
com m odities and sell the same in small quantities for the purpose o f
making a profit and desiring t o sell the whole or a large part o f his stock
in trade, m ust file a notice o f such intention in the tow n clerk’s office
not less than fourteen, nor m ore than thirty days prior to such sale.
S ales. U niform Sales A ct passed in 1907.
S a v in g s B a n k s . (See Banks State and T rust Companies.)
S e rv ice . Service o f a writ o f summons in case o f a resident Is
m ade b y reading it and the com plaint accom panying it in the defend
ant's hearing, or b y leaving an attested co p y in the defendant's hands
or at his usual place o f a bode; in case o f a non-resident, the several
courts, other than courts o f probate, and the judges, clerks, and
assistant clerks thereof, or any cou n ty commissioner, in term time
or In vacation, m ay, except where it Is otherwise specially provided
b y law, make such orders as m ay be deem ed reasonable, in regard
to the notice which shall be given o f the institution or pendency
o f all com plaints, writs o f error and appeal from probate, which
m ay be brought to or pending in any court, when the adverse party,
or any person so interested therein, that they ought to be made
parties thereto, reside out o f the State, or when the names or resi-
1984
BANKING AND COMMERCIAL LAWS— DELAWARE
dences o f any such persons in interest are unknown to the party
Instituting the proceeding; and such notice having been given and
proved shall be deem ed sufficient service and notice.
S u rety C o m p a n ie s . Any corporation with a paid-up capital o f
not less than $250.000, incorporated and organized for the purpose o f
transacting business as surety on obligations for persons or corpora
tions, on com plying with certain requirements o f law may be accepted
as surety upon the bond o f any person or corporation required by
the laws o f this State to execute a bond. E very foreign corporation
before transacting any business in this State amust deposit with the
insurance com m issioner a cop y o f its charter or articles o f association,
ana sworn statement o f the condition or its business. T he insurance
com m issioner m ay thereafter issue to such com pany a license to ao
business in this State. Such com pany must appoint the insurance
commissioner its agent on whom process m ay be served. Such com
pany must die annually on or before M arch 1st, with the insurance
commissioner a statement o f the capital o f such com pany and its
investments and risks. An annual license is granted if annual state
ment be satisfactory. Local agents must procure certificates o f
authority to act as agent from the insurance com m issioner. The
insurance com m issioner m ay also at any tim e examine the affairs
o f any surety com pany doing business in the- State. A reserve fund
must be maintained equal to 50 per cent o f the gross am ount o f
premiums received on business in force. N o such com pany can
Incur on behalf o f any one person or corporation a liability for an
amount larger than one-tenth o f its paid-up capital stock and sur
plus w ithout giving collateral security
T a xes. Land m ay be sold for delinquent taxes after due adver
tising, only so much being sold as is necessary to pay taxes and costs.
Owner has one year in which to redeem, b y paying the purchase
m oney, with 12 per cent interest. Bonds, notes, or other choses
in action, except bonds and notes secured by m ortgage on real estate
situated in this State, m ay be exem pted from all local taxation by
paying to the State a tax o f 2 per cent on the face am ount thereof
for five years, or at the option o f the holder thereof for a greater or
less number o f years at a proportionate rate. Inheritance taxes are
levied on all property within C onnecticut possessed by any resident
o f C onnecticut at the time o f his decease, and all tangible property
within C onnecticut possessed by a non-resident at the tim e o f his
death which passed by gift, to take effect at death or b y will to any
person, corporation, voluntary association or society, with exem p
tions in favor o f charities and on certain particular kinds o f property.
Bates o f the taxes are 2 per cent o f the value o f all property in excess
o f $10.000 passing to any parent, grandparent, husband, wife, lineal
descendant, adopted child, adoptive parent and lineal descendant of
any adopted child, up t o , $25,000 with graded increases; 3 per cent
on property passing to the husband or wife o f any child o f such decedant to any stepchild, brother or sister o f the full or half blood and
to any descendant o f such brother or sister in excess o f $3,000 up
to and including $25,000, with graded increases; 6 per cent o f the
value o f all property in excess o f $500 passing to any persons other
than those above m entioned up to and including $25,000 with graded
increases. Only one exem ption is allowed for each class.
T ra n s fe r o f C o r p o r a t io n S to c k s . (See C orporations.)
T r u s t C o m p a n ie s . (See State Banks and Trust Com panies.)
W a r e h o u s e R e ce ip ts , Uniform W arehouse Receipts A ct passed
1907. Uniform T rust R eceipts A ct passed in 1937.
W ills. All persons o f the age o f eighteen years, and o f sound
mind, m ay dispose o f their estate (real or personal) b y will. N o
devise, except for public and charitable uses, or for the case o f cem e
teries or graves, shall be m ade to any persons but such as are at the
tim e o f the death o f the testator in being, or to their imm ediate issue
or descendants. W ills must he in writing, subscribed b y the testator,
and attested by three witnesses, each o f them subscribing in his pres
ence, but they will be effectual here If executed according to the laws
o f the State or country where executed. If after the making o f a will,
the testator shall marry or a child shall be born to the testator or a
minor child shall be legally adopted b y him. and no provision is made
in such will for such contingency, such marriage, birth or adoption
o f a minor shild shall operate as A revocation of such will. N o will
or codicil shall be revoked in any other manner except by burning,
canceling, tearing or obliterating it by the testator or by som e person
In his presence by his direction or b y a later will or codicil. A devise
o f bequest to a subscribing witness or to the husband or wife o f a sub
scribing witness, is void unless the will is otherwise legally attested,
or unless the devisee or legatee be an heir to the testator. . Wills are
proved and estate' settled in the probate court in the district where
the deceased resided. Wills o f nonresidents owning property in this
State may be proved by filing exemplified copies thereof in district
where property is located. Such course should always be taken Id
order to pass good title to real estate.
W o r k m e n ’ s C o m p e n s a t io n A c t . Passed in 1913.
SYNOPSIS OF
T H E L A W S OF D E L A W A R E
RELATING TO
BANKING AND COMMERCIAL USAGES
R evised b y C a l e b M . W
A ttorn ey a t Law , G eorgetow n,
Delaware.
b ig h t ,
A c k n o w le d g m e n t s , in Delaware, m ay be m ade in the Superior
C ourt, before the C hancellor, or any jud ge or notary public or before
tw o justices o f the peace for the sam e cou n ty, or before the judge
o f the municipal cou rt or the M a yor o f W ilm ington. Elsewhere
in the United States, before any Federal Judge or judge in any
cou rt o f record o f any state or m ayor or ch ief officer o f any city or
borough, with official seal attached; or before the clerk or other officer
o f said courts, or before any Com m issioner o f Deeds, or any notary
public. In foreign countries, before any consul or representative o f
the United States, at his official residence, or any Com m issioner o f
Deeds.
In 1939, all deed records prior to January 1, 1939, were validated
b y statute where signed and sealed b y the grantor, although the
acknow ledgm ent m ight be defective.
A c t io n s ,
\ctions at law and suits in equity are, in general; accord
ing to the com m on law. T h e distinctions between case and trespass,
and covenant and d ebt are abolished. A simplified procedure is
follow ed in suits on instruments in writing for the paym ent o f
m oney, book accounts, judgm ents and mortgages, wherein the plaintiff
files an affidavit o f dem and; judgm ent is entered b y default unless an
affidavit o f defense is filed.
A ffid a v its , in Delaware, m ay be m ade before the C hancellor, any
judge, justices o f the peace, or notary public. In legal proceedings
in Delaware, where an affidavit o f a non-resident is required, it m ay
be m ade before any person authorized to take acknow ledgm ents.
A lie n s . All real and personal property situate in this state m ay b e
taken, acquired, held and disposed o f b y an alien in the same manner
as by a citizen o f the State or Delaware.
All conveyances to or from an alien at any tim e m ade, are validated,
ratified and confirmed.
A t t a c h m e n t s . A ll corporations doing business in the State are
liable to attachm ent, except banks, saving institutions, and loan
associations. Insurance com panies are only so liable for m oneys due
on the happening o f risks p rovided in the p olicy.
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A u c t io n s . Auctioneers m ust be licensed, except honorably dis
charged soldiers and sailors o f the C ivil, Spanish and W orld W ar and
disabled soldiers and sailors w ho have served in the M ilitary and N aval
forces o f the United States and w ho have been honorably discharged
from said services and are residents o f the State o f Delaware.
Fee is $10.00 for residents and fo r non-residents an additional
$100.00 for each C ou n ty wherein th ey a ct as auctioneer.
B a n k s . All banks are under the supervision o f the State Bank
Comm issioner, and subject to exam ination b y him annually or oftener.
Federal Reserve members m ay be exem pted b y him from examination.
H e also has control o f small loan com panies. Banks m ay only be
created b y special act o f th e Legislature, and no corporation created
under the general corporation law m ay be deem ed to have banking
powers. B anking powers m ay be exercised only b y a d uly chartered
and authorized corporation. N ew banks m ust have a certificate from
the State Bank Com m issioner that they are d u ly authorized to do
business. A certificate m ust also be had to open a branch office in
the state. M erger o f banks is prohibited unless ap p roved b y the
Comm issioner.
In case o f im pairm ent o f capital, the Comm issioner
m ust give a sixty-d ay warning, and if the deficiency is not corrected
in that tim e, he assumes con trol o f the business or bas a R eceiver
appointed. Four reports a year o f financial con dition m ust be sent to
the Comm issioner. Strict lim itations are p u t on cash reserves, loans,
investments, equipm ent and pledging o f assets. D irectors m ust be
shareholders. N o double liability in this state.
Use o f the w ord “ T ru st” as a part o f a corporate name- is pro
hibited. There is only on e state bank, chartered in 1807. M inors
are recognized as a dults in banking. Passing worthless checks is a
crim e, if the m aker knew at the tim e the check was passed that he
d id not have sufficient fun ds on deposit to m eet the check. Ten
d a ys’ notice to the m aker m ust be given before criminal proceedings
are instituted. T he B ank Com m issioner has jurisdiction over the
business o f receiving deposits or paym ents on incom e contracts,
annuity contracts or certificates, or annuity bonds. Registration
and a certificate o f authority are required, b u t this does not ap p ly to
sellers o f m erchandise on installments, insurance com panies, building
and loan associations, banks or trust com panies or surety com panies
authorized to d o business in the state. Com panies engaged in mak
ing sm all loans are under rigid con trol b y statute and the B ank C om
missioner.
T he Federal D eposit Insurance C orporation is b y statute sub
rogated to the rights o f the depositors in closed banks and trust com
panies, in like manner as if assigned. Taxation is assessed on the true
value o f shares o f stock. In savings banks or societies, where there
is no capital stock, taxes are assessed on the average o f deposits held
during the preceding year. Such taxes are a lien on the property o f
such savings banks or societies.
B ro k e rs must be licensed. An unlicensed broker cannot collect
com m issions and is guilty o f a m isdemeanor.
B u ild in g a n d L o a n A s s o c ia tio n s are under the jurisdiction o f the
State Bank Comm issioner. T he am ount o f fines is lim ited to 5 per
cent per m onth for six m onths and 14 per cent per m onth thereafter.
A fte r six m onths arrearage, a shareholder m ay be forced to withdraw.
A ll fees, etc., in any one association m ust be uniform . Funds m ay not
be invested in corporate stocks. A n association m ay issue bonds or
certificates o f indebtedness up to 30 per cent o f dues paid in, at not over
6 per cent per annum. N o m ore than 50 per cent paid in dues m ay be
loaned on real estate security on other than first liens. T he business
m ust be licensed annually, and after July 1, 1931, it is a misdemeanor
to solicit sales o f shares on com m ission. An annual statem ent o f
business is required, and a list o f accounts and standing thereof m ay be
dem anded. Failure to maintain standards will expose associations to
suit b y the A ttorney General and assum ption o f its business b y the
Bank Comm issioner.
Such associations are exem pt from the attachm ent laws. N o
lim itation is placed on the lien o f judgm ents on the bonds for loans.
Loans m ay be m ade with their own capital stock for security. Partial
paym ents o f their m ortgages d o not have to be recorded. I f funds
are in excess o f requirements, they m ay be loaned to outsiders for not
over 6 per cent. Foreign associations must deposit sufficient securities
with tbe State Treasurer which, with the assets in the state, will be
equal to the indebtedness to shareholders in the state.
C h a tt e l M o r tg a g e s . A bona fide m ortgage o f personal property
duly signed and sealed and acknow ledged is a valid lien on the property
for five years, if recorded within 10 days o f the date o f acknow ledg
m ent. It m ay be foreclosed in equity or b y sci. fa. if defaulted for
60 days. Affidavit o f bona fides must accom pany the m ortgage. It
is unlawful for the m ortgagor to rem ove the goods from the cou n ty
w ithout consent o f the mortgagee.
C o n t r a c t s are join t and several, unless otherwise expressed.
Bonds, specialties and notes in writing, payable to order or assigns,
are freely assignable; suits thereon are brought b y the real party in
interest. Assignments o f bonds and specialties must be under sea)
and before one credible witness. A sealed agreement has its com m on
law significance. A sale o f goods must be accom panied b y paym ent
or security for paym ent, or delivery; if such goods subsequently com e
Into the vendor’s possession, they are liable to the dem ands o f his
creditors. N o action shall be brought whereby to charge any person
upon any agreement made upon consideration o f marriage, or sale o f
lands, or any agreement not to be perform ed within one year, or any
prom ise to answer for the debt, default or miscarriage o f another, o f
any sum over $25, unless reduced to writing or m emorandum signed
b y the party to be charged or his agent. N o r shall any action be
brought whereby to charge the personal representatives or heirs o f any
deceased person upon agreem ent to m ake a will o f real or personal
p roperty, or to give a legacy or m ake a devise, unless such agreement,
if m ade after M a y 1, 1933, shall be reduced to writing, or som e m em o
randum or note thereof be signed b y the decedent, o rn is agent author
ized in writing. G oods sold and delivered and other matters properly
chargeable in an account are excepted. In such cases the oath o f the
plaintiff together with a book regularly kept, is recognized as evidence.
Bulk sales are presumed fraudulent against creditors unless inventoried
five days before sale and full inform ation is given b y the purchaser to
all creditors o f the seller; failure to com p ly is also a'm isdem eanor.
Sales b y personal representatives or public officers are excepted.
C o r p o r a t io n s . N o t less than three persons m ay form a corpora
tion for any business except banking, m unicipal governm ent o r
charitable, penal, reform atory or educational institutions. T h e cer
tificate o f incorporation m ust set forth the nam e; principal place o f
business in the state; nature and purposes o f the business; types and
am ount o f stock authorized, minimum o f capitalization being $1,000;
nam e and residence o f incorporators; term o f existence, which m ay b e
perpetual; extent o f liability o f stockholders. C orporations have th e
pow er to have succession in its corporate name, to sue and be sued, t o
have a corporate seal, to hold real and personal property, to appoint
officers and agents, to m ake by-law s, to dissolve according to law, t o
con du ct business anywhere, and to exercise all the powers and privi
leges insofar as m ay be necessary for the transaction o f business. It
m ay not issue currency, receive deposits o f m oney, or b u y and sell for
eign m oney as a business. C orporations m ay hold and transfer their
own shares, but cannot v o te them. T h e certificate m ay be amended.
D ividends are payable from annual net profits or net assets beyond
capital. At least three directors are required; the president must b e
one. Other officers are elected by the board. Stock m ay be paid for
b y cash, labor done, or real or personal property. N o-par stock is
recognized, as are proxies, not over three years old, and voting trusts.
M eetings m ay be held outside tb e state, if so provided b y the by-law s.
Shares o f stock are intangible personalty. Fees are based on th »
num ber o f shares o f stock authorized or gross assets whichever is th e
lesser; m inimum, $10. Taxes are likewise s o based; m inim um , $5.
m axim um , $25.000. A n annual report is required. Charters are
BANKING AND COMMERCIAL LAWS— DELAWARE
1985
voided b y proclam ation if taxes are not paid for tw o years in succes
sion; although action m ay be brought b y the A ttorn ey General for
such taxes, and he m ay also h ave a receiver appointed for the co r
poration.
issue in property descending from the m other. A child legitimated
by either marriage before birth or marriage after acknow ledgm ent
o f paternity takes as though legitim ate. A child acknowledged with
out marriage cannot inherit from its father.
Foreign corporations, except insurance companies, must register
with the Secretary o f State in order to d o business in Delaware, show
ing its charter, an authorized agent in the state for service o f process,
and a statement o f its assets and liabilities, with a fee o f $10. E xcep
tions: M ail order or similar business, one that merely em ploys sales
men to solicit orders, one. installing machinery sold outside the state
rèquiring technical skill, and those engaged in w holly interstate
business.
D o w e r. A w idow is entitled to a life estate in an undivided third
o f all real estate held b y her husband, free from Hen or other alienation
unless relinquished b y her. I f the husband dies intestate, the widow
becom es tenant in dower o f one half, and if he dies without issue,
then all o f his real estate. Dow er m ay be alienated b y antenuptual
contract. A widow has the election o f taking dower or devise. Dow er
is barred b y the w idow ’s having lived in adultery w ithout her husband's
connivance or reconciliation. D ow er m ay be barred b y the wife’s
deed, or upon sale o f the lands b y the executor or administrator to
pay debts o f the decedent.
E x e c u tio n s . An execution becom es a lien on personalty when deliv
ered to the sheriff, and binds all goods actually levied upon within
60 days. Priority o f writs is based on the tim e o f deUvery. A sale
cannot be had for 30 days after levy , unless goods are perishable.
T he lien is valid for 3 years as against subsequent execution on the
same goods. Executions issued b y justices o f the peace must be levied
on in 30 days and the lien continues for tw o years. G oods are liable
to one year’s rent in preference to execution. There is no redem ption
o f property sold on execution. A stay o f six m onths is granted to
defendant from judgm ent for want o f an affidavit o f defense, when
security is posted. Before justices o f the peace, six m onths stay m ay
be obtained b y pleading freehold and nine m onths b y posting security.
C o u r t s . Supreme C ou rt: regular term at D over third Tuesday
In June and January; adjourned term is held first Tuesday after the
fourth M on day ip O ctober; special sessions are had at the call o f the
Chancellor at D over when deemed expedient by a m ajority o f the
members.
Court o f C hancery, Orphans C ourt: N ew Castle C ounty at W il
mington, fourth M on da y in M arch and second M on day in September.
Kent C ounty at D over, third M ondays in M arch and September and
second M on days in June and December. Sussex C ounty in George
town, second M on d a y in M arch and first M ondays in June, Septem
ber and Decem ber.
Superior C ourt and C ourt o f General Sessions: N ew Castle C ounty
at W ilm ington, first M on da y in January, M arch, M a y, and N ovem ber
and third M on d a y in September (for criminal cases only).. Kent
County at D over, first M on d a y in July and third M ondays in Febru
ary, April and O ctober. Sussex C ounty at Georgetown, first M ondays
in February, A pril and O ctober and last M on day in June.
Court o f O y e r and Term iner meets on call o f Judges.
The Superior C ourt has general jurisdiction in all civil cases, but if
suit is brought for less th a n -$50, costs can not be recovered. The
Court o f C om m on Pleas, for N ew Castle C ounty, has contract juris
diction up to $1,000. C ourt o f C om m on Pleas for N ewcastle C ounty
now has a limited criminal jurisdiction. T he C ourt o f Com m on Pleas
o f Kent C ounty, created in 1931, has both contract and tort juris
diction up to $1,000, and a lim ited criminal jurisdiction; appeals are
to the Superior C ou rt o f K en t C ounty. T he jurisdiction o f the
Justices o f the Peace is lim ited to $500, exclusive o f interest and costs.
C u rte sy . T h e conveyance or devise o f a married wom an will not
divêst the husband's right to curtesy in her real estate. I f a wife dies
intestate leaving a husband and issue, he is entitled to a life estate in
half o f her realty. I f she dies w ithout issue, he is entitled to a life
estate in all o f her realty.
D e a th , P r e s u m p t io n o f , arises after seven years, as at com m on
law.
D e c e d e n ts E s ta te s . Letters o f administration are granted to
(1)
a person entitled to residue o f personal property, or (2) a creditor,
or (3) to any suitable person. Executors or administrators must give
bond in double the estim ated value o f the personal property. T he
order o f paym ent o f claims is (1) funeral expenses, (2) m edical serv
ices during last illness, (3) household and farm servants wages, not
over one year, (4) rent, not over one yèar, (5) judgm ents, (6) m ort
gages, recognizances, and other obligations o f record, (7) sealed obliga
tions, (8) contracts under hand for paym ent o f m oney or delivery o f
goods, and (9) other demands. I f real estate is sold upon order o f the
Orphans C ourt h o pay debts, all liens thereon becom e o f equal grade
and must be paid from the purchase m oney before other debts. Banks
, are authorized to pay over personal deposits o f decedents not exceeding
$75, not less than 15 days after death to the wife, husband, children,
father, m other, sister or brother (preference in order named) without
requiring letters o f administration; such paym ent is a full release for
the amount so paid. T he widow o f any decedent shall be entitled,
during the year o f administration, to cash up to $500.00 which shall
take priority over all unsecured debts and claims, expenses, legacies,
and taxes, but such paym ent shall not affect any rights under the
husband's will, or the intestacy laws. A debtor, in order to recover
from an estate, m ust make affidavit o f non-paym ent o f the d ebt b y the
decedent. One year is allowed for the settlement o f estates, but an
inventory is required within six m onths from granting o f letters. Es
cheat is recognized. Non-residents, banks and trust com panies o f
Delaware or elsewhere (if perm itted b y their charters) m ay act as
executor or administrator, but a foreign bank m ay only act to thé ex
tent that a Delaware bank m ay act in the place o f incorporation o f
such foreign bank. General claims should be presented within six
months. Letters granted in another state are sufficient authority for a
personal representative to act in Delaware.
D eed s. W arranty deeds are custom ary. The words “ gran t” and
“ bargain and s e ll" im ply-a special warranty against the grantor and
his heirs, and all claiming under him, in the absence o f an express pro
vision otherwise. D eeds m ust be under seal and either acknowledged
or proved b y a subscribing witness in open court to be acknow ledged
A deed o f a corporation must be executed by the president or a vicepresident, duly authorized by resolution o f the board o f directors, or
by the legally constituted attorney o f the corporation; the seal o f the
corporation, attested b y the secretary, must be affixed.
I f a deed is not recorded within 15 days from the sealing and deliv
ery, it does n ot avail against a subsequent creditor, m ortgagee, or
purchaser for a valuable consideration. A deed to tw o or m ore
persons creates a tenancy in com m on, unless to husband and wife,
when it creates a tenancy b y the entireties.
Depositions may be by written interrogatories or orally; they are
taken before a Commissioner named by the applicant, by agreement,
or by the Court. With the interrogatories must be filed a list of wit
nesses, who alone may be examined. If oral, all questions and answers
must be written down by the Commissioner or his duly qualified
stenographer.
Depositions m ay be taken to perpetuate tesitmony o f aged, infirm
or going witnesses, but may be used in evidence only in case those
examined are unable to attend the trial. In cases o f boundary dis
putes, such testimony may be preserved by order of the chancellor.
Registers and justices o f the peace may take depositions of those
beyond the reach o f process or o f those who are sick.
D e s ce n t a n d D is tr ib u t io n . R e a l e s ta te descends in fee unless
otherwise provided, to (1) children in equal shares and lawful issue
o f deceased children b y representation, (2) father and m other, as
tenants b y the entireties, unless divorced, in which case as tenants
in com m on; if one only survives, then in fee. (3) (a) brothers and
sisters o f whole blood and lawful issue by representation, (b) brothers
and sisters o f half blood and lawful issue b y representation. In either
case brothers and sisters o f blood o f ancestor from whom intestate
acquired land b y devise or descent shall be preferred. (4) N ext
of kin, or lawful issue, with preference to those claiming through the
nearest com m on ancestor. (5) Curtesy and dower are saved (see
those titles). (6) I f no kin or heir o f intestate, then to his or her
spouse in fee.
P erson a l E sta te (1) children and lawful issue surviving deceased
children, (2) father and m other in equal shares, or all to survivor,
(3) brothers and sisters o f whole blood and lawful issue surviving,
(4) brothers and sisters o f the half blood and lawful issue surviving,
(5) next of kin in equal degrees, and lawful issue of such as are deceased.
Provided, (1) if intestate is married person without issue, spouse takes
entire estate, and (2) if with children, spouse takes one-third and
children take two-thirds.
Duly adopted children are recognized as of the whole blood. Ad
vancements to children o f real or personal property are deemed to
be in lieu o f their share pro tanto, but do not affect dower. Descent
from an illegitimate child is first to its mother, and after that to her
heirs. An illegitimate child shares with legitimate children or their
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E xem ptions. Family Bible, school books, family library, family
pictures, seat or pew in church, lot in burial ground, all wearing apparel
of debtor or his family, and, in addition tools or fixtures necessary
to carry on a trade, value not exceeding $75 in New Castle and Sussex
counties and $50 in Kent county. Sewing machines owned and used
by seamstresses and private families are exempt, and pianos and
organs which are rented are not liable to distress if the owner has
notified the landlord of his title. The above exemptions apply to
distress for rent as well as to ordinary executions. There is a further
exemption to head of families of personal property of $200 in New
Castle county and of $150 of household goods in Kent county; but
this does not. include goods bought to be sold in the regular transaction
of business by the debtor. There is no such exemption in Sussex
county. This latter exeinption will not avail against a Judgment for
work and labor held by an employee— 60 per cent of all wages exempt
in Kent and Sussex counties. In New Castle county, 90 per cent
of all Wages are exempt from attachment, and balance, not over
$50, may be taken for board and lodging. No exemptions, are
recognized on a sale for taxes. Any husband and wife may make a
joint waiver of exemption.
F ra u d s , S ta t u t e o f , see Contracts.
F r a u d u le n t S ale o f S e c u r itie s . Jurisdiction has been conferred
on the Chancellor to enjoin the fraudulent sale or exchange o f securities
in the State, upon the verified petition o f the A ttorn ey General.
H o lid a y s . T he legal holidays are: Sundays; January 1 (N ew Y ea r’s
D a y ); February 12 (Lincoln's b irth d ay); February 22 (W ashington’s
birth d ay); G ood F riday; M a y 30 (M em orial D a y ); July 4 (Inde
pendence D a y ); first M on da y in Septem ber (Labor D a y ) ; O ctober 12
(Columbus D a y ); N ovem ber 11 (Arm istice D a y ); General Election
D a y as it biennially occurs; Thanksgiving D a y ; D ecem ber 25 (Christ
mas D a y ). Saturday in the C ity o f W ilm ington only shall be know n
as Saturday Bank H oliday, b u t any business done in a Bank on
Saturday is not illegal because it is Saturday Bank H oliday. W hen a
holiday falls on Sunday, the M on da y follow ing is a legal hoHday.
H o m e s t e a d . There is no homestead law in Delaware.
I n s o lv e n t L aw s exist and m ay be applied in the absence o f equiva
lent provisions in the Federal B ankruptcy A ct. T h ey are seldom
resorted to. There is no provision for a general discharge.
In s u r a n c e . T he Insurance law was codified in 1931. T he InsuranceCom missioner has com plete supervision o f all insurance com panies,
agents and brokers, including the collection o f taxes. A certificate or
authority to d o business is required o f all com panies; it may be
revoked for insolvency, fraudulent operation, insufficient assets,
failure to com ply with laws, or financial instability. A foreign or
alien com pany must file copies o f its charter, by-laws, policy form s,
authorization to d o business in its hom e state, and an appointm ent o f
the Commissioner as agent upon whom process may be served. An
annual statement o f financial condition is required. T he resident
agent must countersign all policies. A dom estic com pany cannot d o
business elsewhere without a certificate o f authority. Political con
tributions, defam ation o f rival com panies, misrepresentations as to
policies and rebates are prohibited. Real estate holdings and invest
ments are strictly limited by statute. N o person may insure the life
or health o f another w ithout his consent, except a wife for her hus
band, an em ployer for his em ployees collectively, or heads o f educa
tional institutions for health o f students. A ny minor fifteen years o f
age or m ore m ay validly contract for insurance on his or her person as
though he or she were o f full age. Insurance.agents and brokers must
be licensed to d o business.
T he Insurance Comm issioner likewise has jurisdiction over dom estic
and foreign surety and guaranty com panies and title insurance
companies.
I n t e r e s t. T he legal rate is 6 per cent. N o debtor shall be required
to pay m ore than the legal rate, b u t m ay deduct any excess from the
am ount Of the debt. I f already paid, the debtor m ay recover the
excess paid over the legal rate in an action if brought within one year
from date o f paym ent. Properly registered “ small loan” com panies,
firms or individuals or state banks or trust com panies, which need
not be registered, m ay charge 6 per cent on amounts up to $500 with
an additional investigation fee o f not m ore than 2 per cent.
J u d g m e n t s are a lien from the date o f signing or entry, or, if on a
jury trial, from the date o f the verdict. I f the am ount is not deter
mined, it is a lien from date o f entry only if am ount is ascertained and
entered before the first day o f the next term ; otherwise, the lien com
mences on date o f entry o f am ount. N o judgm ents are entered by
confession in N ew Castle C ou n ty, in spite o f a statute perm itting it.
Satisfaction must be entered in 60 days. I f a testatum fi. fa. is issued,
the Prothonotary must notify other counties within thirty days.
Failure to mark record creates liability to damage suit, and rule to
show cause thereon m ay be served b y publication.
A foreign judgm ent will found an action in d ebt in Delaware. I f
the plaintiff files an affidavit o f dem and, with a certified co p y o f the
judgm ent, judgm ent m ay be had at the first term for want o f an
affidavit o f defense, although appearance m ay have been entered.
T he only defenses recognized go to the jurisdiction o f the court render
ing the foreign judgm ent.
L im itation s. Action for mesne profits must be begun 6 months
after ejectment or mandate o f affirmance if appeal is taken. Recovery
is aUowed for 3 years next preceding the ejectment.
One year: A ctions for personal injuries, forfeiture on a penal
statute, forcible entry, and any suit where prior suit failed for want o f
service or reversal on appeal.
T w o years: Forcible detainer.
Three years: Guardian’s bond, recognizance in Orphans C ourt,
official bond, waste, and all personal actions. M u tu al running
accounts d o not accrue while open and current.
Six years: Sheriff’s official recognizance, testamentary bond, bills,
notes and acknowledgm ents o f debt signed b y the debtor.
Seven years: A fter expiration o f term o f office o f E scheator on his
bond.
T w en ty years: R eal estate titles. Only ten years is allow ed after
rem oval o f disability.
1986
BANKING AND COMMERCIAL LAWS— DISTRICT OF COLUMBIA
Infancy, coverture or m ental incom petency will bar tlie running
o f the statute. I f the defendant is absent from the state when the
action accrues, the lim itation runs from the entry into the state.
A bsence after accrual bars running o f the statute until return.
Appeals from an interlocutory decree in equity m ust be presented
at the first d ay o f the next term o f the Supreme C ou rt; from a final
decree, six m onths from signing the decree; taking exceptions to
account o f executor or administrator 3 m onths after notice that
account is filed with the register, guardian account 3 years, partition
3 m onths. In other cases, rules o f cou rt apply.
M a r r ie d W o m e n m ay freely alienate all property and con tract
as though unmarried. A married wom an m ay not affect her husband’s
right o f curtesy, unless he has abandoned her w ithout just cause. She
m ay sue and b e sued. A husband is liable on his w ife’s m ortgage
b on d on ly if he joins in executing it.
M e c h a n ic s L ie n s . T h e con tractor has a lien on buildings and
land for m oney due for construction or repairs; his claim must be
filed within thirty days after ninety days have elapsed from the com
pletion o f the w ork. A ll other claims m ust be filed within the ninetyd ay period. Proceedings are b y sci. fa., and judgm ent m ay be had
for failure to file an affidavit o f defense. E xecution is b y levari facias.
M o r tg a g e s are executed like deeds, usually accom panied b y bond .
Foreclosure must be b y intervention b y the proper court. P riority
o f m ortgages is based on the date o f recording. Lien o f purchase
m oney m ortgage is superior to all other liens on the property, if
recorded w ithin five days from date o f sale. Satisfaction must be
entered on the record within sixty days from paym ent; failure to d o
t o will render the m ortgagee liable t o court action and for damages.
One witness is required on an assignment. Release o f part o f lands
does not affect the balance, b u t it m ust be under seal and recorded
within sixty days.
N e g o t ia b le I n s t r u m e n t s . U niform N egotiable Instrum ents A ct
adopted January 1, 1912. (See com plete text follow ing “ D igest o f
B anking and C om m ercial Law s.” )
P a r t n e r s h ip s , associations and persons using trade names must
register them with prothonotary, together with the full names o f each
and every person com prising such firm. Jurisdiction o f dissolution
o f partnerships is in the C ourt o f Chancery. Lim ited partnerships
m ay be form ed for any business but banking and insurance. A record
o f m em bers and their liability m ust be filed with the R ecorder o f every
cou n ty in which the firm does business.
P r o t e s t is required on foreign bills, otherwise option al. (N . I. L .,
{118.)
S a le s . See C ontracts.
T a x L ie n s . Taxes are a prim ary lien on all real estate for tw o
years from July first o f year im posed. I f land is sold b y order o f the
Orphans C ourt the lien transfers to funds in the hands o f th e officer
so selling, and continues as a lien on the land for balance due. Taxes
in N ew C astle cou n ty are a prim ary lien now for ten years.
T r a d e M a r k s m ay be registered with the Secretary b f State, as
m ay be labels or form s o f advertisem ent, b y filing tw o copies thereof
with him. T h e rem edy for infringem ent is b y bill for injunction.
T here is also a crim inal penalty for unauthorized use,
T r u s t e e s . T rust com panies incorporated under the laws o f D ela
ware and having their principal place o f business there m ay be
appointed to any office o f trust w ithout giving surety on their bond
for faithful perform ance. A liability growing out o f si trust estate
is a first lien on the com p a n y’s real estate. N ational banks located
in the state are accorded the sam e powers, and security on their bonds
m ay n ot be requited, in the discretion o f the appointing authority.
Trustees m ust file a ju st and true account at least every tw o years
w ith the Register in Chancery.
T r u s t I n v e s t m e n t s m ay be any o f the follow ing: (a) T hose
specified b y trust deed, (b) B onds o f the U nited States, or any
State; o f any cou n ty, school district or incorporated city or tow n o f
D elaw are; o f any city in U nited States o f over 100,000 population,
if net d eb t is n ot over iO per cent o f assessed valuation o f taxable
p rop erty; first m ortgage bonds on real estate located in Delaware with
ou t prior encum brance, and not exceeding 60 per cent o f the value ^of
the land when invested; bonds o f railroads whose earnings for five years
average one and one-half tim es the fixed charges; bonds o f transporta
tion or pu blic service .companies whose earnings for five years average
tw o times the fixed charges; bonds o f industrial com panies whose earn
ings for five years average three tim es the fixed charges; equipm ent
trust obligations, covering n ot over 80 per cent o f the cost, which
m ature in 15 years payable in installments beginning not later than
three years from date o f issue; bonds o f railroad or transportation
com panies guaranteed b y a corporation whose bonds satisfy require
ments abov e; and securities o f any kind approved b y the cou rt
having jurisdiction.
U nsecured obligations o f Industrial corporations o f any State in
cluding finding com panies, m aturing n ot m ore than fifteen yeais from
date o f purchase; obligation cannot be convertable into stock or carry
the creation o f m ortgage d eb t m aturing after one year and p rovided
furth er:
at Assets o f corporations shall be 8100,000,000.
2.
T ota l secured d ebt o f corporation h ot greater than 10% o f
tota l unsecured d eb t o f corporation.
A B ank or T rust C om p any m ay establish a com m on fun d fo r the
investm ent o f trust funds.
R esponsibility for due care in selection still rests upon fiduciaries.
Other property m ay be taken and held while prudent, but m ay not
be purchased. Investm ents legal under prior laws m ay be retained,
but when sold, the proceeds m ust be applied in accordance with the
above.
U n ifo r m A c t s adopted are: Aeronautics, Bills o f Lading, C ond i
tional Sales, Federal T a x Liens, Fraudulent C onveyances, N egotiable
Instrum ents, N on-S up p ort; W arehouse R eceipts, Sales A ct.
W ills . A n y person o f the age o f tw enty-one or upw ard, o f sound
m ind, m ay m ake a will. I t m ust be in writing and signed b y the
testator or som e person subscribing the testator’s nam e in his presence
and b y his express direction. It must be attested and subscribed b y
tw o or m ore credible witnesses. N uncupative wills are accorded a
lim ited recognition.
Probate proceedings are held before th e R egister o f W ills o f the
cou n ty in which the decedent was a resident. Appeals are usually to
the Superior C ourt, although exceptions to accounts o f executors are
heard b y the Orphans C ourt. P robate o f foreign wills is authorized
when there is filed with the. Register o f the cou n ty where the property
is located, a certified co p y o f the probate ’proceedings from the place
o f the testator’s dom icile; such W ills are recognized as to personal
p roperty although they m ay n ot conform to local requirem ents.
D evise w ithout lim itation passes a fee. A fter-acquired land passes
b y will. A will is revocable b y cancellation, a writing executed b y
the testator in testam entary form , b y im plication. A fter-born children
take their intestate share o f the estate, in the absence o f provision to
the contrary. M arriage after the execution o f a w ill b y a husband
entitles his w idow to her intestate share, which m ust be contributed
ratably b y all the beneficiaries. Posthum ous children born alive are
considered as after-born children. A devise or legacy to a child, lineal
descendant, brother, sister, nephew or niece does not lapse on his or her
decease prior to that o f the testator, but passes to their surviving issue.
AT legacy is not satisfaction o f a debt, unless a contrary intent clearly
appears.
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SYNOPSIS OF
T H E L A W S OF
T H E DISTRICT OF COLUMBIA
RELATING TO
BANKING AND COMMERCIAL USAGES
R evised b y H e w e s P k e t t y m a n A w a l t & S m i d d y , A ttorneys at Law,
822 C onnecticu t A ve ., W ashington, D . C.
A c k n o w le d g m e n t s . T he deed o f a corporation shall be executed
b y having the seal o f the corporation attached and being signed with
the name o f the corporation, b y its president or other officer, and shall
be acknow ledged as the deed o f the corporation b y an attorney,
appointed fo r that purpose, b y a pow er o f attorney em bodied in the
deed or b y one separate therefrom , under the corporate seal, to be
annexed to and recorded with the deed.
A c k n o w le d g m e n t o f D e e d s . W hen any deed or con tract under
seal relating to land is to be acknow ledged out o f the D istrict o f
C olum bia, but within the U nited States, the acknow ledgm ent m ay
be m ade before any jud ge o f a cou rt o f record and o f law, o r any
chancellor o f a State, any ju d ge or ju stice o f the suprem e, district, or
territorial courts o f the United States, or any justice o f the peace or
notary pu b lic; P rovided that the certificate o f acknowledgm ent
aforesaid, m ade b y any officer o f a State o r T erritory, n ot having a
seal, shall be accom panied b y a certificate o f the register, clerk, or
other public officer that the officer taking said acknow ledgm ent was
In fa ct the officer he professed to be. D eeds m ade in a foreign coun
try m ay be acknow ledged before any judge or notary public, or before
a n ysecreta ry o f legation o r consular officer or acting consular officer
o f the U nited States as such consular officer is described in section 1674
o f the revised statutes o f the U nited States, and when the acknow l
edgm ent is m ade before any other officer other than a secretary o f
legation or consular officer or acting consular officer o f the United
States, the official character o f the person taking the acknow ledgm ent
shall be certified in the m anner prescribed as to deeds ou t o f the D is
trict o f C olum bia b u t within the U nited States. N o deeds o f con
veyance o f either real o r personal estate b y individuals shall be exe
cu ted or acknow ledged b y attorney.
A c t io n s . U nder th e Federal R ules o f C iv il P rocedure there is one
form o f a ction know n as “ civ il a ctio n ,” which is com m enced b y the
filing o f a com plaint. In suits a t law in M u nicipal C ourt, involving
$1000 o r less, the o ld form s o f a ction obtain, except as m odified b y
statute.
A d m in is t r a t io n .
T he probate court, a special term o f the
D istrict C ou rt o f the U nited States for the D istrict o f Colum bia,
has exclusive jurisdiction o f the settlem ent o f estates. A written
petition stating the facts in the case m ust be filed with the register o f
wills. T his petition is acted upon b y a ju stice o f the D istrict C ourt o f
the U nited States fo r the D istrict o f C olum bia, w h o sits d a ily. A ll
executors and adm inistrators and guardians are required to give
b on d with security t o b e approved b y the cou rt. T h e testator
m ay waive the giving o f bond, but the cou rt always requires a bond
sufficient to cover the debts and legacies o f the deceased not to exceed
double the value o f the personal estate. B y act o f Congress, certain
trust com panies incorporated thereunder m ay act as executor or ad
m inistrator w ithout bond , and corporations having pow er under their
charters m ay act as sureties in all cases where individuals can. Credi
tors m ay be barred in thirteen m onths p rovided the required notice
is properly published. P robate court m ay order sale o f real estate to
pay debts, in case personal assets are insufficient. Assets o f non-resi
dents in D istrict o f C olum bia are su b ject t o claim s o f local creditors
fo r one year after death.
A ffid a v its . Affidavits fo r use In the D istrict o f C olum bia should
be taken before a justice o f the peace, notary public, jud ge o f any
court o f record, o r a U nited States com m issioner. I f taken before a
ju stice o f the peace, a certificate o f his official authority from a clerk
o f a cou rt o f record should be attached.
A lie n s . A lien individuals and corporations m ay acquire and hold
personal p rop erty and lots or parcels o f land in the D istrict o f C olum bia.
A p p e a ls . A ppeals lie from final orders and certain interlocutory
orders o f th e D istrict C ourt o f th e U nited States fo r the D istrict o f
C olu m bia d irect t o th e U nited States C ou rt o f A ppeals fo r the D istrict
o f C olum bia. There is no righ t o f appeal from the M u nicipal C ourt
b u t w rits o f error m ay issue to that cou rt from the U nited States C ourt
o f A ppeals fo r the D istrict o f C olum bia to review judgm ents on ques
tion s o f law. A ppeals to the Suprem e C ou rt o f the U nited States are
governed b y statutes and rules pertaining to appeals from the federal
courts generally.
A rre s t. There is no Im prisonm ent for d eb t in the D istrict o f
C olum bia. T h e cou rt has the pow er to imprison fo r non-paym ent o f
alim ony in divorce cases, and for contem pt o f cou rt.
A t t a c h m e n t s . In any action at law in th e D istrict C ourt o f the
U nited States fo r the D istrict o f C olum bia or the M unicipal C ourt for
the recovery o f specific personal property, or a debt, or damages for
the breach o f a contract, express or im plied, if the plaintiff, his agent
or attorney, either at the com m encem ent o f the action or pending the
same, shall file an affidavit showing the grounds o f his claim and setting
forth that the plaintiff has a just right to recover what is claimed
in his déclaration, and where the action is to recover specific personal
property stating the nature and, according to affiant’s belief, the value
o f said property and the probable am ount o f damages to wnich the
plaintiff is entitled fo r the detention thereof, and where the action is
to recover a d ebt stating the am ount thereof, and where the action is
to recover damages for the breach o f a con tract setting out, specif
ically and in detail, the breach com plained o f and the actual damage
resulting therefrom , and also stating either, first, that the defendant
is a foreign corporation or is not a resident o f the D istrict, or has
been absent therefrom for at least six m onths; o f, second, that the
defendant evades the service o f ordinary process b y concealing him
self or tem porarily withdrawing him self from the D istrict; or, third,
that he has rem oved or is abou t to rem ove som e or all o f his property
from the District, so as to defeat just dem ands against him ; or,
fourth, that he has assigned, conveyed, disposed of, or secreted, or
is abou t to assign, con vey, dispose of, or secrete his property with
Intent to hinder, delay, or defraud his creditors; or, fifth, that the
defendant fraudulently contracted the d ebt or incurred the obligation
respecting which the action is brought, the clerk shall issue a writ
o f attachm ent and garnishment, to be levied upon so m uch o f the
lands, tenements, goods, chattels, and credits o f th e defendant as
m ay be necessary to satisfy the claim o f the plaintiff: Provided, T h a t
the plaintiff shall first file in the cle rk ’s office a bond , executed by
him self or his agent, with security to be approved b y the clerk, in
tw ice the am ount o f his claim, conditioned to m ake good to the
defendant all costs and damages which he m ay sustain b y reason o f
the wrongful suing ou t o f the attachm ent.
A ttachm ent m a y be had u p on accounts in the names o f tw o or
m ore persons held b y any bank, trust com p a n y or any other corpora
tion or person.
(See E xecu tion).
B a n k s . A ll banking institutions are under supervision o f the
C om ptroller o f th e Currency. N o banking business m ay be done
in the D istrict except b y corporations previously organized and
d oing such business or organized in accord w ith the incorporation
laws o f the D istrict o f C olu m bia or U nited States. N on-m em ber
banks o f the Federal Reserve System are required to m aintain re
serves on the sam e basis as national banks doing business in the
BANKING AND COMMERCIAL LAWS— DISTRICT OF COLUMBIA
District. Liquidation o f any banking business is provided for b y a
frwo-thirds v ote o f shareholders. M a n y other sections o f the national
banking laws are extended to a p p ly to all banks. Criminal laws ap
plicable to m em ber banks o f the Federal Reserve System are also in
force. B ank or trust com p any is n ot liable for refusal to p a y check
or other dem and instrum ent presented m ore than one year after
date o f check or instrum ent, unless expressly instructed b y drawer
or maker to p ay the same. L iability o f bank or trust com pany for
non-paym ent, through m istake or error and without malice, o f a check
or other negotiable instrum ent which should have been paid, is lim ited
to actual dam age shown b y reason o f such non-paym ent.
B ills a n d N o te s . U niform N egotiable Instruments A ct, with some
m odification, in force, ad op ted January 12, 1899. ,
C h a tte l M o r tg a g e s . N o bill o f sale or m ortgage or deed o f trust
to secure a d ebt o f any personal chattels w hereof the vendor, m ort
gagor. or donor shall remain in possession, is valid and effectual to
pass the title therein, except as between the parties to such instru
ment and as to other persons having actual notice o f it, unless the
same be executed and acknowledged and within ten days from the
date o f such acknow ledgm ent recorded in the same manner as deeds
o f real estate; and as to third persons not having notice o f it, such
instrument shall be operative only from the tim e within said ten
days when it is delivered to the recorder o f deeds to be recorded.
C o lla te ra ls . T h e holder o f the note as collateral security for debt
stands upon the same footin g as the purchaser and m ay maintain suit
thereon for his own benefit. T he collateral pledged m ay be sold in
accordance with the terms o f the collateral note which usually pro
vides that the collateral m ay be sold upon non-paym ent o f the prin
cipal o f the note, either at public or private sale, and in such cases the
purchaser at any such sale obtains a valid title to the collateral sold.
C o n d itio n a l S a les. U nlawful to sell, con vey, conceal or rem ove
from the District, with intent to defraud, property possessed under
written conditional sales contract, before conditions are fulfilled,
without consent o f vendor. N o conditional sale o f chattels, where
purchase price exceeds $100, is valid as against third parties without
notice, unless reduced t o writing, signed, acknowledged and recorded.
C o n t r a c t s . E very contract and obligation entered into b y tw o
or m ore persons, whether partners or merely join t contractors, whether
under seal or not, written or verbal, and whether expressed to be
Joint and several or not, is for the purposes o f suit deem ed join t and
several. On the death o f one or m ore o f such persons, his or their
executors, administrators, or heirs are bound b y said contract in the
same manner and to the same extent ;as if the same were expressed
to be join t and several. In actions ex'contractu against alleged joint
debtors it is not necessary for the plaintiff to prove their join t lia
bility in order to maintain his action, but he is entitled to recover,
as in actions ex delicto, against such o f the defendants as shall be
shown b y the evidence to be join tly indebted to him, or against one
only, if he alone is shown to be indebted to him, and judgm ent will
be rendered as i f the others had not been joined in the suit. A n y o f
several join t debtors, when their debt is overdue, m ay make a separate
com position or com prom ise with their creditors.
C om m on Law Statute o f frauds in force.
C o r p o r a t io n s . A ny three or m ore persons m ay form a com pany
for the purpose o f carrying on any enterprise or business which m ay be
lawfully conducted b y an individual, excepting banks o f circulation
or discount, railroads and such other enterprise or business as is other
wise provided for. Such corporations m ay have a perpetual existence.
N o such com pany is authorized to transact business until 10 per cent
o f the capital stock shall have been actually paid in, either in m oney
or property at its actual value; and the recorder o f deeds, before
, filing any certificate o f incorporation, must be satisfied that the entire
capital stock has been subscribed for in good faith. A ll o f the stock
holders o f such com pany are severally and individually liable to the
creditors o f the com pany in which they are stockholders for the unpaid
amount due upon the shares o f said stock held b y them respectively,
for all debts and contracts made b y such com pany, until the whole
amount o f capital stock fixed and lim ited b y such com pany shall have
been paid in, and a certificate thereof shall have been m ade and
recorded. E very such com pany must annually, except insurance
companies, within tw enty days from the first o f January, m ake a
report, which shall be d uly published and which report shall state the
amount o f capital and the proportion actually paid and the am ount of
existing debts. Foreign corporations doing business in the District
o f Columbia are subject to service o f process on their agents or on
the persons conducting their business, o r b y leaving co p y thereof at
the principal place o f business o f such com pany, or at the residence
o f its agent. T he affairs o f the corporation shall be m anaged b y not
less than three nor m ore than fifteen trustees, a m ajority o f whom
must b© residents o f the D istrict, to be annually elected, except for
the first year, b y the stockholders, at such tim e and place as m ay be
provided b y the by-laws. T he fee o f the recorder for filing certifi
cates o f incorporation where capital stock is authorized is a minimum
o f $50.00 on the first $100,000. o f capital stock, fifty cents on each
additional $1,000., plus $1.00 for first tw o hundred words m certificate
and tw enty cents for each additional one hundred words or fraction
thereof.
C o u rts . The D istrict C ourt o f the U nited States for the D istrict
o f Colum bia has jurisdiction generally in matters sounding in law
and equity. M unicipal C ou rt has jurisdiction m contract and tort
cases involving $1,000. or less. Trial C ourts are in session continu
ously throughout the year, except the D istrict C ourt which, usually,
during July, A ugust and September hears only uncontested matters
and criminal cases. U pon sufficient affidavit filed in suits on contract
in M unicipal C ourt, judgm ent m ay be granted in tw enty days, exclu
sive o f Sundays and legal holidays, unless the defendant file an aijir
davit sufficient t o constitute a valid defense.
Days o f G r a c e abolished.
D eed s. The follow ing form o f deed is now all that is required in
the District o f Colum bia td con vey a fee simple title to real estate:
This deed, m ade t h i s .. . .d a y o f ........... . m the y e a r .. . . . b y m e ,. . . .
o f ............ witnesseth: That in consideration o f (here insert con
sideration) , I. the said
. d o grant unto (here insert grantee s
name), o f ........... .a l l that (here describe the property)
Witness m y hand and seal.
........................ ■■■•(Seal.)
A deed to be effective as to third persons w ithout notice, m ust be
acknowledged and recorded w ith the recorder o f deeds and takes
effect from the tim e o f recording. ' N o deed m ay be recorded w ithout
acknowledgment. A scroll is considered a sufficient seal.
D e p o s itio n s . D epositions o f any party or person m ay be taken,
without leave o f cou rt, up on oral examination or written interroga
tories at any tim e after jurisdiction o f the defendant or property in
volved is obtained and after answer is served, either for purpose ot
discovery or for use as evidence in the action or for b oth purposes.
Leave o f C ourt m ust be obtained to take a deposition before answer
is served. The deposition m ay b e taken before any judge o f any
court o f the U nited States, U nited States Commissioner, any clerk o f
a district court, or any chancellor, justice, or judge_ o f a Supreme or
Superior C ourt, m ayor or ch ief magistrate o f a city, ju d ge o f a cou nty
court or cou rt o f com m on pleas o f any State, or any notary public,
not being o f counsel or attorney to any o f the parties, nor interested
in the event o f the cause. T he Federal Rules o f C ivil Procedure
govern.
D e s ce n t a n d D is t r ib u t io n , (a) R eal Estate. Lands o f inte
state descend first to child or children equally. Children o f a deceased
child take (equally) the share o f their imm ediate ancestor. I f there
be no child or descendant o f a child, the estate descends equally to the
father and m other o f the intestate, or the whole to the sole surviving
parent. I f there be no father or m other, the brothers and sisters o f
the intestate take equally, and the descendants o f a deceased brother
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1987
or sister share equally in the share o f such brother or sister. I f there
be no brother,' or sister or a descendant o f a brother or sister, the
whole goes to the w idow or w idow er o f the intestate. I f there be no
w idow or widower, one h alf goes to the paternal, and the other half
to the maternal kindred o f the intestate in the follow ing ord er:
T o the grandfather and grandm other equally, or the entire h alf t o the
surviving grandparent. I f none, then to the uncles and aunts o l the
intestate equally or t o the descendants o f any deceased uncle or aunt.
I f none, then to the great-grandfathers and great-grandmothers, in
the same manner prescribed fo r grandfather and grandmother. I f
none, then to the brothers and Sisters o f the grandfathers and grand
m others or their descendants equally. A n d so on, in other cases,
w ithout end, passing to the nearest lineal ancestors^ and the descend
ants o f such ancestors. I f their b e no paternal kindred, the whole
goes to the m aternal kindred; and if their be no*maternal kindred, the
whole goes to the paterhal kindred. I f their b e neither paternal nor
maternal kindred, the whole goes to the kindred o f the husband or
wife o f tb e intestate in like manner as to the kindred o f the intestate,
and i f the intestate has had m ore than one spouse, all deceased before
the intestate, the estate shall be equally divided am ong the kindred
o f the several spouses in equal degree equality. There is no distinc
tion between kindred o f the w hole b lo o d and kindred o f the half
blood.
P e rs o n a l E sta te . Surplus o f personal estate o f an intestate, after
paying debts and expenses o f administration, is to be distributed as
follow s: I f the intestate leave a w idow or surviving husband and no
child, parent, grandchild, brother, or sister, or the_ child o f a brother
or sister o f the said intestate, the said widow or surviving husband shad
be entitled to the whole. I f there be a w idow or surviving husband
and a child or children, or a descendant or descendants from a child,
the widow or surviving husband shall have one third only. I f there
be a widow or surviving husband and no child or descendants o f the
intestate, but the said intestate shall leave a father or m other, or
brother or sister, or child o f a brother or sister, the w idow or surviving
husband shall have one half. T h e surplus, exclusive o f the w idow s
or surviving husband’s share, or the whole surplus (if there be no
w idow or surviving husband), shall go as follow s: I f there be children
and no other descendants, the surplus shall b e divided equally am ong
them . I f there be a child or children and a child or children o f a
deceased child, the ch ild or children o f such deceased ch ild shall take
such shares as his, her, or their deceased parent w ould, i f living, be
entitled to, and every other descendant or descendants in existence
at the death o f the intestate shall stand in the place o f his, her, or
their deceased ancestor. I f there be no child, or descendant, the whole
shall go to the father and m other in equal shares, or to the survivor
o f them . I f there be a brother or sister, or child or descendant or
a brother or sister, and no child, descendant, or father or m other
o f the intestate, the said brother, sister, or child or descendant o f a
brother or sister shall have the whole. E very brother and sister o f
the intestate shall be entitled to an equal share, and the child or
children, or descendants o f a brother or sister o f the intestate, shall
stand in the place o f their deceased parents respectively. A fter
children, descendants, father, m other, brothers, and _sisters o f the
deceased and their descendants, all Collateral relations m equal degree
shall take, and no representation am ong such collaterals shall be
allowed. I f there b e n o collaterals, the grandfathers and grand
mothers, or-such o f them as survive, shall take alike. I f any person
entitled to distribution shall die before the sam e shall be m ade, his
or her share shall go to his or her representatives. t^®ipum ous
children o f intestate shall take in the same m anner as if th ey had
been born before the decease o f the intestate, b u t no other posthum ous
relation shall b e considered as entitled to distribution in his or her
own right. In the distribution o f personal estate there shall b e no
distinction between the whole and h alf blood.
D o w e r. A w ife is entitled to dow er in all real estate owned b y
the husband during coverture, whether or n o t owned b y him a t the
tim e o f his death, including equitable as well as legal estates. 1 he
wife m ay relinquish dower b y joining in deed with husband or b y
separate deed.
;
E v id e n ce . In all trials the testim ony o f witnesses is taken orally
unless otherwise provided b y the Federal R ules o f C ivil Procedure.
A ll evidence is adm itted which is admissable under the statutes o f
the U nited States, or under the rules o f evidence applied m courts
o f the U nited States on the hearing o f suits in equity. A n official
record m ay be evidenced b y an official publication thereof or b y
a co p y attested b y the officer having the legal cu stod y o f the record,
or b y his deputy, and accom panied w ith a certificate that such officer
has the cu stod y; or b y a certificate o f the one having cu stod y under
the seal o f the office or cou rt where the record m ay b e m ade.
E x e c u tio n s . Executions m ay b e levied upon all goods, chattels and
credits o f the d ebtor n ot exem pt, and upon gold and silver com , ba n k
notes or other m oney, bills, checks, prom issory notes or bonds, or
certificates o f stock in corporations ow ned b y said d ebtor, and upon
m oney owned b y bim in the hands o f the marshal or o f the constable
charged with the execution o f such writ, and also upon ah legal leasehold and freehold estates o f the d ebtor in land. Executions on judg
ments before justices o f the peace m ay be superseded, according to
the amount o f the judgm ent, upon good and sufficient security being
entered b y a person who m ay at the tim e be the owner o f sufficient
real property located in the D istrict, a bove all liabilities and exem ptionsT to secure the debt, costs and interests from one to six months,
but there can be no stay o f execution for wages o f servants or com m on
laborers, nor upon any judgm ent for less than $5.
E x e m p tio n s . (Actual residents.) In addition to wearing ap
parel etc., there are exem pt from execution or attachm ent household
furniture to the value o f $300, im plem ents o f debtor s trade or business
to the value o f $200, stock for carrying on business to am ount o f $200,
one horse, harness and cart, wagon or dray, and earnings o f married
m en or heads o f families, not to exceed $100 per m onth for tw o months.
Exem ptions are only allowed where the p a rty claim ing such is the
head o f a fam ily or householder residing in the District. A lso exem pt
are a notary’s seal and his official docum ents, m oney or benefits to be
paid b y a fraternal beneficial association and m oney recovered b y
fam ily o f deceased as damages on w rongful death.
F o r e ig n J u d g e m e n t s . A ctions m ay be instituted in the D istrict
C ourt o f the U nited States for the D istrict o f Colum bia on any ju d g
m ent o f a court o f record in any other jurisdiction. T he com plaint
in any such case m ust be accom panied b y a transcript o f the record
o f such judgm ent with the attestation o f the clerk o f the cou rt and
a certificate o f the judge, ch ief justice and presiding m agistrate that
the attestation is in due form . A ction m ay n ot be brought i f barred
in foreign jurisdiction.
G a r n is h m e n t . A fter judgm ent, the w rit h f
issue against specific property or credits m the hands o f the garnishee
and on the return o f the writ, i f there be property or credits, the ju d g
m ent or condemnatiQn follows. W rit m ay issue against property or
credits in jo in t account. T he writ o f garnishment can n ot be issued
against the U nited States or the D istrict o f C olum bia.
H o lid a y s . T he legal holidays are: Sundays; January 1 (N ew
Y ea r’s D a y ); February 22 (W ashingtons birth d ay); M a y 30 (M em o
rial D a y ); Julv 4 (Independence D a y ); first M on da y in September
(Labor D a y ); N ovem ber 11 (Arm istice D a y ); Thanksgiving D a y ;
D ecem ber 25 (Christmas D a y ); and d ay o f the inauguration o f the
President, in every fourth year. E very Saturday is a legal half
holiday after tw elve o ’clock noon and notes falling due on that d ay
are not payable un til M on day, except dem and notes which m ay, at
the op tion o f the holder, be presented for paym ent m the forenoon.
H u s b a n d arid W ife . T he w ife’s property is exem pt from execu
tion for the husband’s debts. T h e husband m ay con vey direct to his
wife. T he wife m ay use all o f her property o f every description as
fu lly as i f she were unmarried, and m ay dispose o f the same b y deed,
1988
B A N K IN G A N D C O M M E R C IA L L A W S — F L O R ID A
etc., as fu lly as if she were unmarried. She also has pow er to trade
and to sue and be sued, b u t n o - m arried w om an under the age o f
tw enty-one years' can m ake a valid deed or conveyance. On the
death o f a married wom an the husband is entitled to an estate b y
curtesy in her fee sim ple property o f which she dies intestate, if a child
be born capable o f inheriting. T h e husband is n ot liable for the
debts o f his wife con tracted before marriage. A husband, w ho wil
fu lly neglects to p rovid e for wife, or m inor child under sixteen years,
in destitute circum stances, m ay be adjudged gu ilty o f a misdemeanor,
and m ay be fined, or im prisoned, b y the cou rt having jurisdiction.
in t e r e s t. The legal rate o f interest in the D istrict o f C olum bia is
6 per cent, and in any suit where the contract is tainted with usury the
plaintiff forfeits the whole o f the interest so contracted to be received,
and where usurious interest has been paid it can be recovered pro
vided action for such recovery be brought within one year. In an
action on a contract for the paym ent o f a higher rate o f interest than
is lawful in the District, made or to be perform ed in any state or
territory o f the United States where such contract rate o f interest
is lawful, the judgm ent for the plaintiff shall include such contract
interest to the date o f the judgm ent and interest thereafter at the
rate o f 6 per centum per annum until paid. B y written contract this
rate m ay be increased t o 8 per cent.
J u d g m e n t s . E very judgm ent is good and enforceable b y an execu
tion issued thereon for a period o f twelve years from the date when an
execution might first have been issued thereon or from the date o f the
last revival thereof b y m otion to revive. Judgm ents o f the M unicipal
C ou rt are goo d for six years, b u t are n ot liens on real estate until
recorded in the D istrict C ou rt o f the U nited States for the D istrict o f
C olum bia.
J u r is d ic t io n . (See Actions, Administrations, Appeals, Courts and
Municipal Court.)
L im it a tio n s . Fifteen years for recovery o f lands, tenements or
hereditam ents; executor’s or adm inistrator’s bond, five years; instru
ments under seal, twelve years ; sim ple contracts and recovery o f per
sonal p rop erty and damages for in ju ry t o or for its unlawful detention,
three years; statu tory penalty or forfeiture, libel, slander, assault,
battery, m ayhem , w ounding, m alicious prosecution, false arrest or
im prisonm ent, one year; all other actions three years. Usual excep
tion s m fa vor o f persons under disability. A cknow ledgm ent to revive
action on d ebt m ust be in writing. P art paym ent will take d ebt ou t
o f statute. A ction s m ay n ot be m aintained against D istrict fo r un
liquidated damages unless w ritten notice o f tim e, cause, place is given
within six m onths o f damage.
M a rried W o m e n . (See Husband and W ife.)
M o r tg a g e s . M ortgages are almost entirely supplanted b y deeds
o f trust, requiring n o cou rt proceedings to foreclose. Acknow ledged
recorded and effective in sam e m anner as absolute deeds. Trustee
holds qualified fee sim ple title. Joining the w ife is necessary to bar
dower.
M u n c ip a l C o u r t . T h e M unicipal C ourt o f the D istrict o f C olum
bia is a cou rt o f record. It has exclusive jurisdiction in all civil cases
in which the claim ed value o f personal p roperty, debt or damages ex
clusive o f interest and costs, does n ot exceed $1,000. E quitable
defenses m ay b e interposed. W hen the value in controversy shall
exceed $20, and in all actions for the recovery o f the possession o f
real property, either p a rty m ay dem and a ju ry trial. • Judgm ent
rendered b y the M unicipal C ourt remain in forcé for six (6) years and
no longer, unless d ocketed with the clerk o f the D istrict C ourt o f the
United States for the D istrict o f C olum bia, when it remains in force
for tw elve (12) years. N o ju d gm en t shall be a lien upon real property
until so docketed.
f
*
P a rtn e rs h ip s . Lim ited partnerships for the transaction o f any
mercantile, mechanical, or m anufacturing business within the District
may be form ed b y any tw o or m ore persons, but the num ber o f special
partners is lim ited to six. T he special partners are not liable for
the debts o f the partnership beyond the fund contributed b y them
to the capital. A certificate setting forth the firm name- general
nature or the business to be con du cted; names o f all the general
and special partners Interested therein, distinguishing which are
general and which are special, and their respective places o f residence; the am ount o f capital contributed by each special partner
to the com m on stock ; and the period at which the partnership Is
to com m ence and term inate, m ust be filed with the clerk o f the D istrict
C ou rt o f the U nited States fo r the D istrict o f C olum bia after having
been acknowledged in the manner prescribed for deeds. Partnership
terms m ust be published in tw o newspapers.
P ro te s t. M ay De made by a notary public under his hand and
seal ; or by any respectable resident o f the place where the bill is
dishonored, in the presence o f tw o or m ore credible witnesses. Where
a foreign bill, appearing on its face to be such, is dishonored b y nonacceptance, it must be d uly protested for sam e; and where such a
« j i v ™ “ as not previously been dishonored b y non-acceptance.
Is dishonored by non-paym ent, it must be duly protested for same.
H i t s not protested the drawer and indorsers are discharged. W here
a bill does not so appear to bé a foreign bill, protest thereof In case
o f dishonor is unnecessary. T h e protest must be annexed to the bill
or contain a co p y th ereof and m ust state the (1) tim e and place
for presentm ent; (2) thé fact that presentment was m ade and the
manner thereof: (3) the cause or reason for protesting; (4) the demand
m ade and the answer given, i f any, o r the fa ct that the drawee or
accep tor cannot be found.
R e c o r d s . T he exem plification o f the record under the hand o f the
keeper o f the same, and the seal o f the office or court where such
record m ay be made, is good and sufficient evidence to prove any
record made or entered in any o f the States or Territories o f the United
States: and the certificate o f the party purporting to be the keeper
o f such record, accom panied by such seal, is prim a facie evidence
o f that fact. A co p y o f the record o f any deed or other instrument
m writing not o f a testam entary character, where the laws o f the
State. T erritory, or country where the same m ay be recorded require
such record, and which has been recorded agreeably to such laws,
and the cop y o f any will which said laws require to be adm itted
to probate and record, b y ju d icial decree, and o f the decree o f the
court adm itting the same to probate and record, under the hand
o f the clerk or other keeper o f such record and the seal o f the court
or office in which the record has been m ade, is prima facie evidence
to prove the existence and contents o f such deed, will, or other instru
m ent in writing, and that it was executed as it purports to have been.
See Evidence.
S a le s . U niform Sales A ct in force, effective Ju ly 1, 1937, does not
relate to conditional sales.
T a x e s . T h e rate fixed annually b y Congress, on real and tangible
personal property is, at present, 1.75 per centum o f the assessed value
o f such property. Assessments are based on the fair cash value, and
new assessments are m ade annually b y a B oard o f Assessors. These
taxes are payable, one-half in Septem ber and one-half in M arch o f
each year, with a penalty o f one per centum per m onth for default.
R eal estate taxes becom e liens on real p rop erty on the date placed on
the records, July 1st.
Incom e tax rates for individuals dom iciled in the D istrict are:
1% on the first $5,000. o f taxable incom e, 1 M % on the next $5,000.,
2 % on the next $5,000., 2 14 % on the next $5,000. and 3 % on all in
excess o f $20,000. C orporations, whether dom estic or foreign, are
required to p a y 5 % on taxable incom e derived from D istrict o f C olu m
bia sources, Taxable incom e is arrived at b y exem ptions, exclusions
and deductions substantially the sam e as in the federal incom e tax
law. Returns and p aym ent o f one-half o f the tax m ust be m ade
on A pril 15 o f each year, or, i f the return is m ade on the basis o f a
fiscal year, the return and paym ent o f one-half o f the tax m ust be
m ade on the 15th d a y o f the fourth m onth follow ing the close o f the
fiscal year. T he remaining one-half o f the tax m ust be paid on
O ctober 15, or, i f the return is m ade on the basis o f a fiscal year, on
the 15th d a y o f the tenth m onth after the close o f the fiscal year.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Inheritance taxes are levied on all transfers o f property, or interest
therein, having its taxable situs in the D istrict o f C olum bia, m ade or
intended to take effect in possession or enjoym ent after the death
o f the decedent, or m ade in contem plation o f death. R ates are
graduated on the basis o f the relationship o f the beneficiary to the
decedent. In addition thereto, an Estate T ax is im posed equal to
8 0 % o f the federal tax im posed under the 1926 A ct and m ust be paid
within seventeen m onths after the death o f the decedent. W here
the gross value o f the estate exceeds $1,000. the personal representa
tiv e m ust file a return within fifteen m onths from the date o f death
o f the decedent,’ and p ay the tax Within eighteen m onths from the
date o f death. I f there be no personal representative, each benefi
cia ry o f prop erty in excess o f $1,000. in value, m ust file a return within
six m onths from the date o f death o f the decedent and p a y the tax
within nine m onths from the date o f death. A co p y o f the federal
estate tax return m ust be filed with the D istrict Assessor within
sixteen m onths after the death o f the decedent.
T r u s t C o m p a n ie s . T rust com panies can be organized under the
general provisions o f the C od e on that subject. M u st be tw enty-five
or m ore incorporators, all citizens o f the U nited States. Visitorial
powers exercised b y com ptroller o f currency similar to such powers
exercised with respect to national banks. N o trust com pany can be
incorporated with less capital stock than $1,000,000. M a y d o a
storage business with a capitalization o f not less than $1,200,000.
Foreign com panies desiring to operate in the D istrict m ust first com
p ly w ith the provisions for the governm ent o f trust com panies under
the laws o f this District.
W ills . All wills and testaments m ust be in writing and signed b y
the testator, or b y som e other person in his presence and b y his express
directions, and shall be attested and subscribed in the presence of
the said testator b y at least tw o credible witnesses. N o will, testa
m ent, or codicil is effectual for any purpose whatever unless the
person m aking the sam e be, if a m ale, o f the full age o f tw enty-one
years, and if a fem ale, o f the full age o f eighteen years, and be at
the tim e o f executing or acknow ledging It, o f sound and disposing
mind and capable o f executing a valid deed or contract. A n y will
executed after January 17, 1887, and before January 1, 1902, devising
real estate, from which it shall appear that it was the intention o f
the testator to devise property acquired after the execution thereof
shall be deem ed, taken and held to operate as a valid devise o f all
such p rop erty; and a n y w ill executed after January 1, 1902, which
shall b y w ords o f general im p ort devise all o f the estate or all o f the
real estate o f the testator shall be deem ed, taken and held to operate
as a valid devise o f any real estate acquired, b y said testator after the
execution thereof, unless, an intention shall appear to the contrary.
W here a devisee or legatee dies before the testator, leaving issue, such
issue stands in the place o f the deceased devisee or legatee unless a
con trary intention appear from the Will.
D evises and bequests to attesting witnesses are void .
(See A dm inistration.)
SYNOPSIS OF
THE L A W S OF FLORIDA
RELATING TO
BANKING AND COMMERCIAL USAGES
R evised b y W il l i a m s & W i l l i a m s ,
A ttorneys a t Law , Professional B ldg., Sarasota, Fla.
A c c o u n t s . Open accounts are barred in three years.
A c k n o w le d g m e n t s must in every instance be under official seal.
I f m ade in the State o f Florida, m ay be m ade before any judge, justice
o f the peace, clerk or deputy clerk o f a court o f record, or notary public;
or if made out o f the State, and within the United States, before a
United States Com m issioner o f D eeds appointed b y the governor of
this State, or before a judge or clerk o f any cou rt o f the United States
or o f any state, territory o r district, having a seal, o r before a notary
public or justice o f the peace o f such state, territory or district, having
an official seal, and the certificate o f acknow ledgm ent or p ro o f shall
be under the seal o f the cou rt or officer as the case m ay be. I f made
out o f the United States, before any com m issioner o f deeds appointed
b y the governor o f the State to reside in such country, or any notary
public o f such foreign country, or before any m inister charge d ’affaires,
consul-general, consul, vice-consul, com m ercial agent, or vice-com
mercial agent o f the United States appointed to reside in such country.
C onveyances o f dow er and powers o f attorney for the execution o f
deeds to real estate must be executed in like m anner as conveyances o f
real estate. A w ife’s acknow ledgm ent m ust be taken separate and
apart from her husband. Officers m ust certify that the grantors are
known to him. T he follow ing is the usual form adopted, viz;
State o f Florida,
)
.................... j
C ou n ty o f
B efore the subscriber personally appeared............. ........................ and
his w ife....................know n to m e to be the individuals described in
and who executed the foregoing Instrument who acknowledged that
they executed the same for the uses and purposes therein expressed
and the s a id ................................................................wife o f the s a id ............
.............................being b y m e further and privily exam ined separate
and apart from her said husband, acknow ledged and declared that
she executed the same freely and voluntarily, and w ithout fear, appre
hension, com pulsion, or constraint of, or from hsr said husband, and
for the purpose o f renouncing and relinquishing all her right, o f what
soever kind, in and to said property.
G iven under m y hand and seal official this
d ay of,
1 9 ________
N ota ry P ublic.
M y com m ission expires
. . (See notaries.)
A c t io n s . Suits shall be begun only in the cou nty (or if less than
$100 in justice district) where the defendant resides, or where the
cause o f action accrued, or where the property in litigation is. I f
brought in any cou nty where defendant does not reside, the plaintiff,
or som e person in his behalf, shall file with the praecipe or bill in chan
cery, an affidavit that the suit is brought in good faith and with no
intention to annoy the defendant. This latter provision does not
apply to suits against non-residents. W here there are join t defendants
suit m ay be brought in any court (or justice district) where any one o f
the defendants resides, or where the cause o f action accrued or where
the property in litigation is. C orporations (dom estic) can on ly be
sued in a county where they keep an office. Foreign corporations m ay
be sued in any cou nty where th ey have an agent, or where the cause
o f action accrued or where the property in litigation is.
A d m in is t r a t io n o f E sta te s . U pon the death o f a person intestate
o r having m ade a will b u t appointing no executor, the cou nty judge
appoints an adm inistrator, preferring first the next o f kin; but if none
such apply, then, upon notice given b y publication, any creditor or
suitable person. N o m inor can be appointed. I f no one applies for
letters o f administration within thirty days after death, the probate
court m ust order the sheriff to act. T h e administrator appointed by
the cou rt m ust give bond in am ount to be fixed by the probate judge,
respect being had to the value o f the estate. T he sheriff when acting
as administrator is liable upon his official bond. Claims against an
B A N K IN G A N D C O M M E R C IA L L A W S — F L O R ID A
estate are barred after one year from date o f notice given b y adminis
trator to present sam e. Claims are required to be filed in the office
o f the C ounty Judge. T h e com pensation o f the administrator is
determined b y the court and, in addition to com pensation for his
ordinary duties, not to exceed 6 per cent o f m oney received for sales
made o f personal and real property. Administrators m ust make
annual settlements before the first day o f June each year or forfeit
commissions. T h e C ircuit C ourt is empowered to authorize admin
istrator or executor to carry on deceased’s trade or business for a
reasonable tim e.
Administration o f estates shall not be necessary where there is a
sole heir and the estate is not indebted, or where the estate is not
indebted and there are several heirs to m ake division o f the property
amicably am ong them selves, or where there is no property except
the exempt hom estead or exem pt personal property, or where there
is m oney in the bank less than $1,000.00, or where collections are to
be made that will not cause the aggregate amount o f personal property
to exceed $1,000.00 (instead o f the above you m ay m erely state that
under certain conditions administration o f estates is unnecessary).
A ffid a v its m ay be m ade before any judge, clerk o f the circuit and
supreme courts, justice o f the peace, or notary public.
A lien s. N o distinction between any citizens, except that they are
not allowed to vote.
A p p ea ls. A ppellate proceedings for the com m on law side are b y
writ o f error, except where certiorari or prohibition lie, which m ust be
sued ou t within six m onths from the date o f the judgm ent. T he
record must be filed in appellate court on or before the return day o f
the writ, under penalty or dismissal. Questions o f fact can only be
taken up b y b ill o f exceptions, which must b e presented within the
term o f the court unless b y special order the tim e is extended. Appeals
in chancery m ay b e taken within six m onths and the law governing
writs o f error as far as it relates to filing o f transcripts o f records and
proceedings thereon and filing assignment o f errors, the d u ty o f
appellate court in giving judgm ent, in causing execution o f its decrees
and quashing writs o f error, are applicable to appeals in chancery.
N otice o f appeal in chancery m ust be filed with clerk and recorded in
minutes. This gives appellate court jurisdiction.
A s s ig n m e n ts a n d I n s o lv e n c y . Assignments b y insolvents are
provided for b y law. Preferences are not allowed. All property,
except that which is exem pt, must be surrendered to the assignee.
Assignee gives' bond and winds up estate.
A tt a c h m e n t process m ay issue upon affidavit m ade, setting forth
that am ount is actually due; that plaintiff has reason to believe defend
ant will fraudulently part with his property before judgm ent can be
recovered or is actually rem oving his property, or is about to rem ove
it out o f the State, or resides beyond the limits thereof, or is actually
removing or about t o rem ove out o f .the State, or absconds or conceals
himself or is secreting property or fradulently disposing o f same, or
actually rem oving, or is abou t to rem ove, beyond the judicial circuit
In which he, she, o r they reside. Attachm ent m ay also issue for a debt
not due, upon affidavit stating that the debt is actually existing, and
that the defendant is actually rem oving his property beyond the
limits o f the State, or is fraudulently disposing o f his property for
the purpose o f avoiding the paym ent o f his just debts or demands, or
Is fraudulently secreting his property for such purposes. T he making
o f the affidavit causes all debts to mature for the purpose o f the suit.
Plaintiff must give bond, with tw o sureties in at least double the debt
or sum dem anded. One surety is sufficient if that surety is a surety
com pany authorized to d o business in the state o f Florida. Service
of notice o f the suit m ay be either personal or b y publication where
attachment is levied and property is not retaken b y defendant. N o
arrest allowed in civ il actions. Writs o f garnishment m ay be issued
both before and after judgm ent. I f issued before judgm ent plaintiff,
his agent or attorney m ust make affidavit that the debt for which the
plaintiff sues is just, due and unpaid; that the garnishment applied
for is not sued out to injure either the defendant or the garnishee;
that he does not believe that defendant will have in his possession
after execution shall be issued visible property in this state and in
the county in which suit is pending upon which a levy can be made
sufficient to satisfy the am ount o f plaintiff’s claim, stating the amount,
and, except in cases in which plaintiff has had an attachm ent or
obtained his final judgm ent, he, his agent or attorney, must enter into
bond payable to defendant in double the amount o f the debt, condi
tioned to pay all costs and damages which defendant m ay sustain in
consequence o f plain tiff’s improperly suing out the writ,
v
B a n k s. C orporations for carrying on the business o f banking m ay
be form ed b y any number o f persons not less than five, with a board
o f directors consisting o f not less than five nor m ore than twenty-five.
N o banking com pany shall be organized with a capital o f less than
$50,000, except that banks with a capital o f not less than $25,000
may, with the approval o f the com ptroller, be organized in any city
or town containing not m ore than 3,000 inhabitants. T he capital
stock shall be divided into shares o f $100 each. Stockholders o f
every banking, savings and trust com pany, shall be held individually
responsible equally and rateably and not for one another for all
contracts, debts and engagements o f such com pany to the extent o f
the amount o f their stock therein at the par value thereof in addition
to the amount invested in such shares. Persons holding stock as
executors, administrators, guardians, or trustees are not personally
subject to any liability as stockholders; but the estates and funds
in their hands are liable to the same extent as a testator, intestate,
ward or person interested in trust funds would be if living and com
petent to hold the stock in his own name. Banking corporations are
formed as other corporations and cannot begin business until author
ized b y the com ptroller. Directors must be citizens o f the United
States and at least three-fifths o f the directors must have resided in
the State o f Florida for at least one year preceding their election as
director and every director must own in his own right at least ten
shares o f stock. E very banking firm, banking com pany or trust
com pany or liquidating agency, except national banks, shall be ex
amined at least tw ice in each year by examiners appointed b y the
State Com ptroller, and shall furnish financial reports whenever called
upon b y the State C om ptroller. T he com ptroller on becom ing satis
fied o f the insolvency o f all banking corporations in the State except
national banks, or that the affairs o f any such bank are in an unsound
condition or threatened with insolvency because o f illegal or unsafe
investments, or that it is violating any o f the laws o f the State relative
to banking corporations, m ay in his discretion apply to the proper
court and have a liquidator take charge o f the assets and affairs o f
such banking corporation. Such liquidator is under the direct control
o f the com ptroller and m ay be rem oved b y the com ptroller. N o new
private banks perm itted after June 4, 1915. Banks and Trust C om
panies m ay issue preferred stock but it cannot affect liability o f com
mon stock.
Stockholders o f banks, savings and trust com panies, members o f the
Federal D eposit Insurance C orporation, or whose unimpaired surplus
equals its capital stock, not subject to assessment.
Com ptroller m ay perm it D eposit Insurance C orporation to act as
Liquidator o f any closed bank having membership therein, without
bond.
Banks and trust com panies m ay refuse paym ent o f check or other
demand instrument presented m ore than one year after date.
Foreign trust com panies and banks n ot authorized to d o business
in the state prohibited from exercising t^ust powers in the state.
B ills o f L a d in g . Bills o f lading are evidence against the carrier of
the direction b y which freights are to be received, carried, and delivered
— collector or holder o f com m ercial paper, attached to a bill o f lading
not a warrantor o f the quantity or quality o f the goods represented
thereby, except b y express contract in writing, and the officers, agents,
ana em ployes o f the carrier are required to com ply with the’ terms of
the bill oi lading under penalty o f criminal prosecution.
B lu e S k y L a w . “ On 7-1-31 the U niform Sale o f Securities A ct went
into effect and is administered b y the Florida Securities C om m ission.”
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1989
C h a tte l M o r tg a g e s a n d D eed s o f T r u s t. All conveyances in
tended to secure the paym ent o f m oney are mortgages. Chattel
mortgages must be recorded or the property delivered to m ortgagee
to make them effectual against bona fide creditors and purchasers for
value. Injunction will be granted against the removal o f mortgaged
personalty from the State; can only be foreclosed by bill in chancery
unless under $100, and upon personal property, when a com m on la w
action m ay be brought in justice o f the peace court, and m ortgage filed
with precipe. T he form and effect o f trust deeds have not been dis
turbed b y statute. It is a criminal offence to m ortgage personal prop
erty m ore than once without the consent o f first lienor.
C o lla te ra l S e c u r ity . It is a misdem eanor to sell, pledge, loan, or
in any way dispose o f collateral security without the consent o f pledgor.
A written agreement m ay be made at the tim e o f making the pledge
for the sale o f the collateral in such manner and upon such terms as
the parties m ay desire, b u t notice must be given to pledgor ten dayB
prior to sale.
C o n d itio n a l S ales C o n t r a c t . C onditional sales' contracts are
valid in Florida as such and m ay be either oral or in writing. N o
requirement as to recordation until the elapse o f tw o years from
date o f delivery o f the property. Invalid after tw o years against
purchasers or creditors unless recorded. For purpose o f recordation
contract should be signed, sealed, witnessed and acknow ledged before
a N otary Public.
C o n t r a c t s . S t a t u t e o f F r a u d s . In order to bind an adm in
istrator personally, or any one for the debt or default o f another, or
one upon an agreem ent m ade in consideration o f marriage ; or upon
contracts for the sale o f lands .tenements, or hereditaments or any uncer
tain interest therein or for any lease thereof for a period longer than
one year; or upon an agreement not to bè perform ed within one year,
there must be an agreement, note, or memorandum thereof in writing
signed b y the party to be charged, or som e one lawfully authorized
b y him. Contracts fo r the sale o f personal property must be in writing
or the property must be delivered or earnest m oney paid. News
papers and periodicals must either be subscribed for or ordered in
writing.
C o n v e y a n ce s . (See Acknow ledgm ents.) All conveyances o f real
estate, or any interest therein for a term o f years o f m ore than two
years, must be b y deed in writiiig, signed, sealed and delivered in the
presence o f at least tw o subscribing witnesses; and in order to be
effectual against subsequent grantees or incumbrances, must be
recorded. T he wife's separate estate can be con veyed only by the
joint deed o f herself and husband, and confirmed by her acknowledg
ment, taken separate and apart from her husband. W ords o f lim ita
tion unnecessary. Husband m ay con vey direct to wife.
C o r p o r a t io n s m ay be organized for any lawful business under the
General Corporation Law o f 1925, except banking, trust, safety
deposit, building and loan, insurance, m utual fire insurance, surety,
express, railroad and canal, telegraph and telephone, cooperative,
fraternal, benefit, state fairs, and cem etery com panies and corporations
not for benefit, which are organized under special acts. In general
corporations, stockholders are liable only for am ount unpaid upon
subscription. Charter fee, payable to the Secretary o f State, is $2.00
for every $1,000, o f capital stock up to $125,000; $0.50 per $1,000, on
each additional $1,000, up to $1,000,000; $0.25 per $1,000 on each
additional $1,000 up to $2,000,000; and $0.10 for each $1,000 in excess
o f $2,000,000. C orporations m ay have stock o f no par value, and
upon such stock the fee is $0.20 a share up to 1,250 shares; $0.05 a
share in excess o f 1,250 to 10,000 shares; $0.0025 a share in excess o f
10,000 to 20,000 shares; and $0.001 a share in excess o f 20,000 shares.
M inim um fee $10.00. All corporations required to file annual report
and pay annual tax on capita] stock as follow s: Capital stock author
ized not exceeding $10,000, $10.00; exceeding $10.000 to $25,000,
$25.00; exceeding $25,000 to $50,000, $50.00; exceeding $50.000 to
$100.000. $75.00: exceeding $100.000 to $200.000. $100.00: exceeding
$200.000 to $500,000, $200.00; exceeding $500,000 to $1,000,000,
$500.00; exceeding $1,000,000 to $2,000,000, $750.00; exceeding
$2,000,000, $1,000.00. Corporations m ay pay annual tax o f $1,000.00
and avoid filing report. Designation o f resident agent for service o f
process required o f dom estic and foreign corporations doing business
in the state.
T w o or m ore corporations m ay m erge in to one b y agreem ent o f
a m ajority o f the directors o f all.
Corporations dissolved for non-paym ent o f tax m ay reinstate b y
paym ent o f three years’ capital stock tax and filing o f certificate.
C o s ts . N on-resident plaintiff required to give $ 1 0 0 bond to secure
costs
T he defendant may have suit dismissed if bond is not given.
C o u r t s . Circuit courts have original jurisdiction in all equity cases
and all cases at law not cognizable b y inferior courts. C ounty C ourts,
in such counties as have C ounty Courts, have jurisdiction o f amounts
not exceeding $500.00. C ounty Judge’s Courts have jurisdiction o f
probate matters and, in counties where there are no C ivil Courts o f
R ecord, have civil jurisdiction up to $100.00. Justices o f the Peace
have civil jurisdiction up to $100.00. In counties having a population
o f m ore than 100,000 C ivil Courts o f R ecord are organized, with
jurisdiction from $100.00 to $5.000.00.
C r e d ito r s ' B ills may be brought before claim is reduced to Judg
ment. but suit at law must be first brought and judgm ent m ust be
obtained before decree can be rendered.
D ays o f G r a c e are abolished.
D e p o s itio n s may be taken upon com m ission when witness resides
out o f the county, or is bound for sea, or is abou t to go out o f the
State to remain until after the trial o f the cause, or is very aged or
infirm ; or when oath is made that a material part o f the case or defense
depends upon the testim ony o f such witness. T he tim e for the suing
out o f the commission, the names o f the witnesses, and the name o f
one commissioner must be given to opposite side a reasonable time
before commission is issued. Printed instructions for the guidance o f
commissioners usually accom pany com m ission. Fees or not less than
$5 a witness are to be taxed as costs b y the clerk and paid b y losing
party.
D e s ce n t a n d D is tr ib u t io n o f P r o p e r t y . Section 24: O R D E R
O F SU C C ESSIO N — T he real and personal property o f an intestate
shall descend and be distributed as follow s: 1. T o the surviving
spouse and lineal descendants, the surviving spouse taking the same as
if he or she were one o f the children. 2. I f there be no lineal descend
ants to the surviving spouse. 3. I f there be no surviving spouse to
the lineal descedants. 4. A nd, if there be none o f the foregoing, to
the father and m other equally, or to the survivor o f them . 5. And,
if there be none o f the foregoing, to the brothers and sisters and the
descendants of. deceased brothers and sisters. 6. And, if there be
none o f the foregoing, the estate shall be divided into m oieties, one o f
which shall go to the paternal and the other to the maternal kindred in
the follow ing course: (a) T o the grandfather and grandmother
equally or to the survivor o f them , (b) I f there be no grandfather or
grandmother, to the uncles and aunts and the descendants o f such o f
them as m ay be deceased, (c) I f there be no grandparent, uncle or
aunt, or their descendants, to the great grandfathers and the great
grandmothers equally, or to the survivor o f them , (d) I f there be
no great grandfather or greatgrandmother, then to the brothers and
sisters o f the grandfather and grandmother on the same side and to the
descendants o f such o f them as m ay be deceased, (e) A nd so in
other cases w ithout end passing to the next lineal ancestors or ancestor,
and for want o f them, to the descendants o f such ancestors. 7. And
where the estate is hereinbefore directed to go b y m oieties to the pa
ternal and the maternal kindred, if there should be no such kindred on
the one part, the w hole shall go to thè other part ; and if there b e no
kindred either on the one part or the other the whole estate shall go to
the kindred o f the deceased spouse o f the intestate in like course as If
such deceased spouse had survived the intestat and then died entitled
to the estate.
H A L F -B L O O D . H alf-bloods inherit only one-half.
IL L E G IT IM A T E S , inherit and transmit through m other’s side as
if legitimate, and also through father’s side when recognized b y father.
1990
B A N K IN G A N D C O M M E R C IA L L A W S — F L O R ID A
A d opted children inherit th e same as children o f blood and also
inherit from own parents, b u t such blood parents shall not inherit from
such adopted children. Aliens have sam e right as citizens. There
are no entailed estates nor right o f survivorship.
D o w e r. Deceased m ay n ot b y will cu t off his w ife’s right to dow er,
b u t she shall be entitled to take dower consisting o f one-third o f all his
real and personal property b y electing to d o so within prescribed period
o f tim e, without regard to num ber o f children. T h e hom estead shall
not b e included in the property subject t o dow er, b u t shall descend as
p rovid ed b y law. In addition to dow er the w idow o f an intestate shall
b e entitled to retain necessary clothing, household goods, utensils and
provisions necessary for fa m ily use, upon petition to the C ounty Judge.
E v id e n ce . W itnesses n ot disqualified b y reason o f Interest. In
civil cases, husband and w ife m ay testify for or against each other.
In suits b y o r against lunatics or personal representatives, heirs-atlaw, next o f kin, assignee, legatee, devisee, or survivor o f a person
deceased, no evidence o f a transaction or com m unication between
such lunatic or deceased person and the opposing party or those under
whom he claims, can be given b y the opposing party, unless such evi
d ence is first offered in behalf o f such lunatic representatives legatees,
devises, etc. N o person is excused from testifying or producing
docum ents in trials fo r bribery, burglary, larceny, gam bling, or illegal
sale o f liquors, on ground that it m ay tend to con vict him o f crim e
but no such person shall thereafter be prosecuted or subjected to any
penalty on account o f anything concerning which he m ay so testify
o r produce evidence.
E x e m p tio n s to every head o f a fam ily residing in the State hom e
stead o f 160 acres o f land, and im provem ents, i f in the cou n try: onehalf acre o f ground, if in an incorporated city or tow n, together with
S1.000 w orth o f personal property. T he exem ptions in a city or town
shall n ot extend to m ore im provem ents or buildings than the residence
and business house o f the owner. N o property is exem pt from sale
for taxes or assessments, or for obligations contracted for its purchase,
or the erection or repair o f im provem ents thereon, or for house, field,
or other labor perform ed thereon. W ages and salary o f head o f a
fam ily residing in the State is exem pt from garnishment.
F o r e ig n C o r p o r a t io n s . C om m ercial corporations can d o business
In this State w ithout restriction upon com plying with requirements
as to foreign corporation, provided its name is not the same or so
nearly sim ilar to any dom estic corporation as to cause confusion.
(See Service o f Process.)
Subject to sam e charter fees and annual taxes except that it is based
only on capital actually used in Florida.
F o r e ig n J u d g m e n t s . Judgm ents obtained in the several courts
o f the State, m ay be recorded in any cou n ty and have same force and
effect as if originally obtained therein. Judgments obtained in other
States or countries, m erely evidence, and have to be sued upon to be
m ade effective as judgm ents.
F r a u d . (See Lim itations o f A ctions.) Obtaining m oney or prop
erty under false pretense or b y falsely personating another, are punish
able crim inally.
G u a r d ia n s . Guardian or curator m ay be appointed for physically
or m entally incapacitated, b y reason o f age, epilepsy, drugs, alcohol,
or other reason m aking them incapable.
Guardians m ay invest w ard’s funds only in certain specified secur
ities. (C hap. 17949, A cts o f 1937.)
G u a r a n ty C o m p a n ie s . Guaranty Com panies are perm itted to
becom e surety upon bonds for all purposes after com plying with certain
statutory requirem ents.
H o lid a y s . T he legal holidays are: Sundays; January 1 (N ew
Y ea r’s D a y ); January 19 (R obert E . L ee’s b irth d ay ); February 22
(W ashington’s b irth d ay ); and in cities or tow ns where carnival asso
ciations are organized for the purpose o f celebrating the same, the d ay
in each year know n as Shrove T uesday; G ood F rid ay; A pril 26 (C on
federate M em orial D a y ); June 3 (Jefferson D avis b irth d a y ); July 4
(Independence D a y ); first M on d a y in Septem ber (L abor D a y );
O ctob er 12 (C olum bus D a y ); Farmers D a y (second F riday in
O ctob er); general election d a y ; N ovem ber 11 (Arm istice D a y );
Thanksgiving D a y ; D ecem ber 25 (Christm as D a y ).
H u s b a n d a n d W ife . T h e husband has fu ll control o f w ife’s prop
erty and is not chargeable b y the w ife with the rents and profits, but
he cannot charge for his services. M u st be join ed with wife in sales
o f her p roperty. H om estead can on ly b e alienated b y their join t
deed. Estates b y entireties as at com m on law. H usband not liable
for w ife’s antenuptial debts. Has no interest in her separate earnings.
H as action for negligence causing her d eath; w ife’s property not
generally liable for husband’s debts. W ife m ay sue w ith respect to
separate estate without husband joining. Infant wife m ay join
husband in sale o f real estate.
I n s o lv e n c y . Statutes suspended b y national bankruptcy law.
I n s u r a n c e C o m p a n ie s . Foreign and dom estic, are placed, b y
statute, under control o f State treasurer. T h ey must annually file
a statem ent with, and obtain from the State treasurer, a certificate
before being authorized to d o business. Certificate m ay be revoked
if com pany refuses to p ay judgm ents which have been legally obtained
against it.
I n t e r e s t. E ight p er cent is allow ed on judgm ents and contracts
where interest is payable but no rate is specified. C ontract fo r m ore
than 10 per cent is usurious, and all interest forfeited.
J u d g m e n t s o f a court o f record are a lien for tw enty years upon
real estate o f d eb tor within the cou n ty where rendered, and m ay be
extended to other counties b y recording certified transcript o f ju d g
m ent in any cou n ty where a lien is sought. Judgments o f justice o f the
peace m ay be m ade a lien upon real estate b y recording in the office
o f clerk o f circuit' court.
L ie n s . In order to secure a lien b y lis pendens, a statem ent must
be filed with the clerk o f the circuit court, and recorded b y him in a
b ook kept for that purpose, setting forth the names o f the parties- and
the nature oi the relief sought, and the description o f the property
upon which it is desired to obtain ailien. Statutory liens are given to
laborers and m aterial-m en. P rop erty for which materials are fur
nished upon which labor has been done, is liable to persons not in
p rivity with owner to the extent o f the unpaid balance o f d ebt due
to contractor. Owner personally liable in like amount. Statutory
liens upon real estate, in order to be available as against subsequent
purchasers or lienors w ithout notice, m ust be recorded, and suit
must be brought within twelve m onths after the furnishing o f the
material, or the perform ance o f the labor. Liens upon personal
p roperty exist on ly while possession is retained b y lienor.
L im it a t io n s o f A c t io n s . C ivil actions can only be com m enced
within the following periods after the cause o f action shall have
accrued, to w it: A ctions on Florida judgm ents, actions on con
t r a c t s o r obligations in writing and under seal tw enty (20) years;
actions for the recovery o f real property, actions on judgm ents o f
courts o f the U nited States or any .other state or territory seven (7)
years. On contracts in writing not under seal, five (5) years. On
all actions not herein and specifically m entioned, four (4) years.
Trespass to , realty, action upon liability created b y statute other
than a penalty o f forfeiture, taking, detaining or injury to chattels,
for relief on the ground o f fraud, upon contract not founded upon
instrum ent o f writing, including an action open account for goods,
wares and m erchandise, three (3) years. A ctions for libel, slander,
assault, battery, false im prisonm ent, or an action b y another than the
State upon a s ta tu tefor a penalty or forfeiture tw o (2) years. A ctions
for wrongful death o f a child, actions against railroad com panies for
killing cattle, and any action b y the State for a statutory penalty or
forfeiture, one (1) year.
M a r r ie d W o m e n retain their property, real or personal, ow ned at
marriage or acquired thereafter b y gift, devise, descent, or purchase,
and it is not liable for husband’s debts except b y her written consent,
executed according to law regulating conveyances o f married wom en.
H usband m ust join in all sales, transfers, and conveyances o f the w ife’s
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property except when he has been adjudged insane for m ore than a year.
W ife m ay sue concerning her real estate without joining her husband
with her in the suit. W idow entitled to take dow er consisting o f onethird o f all deceased’s real and personal property b y electing to d o so
within prescribed period o f tim e,-w ithout regard to num ber o f children.
I f there are no children she will inherit all the property, real and per
sonal. W ife b y petition to proper court m ay b e decreed a free-dealer
and as such sue and be sued. (See also d o w e r ).
M in o r s . B oth sexes attain their legal m ajority at the age o f 21
years. M inors who d eposit in savings banks m ay control, transfer
or withdraw the m oney so deposited. A ll other contracts m ade by
them are voidable, except for neoessaries. M arriage rem oves dis
ability o f non-age o f m ale m inor. M inors over 18 m ay have dis
abilities rem oved b y petition in chancery.
M o r tg a g e s o f real estate must be executed and proved or acknow l
edged in the sam e m anner as deeds, and they, likewise assignments
thereof, to be effectual against creditors or bona fide purchasers,
must be recorded. Are foreclosed b y bill in equity in the circuit
court. C hattel m ortgages must be recorded unless property is
delivered to m ortgagee and remains in his possession; becom es subject
to debts o f m ortgagee i f left in his possession m ore than tw o years
without the m ortgage being recorded.
N o ta rie s . B oth m en and wom en over twenty-one years m ay be
appointed notaries public. T h ey m ust renew com m issions every four
years. M a y adm inister oaths, take acknowledgm ents and perform
marriage cerem ony. $400 bond is required to be given. Certificate
must show date o f expiration o f com m ission.
N e g o t ia b le I n s t r u m e n t s . T h e U niform N egotiable Instrum ent
A ct adopted. (See com plete text follow ing “ D igest o f Banking and
C om m ercial L aw s.” )
P a r t n e r s h ip , L im it e d , a n d S p e c ia l. N on e. N o uniform acts
a dopted. C om m on law rules a pply.
P o w e r s o f A t t o r n e y . A n y con tract or con veyan ce m ay be made
b y pow er o f attorney. A con veyan ce o f a married wom an’s real estate
b y pow er o f attorney in order to be valid the pow er o f attorney must
be acknow ledged b y her separate and apart from her husband, and the
acknow ledgm ent must state that she executes it freely and voluntarily,
without com pulsion, fear, apprehension, or constraint o f or from her
husband. T he husband must join either in the deed or powers o f
attorney. Powers o f attorn ey for the con veyan ce o f real estate must
be recorded.
P r o b a te L a w . (See A dm inistration o f E states.) T he county
judge has original jurisdiction o f all m atters relating to the administra
tion o f estates o f decedents.
P r o t e s t. (See N otes and Bills o f E xchange.)
R e c o r d s . R ecords o f deeds and m ortgages are kept in the office o f
the clerks o f the several circuit courts, and the original must be recorded
in the cou n ty within which the property lies. W ills are required
to be recorded with the several cou n ty judges and may- be probated
in any cou n ty in which the deceased left property, if he dies out o f the
State. I f death takes place within the State, then in the cou n ty in
which he has had residence, house, or other place o f abode at the time
o f his death, and if he had none such, then in the cou nty wherein he
died.
R e d e m p t io n . N one, excepting tax sales.
S e a l. A scrawl or scroll, printed or written, affixed as a seal to any
written instrument, is effectual.
S e rv ice o f P r o c e s s . Out o f circuit court, m ade b y the sheriff or
his d eputy. Out o f cou n ty ju d ge ’s or justice o f peace courts, m ay be
m ade b y sheriff or constable. Service in civil actions m ay be made
either upon the person o f the defendant, or b y leaving a co p y at his
residence with som e person over fifteen years o f age. Process against
a dom estic or foreign corporation m ay be served upon any officer or
business agent o f said corporation residing in Florida. D om estic and
Foreign corporations are required to file w ith Secretary o f State a
certificate designating an office for service o f process, which office must
contain a sign with nam e o f corporation and agent and m ust be kept
open and agent m ust be present from ten A . M . to tw elve noon each
d a y except Sundays and H olidays. In lieu o f such agent corporation
m ay designate Clerk o f Circuit C ourt. Failure to com p ly with act
authorizes service b y publication once each week for four weeks and
carries penalty o f one dollar per d a y up to T w o H undred F ifty Dollars.
Service against dissolved corporations can be had b y publication.
S u its . Actions at law are com m enced b y filing a precipe with the
clerk. Personal service is required except in suits b y attachm ent and
garnishment. W rits are returnable on the next rule day, provided
ten days intervene; if not, then on the rule day in the next succeeding
m onth. I f no appearance o f defendant, default is entered forthw ith.
D efault m ay be entered for want o f plea or other pleading on rule d a y.
next after appearance day.
T a x e s , T axes are not due and payable until the first d ay o f N ovem
ber, and if n ot paid b y first day o f the follow ing April prop erty m ay be
sold. Owner nas tw o years within which to redeem . Taxes are a
lien from the first d ay o f the year o f the assessment, and have the force
and effect o f a judgm ent upon which execution m ay issue.
T e s t im o n y . (See D epositions.)
T r a n s fe r o f S to c k . Stock is transferable in the m anner prescribed
In the by-laws. N o stock can be transferred until, after all previous
assessments thereon have been fully x>aid. T he transferee succeeds
to all the rights and liabilities o f the prior holder.
W a r e h o u s e R e c e ip ts . Uniform W arehouse R eceipts A ct adopted,
and effective after July 31st, 1917.
W ills . W h o M a y M a k e a W ill. E very person, m ale or fem ale
married or single, who is at least eighteen years o f age and w ho is of
sound m ind m ay m ake a will. N o other person m ay m ake a will.
P r o p e r ty W h ich M a y B e D evised . A n y p roperty, real or personal,
held b y any title, legal or equitable, with or w ithout actual seizin, m ay
be devised or bequeathed b y w ill; provided, how ever, that w henever a
person who is- head o f a fam ily, residing in this State and having a
hom estead therein, shall die and leave either a w idow or lineal descend
ants or b oth surviving him , the hom estead shall not be the subject o f
devise, b u t shall descend as otherwise provided in this A ct for the
descent o f hom esteads.
R eq u isites o f N u n c u p a tiv e W ills. N o nuncupative will shall be
good which is not p roved b y the oaths o f three witnesses present at the
m aking thereof, nor unless it be p roved b y the said witnesses that the
testator at the tim e o f pronouncing the same did desire the persons
present, or some o f them to bear witness that such was his will, or to
that effect, nor unless such nuncupative will was m ade in the tim e o f the
last sickness o f the deceased. Personal property on ly shall be subject
to disposition b y nuncupative wills.
E x ecu tio n o f W ills. E very will, other than a nuncupative will,
m ust be in writing and m ust be executed as follows : It m ust be signed
at the end thereof b y the testator himself, or som e person in his presence
and b y his direction m ust subscribe the nam e o f the testator thereto.
T h e testator; in the presence o f at least tw o attesting witnesses
present at the same tim e, m ust sign his will or causé his nam e t o be
signed as aforesaid or acknow ledged his signature thereto.
N o will executed b y a non-resident o f Florida, is valid as a will In
this state unless it is executed in accordance w ith the laws o f'th is state
in force at the tim e o f its execution, e x ce p tth a t a will valid under the
laws o f the state or cou ntry in which the testator is dom iciled at the
tim e o f his death is valid in this state, so far as the same relates to
personal property.
A codici) shall be executed with the same form alities as a will.
R evocation m ay be b y fraud, subsequent inconsistent will, codicil,
or b y testator’s act. N either subsequent marriage nor subsequent
marriage and birth o f issue shall revoke a will.
B A N K IN G A N D C O M M E R C IA L L A W S — G E O R G IA
SYNOPSIS OF
THE L A W S OF GEORGIA
RELATING TO
BANKING AND COMMERCIAL USAGES
R evised b y M a c D o u g a l d , T r o u t m a n & A r k w r i g h t , A ttorneys at
Law, 1607 W illiam -O liver B ldg., Atlanta. (See card in A ttorney List.)
A c k n o w le d g m e n t s . (See Deeds.)
A c t io n s . All distinction between suits at law and In equity is
abolished. E quitable relief can be had in superior courts o f law.
A d m in is tr a t io n o f E sta te s . Letters o f administration issue in
the line o f preference, first to the husband or wife, second to the next
o f kin, relations b y consanguinity are preferred to those b y affinity.
I f there are several o f the next o f kin in the same degree, preference
is given to that one selected in writing b y those m ost interested in
the estate. I f no preference is expressed the ordinary exercises
his discretion. I f no application is made b y next o f kin a creditor
m ay be appointed, and if no application is made the ordinary will
vest the adm inistration in a cou nty administrator, an officer authorized
b y statute for that purpose. Administrators must give bond in double
the value o f the estate. Out o f the estate o f each deceased person,
the first charge, and before paym ent o f funeral expenses, is a year’s
support for the fa m ily, to be laid oil b y commissioners according to the
condition and standing o f the fam ily. Foreign administrators m ay act
in this State on giving bond to the ordinary where they qualify
The
bondsm en m ust be residents o f this State.A citizen o f any other State
m ay act as executor o f the will o f a deceased citizen o f this State when
he has the same interest and will give the same bond as in the case o f
foreign administrators. Administrators o f other States m ay sue in
this State b y filing in the office o f the clerk o f the court, to Which suit
Is brought, a properly authenticated cop y o f their letters o f adminis
tration.
A ffid a v its . Pleas and defenses in the courts o f this State which
are required to be under oath, m ay be made before any official o f
the State or cou n ty where the oath is made, who is authorized b y
the laws o f such State or cou n ty to administer oaths. Prim a Facie
the official attestation o f the officer is evidence that he was author
ized to act. A n y non-resident seeking equitable relief, when called
on to verify proceedings, should be sworn before a com m issioner o f
this State, or a judge o f a court o f record Where the oath is m ade,
with the attestation o f the clerk o f such court that the signature o f
the judge is genuine, and that the court over which he presides is a
court o f record.
A lie n s. T he subjects o f governm ents at peace with the United
States and this State are entitled to the rights o f citizens o f other
States, resident here, in so far as they accord to them the privilege
o f purchasing, holding, and conveying real estate.
A p p ea ls. (See Courts.)
A r b it r a t io n . U nder the law o f Georgia disputes and controversies
relating to rights, or property, m ay be subm itted to arbitration.
A s s ig n m e n ts . Assignments for the benefit o f creditors are per
mitted.
A t t a c h m e n t s . A sum mary process o f attachm ent will lie In
the following cases': 1. W here the debtor resides out o f the State.
2. W here he is actually rem oving, or about to rem ove, w ithout the
limits o f the cou nty. 3. W hen he absconds. 4. W hen he resists
a legal arrest. 5. W here he is attem pting to rem ove his property
beyond the limits o f this State. 6. W here he has disposed of, or
threatens to conceal, his property, liable for the paym ent o f his debts,
or shall m ake a fradulent lien thereon to avoid paying his debts.
Attachm ent will lie to recover the purchase m oney o f an article sold
when the debtor is still in the possession o f the property. A ttach
ments m ay issue upon affidavit b y the plaintiff, his agent or attorney,
who must swear that one o f the state o f facts exists which authorize
an attachm ent, and also as to the am ount o f the claim . B ond and
security, in double the am ount sworn to, must accom pany the affidavit
and the officers require personal security. N on-resident corporations
are liable to attachm ents, and one non-resident m ay attach the
property o f another non-resident in this State, except for wages
earned without the State.
B a n k s a n d T r u s t C o m p a n ie s .
Bands o f Banks perm itted: Banks and Trust Companies.
Private banks or p rivate bankers, not within definition o f A Banks,
given right to p a y checks drawn on it or them when presented b y
any bank, banker, trust oo. or agent thereof, and to charge an exchange
charge o f n ot m ore than y& o f 1% o f the aggregate am ount o f the
check or checks paid.
C apital Stock, and S u rp lu s R equ ired : M inim um capital stock in cities
o f 6,000 population or less, $25,000.00; over 6,000 population, $50.000;
all trust companies, $50.000. N o increase in capital stock which would
reduce surplus below 20 % o f capital stock.
R eserves: Cash in hand, including amount due b y banks and bankers,
shall not be reduced below 15% o f dem and deposits.
In corp ora tors: M inim um number is five.
Officers' and D ir ecto r s: Board o f directors to consist o f not less than
three or m ore than tw enty-five o f stockholders o f tw o or m ore shares.
Directors to examine affairs semi-annually.
S upervisin g A u th o r ity : Superintendent o f banks.
E xa m in ation s and R ep o rts: Semi-annual examinations b y Super
intendent o f Banks. R eports four each year and oftener if required
b y Superintendent o f Banks, on form s prescribed b y latter, verified
b y president or cashier and certified b y at least tw o directors.
L oa n L im ita tion s: Individuals— m aximum is 2 0% o f capital and
unimpaired surplus, and if m ore than 10% , must be am ply secured
and approved b y directors. A ll loans to officers, directors and
employees must be am ply secured and approved b y directors.
Stockholders L ia b ility : Unpaid stock subscription and amount
equal to face value o f shares.
B ra n ch B a n k in g . B ranch banks established prior to 1920 are
permitted, b ut not perm itted after that date.
B ills o f L a d in g . A bona fide assignee o f a bill o f lading o f goods
Will be protected in his title against the seller’s right o f stoppage in
transit.
C o lla te ra ls . T h e holder o f a note as collateral security for a debt
stands upon the .same footin g as the purchaser. P roperty left in
pledge or pawn m ay be sold at public sale to the highest bidder, upon
thirty days’ n otice.1*
C o r p o r a t io n s . P ow er to create corporations in this State is vested
in the general assem bly and the superior- courts. Said courts m ay
grant charters to all corporations except banking, insurance, canal,
navigation, express, and telegraph com panies and railroads. The
Secretary o f State may- grant charters for the corporations a bove
enumerated in manner prescribed b y law in the particular case. A
charter for a private corporation is obtained b y a petition to the
superior court, setting forth the object, particular business, corporation
name, capital, place o f business, tim e for which incorporation is desired,
not exceeding thirty-five years. T he petition and order granting the
sam e constitute the charter. Thereafter m ust be advertised in news
paper o f general circulation in C ounty o f principal o f corporation,
once a week for fou r consecutive weeks. In such corporations the
liabilities o f the stockholder is measured b y the am ount o f unpaid
stock subscription due b y him. T he liability o f Bank Stockholders
exists only to the extent o f the balance remaining unpaid on his or her
shares o f stock. T he paym ent o f 10 per cent o f the capital stock is
necessary before com m encing business. General powers o f corpora
tions are conferred on all corporations organized in this state. A ll
corporations organized under the laws o f the State or doing business
therein are required to register with the Secretary o f State and p ay a
graded license fee, with a m inim um o f $10, maximum $1000. V olun
tary dissolution o f a corporation m ay be granted b y the Superior C ourt
upon petition filed b y the C orporation if authorized b y two-thirds o f
capital stock. Lost stock certificates m ust be established b y petition
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1991
to Superior C ourt. Corporations organized under charter granted
b y act o f Legislature, or b y Secretary o f State, m ay at any tim e
renew or extend its charter fo r an additional 30 years, b y filing with
the Secretary o f State a petition signed in corporation’s name, stating
name o f corporation, when incorporated, date o f original incorporation
and all amendments— ; and paying fee o f $100 to Secretary o f State
and filing affidavit from editor that applicant has deposited with
newspaper the cost o f publishing fou r insertions o f said applicant
for renewal.
C o sts. A deposit o f $10 is required in courts o f record from
non-resident plaintiffs before the filing o f suits and a deposit o f $6 in
all divorce cases except in certain counties it is $10.00.
C o u rts . T he term, jurisdiction, etc., o f the several courts o f the
State are as follow s; JU S T IC E C O U R T S hold m onthly sessions and
have civil jurisdiction up to $100. In criminal m atters they are
only com m itting courts. C O U R T S O F O R D I N A R Y hold their
sessions m onthly and have jurisdiction over wills, administration o f
estates, and o f the conduct o f administrators, executors and guardians.
C O U N T Y C O U R T S have m onthly and quarterly sessions. Their
jurisdiction is limited to controversies n o t exceeding $300. C I T Y
C O U R T S hold fou r sessions per annum. T h e jurisdiction o f city
courts is unlim ited except in m atters o f divorce, titles to land and
administration o f equitable relief. T he C ivil C ourt o f Fulton C ounty
replaces the Justices Courts. Its jurisdictional lim it is $2500. It
holds one term each m onth. S U P E R IO R C O U R T S have juris
diction o f all suits and. controversies and have exclusive jurisdiction
in equity powers, d ivorce cases, and suits involving titles to land, and
on the criminal side exclusive jurisdiction o f all cases involving life
or imprisonment in the penitentiary.
D eed s. Deeds to real estate in G eorgia m ust be in writing, and
should be executed in the presence o f two witnesses, one o f whom shall
be an officer authorized fo r that purpose. T h e y should be recorded
In the office o f the clerk o f the superior court o f the cou nty where the
land lies, and all deeds, m ortgages and other liens, should be recorded
Immediately to be available against third parties and innocent pur
chasers. T o authorize the record o f a deed to realty, it must be at
tested b y or acknow ledged before, if executed out o f this State, a
com m issioner o f deeds fo r the State o f Georgia, notary public, clerk
o f a court o f record, or a consul, or vice-consul o f the U nited States
(the certificates o f these officers under their seals being evidence of
the fa ct). W hen the deed is executed out o f this State before a
notary public, the attestation should be under his hand and official
seal. In case o f acknowledgm ent it is better, as a m atter o f precaution,
always to have tw o witnesses, besides the officer w ho takes the acknowl
edgm ent. I f executed in this State, it mu^t be attested b y a judge of
a court o f record o f this State, or a justice o f the peace, or notary
public, or clerk o f the superior cou rt, in the cou nty in which the three
last m entioned officers respectively hold their appointm ent, or if subse
quent to its execution the deed is acknowledged in the presence o f
either o f the nam ed officers, that fact, certified on the deed b y such
officer, shall entitle it to be recorded. (A ct o f 1893.) Deeds to secure
loans are in m ore com m on use than m ortgages because they have
been held to pass the absolute title and protect against year’s support
and dower, the equity o f redem ption remaining in the maker, can not
be levied upon until the debt secured b y the deed has been paid
off. Under the law o f Georgia these deeds can not be foreclosed as
m ortgages, the notes they are given to. secure must be sued to judg
ment, the land must be re-conveyed to the grantor, and then levied
on, but the lien o f the judgm ent relates back to the date o f the con
veyance. In the Federal courts, how ever, foreclosure can be made
In equity as in the case o f ordinary m ortgages. Usury will, however,
void such a conveyance, only as to the interest paid on such debt.
D e p o s itio n s . T estim ony is taken in this State b y written inter
rogatories where the witness is a fem ale, or where the witness does
not reside in the cou nty where the suit is pending, or b y reason o f disa
bility is unable to attend cou rt. In all counties within this State,
depositions m ay be taken upon five days’ notice to the other party o f
the tim e and place at which the witness is to be exam ined. This latter
process cannot be used for taking testim ony outside o f the State.
Depositions m ay be taken within or without the state, without com
mission, before a notary public or any officer authorized to issue
attachments. I f within the state or if taken without the state, before
any officer o f the state or county where taken, authorized b y laws o f
Georgia to attest deeds or take acknowledgm ents, upon 10 days’
notice to opposite party. In taking answers to interrogatories,
which must be authorized b y a com m ission issued for such purpose
b y the court here, tw o com m issioners must act. Commissioners must
Be disinterested and not related to either party, or connected with
the case; attorneys o f the parties are incom petent. N one o f the parties
to the case, nor their agents or attorneys, can be present when the
com m ission is executed. T he witness can only write his answer Ip
the presence o f the commissioners. It is usual, and the better practice,
for one o f the commissioners to write the answers o f the witness as
they are given. Depositions m ay be written with the typewriter,
and commissioners m ay adjourn their sittings from day to day. The
following instructions for taking testim ony are im portant: Instruc
tions for taking answers to interrogatories:' 1. insert the com m is
sioners' names in the com m ission; any tw o respectable citizens will
do. 2. State the case as you find it. Then com es the caption, th u s:
State o f .............................
(H ere insert the cou n ty and State
C ounty o f ............................. ss. where the com m ission is executed.)
B y virtue o f a com m ission from t h e ....................court; o f . . . . . . . . . . .
county, we have caused the person in said com m ission nam ed to com e
before us, who being duly sworn true answers to make to certain
interrogatories thereto annexed, deposeth and answereth as follows;
(H ere insert answers o f the witnesses to each interrogatory in order
3. L et the witness sign the answers; then say: “ Answered, sw orn to,
and subscribed before us, t h i s .. . .d a y o f ....................1 9 . . . . ” Then
sign your own names, adding the words “ Comm issioner (L. S .) " after
each name. 4. Seal all up together, using twp wafers, each com
missioner writing his name with “ C om m issioner” across a wafer or
seal. 5. State the case on the package, and address it to the clerk
o f the court issuing the com m ission. 6. I f it is to go b y mail, get
the postmaster to receipt on the package. “ R eceived from one o f
the commissioners (giving his name) the within interrogatories, to be
forwarded b y due course o f m ail,” naming his post-office. T estim ony
thus taken must be sent b y mail, or b y some person specially author
ized b y the com m issioner to carry it to the court.
D e s ce n t a n d D is tr ib u t io n o f P r o p e r t y . T he husband is the
sole heir to his intestate wife, unless she leave children, and in that
event the husband and children shall inherit per capita, but the
descendants o f children shall take per stirpe. I f a man die without
children, or the descendants o f children, leaving a w ife, the wife is
his sole heir. I f there are children, or those representing deceased
children, the wife shall take a child’s part, unless the shares exceed
five in number, in which case the wife shall have one-fifth part o f the
estate. I f the wife elects to take her dower, she has no further interest
in the estate. Children stand in the first degree to the intestate, and
Inherit equally. Posthum ous children stand upon the same footing
with other children. Lineal descendants o f children stand in the
place o f their deceased parents, and take per stirpe, and not per
capita. Brothers and sisters stand in the second degree and inherit
If there be no widow or children, or representatives o f children. The
half-blood on the paternal side inherit equally with the whole blood.
T he father, if living, inherits equally with brothers and sisters, and
stands in the same degree. I f there be no father, and the m other
Is alive, she shall inherit in the same manner as the father would.
R eal estate descends direct to the heirs, and personal estate to the
administrator. B u t real estate is subject to administration for the
purpose o f paying debts, and if necessary, for distribution.
D o w e r. In this State the wife is entitled to an estate for life in onethird o f all lands o f which the .husband dies seized or possessed at the
time o f his death, or to which the husband obtained title in right o f
1992
B A N K IN G A N D C O M M E R C IA L L A W S — ID A H O
bis w ife. There is no necessity for renunciation o f dow er in this State,
and a m arried woman, on that question, need not join with her hus
band in con veyin g land, except in cases where, before 1866, he obtained
real estate belonging to his w ife, b y virtue o f the marital relation.
E x e c u tio n s . M u st follow the judgm ent or decree from which they
issue. T h ey are good for seven years and m ay be renewed fo r a like
period b y entry nulla bona.
E x e m p tio n s a n d H o m e s te a d s . U nder the constitution and laws
o f Georgia, each head o f a fam ily or guardian, or trustee o f a fam ily
o f m inor children, or o f an aged o r infirm person, or a person having
care and support o f dependent fem ales o f any age, who is not the
head o f a fam ily, shall have exem ption o f realty, or personalty, or
both, to the aggregate o f $1600. T he d eb tor shall have power to waive
or renounce, in writing, his right to the benefit o f exem ption above
stated, except as to wearing apparel and not exceeding $300 worth
o f household and kitchen furniture, and provisions. T he hom estead
or exem ption m ay be sold b y the d eb tor and his w ife, if any, with the
sanction o f the judge o f the superior cou rt o f the cou n ty where the
debtor resides, or the land is situated. T he proceeds to be re-invested
upon the same uses. A general waiver in writing, o f the hom estead,
or exem ption, is good.
.
. . .
T h e hom estead o f each resident o f the state actually occupied b y
owner as a residence shall be exem pt from all taxes for state, cou nty,
and school purposes, to value o f $2,000, if said applicant file his
written application and schedule with C ou n ty T a x R eceiver on or
before A pril 1st o f year In which exem ption from tax is sought.
F o r e ig n C o r p o r a t io n s . Ail corporations,' except those chartered
and organized under the laws o f this State, are held to be foreign
corporations. Such corporations are recognized b y com ity on ly:
they are subject to attachm ent, but have all the rights o f replevy and
defense. T h ey cannot exercise any corporate powers or privileges
which b y the constitution and laws o f Georgia are denied to dom estic
corporations or the exercise o f which would be contrary to the public
policy o f this State. There is otherwise no restriction upon foreign
corporations except in the case o f insurance com panies and building
and loan associations, which are required to m ake deposits. All co r
porations are subject to license fees for doing business and all are liable
for taxes on property ow ned or held in the State* (See Corporations.)
F r a u d . Contracts, awards, marriages, judgm ents, sales, and wills
are void when they are brought about and procured b y fraud. P rom
issory notes when procured b y fraud are void in the hands o f the holder,
who so procures them . T he statute o f frauds, as o f force in Georgia,
requires the follow ing obligations to be in writing, signed b y the party,
or his authorized agent, to be binding: 1. A prom ise b y an executor,
administrator, guardian, or trustee, to answer in damages out o f his
own estate. 2. A prom ise to answer for the debt, default, or m is
carriage o f another. 3. A n agreem ent m ade upon consideration of
marriage, except marriage articles as otherwise provided. 4. Any
contract for the sale o f lands, or any interest in or concerning them.
5. A ny agreem ent that is not to be perform ed in a year. 6. A
prom ise to revive a debt barred b y statute o f lim itations or bankruptcy.
7. A ny contract for the sale o f goods, wares, an d merchandise.
In existence or not in esse, to the am ount o f $50 or m ore, excep t the
buyer shall a ccept part o f the goods sold and actually receive the same
or give som ething in earnest to bind the bargain or in part paym ent.
8. An acceptance o f a bill o f exchange.
G a r n is h m e n t s , This process m ay b e invoked in any case, b ut wa
ges or salaries are not subject until after judgm ent has been rendered.
Garnishm ent m ay b e dissolved b y giving bond and a third party m ay
claim a fund held up under garnishm ent and m ay release the fund .by
giving bond. A n y person m ay claim exem ption from garnishment as
to wages to the extent o f $1.25 per d ay and one-half o f the remainder.
H o lid a y s . T h e legal holidays are: Sundays; January 1 (New
Y ea r’s D a y ); January 19 (R obert E . L ee’s b irth d ay ); February 22
(W ashington’s birthday) ; A pril 26 (C onfederate M em orial D a y ) ;
June 3 (Jefferson D a v is’ birthday) ; July 4 (Independence D a y ) ; first
M on d a y in Septem ber (Labor D a y ); O ctober 12 (C olum bus D a y );
N ovem ber 11 (Arm istice D a y ); Thanksgiving D a y ; and D ecem ber 25
(Christm as D a y ).
I n t e r e s t . T he legal rate o f interest in Georgia is 7 per cent, but
8 per cent is legal when con tracted for in writing. B ut 1 H % per
m onth m ay be charged under Small Loan A ct up to $300. Parties
charging usury forfeit the excess if usury is set up. Usury has no
present penalty in Georgia, except forfeiture o f all interest paid upon
the debt.
J u d g m e n t s create liens from their rendition upon the real or per
sonal property o f the defendant; all judgm ents at the same term rank
equally, and p roperty sold b y a d eb tor after judgm ent is obtained
against him is only discharged from the lien o f such judgm ent, if real
estate, after four years’ possession b y the vendee, and in cases o f per
sonal property, after tw o years’. Judgm ents, whether in the United
States cou rt, or in any State court, obtained in any other cou n ty than
that in which the defendant resides have no lien on the property o f
the defendant in any other cou nty, unless the execution thereon is
recorded in the cou nty o f the defendant’s residence. Unless such
execution is recorded as so required within thirty days, its lien will
only date from the tim e o f record. (See A ctions.)
J u r is d ic tio n . (See T itle C ourts.)
L ic e n s e . N o license is required o f com m ercial travelers. Itinerant
traders must pay license fees.
L ie n s . U nder the laws o f Georgia mechanics, m aterial-men, m a
chinists, em ployes o f steam boats, millwrights, builders o f gold mine
machines, stone-cutters, and marble works laborers have special liens
on property im proved or worked on. Landlords have a general lien
which takes effect from the levy o f distress and a special lien on crops
for rent o f land on which they are raised. C om m on law liens o f inn
keepers, factors, pawnees, carriers, attorneys and others are recog
nized. V endor’s lien on land has been abolished. A ttorneys have a
special lien on papers in their hands and on property recovered in suits
brought b v them or successfully defended b y them.
L im it a t io n s . Suits on open accounts are barred after four years,
on prom issory notes and bills after six years, on instruments under
seal after tw enty years, on suits for personal Injury after tw o years.
Seven years’ adverse possession o f real estate under color o f title, and
tw enty years’ adverse possession without color o f title, will bar the
claims o f all persons not laboring under disability. Infants have seven
years to assert their rights, after becom ing tw enty-on e years o f age.
T his State does not require that notes or contracts under seal be
witnessed, so that a note or con tract under seal whether witnessed
or not carries the tw enty-year statute o f lim itation provision.
M a rr ie d W o m e n . T he wife m ay contract and sue and be sued in
her own name in respect to her separate estate as a fem m e sole, except
that she can not bind her separate estate b y suretyship fo r any one,
and any promise to p ay her husband’s d eb t is void . She, cannot
sell to her husband o r trustee for any purpose, except b y order o f the
superior court. A wife or her heirs m ay sue and recover from any
person m oney or prop erty used b y her husband to pay his d eb t where
the creditor takes with notice. A ll the prop erty o f the wife at the
tim e o f marriage, and all she m ay acquire b y gift, inheritance, or p u r
chase, shall vest in and belong to her, and shall n ot be liable fo r the
debt, default, or contract o f her husband. T he wife with her children,
if any, is entitled to tw elve m onths’ support ou t o f the estate o f her
deceased husband. T he husband is bound to support and maintain
the wife, and his consent is presum ed to her agency in the purchase o f
necessaries. T he w ife’s separate prop erty is not liable for debts con
tracted b y her as agent o f her husband in the ordinary support o f her
self and children, but b y special con tract in her own capacity, and
not as agent for her husband, she cou ld bind her separate estate, for
that purpose. A married wom an can dispose o f her property b y will.
M o r tg a g e s . M ortgages are only security for debts. T h e y m ay
em brace property in the m ortgagor’s possession, or to which he has
a right o f possession. T h ey m ay cov er a stock in bulk, b u t changing
In specifics, and after acquiring property. N o particular form is
necessary, b u t it must be cleared that the instrum ent indicates a lien.
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Federal Reserve Bank of St. Louis
describes the property and specifies the d ebt it secures. M ortgages
on land are n ot good against dower, and a wife cannot waive her
dow er as against this lien. M ortgages must be executed and attested
in the sam e manner as deeds, except that in m ortgages on personal
property, only the official witness is necessary. M ortgages with power
o f sale are valid in Georgia. H om estead and exem ption m ay be
waived in the m ortgage. All m ortgages on personal property must
be recorded in the cou n ty where the m ortgagor resides and the prop
erty is located. M ortgages on land must be recorded in the county
where the land is situated.
N e g o t ia b le I n s t r u m e n t s . U niform N egotiable Instrum ents A ct
(see com p lete text follow ing “ D igest o f B anking and Com m ercial
L a w s” ). A d opted A ugust 18, 1924, with certain changes, i.e., m ay
be m ade payable in co tto n or other articles o f value, om its provision
authorizing confession o f judgm ent if not paid at m aturity, where
instrum ent payable at bank it shall n ot be equivalent to an order
to the bank to p a y same for account o f principal debtor. A contract
to p a y attorn ey’s fees cannot be enforced unless the debtor when
served ten days before suit is filed with a written notice o f intention
to sue with am ount and term o f cou rt to which suit w ill be brought,
shall fail to p a y such d eb t before return day. A waiver o f hom estead
in a prom issory n ote is a bar to such a claim as against the collection
o f such note. P rom issory notes and contracts containing reservation
o f title to personal p roperty m ust be executed before a notary public,
justice o f the peace, or clerk o f a court o f record, and m ust be recorded
as m ortgages to hold such property as against third parties or innocent
purchasers. A n y draft, b ill o f exchange or check, drawn upon an
institution or person with which the drawer has not sufficient funds
on deposit to m eet the same, subjects the drawer t o crim inal liability.
N o ta rie s . Com m ercial notaries, male or fem ale, are appointed
for four years b y the superior courts, and for the state at large b y the
State Librarian. T h e y must have seals and are authorized to attest
deeds and m ortgages, and m ake protest o f com m ercial paper.
P r o b a t e L a w . (See Administration or Estates, Deeds and M o rt
gages.)
P r o t e s ts . (See Bills o f Lading and Prom issory N otes.)
R e c o r d s . (See Deeds and M ortgages.)
R e d e m p t io n , There is no redem ption in this State under judicial
sales except in case o f sale o f property under tax execution where
parties m ay redeem in tw elve m onths if im proved land and wild land
within tw o years. Unless after 12 m onths from date o f sale notice is
given the defendant in execution o f purchaser’s intention to foreclose
redem ption real estate m ay be redeem ed any tim e thereafter. (N ot
applicable to redem ption o f w ild land.)
R e p le v y . All property seized under attachm ent, distress, or other
similar process, m ay be replevied. P roperty seized under process
and claim ed b y the third party m ay be delivered over upon bond and
security for its forthcom ing to answer final judgm ent o f decree.
R e v is io n . (See C ourts.)
S ales. Sales m ay be m ade t o p ay debts, but any sale o f stocks of
goods in bulk is deem ed fraudulent unless the seller delivers to the
buyer a list o f all creditors and the am ount due each. I t shall then be
the d u ty o f the buyer to n otify the creditors o f his purchase. This
notice must be m ailed five days before com pletion o f the purchase.
T a x e s . Taxes are a lien upon all the property o f the debtor, real
or personal, and its lien is preferred as stated in section herein relating
to distribution o f the estates. Sales o f property for taxes are con
ducted in the same manner as other judicial sales. One vear in which
to redeem is allow ed. A ll taxes and liens fo r taxes accrued against
property, an eq u ity o f redem ption in which is em braced in a year’s
support d uly set apart, shall be thereby divested, the sam e as if the
entire title were included in such year’s support.
W ills. All persons o f full age and sound and disposing m em ory.
Including married women, m ay make wills, and dispose o f their estates.
W ills must be executed in the presence o f three witnesses, all o f whom
shall be present, must be called b y the testator as witnesses, and must
sign, and shall certify that they signed, in the presence o f the testator,
and in the presence o f each other. W ills must be in writing, except
nuncupative wills. W ills o f citizens o f other States, where executed
according to the laws o f the State, and probated in solemn form in
such State, which dispose o f real or personal property in Georgia, m ay
be adm itted to probate in this State, when an exemplified co p y o f
the will is presented. W ills are probated in the court o f ordinary
In the cou nty where the testator resides at the date o f his death. All
wills executed out o f this State b y citizens o f this State to dispose
o f property in Georgia must be executed according to our law. A
foreign will, executed according to the law o f Georgia, will constitute
a muniment o f title to real property w ithout being probated in this
State, when recorded on the record o f deeds in the cou n ty where the
land lies, together with an exem plification o f record adm itting it to
probate in another State, certified according to the A ct o f Congress.
U niform Stock Transfer A ct adopted M arch 24, 1939.
SYNOPSIS OF
THE LA W S OF IDAHO
RELATING TO
BANKING AND COMMERCIAL USAGES
R evised b y C h a s . H . D a r l i n g , A ttorn ey at L aw , Boise.
(See card in A ttorn ey List.)
A c k n o w le d g m e n t s . All conveyances and other instruments
required to be acknow ledged in this State m ust be acknow ledged, if
within the State, before a jud ge or clerk o f a cou rt o f record, or the
Secretary o f State, as cou n ty recorder, a notary public, or a justice
o f the peace. T he authority o f a justice or clerk o f the Supreme
C ourt, or N ota ry Public, or the Secretary o f State, to take acknow l
edgm ents extends to any place within the state, and o f the remaining
officers authorized to take acknow ledgm ents to the city, cou n ty or
district for which said officer was elected or appointed. I f w ithout the
State, but within the United States, they must be acknow ledged before
any such officer, or a com m issioner o f deeds for this State, or before
any officer authorized by the laws o f this State or T erritory to take
such acknow ledgm ent. I f w ithout the U nited States, th ey must be
acknowledged before a m inister or charge d ’affairs o f the United
States, resident and accredited in the cou ntry where the acknow ledg
m ent is taken, before a consul or vice-consul, a judge o f a cou rt of
record, a d uly appointed com m issioner, or a notary public. The
certificate o f acknow ledgm ent, if m ade before a justice o f the peace,
when used in any cou nty other than that in which he resides, must
be accom panied b y a certificate, under the hand and seal o f the recorder
o f the cou nty in which the justice resides, setting forth that such
Justice, at the tim e o f taking such acknow ledgm ent, was authorized
to take the sam e, and that the recorder is acquainted with his hand
writing, and believes that the signature is genuine. P ro o f o f the
execution o f an instrum ent m ay be m ade though it has not been
acknow ledged. Form o f married w om an’s acknow ledgm ent the
sam e as that o f a single person. T h e form s o f certificates o f acknow l
edgm ent b y trustees, executors, administrators, guardians, sheriffs,
receivers, and other officials, and o f partnerships, and o f the state, and
o f any cou n ty or subdivision, are prescribed b y Idaho C od e A nnotated,
Secs. 54-710 to 54-714, Inc. (See C onveyances.)
A c t io n s . There is but one form o f civil action in this State. An
action is com m enced within the m eaning o f the statute when the
com plaint is filed with the clerk. E very action m ust be prosecuted
In the nam e o f the real party in interest.
B A N K IN G A N D C O M M E R C IA L L A W S — ID A H O
A ffid a v its are used only to verify pleadings,, to prove service o f
summons, notice, or other paper, to obtain provisional rem edy.
A lien s. A nti-Allen bill prohibits aliens not eligible to citizenship
and corporations, a m ajority o f whose members are such aliens, from
acquiring or holding real estate except to the extent and for the pur
poses prescribed b y existing treaties between their countries and the
United States, but permits such aliens to lease lands for n ot m ore
than five years for agricultural purposes. Also prohibits such aliens
from acting as guardian or trustee for any real estate and provides
that lands hereafter con veyed to such aliens shall escheat to the State.
(I. C . A ., Sec. 23-102, et. seq.)
A r b it r a t io n . Persons capable o f contracting m ay subm it to
arbitration any con troversy which m ight be the subject o f a civil
action between them , except a question o f title to real property In
fee or for life.
A s s ig n m e n t f o r B e n e fit o f C r e d ito r s . N o assignment for benefit
o f creditors shall be valid unless made to a bona-fide resident o f this
state or to a corporation d uly authorized to d o business in this state.
(I. O. A . Sec. 66-201.)
A t t a c h m e n t s . A ttachm ents m ay be had in actions on judgm ents
or contracts express or implied where defendant is a non-resident or
the d ebt Is unsecured. Plaintiff at the time o f issuing the summons
or any tim e afterwards m ay obtain the attachm ent upon filing affi
davit and undertaking and notice o f attachm ent m ust be published.
B a n k C o lle c t io n C o d e . E ffective M a y 5, 1931. Given directly
following laws.
B a n k s a n d B a n k in g . T itle 25 o f Idaho C ode A nnotated, as
Amended, entitled “ Bank A c t ,” governs the form ation, regulation and
administration o f banks.
It is unlawful to engage in banking or trust business except b y
means o f a corporation d u ly organized for such purpose, except that
any individual, copartnership or unincorporated association actually
transacting banking or trust business as defined in the A ct, on the
effective date thereof, M a y 5, 1925, m ay continue in such business
at the places where they are then located, subject to the provisions
o f the A ct.
Bank A ct does not ap p ly to national banks. Supervising authority
is thé Departm ent o f Finance o f State. Banks are divided into the
following classes: Savings Banks, Com m ercial Banks, T rust C om
panies. C orporations m ay be organized b y any number o f natural
persons-r-not less than five in any case— under the General Corporation
Laws o f the State and as provided in the Bank A ct. Officers and
Directors are as provided b y the General Corporation Laws o f the
State. C apital Stock required varies in proportion to the population
o f the com m unity, from $25,000 to $100,000. Articles o f Incorpora
tion m ust be prepared under the General Corporation Laws and m ust
be approved b y the D epartm ent o f Finance before filing. N o bank
shall transact any business, except such as is incidental to its organi
zation, w ithout the written approval o f the Comm issioner o f Finance
and his Certificate stating that it has com plied with the provisions o f
the Bank A ct and all requirements o f law. The entire Capital, plus
10% for Sin-plus, in cash, or property approved b y the Commissioner
o f Finance, m ust be paid in before com m encing business. A s a pre
requisite to obtaining the perm it from the Departm ent o f Finance,
Bank m ust file (1) Certified C op y o f Articles, (2) 6 -o o f that entire
Capital, plus 10% Surplus, is paid in, (3) Names and addresses o f its
Officers and Directors, (4) Names and addresses o f all Subscribers to
its Capital Stock and am ount subscribed b y each, (5) Financial State
ment o f each and every Subscriber, showing the property he owns,
not exem pt from execution, which m ust be at least three times the
amount o f subscriber’s subscription, (6) Oath o f each Director,
(7) Affidavit o f Directors that corporation has com plied with all
provisions precedent to doing business.
E very bank not a member o f the Federal Reserve System shall, at
all times, have on hand as a Reserve an amount equal to at least 15%
of its aggregate deposits, in cash, in its vaults or held on deposit,
subject to check,, with other banks, which shall have been approved
by the Com m issioner o f Finance. 33 K % o f Reserve m ay consist o f
U. S. B onds not hypothecated. A ny bank becom ing a member o f
Federal Reserve System shall com p ly with requirements o f Federal
Reserve A ct.
Comm issioner o f Finance is required to examine State Banks twice
each year and whenever he shall deem it necessary. Fees for exami
nation are réquired to be paid b y the bank. E very bank is required
to make not less than three reports to Departm ent each calendar year
at the times reports are called for from N ational Banks. Departm ent
o f Finance prescribes form s for reports. Commissioner o f Finance m ay
om it exam ination o f any bank and accept in lieu thereof findings o f
the exam ination m ade b y any agency o f the United States authorized
and required b y laws o f the U nited States to make such examination.
Total liabilities o f any one person to any bank shall not at any one
time exceed 2 0% o f the aggregate paid in Capital and Surplus. In
debtedness o f an Officer whoi s actively engaged in managing o f bank,
or an E m ployee, shall not exceed 5 % o f paid up Capital and Surplus.
N o loan to Officer or E m ployee shall be m ade without being approved
by m ajority o f B oard o f Directors, and every such loan shall be acted
upon in absence o f applicant. Com bined indebtedness o f Directors,
Officers and E m ployees shall not exceed 4 0% o f paid up Capital and
Surplus. N o Officer or E m ployee m ay borrow except on good co l
lateral or other am ple security. Loans to Officials o f Departm ent o f
Finance are prohibited.
Banks m ay m ake real estate loans secured b y first liens, represented
by mortgages or deeds o f trust, upon real estate including im proved
farm lands, business and residential properties, and m ay purchase
obligations so secured, when entire am ount o f such obligation is sold
to bank. A m ount o f any loan on real estate shall not exceed 50% o f
appraised value o f real estate, and no loan shall be m ade for a longer
term than five years except that loans m ay be made in an am ount
not to exceed 60% o f appraised value o f real estate for term not longer
than 10 years i f loan is secured b y amortized m ortgage or deed o f trust
upon terms b y which instalment paym ents shall amortize 4 0% or
more o f principal o f loan within not m ore than 10 years, and these
limitations d o not prevent renewal or extension o f loans which _are
insured under act o f Congress relating to Federal Housing Adminis
tration. N o bank shall m ake real estate loans in aggregate in excess
o f the am ount o f the capital stock o f the bank paid in and unimpaired
plus unimpaired surplus fund or in excess o f 60% o f am ount o f its
time and saving deposit— whichever is greater. Loans m ade to
finance construction o f residential or farm bnildings and having
maturities o f not to exceed six months, whether or not secured b y
mortgage on real estate, shall not be considered as real estate loans
but shall be classed as ordinary com m ercial loans provided no bank
shall invest in or be liable on any such loans in aggregate am ount in
excess o f 50% o f actually paid-in and unimpaired capital. Loans
made to established industrial or com m ercial businesses which are
in whole or in part discounted hr purchased or loaned against b y
Federal Reserve B a n k under act o f Congress o f June 19, 1934, or for
any part o f which a com m itm ent shall have been m ade b y Federal
Reserve Bank or in the m aking o f which a Federal Reserve Bank
participates under the provisions o f said act o f Congress, are not sub
ject to the above restrictions or limitations upon loans secured b y real
estate.
Banks m ay invest their funds and m oney in their cu stod y eligible
for investment in notes or bonds secured b y m ortgage or deed o f trust
insured or debentures issued b y Federal Housing Adm inistrator and
in securities o f National M ortgage Associations, and in bonds or other
obligations issued b y a housing authority pursuant to the Housing
Authorities Law o f this state or issued b y any public housing authority
or agency in the U nited States when such bonds or obligations are
secured b y a pledge o f annual contributions to be paid b y the United
States Governm ent or any agency thereof. N o bank shall accept
as collateral or m ake loan on, or purchase any o f its own Capital
Stock or Shares o f any other bank, except Stock o f Federal Reserve
Banks, unless' such security or purchase shall be necessary to prevent
loss upon debt previously contracted in good faith, and Stock so
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Federal Reserve Bank of St. Louis
1993
purchased or acquired shall, within six m onths from date o f acquire
ment, be sold or disposed o f at public or private sale.
Banks and trust com panies m ay act as executors or administrators
and are not required to give bond, except when appointm ent is m ade
under will requiring bond.
Excess or double liability o f stockholders is prohibited b y Section 17
o f A rticle 11 o f the State Constitution.
Branch banks m ay be operated with approval o f Comm issioner o f
Finance, provided that any corporation operating branch banks shall
have paid in Capital Stock o f not less than $100,000 and Surplus o f
not less than 10% o f Capital Stock. N o corporation shall establish
branch banking offices unless its paid-in C apital Stock shall, in the
aggregate, am ount to at least $25,000 for each o f its banking offices
and, after M arch 19, 1935, no corporation shall establish new branch
banks unless it has, paid in, an unimpaired C apital Stock in amount
not less than M inim um C apital Stock required b y Subsections (O)
and (D ) o f Section 36 o f T itle 12 o f U nited States C ode as Am ended
b y Section 23 o f A ct o f Congress approved June 16, i933, for N ational
Banking Associations.
Branch banking offices shall not be established in any city or town
in which is located a state or national bank regularly transacting
banking business, unless corporation establishing such branch shall
take over existing bank or obtain consent of all banks there located.
No unit bank shall be acquired for the purpose o f establishing a
branch bank until said unit bank shall have been in operation as a
unit for a period of five years.
B ills o f L a d in g . U niform act recom m ended b y the American
Bar Association.
B lu e S k y L a w . Idaho has a blue sky law governing corporations,
unincorporated associations and partnerships, dom estic or foreign,
dealing in stocks, bonds, and other securities, excepting U nited States
bonds. State or municipal securities in Idaho, and Idaho real estate
mortgages.
This law requires the filing o f various statements,
accounts and other papers, and makes it unlawful to d o business in
the State w ithout com pliance. Securities issued or guaranteed b y
the United States, or any territory or possession thereof, o r b y any
state, or b y any foreign governm ent with which the U nited States
is maintaining diplom atic relations, securities issued b y cooperative
associations organized trader the laws o f Idaho, securities issued or
guaranteed b y public service utilities, securities appearing in lists on
N ew Y ork Curb, N ew Y ork , B oston, San Francisco and Chicago
Stock Exchanges, or other recognized exchanges which have been
approved b y the Commissioner o f Finance, securities issued b y or
representing interest in, or a direct obligation of, a bank, trust com
pany, or savings institution, or issued b y a federal land bank or joint
land bank or national farm loan association, or b y any com pany
created and acting as an intrum entality o f the governm ent o f the
United States, any security other than com m on stock outstanding in
the hands o f the pu blic for a period o f not less than five years, upon
which there has been no default in the paym ent o f principal, interest
or dividends for a continuous imm ediately preceding period o f five
years, securities evidencing indebtedness under any contract m ade
pursuant to the provisions o f any statute o f any State o f the United
States providing fo r the sale o f personal property under conditional
sales contracts, and conditional sales contracts and prom issory notes
in the ordinary course o f business, are exem pt from thé operation o f
the Blue Sky Law. T he provisions o f the B lue Sky Law d o not
apply to persons or corporations engaged in actual m ining operations,
developing mining property within the State, except that mining
corporations m ust m ake an annual report. T he provisions o f the
A ct d o not a pply to any judicial sale, or to a sale b y a pledgeholder,
a bona fide sale b y an owner who is not the issuer or underwriter o f
a security who sells the same for his own account, nor to transfers or
exchanges b y one corporation to another corporation in the course
o f a merger, nor to the bona fide sale o f m embership certificates b y
established enterprises actually engaged in business in this State where
no com pensation, fees or commissions are paid. Adm inistration o f
Blue Sky Law b y D ept, o f Finance. Appeal is allowed from ruling o f
Commissioner o f Finance t o D istrict C ourt, A da C ounty. (I. O. A .,
Sec. 25-1601 et seq.)
C o lla te ra ls . N o statutory regulation.
C o lle c tio n s . Uniform Bank C ollection C ode as recom m ended b y
Am erican Bankers Association, see com plete text, back o f laws.
C o m m u n it y P r o p e r ty . All property acquired after marriage
other than b y gift, bequest, devise, or descent, is com m unity property.
The personal earnings o f the wife and the incom e from her separate
property are com m unity property unless she is living apart from her
husband.
C o n t r a c t s . A written instrument is presum ptive evidence o f a
consideration.
C o n v e y a n ce s . Real estate Is conveyed b y Instrument in writing,
subscribed b y the party or his authorized agent in writing. The
com m unity property can be conveyed or incumbered only b y husband
and wife joining in the execution and acknowledgm ent o f the instru
ment. During the continuance o f the marriage the wife has the
management, control, and absolute power o f disposition o f her separate
property, and m ay bargain, sell, and con vey her real and personal
property, and m ay enter into any con tract with reference to the same,
in the same manner and to the same extent and with like effect as a
married man m ay in relation to his real and personal property.
Separate property o f wife not liable for debts o f her husband, wife is
not liable as surety unless the obligation is for her benefit or benefit
o f her separate property. An instrument purporting to grant real
property to take effect upon condition precedent, does not pass the
estate upon the perform ance o f the condition. Such instrum ent is
merely an executory contract. (See Acknowledgm ents.)
C o r p o r a t io n s . Private corporations m ay be form ed b y three or
m ore natural persons o f full age, at least two-thirds o f whom are
citizens o f the United States. Such corporations are form ed b y
executing articles o f incorporation signed in triplicate by each o f
the incorporators and acknowledged b y at least three o f them before
an officer authorized to take acknowledgm ents, and in addition to
stating the name o f the corporation, shall state in the English language:
1. Its purpose. 2. Its duration. 3. Location and post-office address
o f its registered office in this state. 4. T otal authorized number o f
par value shares and their aggregate par value, and if any o f its
shares have no par value, the authorized number o f such shares.
5. Description o f the classes o f shares, if shares are to be classified,
and a statement o f the number o f shares in each class and the relative
rights, voting power, preferences and restrictions granted to or imposed
upon the shares o f each class. 6. T h e name and post-office address
o f each o f the incorporators and a statement o f the number o f shares
subscribed b y each, which shall not be less than one, and the class o f
shares for which each subscribes. Triplicate originals o f the articles
o f Incorporation shall be delivered to tne Secretary o f State, and if
he finds that they conform to law he shall put an endorsement o f his
approval on each set and when all taxes, fees and Charges have been
paid as required by law, he shall file one o f such sets in his office and
record the Same and shall issue and record a certificate o f incorpora
tion. One o f the sets o f articles o f incorporation shall then be filed
for record in the office o f the C ounty R ecorder o f the C ounty in which
the registered office o f the corporation is situated, and the other shall
be retained b y the corporation. T he articles m ay provide for the
election o f one-third o f its directors annually. Railroad, wagon road,
telegraph and telephone corporations m ust state also in their articles:
1. T h e kind o f road, telegraph or telephone line intended to be con
structed. 2. T he estimated length o f the road or line. 3. T hey m ay
provide in their articles the number o f directors which shall constitute
a quorum for the transaction o f business, the decision o f the m ajority
o f such quorum to be a valid act. 4. W hether meetings o f the board
shall be held within or without the State. 5. W hether stockholders
shall be individually liable for debts o f corporation. Railroad corpo
rations must have subscribed, before filing articles, $1,000 per m ile;
wagon road corporations, $300 per m ile; telegraph corporations, $100
per mile, and the articles must be verified b y affidavit o f president.
1994
B A N K IN G A N D C O M M E R C IA L L A W S — ID A H O
secretary, or treasurer nam ed in articles, that such stock has been
subscribed. A ll corporations, except insurance, non-production min
ing com panies, co-operative telephone and irrigation com panies, must
p ay between July 1 and Septem ber 1 o f each year, a license fee based
on the am ount o f authorized capital stock, varying from $10 to
$150; a failure to m ake paym ent b y Septem ber 1 entails a penalty
o f $10, and a failure t o m ake paym ent b y N ovem ber 30 entails a
loss o f charter for dom estic corporations and a loss o f the right-to do
business within the State for foreign corporations. Betw een July 1
and Septem ber 1, all corporations m ust m ake an annual report.
C orporations m ay be reinstated b y paying all license taxes that have
accrued and a penalty o f $10 for each year they have failed t o file
their annual statem ent or failed to p ay their annual license fee
(I. C . A ., T itle 29, C hap. 1), styled the “ business C orporation
A c t,” follow s very closely the U niform Business C orporation A ct
drafted b y the N ational C onference o f Comm issioners on U niform
Laws.
.
'
C o r p o r a t io n , F o r e ig n . Foreign corporations desiring t o d o busi
ness in this State, m ay have all the rights and privileges o f like dom es
tic corporations, b y filing with the secretary o f state, a certified cop y
o f the articles o f incorporation, and in the office o f the cou nty recorder
o f the cou n ty where the principal place o f business o f such corporation
is t o be conducted, a co p y o f their articles o f incorporation duly certified
b y the secretary o f state o f this State, and the designation o f som e per
son residing in the cou n ty in which such principal place o f business is
t o be located upon w hom process issued b y authority o f or under any
law o f this State m ay b e served. T h e original designation o f agent
must be filed with the secretary o f state and a co p y certified b y the
secretary o f state m ust be filed in the office o f the C ounty R ecorder
in which its principal p lace o f business is loca ted in this State,
F o r
eign corporation m ay surrender its figh t to d o business within State
o f Idaho b y filing w ith Secretary o f B tate certificate that it surrenders
its authority to transact intrastate business in the state, that it con
sents that process against it upon any liability incurrred prior to
filing the certificate o f withdrawal m ay be served upon Secretary o f
State, and p ost office address to which Secretary o f State m ay m ail co p y
o f any process against such corporation that m ay be served'upon him.
Surrender o f authority to transact business in this state does n ot affect
any action pending at tim e o f such withdrawal, and retirem ent from
transacting business in the state w ithout filing certificate o f with
drawal does not revoke „appointm ent o f agent up on w hom process
m ay be served within the state. A n y foreign corporation that has
voluntarily surrendered its right t o d o business in this state, or whose
license has been forfeited for failure to p a y its annual license tax or
otherwise com p ly with the laws o f the state relating t o foreign cor
porations, before it is again perm itted t o resume doing business in
the state, shall reinstate w ith the Secretary o f State b y paying all
the fees and annual license taxes which have accrued during the
tim e the charter was forfeited, or shall requalify under the statutes
o f the state and p a y the fees and annual license tax fixed b y statute
for corporations n ot p reviou sly qualified to d o business in the state.
C o u r t s . Term s and Jurisdiction. T h e judge o f the district court
o f each o f the judicial districts o f the State must annually fix the
tim e for holding the district court in the several counties o f his dis
trict; and he m ay R old such special term s as he deem s proper and
necessary. D istrict courts have original jurisdiction in all civil cases.
Probate courts are held in each cou n ty continuously, and have juris
diction up to $500, in civil cases and concurrent jurisdiction with
ju stice’s courts in all crim inal cases. Justices’ civ il jurisdiction, $300.
C u r t e s y does not exist.
D a y s o f G r a c e abolished b y statute.
D e p o s itio n s m ay be taken before any judge, justice o f the peace,
notary public, or com m issioner appointed b y the C ourt, upon notice
served upon the opposite party, stating the court, action, tim e, and
place, and before whom the sam e will be taken, or they m ay be taken
up on com m ission issued b y the jud ge with interrogatories attached.
D epositions shall not be taken before any person or the kin o f any
person interested in the action.
D e s c e n t a n d D is t r ib u t io n o f I n t e s t a t e E sta te s . I f a person
dies intestate, surviving spouse takes all the com m unity property,
b oth real and personal.
On death intestate separate property, b oth real and personal,
descends as follow s: I f decedent leaves spouse and one child, each
entitled to one-half o f d eced en t’s separate p rop erty; J f m ore than
one child, surviving spouse gets one-third and remainder goes in
equal shares to children o f decedent and to the lawful issue o f any
deceased child b y right o f representation, b u t if no children o f decedent
living at his death, remainder goes to all o f his lineal descendants,
and i f they are in same degree equally, otherwise according to right
o f representation; if decedent leaves no surviving spouse but leaves
issue, the whole estate goes to such issue or their descendants if
deceased; if decedent leaves no issue, one-half goes to surviving
spouse and other half to d eced en t’s father and m other in equal shares,
or if either be dead, the whole goes to the other; if no issue nor hus
band or wife, estate goes to father and m other: i f neither issue, hus
band. wife, father nor m other, in equal shares to brothers and sisters
o f decedent and to their children b y right o f representation; if spouse
survives decedent and there are! neither issue, father nor m other,
whole estate goes to such spouse; if decedent leaves neither issue,
husband, wife, father, m other, brother, nor sister, estate goes to next
o f kin in equal- degree, com puted according to rules o f civil law ; if
decedent leaves no heirs, prop erty escheats t o State, W hen ahy
estate is devised or bequeathed to any child or other relative o f the
testator and the devisee or legatee dies before the testator, leaving
lineal descendants, such descendants take the estate so giv(e n b y the
w ill in the same manner as the devisee or legatee w ou ld have done
had he survived the testator.
D o w e r does not exist. (See C urtesy and C om m unity property).
E m p lo y e r s a n d E m p lo y e s . All persons em ploying m echanics or
laborers in working m ines, erecting or repairing buildings, construct
ing canals, railroads, etc., m ust m ake, record, and publish a state
m ent, under oath, setting forth the follow ing: T he name o f the
owner o f the premises where work is being d one or upon which it is
intended to begin w ork; the nam e o f the person or com pany engaged
in o r who contem plates engaging in w ork upon such prem ises; the
conditions under which such person or corporation is prosecuting
the w ork as agent, owner, etc., the principal office o f the ow ner and
the agent in this State; the tim e and place where paym ent o f laborers
and m echanics will he m ade. A co p y o f the statem ent must be
posted at the place where w ork is prosecuted.
E m p lo y e r ’ s L ia b ilit y L a w . (See W orkm en’s Com pensation.)
E x e c u tio n s issue at a n y tim e within five years after judgm ent.
T h e only stay is b y appeal, w ith supersedeas b on d . One year allowed
for redem ption from execution and foreclosure sale.
E x e m p tio n s . H om estead, n ot exceeding $5,000,; b y head o f
fam ily and $1000.00 b y any other person, if declaration o f hom e
stead is d u ly acknow ledged and recorded; office furniture and library,
$200; necessary household and kitchen furniture not exceeding
in value $300, and provisions for fam ily for six m onths; certain farm
animals, etc., with fo o d for six m onths; and water right o f 160 inches,
when actually used in irrigation; also crops growing or grown on
fifty acres o f land, leased, ow ned or possessed b y person cultivating
the sam e; tools or im plem ents o f m echanic necessary fo r his trade
o f the value o f $500; m otor vehicles n ot exceeding $200 in value; all
instrum ents o f surgeons, etc., also all professional libraries; m iner’s
dwelling o f value $500, and his pipes, cars, etc., o f the value o f $200;
p a ck animals and equipm ents, n ot exceeding $250; team , wagon, etc.,
o f d raym an; 75 per cent o f the personal earnings o f a debtor within
th irty days preceding lev y , where earnings are necessary fo r use o f
fam ily, residing in this State; the shares held b y mem bers o f a Building
and Loan A ssociation to the value o f $1,000; provided, such person
has n o hom estead: all benefits arising out o f life insurance, represented
b y an annual prem ium o f $250; all p rop erty o f fire com panies. A ll the
above property m ay be sold under foreclosure o f m ortgage, which
includes same or execution issued on judgm ent for purchase price. |
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G a r n is h m e n t . A n y personal property or credits in the hands o f
another, belonging to the defendant, is subject to garnishment, as
are debts ow ing to him from another if due.
G u a r a n ty , T it le a n d T r u s t C o . M a y furnish abstracts, act as
surety, trustee, fiscal agent. Paid up capital o f $25,000 required.
C apital deem ed security for the perform ance o f their duties.
H o lid a y s . T h e legal holidays are ¡S un d ays; January 1 (N e w Y e a r’s
D a y ); February 22 (W ashington’s b irth d ay ); M a y 30 (M em orial
D a y ); June 15 (Pioneer D a y ); July 4 (Independence D a y ); first
M o n d a y in Septem ber (L abor D a y ); O ctober 12 (C olum bus D a y );
general election d a y ; N ovem ber 11 (Arm istice D a y ); Thanksgiving
D a y ; and D ecem ber 25 (Christm as D a y ) ; every d ay on which an
election is held throughout the state, every d a y appointed b y the
President or b y the G overnor o f the state for a public fast, thanks
giving or holiday.
H u s b a n d a n d W ife . A ll the property o f the wife owned b y her
before marriage, and that acquired afterwards b y gift, bequest, or
descent- or that which she shall acauire with the proceeds o f her
separate property, shah remain her sole and separate p roperty, to
the same extent and w ith the same effect, as the property o f a hus
band sim ilarly acquired. T h e w ife has the m anagem ent, control, and
absolute pow er o f disposition o f her separate property, to the same
extent and with like effect as a married m an m ay have in relation
to his real and personal property. T he separate p rop erty o f the
w ife is n ot liable fo r the debts o f her husband, but is liable fo r her
own d ebts contracted before o r after marriage. There is np estate
b y courtesy or in dower. M arriage settlem ents are p rovided for,
and when properly executed and recorded m ay vary the statute
governing the relations o f husband and w ife concerning property
rights. M inors m ay execute valid marriage settlements.
I n t e r e s t . W here there is n o express con tract in writing fixing a
definite rate o f interest, the rate is 6 per cent per annum. Parties
m ay agree in writing for interest at a rate n ot to exceed 8 per cent per
annum. Judgm ents bear interest at the rate o f 6 per cent per annum.
C om pou nd interest allow ed if aggregate does n ot exceed 8 per cent
on principal.
J u d g m e n t s are liens on all real estate o f d eb tor within the county,
from tim e o f docketing, and m ay be extended to other counties b y
filing transcript in recorder’s office. Lien continues five years.
Justice’s court judgm ents becom e liens when certified and recorded.
M a y b e revived b y issuing execution within lim itation. Transcript
o f judgm ent o f U . S. C ou rt m ust b e filed with Clerk o f D istrict C ourt
in any cou n ty in the State in order to m ake it a lien on real property.
L ie n s , M e c h a n ic s ’ . E ve ry person perform ing labor upon or fur
nishing m aterials used in the construction or repair o f any mining
claim , building, or other im provem ent, has a lien thereon. Farm
laborers have lien upon the crop and products thereof, upon which
they bestow labor. A ll liens m ust be set forth b y a statem ent in
writing, showing the am ount due, the facts connected with the_matter,
that there are no credits due on the claim , o r offsets against ■the
sam e; which statem ent m ust be verified b y the claimant, and recorded
in the office o f the cou n ty recorder, i f on claim o f original contractor,
within ninety days, if on claim o f other persons, within sixty days
from the tim e o f the com pletion o f the structure the com pletion o f the
labor, or the furnishing o f the materials. Lien must be enforced b y
suit within six m onths, unless credit is given, expires at all events
in tw o years.
L i m it a t i o n f o r S u its . Judgm ents six years; written contracts
or for real p roperty, five years; contracts or obligations n ot founded
on writing including open accounts, four years; trespass, trover
replevin and fraud, three years; personal injuries, tw o years; other
relief, four years. R ev iv o r: b y acknow ledgm ent o f d ebt in writing
or part paym ent o f principal or interest. A ction against a director or
a shareholder o f a corporation for illegal dividend m ust be brought
within tw o years fro m the date o f paym ent. T h e five year lim itation
prescribed fo r action on written contract does n ot a p p ly to actions in
the nam e o f or fo r the benefit o f the state and shall n ot be asserted or
interposed as defense to any action in the nam e o f or fo r benefit o f
the state although lim itation m ay have been fu lly operative as a de
fense prior to the adoption o f am endm ent. (C hapter 244, 1939
Session Laws.)
„
M a r r ie d W o m e n . A ll p roperty, real or personal, acquired before
marriage and acquired after marriage, b y gift, bequest, devise, or
descent, Is the w ife’s separate prop erty; all other p roperty acquired
after marriage, com m on p rop erty; wife m ust record inventory o f
separate personal property. N o estate as tenant by cou rtesy allowed
the husband nor dow er to the wife.
M in e s a n d M in in g . (Principal regulations under U nited States
Statutes.) Quartz locations m ay be 1,500 feet long and 300 feet on
each side o f the m iddle o f lode. M onum ents must be established at
all exterior angles o f claim. Claim should be tied to som e natural
or perm anent m onum ent. C o p y o f location notice must be posted
at discovery within three days after discovery. N o tice o f location
must be recorded within ninety days after location; within sixty days
ten-foot shaft m ust b e sunk or its equivalent. L ocation notice must
contain name o f locator, name o f claim, date o f discovery, dimensions,
distance from som e perm anent, natural, or artificial o b je c t ; name of
mining district, cou nty, and state. P lacer locations m ade in same
manner as auartz locations, except that within fifteen days after
m aking location, locator must excavate not less than 100 cubic feet
for purpose o f prospecting claim, and must record notice o f location
within thirty days after m aking location. Official patent survey o f
lod e or placer claim b y U . S. M ineral Surveyor is labor perform ed
upon an fo r the benefit of, said claim . State Land B oard m ay lease
mineral rights in state lands and m ineral deposits which m ay belong
to state b y reason o f being situated betw een high-water marks o f
navigable rivers. N otice o f application to lease lands belonging to
state situated betw een high-water m arks o f navigable rivers m ust be
published before lease can be m ade.
M o r tg a g e s . A real estate m ortgage must b e acknow ledged and
certified, and recorded in like manner as conveyances and deeds
o f real property, and is foreclosed b y action in the district court.
D eficiency judgm ent cannot be had for an am ount greater than differ
ence betw een indebtedness, plus costs o f foreclosure and reasonable
value o f the m ortgaged p roperty. C hattel m ortgages m ust be
acknow ledged as real estate m ortgages and sworn to b y the m ortgagor
that the same is m ade in good faith without any design to hinder,
delay, or defraud creditors. M u st b e filed and a m inute record m ade
b y recorder, unless m ortgagee has possession. Survives as lon g as
the debt. M ortgages are discharged b y a satisfaction d u ly executed
and recorded, or b y entry on margin o f the record, witnessed b y
recorder.
N e g o t ia b le I n s t r u m e n t s . U niform N egotiable Instrum ents A ct
adopted. (See com plete text o f the law follow ing “ D igest o f Banking
and C om m ercial L aw s.” ) N egotiable instrum ents are governed
b y the rules o f the U niform N egotiable Instrum ent Law , as recom
m ended b y the Am erican B ar Association.
N o ta rie s , when requested, to dem and acceptance and paym ent
o f foreign, dom estic, and inland bills o f exchange or prom issory
notes and protest the same fo r non-acceptance and non-paym ent;
exercise such other powers and duties as b y the law o f nations and
com m ercial'usage, or b y the laws o f any other Territory, State, govern
ment, or cou ntry m ay be perform ed b y notaries. A ttach acknow l
edgm ents or p ro o f o f powers o f attorn ey; m ortgages, deeds, grants,
transfers, and other instruments o f writing executed b y any person.
G ive certificate o f such p ro o f or acknow ledgm ent, to take depositions,
affidavits, and administer oaths and affirmations in all m atters incident
to duties o f the office. T o keep a record o f all official acts; when
requested, and upon paym ent o f his fees therefore, to m ake and give
a certified co p y o f any record in his office; to provide and keep an
official seal, on which m ust be engraved his name, the words “ N ota ry
P ublic,” and “ State o f Idaho. T o authenticate with his official
seal all official acts. Thle com m ission is good throughout the State.
B A N K IN G A N D C O M M E R C IA L L A W S — IL L IN O IS
P ow er o f A tt o r n e y . Powers o f attorney fo r grants o f real estate
and to execute a m ortgage must be in writing, subscribed, acknow l
edged or proved, certified and recorded as other instruments affecting
real property. Powers o f attorney which have been recorded must
be revoked b y revocation in writing, acknowledged, proved, certified,
and recorded the same as original power.
P r o b a te L a w . Probate courts have Jurisdiction to open and
receive p roof o f wills and adm it them to proof; to grant letters testa
mentary and guardianship and revoke same: appoint appraisers o f
estates, com pel executors, etc., to render accounts; order sale o f prop
erty o f estates and m inors; order paym ent o f debts due from estates,
order and regulate distribution o f property or estates; com pel attend
ance o f witnesses and production o f all instruments pertaining to
estates and p roperty o f minors, and make such orders as m ay be neces
sary to exercise all powers conferred. Proceedings o f this cou rt are
construed the same as courts o f general jurisdiction and like force given
to its records.
P r o t e s t. (See N otaries.)
R e c o r d s . All deeds, m ortgages, real and chattel, and instruments
affecting the title to lands must be recorded. Inventory o f the
separate personal estate o f a married woman when recorded, becom es
prima facie evidence that the property therein enumerated is her
separate property. In case o f levy o f attachm ent upon real estate, a
copy o f the writ, with a co p y o f the notice o f levy attached thereto,
must be filed in the office o f the cou nty recorder.
R e d e m p t io n . Property m ay be redeem ed within one year after
sale, on paying purchaser am ount paid on sale and 6 % interest addi
tional. P roperty m ay be redeem ed b y successive redemptioners
within sixty days from last redem ption, and within one year from
sale, b y paying an additional 6 % interest. In cases o f tax sales, the
owner m ay redeem in three years.
R e p le v in . A ction of, m ust be brought within three years from time
it accrues. Plaintiff m ay sue for the possession without claiming
Immediate possession, or he m ay claim im m ediate possession at tim e o f
com m encing suit or afterward. Affidavit showing that plaintiff is the
owner, the detention, the unlawfulness o f the detention, etc., and bond
with sureties required to obtain immediate Dossession. Defendant
may execute undertaking, with approved sureties, for the retention o f
the property, and that it will be forthcom ing, subject to the order o f
the court in whicji the action is pending, and thereupon retain the pos
session o f the p roperty involved.
S ales. U niform sales A ct recom m ended b y American B ar Asso
ciation.
Seals. T he distinctions between sealed and unsealed instruments
are abolished. W ritten contracts presumptive evidence o f con
sideration.
T a xes. A ll property m ust be assessed with reference to its value
at twelve o ’clock noon on the second M on da y o f January o f each
year at its full cash value, and the owner or other claimant o f the
property shall have the same listed for taxation, and such taxes are
a lien from and after that date. Personal property com ing into
State after second M on d a y in January subject to assessment with
reference to its fu ll cash value as to the date it com es into State for
such proportion o f fu ll value as is represented b y that part o f the
year subsequent t o its date o f entry. I f taxes are not paid b y the
fourth M on d a y in D ecem ber they becom e delinquent, but half o f the
taxes m ay be paid before said date and the remaining half before the
fourth M on d a y in June w ithout delinquency. A penalty o f 2 per
cent is added on all delinquent taxes. Delinquency entries are m ade
as o f the first M on d a y in January in the succeeding year b y the tax
collector and have the force and effect o f a sale to the cou nty. T hey
bear interest at th e .rate o f 10 percent per annum from date and are
not assignable. R edem ption m ay be m ade within three jrears from
the date o f such entry. N otice o f expiration o f redem ption period
must b e given b y tax collector not less than three, nor m ore than five
months before such expiration in order to entitle cou n ty to deed.
Special provisions are m ade for redem ption from taxes for years 1932
to 1935, inclusive. (See 1937 and 1939 Session Laws.) Special
provisions are m ade for redem ption from taxes for years 1928 to 1934,
inclusive. (See 1935 and 1937 Session Laws.)
T ru s t C o m p a n ie s . (See G uaranty Companies.)
W a r e h o u s e R e c e ip ts . T he U niform W arehouse R eceipts A ct.
recom m ended b y the Am erican Bar Association.
W ills . E very person over the age o f eighteen years, and o f sound
mind, m ay m ake a will. E very will, other than a nuncupative will,
must be in writing, and every will other than an olographic and a
nuncupative will, must be executed b y the testator subscribing thereto
or some person b y his direction, which must be done ini the presence
o f tw o attesting witnesses, each o f whom must sign his name and
state that the testator requested him to witness the testator’s signa
ture, and the testator must also declare in the presence o f the w it
nesses that such is his last will and testam ent. One-half o f com
munity property m ay be disposed o f b y will to the surviving spouse,
his, her, or their children, the grand-children or parents o f either
spouse, or one or m ore o f such persons, but not to exceed one-fourth
to a parent or parents o f either spouse, unless lim ited to an estate for
life or less, and any part o f the decedent’s share o f the com m unity
property in excess o f the unencumbered appraised value o f $25,000
m ay be disposed o f as the testator sees fit.
W o r k m e n ’ s C o m p e n s a t io n A c t . T h e .W o rk m e n ’s Compensa
tion A ct o f this state is based upon the A ct recom m ended b y the
National Conference o f Comm issioners on Uniform State Law.
(I. C. A . T itle 43 Chapters 9 -19 Inc.) The law provides Com pensa
tion for a workm an for personal injury b y accident arising ou t o f
and in the course o f his em ploym ent. Compensation is provided for
certain occupational diseases.
SYNOPSIS OF
THE LA W S OF ILLINOIS
RELATING TO
BANKING AND COMMERCIAL USAGES
A c k n o w le d g m e n t s . O f deeds o f real estate and other instrum ents,
m ay be taken before the following officers: W ithin this State before
a master in chancery, notary public, United States com m issioner,
county clerk, justice o f the peace, any court o f record having a seal
or any judge, justice, clerk, or d ep uty clerk thereof. W hen taken
before a notary pu blic or U nited States commissioner, the sam e shall
be attested b y his official seal; when taken before a cou rt or the clerk
thereof, or a dep uty clerk thereof, the same shall be attested b y the
seal o f such cou rt; and when taken before a justice o f the peace there
shall be added the certificate o f the cou nty clerk under his seal o f
pffice that the person taking such acknowledgm ent or p ro o f was a
justice o f the peace in said cou n ty at the tim e o f taking the same. I f
the justice o f the peace reside in the cou nty where the lands m entioned
in the instrument was situated, no such certificate shall be required.
W ithout this State, and within the United States, its territories, de
pendencies, or the D istrict o f C olum bia, before a justice o f the peace,
notary public, master in ch an cery,'U n ited States commissioner, com
missioner to take acknowledgm ents o f deeds, m ayor o f a city, clerk o f
a county, or before any judge, justice, clerk or d ep uty clerk o f the
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supreme, circuit, or district cou rt o f the U nited States, or before any
judge, justice, clerk or d ep u ty clerk, prothonotary, surrogate, or
registrar o f the suprem e, circuit, superior, district, county, com m on
pleas, probate, orphans or surrogate cou rt o f any o f the States, Terri
tories, or dependencies o f the U nited States. In any dependency o f
the U nited States, such acknow ledgm ent or p ro o f m ay also be taken
or m ade before any com m issioned officer in the m ilitary service o f the
United States. W hen such acknow ledgm ent or p ro o f is m ade before
a notary public, U nited States com m issioner, or commissioner o f deeds,
it must be certified under his seal o f office. I f taken before a m ayor o f
a city, it m ust be certified under the seal o f the city ; i f before a clerk,
dep uty clerk, prothonotary, registrar, or surrogate, under the seal o f
his cou rt; if before a justice o f the peace or a m aster in chancery, there
m ust be added a certificate o f the proper clerk under the seal o f his
office setting forth that such person before w hom such p ro o f or ac
knowledgm ent was m ade was a ju stice o f the peace or m aster in
chancery at the tim e o f taking such acknow ledgm ent or proof. A n
acknowledgm ent or p ro o f o f execution m ay be m ade in con form ity with
the laws o f the State, Territory, dependency, or district where it is
m ade. W ith out the U nited States, before any cou rt o f any republic,
dom inion, state, kingdom , empire, colon y , territory, or dependency
having a seal, or before any judge, justice, or clerk thereof, or before
any m ayor or ch ief officer o f any city or tow n having a seal, or before a
notary public or com m issioner o f deeds, or any ambassador, minister or
secretary o f legation, or consul o f the U nited States, or vice-consul,
dep uty consul, com m ercial agent, or consular agent o f the United
States. In any foreign republic, dom inion, state, kingdom , empire,
colony, territory or dependency attested b y his official seal or before
any officer authorized b y the laws o f the place where such acknow ledg
m ent or p roof is m ade t o take acknowledgm ents o f conveyances o f
real estate or to administer oaths in p ro o f o f the execution o f con vey
ances o f real estate. Such acknowledgm ents to be attested b y the
official seal, i f any, o f such court or officer, and in case such acknow ledg
ment or p roof is taken or m ade before a cou rt or officer having no
official seal, à certificate shall be added b y som e ambassador, minister,
secretary o f legation, consul, vice consul, d ep u ty consul, com m ercial
agent or consular agent o f the U nited States residing in such republic,
dom inion, state, kingdom , empire, colony, territory, or dependency
under his official seal, showing that such cou rt or officer was d uly
elected, appointed or created and acting at the tim e such acknow ledg
m ent or p ro o f was m ade.
N o judge or other officer shall take the acknow ledgm ent o f any
person to any deed or instrum ent o f writing, as aforesaid, unless the
person offering to m ake such acknow ledgm ent shall be personally
known to him t o be the real person w ho and in whose nam e such ac
knowledgm ent is proposed to be m ade, or shall be proved t o be such
b y a credible witness, and the jud ge or officer taking such acknow ledg
m ent shall, in his certificate thereof, state that such person was person
ally know n to him to be the person whose name is subscribed to such
deed or writing, as having executed the same, or that he was proved to
be such b y a credible witness (naming h im ), and on taking p ro o f o f any
deed or instrument o f writing, b y the testim ony o f any subscribing
witnesses, the jud ge or officer shall ascertain that the person w ho
offers to prove the same is a subscribing witness, either from his own
knowledge, or from the testim ony o f a credible witness ; and if it shall
appear from the testim ony o f such subscribing witness that the person
whose name appears subscribed to such deed or writing is the real
person who executed the same, and that the witness subscribed his
naine as such, in his presence and at his request, the jud ge or officer
shall grant a certificate, stating that the person testifying as sub
scribing witness was personally know n to him to be the person whose
name appears subscribed to such deed, as a witness o f the execution
thereof, or that he was proved to be such b y a credible witness (naming
him ), and statin gi;h e p ro o f m ade b y him ; and where any grantor or
person executing such deed or writing, and the subscribing witnesses,
are deceased or cannot be had, the jud ge or officer, as aforesaid, m ay
take p ro o f o f the handwriting o f such deceased p a rty and subscribing
witness or witnesses (if any) ; and the exam ination o f a com petent and
credible witness, who shall state on oath o f affirmation that he person
ally knew the person whose handw riting he is called to prove, and
well knew his signature (stating his means o f know ledge), and that
he believes the name o f such person subscribed to such deed or writing,
as party or witness (as the case m ay b e), was thereto subscribed b y
such person; and when the handwriting o f the grantor or person
executing such deed or writing, and o f one subscribing witness (if
any there b e), shall have been proved, as aforesaid, or b y p ro o f o f
signature o f grantor where there is no subscribing witness, the judge
or officer shall grant a certificate thereof stating the p r o o f aforesaid.
T he acknow ledgm ent o f a con veyan ce b y a married wom an m ay be
m ade and certified as if she were single. A n acknow ledgm ent taken
b y any one interested in the conveyance is void.
A c t io n s . T he C ivil Practice A ct o f 1933 abolishes the ctfmmon law
form s o f action and simplifies pleading; provides for uniform procedure
in law and equity by, in m ost cases, m aking the equity rules applicable
to b oth types o f proceeding.
A d m in is t r a t io n o f D e c e d e n t s ’ E s ta te . Letters testam entary
issue to executor nam ed in will, i f he be a resident. I f there b e no
will, or n o executor nam ed, or the executor is disqualified, or refuses
to act, the follow ing persons are entitled to preference in the order
given in obtaining the issuance o f letters o f adm inistration: Sur
vivin g spouse, children, parents, brother or sister, grandchildren,
next o f kin, public administrator or creditors. I f a person flies a
petition and another is entitled t o preference, petitioner shall give
tw enty (20) days notice t o said person. A non-resident, an incom pe
tent, a m inor and persons con victed o f infam ous crim es are not.
qualified to act as administrator. W hen no letters are issued in
this state upon the estate o f a non-resident decedent, a foreign execu
tor or administrator, within the U nited States, m ay sue in this state
in any case in which a resident executor or adm inistrator m ay sue.
A ll claims except expense o f adm inistration and w id ow ’s or ch ild’s
award, not filed within nine m onths from the issuance o f letters,
àrè barred as t o all property inventoried and share on ly in new ly
inventoried property. Claim s are divided into classes (1) funeral
expenses and costs o f .adm inistration; (2) w id ow ’s or ch ild ’s award;
(3) D ebts due the U nited States G overnm ent; (4) m oney due em
ployees o f decedent if n ot m ore than $400.00 fo r services rendered
within four m onths prior to decedent’s death; (5) m oney or property
held in trust which is n ot identifiable; (6) debts due to the State o f
Illinois and any C ounty, T ownship, C ity , T ow n, Village or School
D istrict located within the State o f Illinois; (7) all other debts or
demands.
W ithin sixty (60) days after the issuance o f letters
the representative m ust file an inventory o f the estate, and within
sixty (60) days after the expiration o f nine m onths after the issuance
o f letters or within such further tim e as the cou rt m ay allow, the
representative shall file his account. Claims are to be paid b y the
representative at expiration o f nine m onths after issuance o f letters
in the order o f classification as above.
Renunciation o f will m ust be filed within ten (10) m onths after
the admission o f the will to probate or such extended tim e as shall
be granted b y the C ourt within said ten (10) m onth period.
Surviving spouse is barred o f dow er unless he flies an election t o
take dower within ten (10) m onths o f death, i f no letters o f adminis
tration are issued within that period ; or within ten (10) m onths o f
letters if issued within ten (10) m onths o f death or if a w ill is filed
for probate then within ten (10) m onths after the admission o f th e
will to probate; or within the tim e as extended b y the C ourt.
A ffid a v its . W ithin this State oaths and affirmations m ay b e
administered b y any judge, justice o f the peace, master in chancery,
clerk o f a court, police magistrate, or notary public, in their respective
jurisdictions. W ithout the State the oath or affirmation m ay be
administered b y any officer authorized b y the laws o f the particular
State, and if such officer has a seal, his certificate'un der his official
seal is received as prim e facie evidence o f his authority.
1996
B A N K IN G A N D C O M M E R C IA L L A W S — IL L IN O IS
A lie n s . T he present law went into effect July 1, 1897. (Am ended
in 1935.) I t does n ot affect the rights o f aliens as to personal property,
w ho still take the same as citizens. Its provisions are su b ject to
treaties m ade b y the U nited States with foreign countries. A ll aliens,
su b ject to certain restrictions m entioned in the act, m ay acquire and
for a lim ited tim e hold real estate situated in this State b y deed,
devise, or descent, and m ay transfer, devise or encum ber it.
A s s ig n m e n t s . T he operation o f the Illinois A ct relating to
voluntary assignments for the benefit o f creditors has been suspended
by the national bankruptcy law.
A t t a c h m e n t s . A creditor, resident or non-resident, whose claim is
due, m ay bring attachm ent in a cou rt o f record if the am ount exceeds
$20, and in justice cou rt for any am ount n ot exceeding $200, on any o f
the follow ing grounds: 1. W here the d ebtor is a non-resident o f this
State. 2. W here the debtor conceals himself, or stands in defiance o f an
officer so that process can n ot be served upon him. 3. W here the
d eb tor has departed from this State with the intention o f having
his effects rem oved from this State. 4. W here the debtor is about
t o depart from this State w ith the intention o f having his effects
rem oved from this State. 5. W here the d ebtor is about to rem ove
his prop erty from this State to the injury o f such creditor. 6. W here
the debtor has, within tw o years preceding the filing o f the affidavit
required, fraudulently con veyed or assigned his effects, or a part
thereof, so as to hinder or delay his creditors. 7. W here the debtor
has within tw o years prior to the filing o f such affidavit fraudulently
concealed or disposed o f his property so as to hinder or delay his
creditors. 8. W here the d ebtor is abou t fraudulently to conceal,
assign, or otherwise dispose o f his property or effects so as to hinder
or delay his creditors. 9. W here the d eb t sued for was fraudulently
contracted on the part o f the d ebtor, provided the statem ents o f the
debtor, his agents or attorney, which constitute the fraud, shall have
been reduced to writing, and his signature attached thereto b y him
self, agent, or attorney. T h e creditor must give bond in double the
am ount o f the claim . R eal estate or personal property m ay be
attached or funds garnished. T he property or funds m ay be released
b y the d eb tor givin g a forthcom ing bond, or entering into a recog
nizance in cou rt to pay the judgm ent.
B a n k s a n d B a n k in g . Under the state constitution stockholders
have a double stock liability, and every bank m ust make, under oath,
and publish each quarter a full and accurate statem ent o f its, affairs.
An A ct to revise the law in relation to banks and banking was
passed and approved June 23, 1919, and ratified b y referendum at
the election o f N ovem b er 2, 1920. Banks m ay be form ed under the
statute for the purpose o f discount and deposit, buying and selling
exchange, and doing a general banking business, except the issuing
o f bills to circulate as m on ey; m ay loan on both personal and real
estate security, and m ay accept and execute trusts. A n association
o f persons, as hereinafter set forth m ay organize a bank b y filing a
statem ent w ith the A uditor. T h e m inim um number o f persons in
such associations is fixed according to populations as follow s:
Populations
N o. o f Persons
10.000 or less.......................................................... 5
10.000 to 2 5.000......................................................10
25.000 to 50,000......................................................15
50.000 to 100,000....................................................20
O ver 100.000.......................................................... 25
A ll such persons must be residents o f place where Dank Is to be
established and in places exceeding 100,000 population, 20 persons o f
the association m ust reside within 3 miles o f the proposed location
o f the bank.
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. . .
A ccom panying the application must be a statem ent m ade before
som e officer authorized to acknow ledge deeds giving the net financial
w orth o f each o f the members o f such associations together with at
least three references as to personal character o f each individual
nam ed therein. W hereupon the A uditor issues a permit to organize.
T h e shares shall be not less than $10 nor m ore than $100 each. A fter
the perm it t o organize is issued and the stock fu lly subscribed, the
stockholders m eet, fix the num ber o f directors and elect the directors
w ho shall m anage the corporation for one year, or until their successors
are elected. A t the election o f directors, stockholders have the right o f
cu m ulative voting. T h e directors elect one o f their num ber President,
appoint the necessary Officers and em ployes, fix their salaries and make
by-law s. E ach director shall file with the State A uditor an affidavit
that he will faithfully perform the duties o f his office in accordance
with law : that he is the owner in his own right, o f ten shares o f the
stock o f th e bank o f the par value o f $1,000 all told , free from incum
brance. T h e directors m ust cause suitable books to be kept and file
w ith the A uditor a list o f stockholders and a co p y o f any other records
the A uditor m ay require. Unless another d ay is fixed b y the by-laws
o f the Association, the stockholders shall m eet the first M on d a y in
January and elect directors. Vacancies are filled b y vote o f tw othirds o f the directors. Each director m ust ow n shares o f the stock
o f the bank o f the par value o f not less than $1000, and file a certificate
or certificates thereof with the Cashier, to be held during his term as
director. A quorum o f the directors m ust m eet once each m onth.
Any officer, director or em ploye w ho shall m ake a false statem ent to
any official authorized t o examine the affairs o f the bank, upon con
viction shall be punished b y im prisonm ent o f n ot less than one or m ore
than ten years. W hen the State A uditor is satisfied on exam ination
that the bank has been d u ly organized and its stock fu lly paid, he
issues a certificate that the bank is authorized to com m ence business,
which certificate m ust be filed with the R ecorder o f D eeds o f the
cou n ty in which the bank is to carry on its business.
T h e double liability o f stockholders applies to all debts contracted
while they hold stock in the bank and is not released b y an assignment
•o f the stock. T he President o r Cashier must, within thirty days after
organization file with the R ecorder o f Deeds, a com plete list o f stock
holders and their holdings and record thereafter a certificate o f all
transfers within ten days after such transfers. A statem ent o f the
resources and liabilities o f the bank must be filed with the State Auditor
when required b y him . T h e A uditor must call for such report at least
once each three months. This report m ust be published in a news
paper o f the city or tow n where the bank is located.
T h e State A uditor shall appoint a suitable person, not connected
with the bank, to m ake a thorough examination o f the affairs o f each
bank once a year, and report the same to the A uditor. A bank m ay
hold on ly such real estate as m ay be necessary for a banking house or
such as m ay be acquired in the collection o f debts. R eal estate
acquired for debts m ust be disposed o f within five years. N o bank
m ay establish branches. T h e total liability for m oney borrow ed o f
a n y person, corporation or firm (including th e members o f the firm)
to any banking association shall at n o tim e exceed 15 per cent o f the
capital and surplus (not including undivided profits) o f such bank
and shall in no event exceed 30 per cent o f the capital stock actually
paid in. Provided, how ever, that m oney borrow ed within the mean
ing o f the A ct shall not Include (1) the discount o f bills o f exchange
drawn in good faith against actually existing values; (2) the discount
o f com m ercial or business paper actually owned b y the person negoti
ating the sam e; (3) the purchase o f, or loaning m oney in exchange for,
evidences o f indebtedness which shall be secured b y m ortgage or trust
deed upon productive real estate, the value o f which, exclusive o f
buildings as ascertained b y the oath o f tw o disinterested appraisers,
is d ouble the am ount o f the principal d eb t secured; b u t in no event
shall the liabilities o f any such person, corporation or firm to such bank
exceed the am ount o f its capital stock and unimpaired surplus or 25
per cent o f its deposits. Directors are m ade personally liable for any
violations o f this provision t o the extent o f the loss occasioned thereby
to the bank, its stockholders or any other party. N o loan shall be m ade
to the President, V ice-President or any em ploye o f the bank or to cor
porations or firms controlled b y them , or in the m anagement o f which
any o f them are a ctiv ely engaged, until the loan shall have been
approved b y the B oard o f Directors.
T h e minimum am ounts provided for the capital stock o f banks
are as follows. In cities, tow ns and villages that have n ot exceeding
ten thousand Inhabitants. $50.000; betw een ten thousand and fifty
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
thousand, $100,000; over fifty thousand, $200,000. U pon impairment
o f the capital stock tbe A uditor m ay require assessments o f stock
holders or a reduction o f the capital. I f he shall deem the bank is being
con du cted in an unsafe, fraudulent or illegal manner, he m ay, for the
purpose o f reorganization, or liquidation through receivership take
possession and control o f such bank. Such receiver m ay upon order o f
Circuit C ourt borrow m oney and issue evidences o f indebtedness
therefor and m ay receive the paym ent o f such loan b y pledge o f assets
o f such bank, for the purpose o f facilitating liquidation, protecting or
preserving the assets.
Creditors m ay enforce stockholders liability b y a bill in equity in
the nature o f a creditor’s bill, p rov id ed sam e is bought within one year.
T here are provisions for consolidation, change o f name and voluntary
dissolution. All banking associations heretofore organized by general
or special A ct, are m ade su bject to all the provisions o f this A ct.
A fter January 1, 1921, no natural person or natural persons, firm
or partnership shall transact the business o f banking or the business
o f receiving m oney upon deposit, or shall use the word “ B ank” or
“ B an k er” in connection with said business; provided, that nothing
herein contained shall be construed to prohibit banks incorporated
under the laws o f this State or o f the United States from appointing
natural persons as agents to receive deposits o f savings in and through
the public schools. A n y person violating the A ct is guilty o f a mis
dem eanor and is subject to a fine not exceeding $1,000, or im prison
ment in the penitentiary for one year. A banker is liable to fine and
Imprisonment if he receives a deposit after he knows the bank has
becom e insolvent and thereby the depositor suffers loss.
One drawing and delivering a check, draft, or .order on a bank with
intent to defraud, and know ing at the tim e that he had not sufficient
funds in or credit with the bank to pay the check, draft or order in
full is guilty o f a misdem eanor and is subject to a fine o f $1.000 or
Imprisonment for one year, or both. (See N egotiable Instrum ents.)
B ills o f L a d in g . T he U niform Bills o f Lading Law is in force Id
Illinois.
B lu e S k y L a w went into effect June, 10, 1919. governing the
sale o f stocks o f corporations. Securities are divided in to six classes.
Certain securities can be sold only after a full statement in regard
thereto has been filed with the Secretary o f State and a perm it issued
T he law is stringent. C opies o f the law and form s for use thereunder
can be obtained b y writing to the office o f the Secretary o f State,
Springfield. Ill
T h e act is entitled “ T he Illinois Securities L a w .”
C h a tt e l M o r tg a g e s . N o m ortgage, trust deed, or other co n ve y
ance o f personal property having the effect o f a m ortgage or lien, is
valid against third persons, unless possession be delivered to, and
remain w ith the grantee; or the instrum ent provides for the possession
o f the property to remain with the grantor, and the instrum ent is
acknow ledged and recorded. Such instrum ent shall be acknow ledged
before any officer authorized b y law to take acknowledgm ents o f deeds.
A fter acknow ledgm ent and within ten days after its execution the
instrum ent m ust be filed for record with the recorder o f the cou nty
In which the m ortgagor resides when the instrum ent is executed,
or, in case o f a non-resident o f the State, then in the cou n ty where
the property is situated. T he m ortgage is a valid lien until ninety
days after the m aturity o f the entire d eb t or obligation, not exceeding
five years from the filing o f the m ortgage, and m ay be renewed for
one year b y affidavit which m ust also b e filed for record. A note
secured b y chattel m ortgage m ust state on its face that it is so secured,
otherwise the m ortgage is void. A m ortgage m ay be released on the
m argin o f the record, or b y a release deed. H usband and wife must
jo in in C hattel M ortgages on household furniture. A chattel m ort
gage m ay be filed w ith the recorder o f deeds, and it is a valid m ortgage
though n ot recorded.
C o m m e r c ia l P a p e r. (See N egotiable Instrum ents.)
C o n s ig n m e n t s . Agreements to sell on consignment are valid.
I f a com m ission m erchant, or party selling on com m ission, converts
the property consigned, or after dem and fails to account for the pro
ceeds, he is subject to fine and im prisonm ent, and liable for double
the value o f the property so converted.
C o n v e y a n c e s . (See Deeds.)
C o r p o r a t io n s . Corporations, except for charitable, educational,
penal, and reform atory purposes, m ay b e organized only under gen
eral laws. (C onst, art. X I , 1.) In all elections o f directors every
stockholder has the right to vote, in person or b y proxy, for the number
o f shares o f stock ow ned b y him, or m ay cum ulate his votes. (Const,
art. X I . 3.)
C orporations m ay b e created under the act for any lawful purpose,
or except for banking, insurance, the operation o f railroads: and m ay
b e organized also for the purpose o f acquiring and m aintaining a uni
form local transportation system com prising several means o f transpor
tation in cities o f 500,000 or m ore.
Corporations under the act have the follow ing rights, powers, and
privileges: (1) succession: (2) to sue and be sued in its corporate
nam e; (3) corporate seal; (4) T o hold, own and deal in and with, any
real or personal property or any interest therein, situated in or out' o f
the State, which m ay be appropriate t o enable it to accom plish any or
all o f its purposes. (5) to sell and con vey, m ortgage, pledge, lease as
lessor, and otherwise dispose o f all or any part o f its property and assets.
(6) t o acauire and to own real property, im proved and unim proved,
and to lend m oney to its em ployees, tor certain purposes.; (7) to pur
chase or otherwise acquire, hold, own and otherwise use, deal in, and
with, shares or other interests in, or obligations of, other dom estic or
foreign corporations, associations, partnerships or individuals; (8) to
m ake contracts and to incur liabilities which m ay be appropriate to
accom plish its purposes; to b orrow m oney w ithout regard to the usury
law o f the State; to issue its notes, bonds and other obligations; and to
secure any o f its obligations b y m ortgage, pledge, or deed o f trust o f all
or any o f its property, franchises and incom e; (9) to invest its surplus
fun ds fro m tim e to tim e and to lend m oney for its corporate purposes,
and to take and hold real and personal p rop erty as security for the
paym ent o f funds so invested or loaned; (10) to con du ct its business,
carry on its operations and have offices within and w ithout this State
and to exercise in any other state, territory, district or possession o f
the U nited States, or in any foreign cou ntry the powers granted b y
this A ct.
T h e defense o f ultra vires is abolished as betw een the Corporation
and any person not a stockholder. I f a proceeding shall be brought by
a stockholder against the corporation to injoin it from continuing an
unauthorized A ct or the transaction or continuation o f unauthorized
business. I f the unauthorized A cts or the business sought to be
enjoined are being transacted pursuant to any con tract to which the
corporation is a party, the cou rt m ay, i f all o f the parties to the con
tra ct are parties to the proceeding, and if it deems the sam e to be
equitable, set aside and enjoin the perform ance o f such con tract, and
in so doing shall allow to the corporation or the other parties, as the
case m ay be, com pensation for the loss or dam age sustained b y either
o f them which m ay result from the action o f the cou rt in setting aside
and enjoining the perform ance o f such con tract, b u t anticipated
profits to be derived from the perform ance o f the con tract shall n ot be
awarded b y the cou rt as a loss or dam age sustained; (11) to elect or
appoin t officers and agents o f the corporation, and to define their
duties and fix their com pensations: (12) to m ake and alter by-laws, not
inconsistent with its A rticles o f incorporation or with the laws o f this
State, for the adm inistration and regulation o f the affairs o f the
corporation; (13) in tim e o f war to transact any law ful business in
aid o f the U nited States in the prosecution o f war, to m ake donations
to associations and organizations aiding in: war activities, and to
lend m oney to the State or Federal G overnm ent for war purposes:
(14) to cease doing business and to surrender its charter; (15) to have
and exercise all the powers necessary or convenient to carry into
effect the purpose fo r which such corporation is form ed.
T h e board o f directors m ust consist o f at least three persons. T he
directors exercise the corporate powers o f the corporation. T h ey m ay
hold m eetings and transact business outside o f this State. T h e y elect
officers, adopt by-laws, and m ay appoint an executive com m ittee. T he
B A N K IN G A N D C O M M E R C IA L L A W S — IL L IN O IS
name o f a corporation m ust indicate that it is a corporation. I f the
name o f a person or copartnership is used, it must be followed b y the
word “ corporation,” “ com pany, “ incorporated,” “ lim ited,” or their
abbreviations. T h e Secretary o f State must be kept inform ed o f any
change o f address o f such office or place o f business.
Bach C orporation shall maintain a registered office which m ay be
but need not be the same as its place ot business and a registered
agent whose p lace o f business shall be the same as the registered office.
Such registered agent shall b e the agent to receive service o f process.
In default o f such appointm ent then the Secretary o f State shall be
Irrevocably appointed as such agent for such corporation.
N o Certificate o f Stock shall be issued for any share until such share
Is fully paid. E very certificate representing shares issued b y a corpora
tion which is authorized to issue shares o f m ore than one class, shall
state upon the face or back thereof, the rights o f the shares o f each
class authorized to be issued. A ll stockholders’ meetings m ay be held
within or without this State. Directors are elected at the regular
annual m eeting o f the stockholders. N o stock can be voted which shall
have been transferred after the record date for closing the stock trans
fer books. N o p roxy is good after eleven m onths unless otherwise pro
vided in the proxy.
Stockholders are liable to creditors o f the corporation, only to the
amount unpaid on the shares held b y them .
Corporation report between January 15 and last day o f February
each year to secretary o f state.
D ecree in f o r e c lo s u r e . (See M ortgages.)
F o re ig n C o r p o r a t io n s . Each foreign corporation organized for
profit (except banking, insurance, building and loan, and surety com
panies), shall before it transacts any business or maintains an office in
this State, procure a certificate o f authority therefor from the Secretary
of State. N o foreign corporation shall engage or continue in any kind
o f business in this State, the transaction o f which b y dom estic corpora
tions is not perm itted b y the laws o f this State. Each licensed foreign
corporation shall keep on file in the office o f the Secretary o f State a
copy o f its charter and all amendments thereto. Foreign corporations
are required to m aintain a registered office and maintain registered
agent and make the same reports as a dom estic corporation. N o foreign
Corporation can m aintain an action at law or in equity until a certifi
cate o f authority is obtained.
F ees a n d T a x e s . T o the Secretary o f State on filing a certificate
of incorporation one-twentieth o f 1 per cent upon the am ount o f
the entire consideration received for issued shares o f capital stock, but
in no event less than $10. A foreign corporation, other than an insur
ance com pany or building and loan com pany, upon obtaining a certifi
cate to d o business in Illinois pays the same fees upon the amount o f
its capital stock represented b y business transacted and tangible pro
perty in Illinois as similar dom estic corporations pay upon incorpora
tion. A dom estic corporation or a foreign corporation licensed to do
business in Illinois (except .insurance com panies), and which are re
quired to m ake annual reports, m ust pay to the Secretary o f State an
annual license fee or franchise tax amounting to 1-20 o f 1 % proportion
of the am ount received for its issued capital stock represented b y busi
ness transacted and property located in this State, but in no event
shall any such license fee or franchise tax be less than $10 for any one
year. The franchise tax is payable on July 1 for the succeeding twelve
months. I f a corporation fails to make an annual report within the
time required, the Secretary o f State assesses a franchise tax on the
best available inform ation, adding a penalty o f 10 per cent on the
amount o f such assessment. Corporations are taxed on their tangible
property, real and personal, within the State, and also upon the fair
cash value o f their capital stock, including franchises, over and above
the assessed value o f their tangible property. Shares o f stock o f
domestic corporations, whose tangible property or capital stock is
taxed, are not subject to taxation in the hands o f owners.
A corporation organized for the purpose o f accepting and executing
trusts m ay be appointed assignee or trustee by deed, and executor,
guardian, or trustee b y will, and any court m ay appoint such com
pany receiver, assignee, guardian, conservator, executor, adminis
trator, or other trustee, provided such appointm ent apply to the
estate only and not to the person. Such corporation is not generally
required to give bond for the perform ance o f a trust, but it is required
to deposit with the A ud itor o f P ublic A ccounts $200,000 (in case the
value o f the personal property b y the annual report exceeds 10 times
the deposit o f the bonds then in the cities o f 100,000 or m ore the
deposit shall be increased to $500,000, and in cities o f 100,000 or
less the deposit shall be increased to $125,000) m bonds o f the U nited
States, or in m unicipal bonds o f this State, or real estate m ortgages,
and to m ake a statem ent, and file reports with the A uditor annually.
There are special acts also as to the organization o f corporations
not for pecuniary profit, religious corporations, loan associations,
co-operative associations for profit, insurance, etc. Corporations,
foreign or dom estic, under certain restrictions m ay d o a surety business.
C o u rts . Supreme court (seven ju d ges); four appellate courts
(intermediate cou rt o f appeals, with certain exceptions final up to
$1,500, three judges each); circuit courts (in C ook C ounty also
superior court o f equal jurisdiction); criminal courts; cou n ty courts
(which also exercise probate jurisdiction in counties having less than
70,000): probate courts (except where abolished b y statute where the
county has less than 85,000 population) (and in counties having
over 85,000 unless established b y statute where they .have over
70,000 p op ulation): m unicipal courts (Chicago has a municipal cou rt
with a ch ief justice and thirty-six associate judges and special p ra ctice );
and justice courts.
D ays o f G r a c e are abolished. (See Negotiable Instruments.)
D eeds conveying land should be signed, sealed,, and acknowledged
by grantor. Scroll seal is i ufflcient. N o subscribing witnesses are
required. Statutory form s o f warranty and quit claim deeds ana
mortgages are provided. The words em ployed are (U conveys and
warrants, (2) con veys and quit claims, (3) mortgages and warrants.
No deed releases the right o f homestead unless it contains a clause
substantially as follow s: “ H ereby releasing and waiving all rights
under and b y virtue or the homestead exemption laws o f the State
o f Illinois,” T o release dower the husband or wife must join in
the conveyance, except in the case o f a mortgage for purchase m oney;
otherwise the husband and wife m ay con vey as unmarried. Deeds
and other instruments affecting real estate should be recorded in the
county where the real estate is situated: until so recorded they are
void as to creditors and subsequent purchasers without notice.- ioee
Land R egistration.)
D e p o s itio n s . In chancery cases if the witness resides in the
county, depositions m ay be taken on five days notice;
a?
ten days' notice and one day in addition for every fifty miles. At
law, on like ten days’ notice, where the witness resides in another
county or is abou t to depart from the state. W here
witness
resides out o f the cou n ty or state, the deposition m ay bo
a notary public or com m issioner on a commission issued on ten days
notice, either on written or oral interrogatories. I f a
poenaed to give his deposition before a, notary Public _p’"®*ber officer
under com m ission issued b y a court o f this State, or of
or country, declines to appear or testify he m ay be cited before the
circuit court o f the cou n ty where he resides and be com pelled to appear,
testify, and produce docum ents.
D e s ce n t a n d D is t r ib u t io n . Property in this State, both real
and personal, o f residents and nonresident proprietors in this State
dying intestate, or whose estates or any part thereof shall be deemed
and taken as intestate estate, after all just debts and claims against
such estate are fully paid, shall descend to and be distributed in
manner following, to w it: 1. T o his or her children and their descend
ants, in equal parts; the descendants o f the deceased child or grand
child taking the share o f their deceased parents in equal parts am ong
them. 2. W hen there is no child o f the intestate, nor descendant o f
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1997
such child, and no widow or surviving husband, then to the parents,
brothers and sisters o f the deceased and their descendants, in equal
parts am ong them, allowing to each o f the parents, if living, a child s
part or to the survivor o f them if one be dead, a double p ortion; and
if there is no parent living, then to the brothers and sisters o f the
intestate, and their descendants. 3a. W hen there i s . a w idow or .
surviving husband and also parents, brothers and sisters o f the
deceased and their descendants but no child or children^ or descend
ants o f a child or children o f the intestate, then (after the paym ent
o f all just debts) one-half o f the real estate and the whole o f the
personal estate shall descend to such w idow or surviving husband a,s
an absolute estate forever and the other half o f the real estate shall
descend to the parents, brothers and sisters o f the deceased and their
descendants in equal parts am ong them , allowing to each o f the
parents, if living, a ch ild’s part or to the survivor o f them, if one be
dead a double portion; and if there is no parent living, then to th e
brothers and sisters o f the intestate and their descendants. (See
D ow er.) 3b. W hen there is a w idow or surviving husband and no
child or children or descendants o f a child or children o f the intestate
and no parents, brothers or sisters o f the deceased and th e ir descend
ants, then after the paym ent o f all just debts, the entire estate, real and
personal, shall descend to the surviving widow or husband outright.
4. W hen there is a w idow or a surviving husband and also a child or
children or descendants o f such child or children o f the intestate, the
widow or surviving husband shall receive as his or her absolute personal
estate, one-third or all the personal estate o f the intestate; and he or
she shall also receive as his or her absolute estate, in lieu o f dower
therein, one-third o f each parcel o f real estate o f which the intestate
died seized and in which such widow or surviving husband shall waive
his or her right o f dower. 5. I f there is no child o f the intestate or
descendant o f such child, and no parent, brother or sister, or descend
ant o f such p'arent. brother or sister, and no widow or surviving
husband, then such estate shall descend In equal parts to the next
o f kin to the intestate in equal degree (com puting b y the rules o f Civil
Law ), and there shall be no representation am ong collaterals, except
with the descendants o f brothers and sisters o f the intestate; and
in no case shall there be any distinction between the kindred o f the
whole and the half b lood. 6. I f any intestate leaves a widow or sur
viving husband and no kindred, his or her estate shall descend to such
widow or surviving husband. 7. I f the intestate leaves no kindred,
and no widow or husband, his or her estate shall escheat to and vest
in the cou n ty in which said real or personal estate, or the greater
portion thereof, is situated. (See D ow er and Curtesy.)
D o w e r. A surviving husband has dower (I. e., life interest In a
third part of. all lands whereof deceased was seized o f an estate of
inheritance during marriage) the same as a widow. Equitable estates,
and land contracted for before death, are subject to dower. I f dower
is waived, surviving husband or wife takes one third o f the rea.1 estate
and personal estate absolutely. Dow er m ay be b a rre d 'b y jointure
assented to; b y devise, unless w idow or surviving husband renounces
benefit o f devise within one year from date o f letters o f administration;
b y divorce as to the party in fault; and b y abandonm ent coupled with .
adultery. There is no dow er in land as against a purchase-m oney lien
T he husband or wife m ay renounce any devise under the will o f the
other and take if there be children, o n e third o f the real estate, and
one-third o f personal estate, or, if no children, one-half o f all real
and personal estate absolutely.
E x e cu tio n s . (See J u d g m e n ts an d E x e cu tio n s .)
E x e cu to rs a n d A d m in is tr a t o r s . (See Administration.)
E x e m p tio n s . There is a hom estead exemption to the extent of
$1000. It m ay be extinguished b y conveyance joined in b y husband
and wife properly acknow ledged. (See Deeds.) T he following
personal property is exem pt: 1. T he necessary wearing apparel,
Bibles, school books, and fam ily pictures. 2. One hundred dollars
worth o f other property, to be selected b y the debtor, and in addition,
when the debtor is the head o f a fam ily and resides with the same,
$300 worth o f other property, to be selected by the debtor. E xem p
tions can not be claimed but o f partnership property. T he wages
o f an em ployee being the head o f a fam ily and residing with the same
are exem pt from garnishment to the am ount pf $20 per week.
F ra u d s , S ta t u t e o f . T he following contracts should be in writing:
1 A prom ise o f an executor or administrator to answer any d ebt or
damages out o f his own estate. 2. A prom ise to answer for the debt,
default, or miscarriage o f another. 3. An agreement made in con
sideration o f marriage. 4. An agreement not to be perform ed within
one year. 5. A ny contract for the sale o f lands, or any interest
therein for a longer term than one year. 3. Express trusts relating
to real estate. -* & contract to sell or a sale o f any goods or cnoses
In action o f the value o f five hundred dollars or upwards is not enforcible ny action, unless the buyer accepts part o f the goods or choses
In action so contracted to be sold or sold, and actually receives the
same, or gives something in earnest to bind the contract, or in part
paym ent, or unless som e note or memorandum in writing o f the
contract or sale be signed b y the party to be charged or his agent in
that behalf. T he act applies to sales for future delivery and to goods
to be obtained or m anufactured by the seller, but not to sales o f goods
to be manufactured on special order if they be not suitable for sale
to others in the usual course o f business.”
G a r n is h m e n t . T he funds or property o f a debtor in the possession
o f a third party m ay be garnished in an attachm ent suit, or m a separate
proceeding after judgm ent has been obtained against the principal
debtor. (See Attachm ents.) W ages up to $20.00 a week are exempt
from garnishment.
H o lid a y s . T he legal holidays are: Sundays; January IjCNew Y ea r’s
D a y ) ’ February 12 (L incoln’s b irth d ay); February 22 (W ashington s
birthday) the Friday before E aster: M a y 30 (M em orial D a y ) ¡ July 4
(Independence D a y ): first M on day in Septem ber (Labor D a y ) ; October
12 (C olum bus D a y ): Thanksgiving D a y ; Tuesdays next after first
M on days in N ovem ber in even years (election d a ys); N ovem ber 11
(A rm istice D a y ); D ecem ber 25 (Christm as D a y )¡a ls o every Saturday
from 12 o ’clock noon to 12 o ’clock m idnight (in cities o f 200,000 or
m ore population). W here holidays fall on Sunday, the d a y following.
H u s b a n d a n d W ife . (See Married W om en.)
.
In s u r a n c e . Agents are required to have license. W rite director
o f T rade and Com m erce, Springfield, 111. Insurance com panies are
bonded to state.
In t e r e s t. Extrem e contract rate, 7 per cent, except as to corpora
tions, no limit as to corporations; legal rate, 5 per cent. Interest is
allowed at the legal rate on m oneys after they becom e due on any bond,
bill prom issory note, or other instrument in w riting; on m oney loaned
or advanced for the use o f another; on m oney due on the settlement
o f an account, from the date o f ascertaining the balance; on m oney
received to the use o f another, and retained w ithout the owner s
knowledge; and on m oney withheld b y an unreasonable and vexa
tious delay o f paym ent. Judgm ents or decrees draw interest at 5 per
cent
Penalty for contracting for m ore than 7 per cent is the loss o f
the entire interest, and only the principal sum can be recovered. A
written contract, wherever payable m ade, in this State between
citizens o f this State and o f a foreign State (or secured b y a mortgage
on lands in this State) is controlled b y the law o f this State as to the
rate o f interest, and the penalty for usury. Usury must be specially
pleaded
In all com putations o f tim e, and o f interest and discounts,
a m onth is considered to mean a calendar m onth, and a year twelve
calendar months, and a day the thirtieth part o f a m onth. A foreign
corporation is subject to the same penalties for usury as a citizen of
this State. Justice o f Peace has jurisdictionin all claims under $500 .
T he interest rate does not a p p ly to the loan business where $300 and
less is involved upon which 3 % per m onth m ay be charged. This
requires an annual license fee o f $200 in counties o f 500,000 and $100
in Counties less than 500.000.
J u d g m e n t s a n d E x e c u t i o n s . A ju d g m e n t o f a c o u r t o f r e c o r d
w ith c o u n t y ju r is d ic tio n is a lie n o n re a l e sta te s itu a te d in. th e c o u n t y
w h ere t h e ju d g m e n t is re n d e re d , fo r s e v e n y e a r s fr o m its d a te , a n d
1998
B A N K IN G A N D C O M M E R C IA L L A W S — IL L IN O IS
to becom e a lien on land registered under Torrens System m ust be
filed with registrar o f titles. I f an, execution is n ot issued on a ju d g
m ent within one year the judgm ent ceases to be a lien. A transcript
o f a judgm ent in another cou n ty m ay be filed and thereupon becom es
a lien upon real estate o f the defendant in the cou n ty where filed,
and execution m ay issue thereunder. A n execution becom es a lien
on personal prop erty from the tim e it is delivered to the officer to
be executed. A ll goods and Chattels, including and m oney stock
in a corporation, m ay be levied on. Personal property m ay be sold
under execution on ten d a ys’ notice. A forthcom ing bond m ay be
given b y the defendant to the officer. A third p a rty claim ing the
property levied on m ay have a trial as to the right o f property in
the cou n ty court. Judgm ents m ay be confessed b y a d ebtor or his
authorized attorney without process in term tim e or vacation. Land
Registration Torrens System in use in C ook C ounty. (See M ortgage
Foreclosure.) Lien o f judgm ent m ay be revived after expiration o f
seven years b y scire facias, b ut n ot after tw en ty years.
L ie n s . A landlord has a lien for rent upon crops growing on the
demised premises. H otel, inn, and boarding-house keepers have a
Hen upon baggage and other valuables o f guests. Stable-keepers have
a lien upon horses, carriages, and harness for the keeping thereof.
Garage keepers are entitled to liens on autom obiles, parts and acces
sories, for keeping, repairing, materials furnished thereto, and the
expenses bestow ed thereon at the request o f the owner, or the person
having the possession thereof. Agisters and persons keeping, yarding,
andtfeeding dom estic animals have a lien therefor. All persons furnish
ing supplies, or doing w ork for any railroad organized under the laws
o f this State, necessary for the construction, m aintenance, operation,
or repair o f the road, have a lien therefor on all the property o f the
com pany, which is good as against m ortgages and other liens acquired
after the com m encem ent o f the delivery o f supplies, or the doing o f
the work. A ttorneys have liens on all demands, claims, and causes o f
action o f their clients, after the service o f notice upon the adverse
party. C ontractors and sub-contractors, including architects, super
intendents, timekeepers, etc., have liens on any real estate, interest
therein, or im provem ents thereon, for all kinds o f labor and services
perform ed, and materials furnished for the erection o f any building,
or the im provem ent o f any real estate, or thing connected therewith.
A person furnishing material, apparatus, fixtures, m achinery or labor
to a contractor for a public im provem ent, has a lien upon the m oney,
bonds or warrants due or to becom e due under such co n tra ct: P ro
vided, the claimant serves upon the m unicipality a notice o f his claim
before paym ent be m ade to such con tractor: but the lien attaches only
to the portions o f the m oney, bonds, or warrants against which no
voucher or other evidence o f indebtedness has been issued and delivered
to the contractor. A n y person expending labor, service, skill or
m aterial on a n y ch attel furnished at the request o f the ow ner has a
lien therefore n ot to exceed $ 2 5 .0 0 .
,
L im it a tio n s . In personal actions as follow s: Libel and slander,
one year; actions for damages for injury to persons, tw o years (where
death results, one year after d ea th ); for false imprisonm ent, malicious
prosecution, for a statutory penalty, for abduction, seduction, or
criminal conversation, tw o years; actions on unwritten contracts,
express or im plied, on awards o f arbitration, to recover damages for
injury to property real or personal, to recover possession o f personal
property, or damages for the detention or conversion thereof, a n d .
all civil actions not otherwise p rovided for, five years; actions on
bonds, prom issory notes, bills o f exchange, written leases, written
contracts, or other evidences o f indebtedness in writing, ten years;
but any paym ent or new prom ise to pay in writing renews the right o f
action on such instrument for ten years from the tim e o f such paym ent
or prom ise. A dom estic judgm ent o f a court o f record, tw enty yea rs;
o f a foreign cou rt o f record, five years. W hen a cause o f action has
arisen in a state or territory ou t o f this state, or in a foreign country,
and, b y the laws thereof, an action thereon cannot be m aintained
b y reason o f the lapse o f tim e, an action thereon shall n ot be m ain
tained in this state. This applies only where b oth d ebtor a,nd
creditor are non-residents o f this state when the cause o f action
accrues, and does not govern an indem nity con tract where the in
dem nitors were residents o f M ichigan and the other parties in Illinois.
I f a person liable to an action fraudulently conceals the cause o f such
action from the know ledge o f the person entitled thereto, the action
m ay be com m enced at any tim e within five years after the person
entitled to bring .the same discovers that he has such cause o f action,
and n ot afterwards.
L im it e d P a r t n e r s h ip . There are statutory provisions as to the
form ation o f lim ited partnerships, b ut such partnerships are not
com m on in Illinois.
M a r r ie d W o m e n . A married wom an m ay sue, be sued, or defend,,
as if she were unmarried. W hen the husband deserts, the wife m ay
prosecute or d efend in his name. T he husband has the same right
upon the desertion o f the wife. T h e husband is not liable for the
w ife’s torts except in cases where he w ould be join tly responsible
If the marriage did not exist. T he husband or w ife is not liable for
the debts o f the other incurred before marriage, or for the separate
debts o f each after marriage, except that the husband and wife are
join tly and severally liable for the expenses o f the fam ily and the
education o f their children. T he wife m ay con tract as if unmarried.
She m ay receive and use her own earnings free from the interference
o f the husband or his creditors. Neither the husband nor the wife can
recover com pensation for any labor perform ed or services rendered for
the other. She m ay own in her ow n right real and personal property
obtained b y descent, gift, or purchase, and manage, sell and con vey it
to the same extent that the husband can property belonging to him ;
b u t no transfer o f personal property between, the husband and wife
living together is good as against third persons, unless acknowledged
and recorded as chattel m ortgages are required to be. A married
w om an who w ithout her fault lives apart from her husband m ay m ain
tain an action for reasonable support and m aintenance. T he wife
m ay insure her husband’s life. She m ay becom e surety for the hus
band. She m ay execute a will, if over eighteen years o f age, at which
age she attains m ajority.
,
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M o r tg a g e s . R eal estate m ortgages should be executed and ac
know ledged the same as deeds. The, wife must loin to bar dow er,
except in m ortgages for purchase-m oney. Trust deeds are often
preferred to m ortgages because o f the facility in the transfer o f the
security and, in case o f non-resident creditors, in obtaining a release,
the trustee generally being a resident. R eal estate m ortgages m ay
be released upon the record or b y release deed. M ortgages and
trust deeds m ust be foreclosed b y scire ‘facias or b y regular foreclosure
suit in a cou rt or chancery. In extrem e cases, where the m ortgaged
property is clearly o f less value than the d ebt secured and the m ort
gagor is Insolvent, there m ay be a strict foreclosure which cuts oft the
right o f redem ption, in which case the m ortgagee takes the property
in discharge o f the debt. In other cases, after decree o f foreclosure,
the officer designated to execute the decree delivers a certificate o f
sale to the purchaser and files a co p y thereof for record. T he debtor
m ay redeem within tw elve m onths. Judgm ent creditor m ay redeem
after tw elve m onths, b u t within fifteen m onths; at the end o f which
tim e the purchaser is entitled to a deed. C orporations m ay waive
right o f redem ption b y provision in any m ortgage or trust deed waive
right o f redem ption. T he holder in due course o f a note seem ed b y a
m ortgage or trust deed on real estate in Illinois stands in n o better
position, so far as the enforcem ent o f his security is concerned, than
the payee or original holder; but this doctrine does n ot a p p ly to cor
porate bonds payable to bearer.
N e g o t ia b le I n s t r u m e n t s . T h e U niform N egotiable Instruments
A ct (see com plete text follow ing “ D igest o f B anking and Com m ercial
L a w s ” ) is in force in Illinois, with the follow ing m odifications: 1.
A ll Prom issory N otes, B onds, D u e Bills, and other instruments in
writing, whereby one prom ises or agrees, t o p a y any sum o f m oney
or articles o f personal property, or any sum o f m oney in personal
property, or acknowledges any sum o f m oney or article o f personal
property to be due, are negotiable. E xcep t as to Prom issory Notes
payable in m oney due diligence must be used b y the holder against
the maker, i f he be a resident and solvent, b y suit at first term o f
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C ourt after m aturity, in order to hold the endorser. 2. A ccom m oda
tion paper m ay be issued after m aturity, if such was the intention o f
the accom m odating party. 3. T he addition o f words o f assignment
or guaranty to a blank indorsem ent does n ot affect the signature as
an indorsem ent unless otherwise expressly stated. 4. T he defenses of
fraud and circum vention in the execution o f negotiable paper, or that
the consideration arose ou t o f a gam bling transaction prohibited b y
sections 130, 131, and 136 o f our Criminal Code, m ay be asserted as
against a holder in due course. 5. T h e fa ct that a depositor makes
his note payable at a bank does not authorize the bank to p ay it out
o f his funds on deposit. 6. A n alteration o f an instrum ent voids it
on ly when it is m aterial or fraudulent, and m ade b y the holder. 7. A
prom ise in writing to accept a bill m ade either before or after it is
drawn is deem ed an actual acceptance as to the person receiving the
bill on the faith thereof. 8. Section 137 o f the Uniform N egotiable
Instrum ents Law, providing that the destruction b y the drawee o f a
bill o f exchange left with him for acceptance, or his refusal to return
the same within tw enty-fou r hours after delivery to him or within such
further period as the holder m ight allow, should be deem ed an accept
ance o f the bill, is om itted from the illlinois act.
E xcept as otherwise provided b y agreement and except as to sub
sequent holders o f a negotiable instrument payable to bearer or
indorsed specially or in blank, where an item is deposited or received
for collection, the bank o f deposit shall be agent o f the depositor for
its collection and each subsequent collecting bank shall b e sub-agent
o f the depositor b u t shall be authorized to follow the instructions o f
its im m ediate forwarding bank and any credit given b y any such agent
or sub-agent bank therefor shall be revocable until such tim e as the
proceeds are received in actual m oney or an unconditional credit given
on the books o f another bank, which such agent has requested or
accepted. W here any such bank allows any revocable credit for an
item to b e withdrawn, such agency relation shall nevertheless con
tinue except, the bank shall have all the rights o f an owner thereof
against prior and subsequent parties to the extent o f the amount
withdrawn.
A credit given b y a bank for an item drawn on or payable at such
bank shall be provisional, subject to revocation at or before the end o f
the d ay on which the item is deposited in the event the item is found
not payable for any reason. W henever a credit is given for an item
deposited after banking hours such right o f revocation m ay be exer
cised during the follow ing business day.
A n indorsem ent o f an item b y the payee or other depositor “ for
d e p o sit” shall be deem ed a restrictive indorsem ent and indicate that
the indorsee bank is an agent for collection and not owner o f the item
A n indorsem ent “ p a y any bank or banker” or having equivalent
words shall be deem ed a restrictive indorsem ent and shall indicate the
creation o f an agency relation in any subsequent bank to w hom the
paper is forw arded unless cou pled w ith thè words indicating the crea
tion o f a trustee relationship; and such indorsement or other restric-.
tiv e indorsement whether creating an agency or trustee relationship
shall con stitu te a guaranty b y the indorser to all subsequent holders
and to the drawee or p a yor o f the genuineness o f and the authority to
m ake prior indorsements and also to save the-drawee or p a yor harm
less in the event any prior endorsement appearing thereon is defective
or irregular in any respect unless such indorsement is cou pled with
appropriate words disclaim ing such liability as guarantor.
W here a deposited item is payable to bearer or indorsed b y the
depositor in blank or b y special indorsement, the fa ct that such item
is so payable or indorsed shall n ot change the relation o f agent o f the
bank o f deposit to the depositor, b u t subsequent, holders shall have
the right to rely on the presum ption that the bank o f deposit is the
owner o f the item . T h e indorsem ent o f an item b y the bank o f deposit
or b y any subsequent holder in blank or b y special indorsem ent or its
delivery when payable to bearer shall carry the presum ption that the
indorsee or transferee is owner provided there is nothing upon the
face o f the paper or in any prior indorsem ent t o indicate an agency
or trustee relation o f any prior party. B ut where an item is deposited
or is received for collection indorsed specially or in blank, the bank
m ay con vert such an indorsem ent into a restrictive indorsement b y
writing over the signature o f the indorser the words “ for d e p o sit” or
“ for collection ,” or other restrictive w ords to negative the presum ption
that such bank o f dèposit or indorsee bank is owner; and in the case o f
an item deposited or received fo r collection payable to bearer, m ay
negative such presum ption b y indorsing thereon the words “ received
for d e p o sit” or “ received for collection” or words o f like im port.
I t shall be the d u ty Of the initial or any subsequent agent collecting
bank to exercise ordinary care in the collection o f an item and when
such d u ty is perform ed such agent bank shall n ot be responsible if for
any cause paym ent is not received in m oney or an unconditional credit
given on the books o f another bank, which such agent bank has
requested or accepted. A n initial or subsequent agent collecting bank
shall b e liable for its own lack o f exercise o f ordinary care b u t shall
not be liable for the neglect, m isconduct, mistakes or defaults o f any
other agent bank or o f the drawee or payor bank.
W here an item Is received on deposit or b y a subsequent agent
hank for collection, payable in another tow n or city, it shall be deemed
the exercise o f ordinary care t o forward such item b y m ail, n ot later
than the business d a y next follow ing its receipt either (1) direct to
the drawee or payor in the event such drawee or p a yor is a bank or
(2) to another bank collecting agent according to the usual banking
custom , either located in the tow n or city where the item is payable
or in another tow n or city.
W here an item is received on deposit or b y a subsequent agent
bank fo r collection, payable b y or at another bank in the same tow n
or city in which such agent bank is located, it shall be deem ed the
exercise o f ordinary care to present the item fo r paym ent at any
tim e not later than the next business d a y follow ing the d a y on which
the item is received either ( l ) at the counter o f the drawee or payor
b y agent or messenger or (2) through the local clearing house under the
regular established procedure, or according to the usual banking cus
tom where the collecting or payor bank is located in an outlying district.
T h e designation o f the above m ethods shall not exclude any other
m ethod o f forw arding or presentment which under existing rules o f
law w ould constitute ordinary care.
W here the item is received b y m ail b y a solvent drawee or payor
bank, it shall be deem ed paid when the am ount is finally charged to
the accou nt o f the maker or drawer.
W here an agent bank forwards an item for collection, it shall not
be responsible for its loss or destruction in transit or, when In the
possession o f others, fo r its inability to repossess itself thereof, p ro
vided there has been n o lack o f ordinary care on its part.
W here ordinary care is exercised, any agent collecting bank m ay
receive in paym ent o f an item w ithout becom ing responsible as debtor
therefor, whether presented b y m ail, through the clearing house or over
the counter o f the drawee or p ayor, in lieu o f m oney, either (a) the
check or d raft o f the drawee or piayor upon another bank or (b) the
check or d raft o f any other bank upon any bank other than the drawee
or p a yor o f the item or Cc) such m ethod o f settlem ent as m ay be cus
tom ary in a local clearing house or betw een clearing banks or other
wise: P rovided that whenever such agent collecting bank shall request
or a ccept in paym ent an unconditional credit which has been given to
it on the books o f the drawee or p a yor or on the books o f any other
bank, such agent collecting bank shall becom e debtor for such item
and shall be responsible therefor as if the proceeds were actually
received b y it in m oney.
,
W here ordinary care is exercised, any agent collecting bank m ay
receive from any subsequent bank in the chain o f collection in rem it
tance for an item which has been paid, in lieu o f m oney, the check or
d raft o f the rem itting bank upon any bank other than itself or the
drawee or p a yor o f the item or such other m eth od o f settlem ent as
m ay be cu stom ary; p rovided that whenever such agent collecting
bank shall request or a ccept an unconditional credit which has been
given to it on the books o f the rem itting bank or on the b ooks o f any
other bank, such agent collecting bank shall becom e debtor for such
item and shall be responsible therefor as if the proceeds were actually
received b y it in m oney.
B A N K IN G A N D C O M M E R C IA L L A W S — IN D IA N A
W here an item is d uly presented b y mail to the drawee or payor,
whether or not the same has been charged to the account o f the maker
or drawer thereof or returned to such maker or drawer, the agent
collecting bank so presenting m ay, at its election, exercised with
reasonable diligence, treat such item s as dishonored b y non-paym ent
and recourse m ay be had upon prior parties thereto in any o f the
following cases:
(1) W here the check or draft o f the drawee or payor bank upon
another bank received in paym ent therefor shall not be paid in due
course:
(2) W here the drawee or payor bank shall w ithout request or
authority tender as paym ent its own check or draft upon itself or
other instrument upon which it is prim arily liable;
(3 ) W here the drawee or payor bank shall give an unrequested or
unauthorized credit therefor on its books or the books o f another
bank-; or
(4 ) W here the drawee or payor shall retain such item without
remitting therefor on the d ay o f receipt or on the day o f m aturity if
payable otherwise than on dem and and received b y it prior to or on
such day o f m aturity.
Provided, how ever, that in any case where the drawee or payor
bank shall return any such item unpaid not later than the day o f
receipt or o f m aturity as aforesaid in the exercise o f its right to m ake
payment only at its own counter, such item cannot be treated as
dishonored b y non-paym ent and the delay caused thereby shall not
relieve prior parties from liability.
Provided further thjit no agent collecting bank shall be liable to
the owner o f an item where, in the exercise o f ordinary care in the
interest o f such owner, it makes or does not make the election above
provided or takes such steps as it m ay deem necessary in cases (2),
(3) and (4) above.
In case o f the dishonor o f an item duly presented b y m ail as pro
vided for in the next preceding section, notice o f dishonor o f such
item to prior parties, shall be sufficient if given with reasonable dili
gence after such dishonor; and further in the event o f failure to obtain
the return o f any such item notice o f dishonor m ay be given upon a
copy or written particulars thereof, and delay in giving notice o f dis
honor caused b y an attem pt with reasonable diligence to obtain return
o f such item shall be excused.
1. W hen the-draw ee or payor, or any other agent collecting bank
shall fail or be closed for business b y the A uditor o f P ublic A ccounts
in the case o f banks incorporated under the laws o f this State, or the
Comptroller o f the Currency in the case o f banks incorporated under
the Federal laws, or b y action o f the board o f directors or b y other
proper legal action, after an item shall be mailed or otherwise entrusted
to it for collection or paym ent but before the actual collection or pay
ment thereof, it shall be the duty o f the receiver or other official in
charge o f its assets to return such item , if same is in his possession, to
the forwarding or presenting bank with reasonable diligence.
2. E xcept in cases where an item or items is treated as dishonored
b y non-paym ent as p rovided in section XI, when a drawee or payor
bank has presented to it for paym ent an item or items drawn upon
or payable b y or at such bank and at the tim e has on deposit to the
credit o f the maker or drawer an amount equal to such item or items
and such drawee or payor shall fail or close for business as above,
after having charged such item or items to the account o f the maker
or drawer thereof or otherwise discharged his liability thereon but
without such item or item s having been paid or settled for b y the
drawee or p a yor either in m oney or b y an unconditional credit given
on its books or on the books o f any other bank, which has been requested
or accepted so as to constitute such drawee or payor or other bank
debtor therefor, the assets o f such drawee or payor shall be impressed
with a trust in favor o f the owner or owners o f such item or items for
the amount thereof, or for the balance payable upon a number o f items
which have been exchanged, and such owner or owners ¿shall be
entitled to a preferred claim upon such assets, irrespective or whether
the fund representing such item or items Can be traced, and identified
as part o f such assets or has been intermingled with or converted
into other assets o f such failed bank.
3. W here an agent collecting bank other than the drawee or payor
shall fail or be closed for business as above, after having received in
any form the proceeds o f an item or items entrusted to it for collec
tion, but without such item or items having been paid or rem itted for
by it either in m oney or b y an unconditional credit given on its books
or on the books o f any other bank which has been requested or accepted
so as to constitute such failed collecting or other bank debtor therefor,
the assets o f such agent collecting bank which has failed or been
closed for business as above shall be impressed with a trust in favor
o f the owner or owners o f such item or items for the amount or such
proceeds and such owner or owners shall be entitled to a preferred
claim upon such assets, irrespective o f whether the fund representing
such item or item s can be traced and identified as part o f such assets
or has been interm ingled with or converted into other assets Oi such
failed bank.
In any case n ot p rovided for in this A ct the rules o f law and equity,
Including the law m erchant and those rules o f law and equity relat
ing to trusts, agency, negotiable instruments and banking, shall
continue to apply.
P a rtn e rs h ip . T he U niform Partnership A ct and the Uniform
Limited Partnership A ct are in force in Illinois.
P ro b a te L a w . (See Administration o f Estates.)
R e c o r d in g A c t s . In counties having a population o f less than
60,000, the clerk o f the circuit court is ex officio the recorder, in
other counties a “ recorder o f d eed s” is elected. As to what instru
ments must be recorded, see respective titles.
R e p le v in . T h e action lies for personal property wrongfully de
tained. T he action m ay be brought in any county where the property
is, or where any o f the defendants reside or m ay be found, the venue
provisions applicable t o other civil cases shall apply to actions in
replevin; and in addition an action m replevin m ay be brought in
any county in w hich the goods or chattels or any part o f them are.
Before the execution o f the writ, the plaintiff, or S offieta e in !hm behalf,
must give the officer a bond with sufficient security Ca real si*®*®
owner o f the cou n ty is generally required) in double the value o f the
property defendant m ay execute bond for double vaffie q f property
conditioned on defense o f suit and retain possession o f property.
S ales. T h e U niform Sales A ct has been adopted in Illinois. Sales
o f securities are b y consent o f Illinois Securities Comm ission and are
classified. (See Blue Sky Law.)
Sales t o B u lk . Sales o f the m ajor part or all of.?
chattels or fixtures n ot in the ordinary course o f b u s in e s ^ are fraudu
lent and void as to creditors unless the buyer o*3ta m s fro m
an affiaavit giving a list o f his creditors with addresses and amounts
due each, and the buyer, five days before p a y n M n t .g m « notice to
each creditor personally or b y mail o f the contem plated purchase.
T r u s t E sta te s . Subject t o rules o f Chancery disbursements to
be approved b y court.
T r u s t R e c e ip t s . T h e uniform trust receipts act has been adopted
in Illinois.
W a r e h o u s e R e c e ip t s . T he U niform Warehouse R eceipts Law
is in force in Illinois.
W ills. E very male over tw enty-one. and female over eighteen.
Is com petent to m ake a will. It must be signed b y the testator or
by some person in his presence and b y his chrection,
^ te s t e d in
his presence at his request b y at least tw o witnesses.
^ ¿^ esses
should be disinterested. A devise to a witness is TOid unless th e w u l
be otherwise duly attested b y tw o witnesses exclusive o f ^ c n persemt
Where the subscribing witnesses are dead, secondary evidence o f the
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Federal Reserve Bank of St. Louis
1999
execution is admissible. T h e will is proved, after notice to heirs and
legatees, in the county (or probate) court, and m ay be contested, in
chancery, within one year after its probate. Wills or authenticated
copies, affecting estate within this State, duly proved outside o f this
State, in accordance with the law o f the State where executed, accom
panied with a certificate o f the proper officer o f that fact, m ay be
recorded here. W ills executed and published out o f this State m ay
be admitted to probate in any cou nty in this State where the testator
had lands or personal property upon like p ro o f as if executed and pub
lished here, whether or not the will has been first probated in another
state or county. T he U niform Foreign Probate A ct is in force in
Illinois. AH originals willst after being filed, must remain in the office
o f the county (or probate) court. Children m ay be disinherited.
SYNOPSIS OF
TH E L A W S OF INDIANA
RELATING TO
BANKING AND COMMERCIAL USAGES
Revised b y L u s h e r M . S w y g e r t ,
6330 H ohm an A ve., H am m ond, Ind.
A c k n o w le d g m e n t s . All conveyances o f real estate, except leases
for less than three years, must be in writing, and acknow ledged and
recorded at once, or they will not bind third parties. W ithin the
State acknowledgments m ay be taken before a judge or clerk o f the
court o f record, justice o f the peace, auditor, recorder, notary p ublic,
member o f the general assembly, or m ayor o f a city, and in other
states and territories before the like officers, or a com m issioner o f
deeds for Indiana. In any foreign country, before a diplom atic or
consular officer o f the United States. I f such acknow ledgm ent or
p roof is in some other than the English language, or is not attested
b y such official seal, it must be accom panied b y the certificate o f an
officer o f the United States, to the effect that it is duly executed accord
ing to the laws o f such foreign country, and that the officer has legal
authority to certify to the p ro o f or acknowledgm ent and the meaning
o f his certificate, i f m ade in a foreign language. W ife must join in
deeds and mortgages o f husband’s lands in order to carry her in
choate one-third interest in husband’ s lands. N o separate acknowl
edgment o f wife necessary in order to con vey her inchoate interest
in husband’s lands, although she must acknowledge. The certifying
officer should state the date when his com m ission expires.
A c t io n s . T he distinction betw een actions at law and suits in
equity, and the form s o f each, are abolished. There is but one form
o f action for the enforcement o f private rights and redress o f private
wrongs, denom inated b y the C od e a civil action. E very action must
’be prosecuted in the name o f the real party in interest, except in suits
b y an executor, administrator, guardian o f an idiot or lunatic, trustee
o f an express trust, or person expressly authorized b y statute, w ho
needs not join with them the person for whom the action is prosecuted.
A ll parties in interest must be join ed as plaintiffs or defendants;
and when a com plete determ ination o f the con troversy can n ot be
had w ithout the presence o f other parties, w ho have not been made
plaintiffs or defendants, the court must cause them to be joined.
Commencement. A civil action is com m enced b y filing in the
office o f the clerk a com plaint and causing sum mons to issue thereon;
and the action is deem ed com m enced from the tim e o f issuing the
summons, or, i f publication be m ade, from the tim e o f the first pub
lication.
J o in d er o f C auses. T he plaintiff m ay unite several causes o f
action in the same com plaint, b ut they m ust fall within the term o f
the statute, and causes o f actions so join ed m ust affect all the parties
to the action, must not require different places o f trial and m ust be
separately stated and numbered.
Severance. W here causes o f action are im properly joined the
court is required b y statute to cause as m any separate actions to be
docketed as there are causes im properly joined.
C onsolidation. T he courts have inherent pow er to consolidate
causes before them in the absence o f statute, when necessary to the
ends o f justice and to avoid a m ultiplicity o f suits.
J o in t D ebtors. In an action against defendants join tly indebted
on contract, plaintiff m ay proceed against such defendant or de
fendants as are served. A judgm ent m ay be enforced against join t
property o f all and the separate property o f those served, j W here
judgm ent is recovered against one or m ore persons jo in tly liable on
contract, but judgm ent is rendered against only part o f the persons
join tly liable for the reason that others were not sum m oned or did
not appear, plaintiff m ay proceed against those not sum m oned and
not appearing, in the same manner as if they were alone liable, but
the com plaint must allege the facts aforesaid.
Survival. A ll causes o f action survival death o f person entitled or
liable t o such action except action fo r personal injuries and for promises
to marry.
A d m in is t r a t io n o f E sta te s . E xcept where special statutes
provide otherwise with respect t o a particular cou nty the Circuit
C ourt has exclusive probate jurisdiction. In cases o f intestacy letters
are granted in follow ing order: 1. W idow or widower, 2. N ext o f km .
3. Largest ’ resident creditor. Letters o f administration shall be
granted in the co u n ty : 1. W here intestate was inhabitant at tim e o f
death. 2. W here, not, being inhabitant o f the State he leaves assets.
W here an intestate, not being an inhabitant, shall die out o f the State,
leaving assets in several counties, letters m ay b e granted in any one
o f the counties in which such assets m ay be at tim e o f death, and
the administration first law fully granted shall extend to all or the
estate. Preference is given to foreign executor o f a decedent not
an inhabitant o f State, if, before letters are granted m this State
it appears that proper letters have been granted in another state,
except there be resident creditors, legatees and heirs entitled to dis
tribution, who are inhabitants o f the State. N o action shall be
brought against an estate fo r any claim against the decedent; but
the holder thereof, whether the claim be due or not, shall file a suc
cinct and definite statem ent thereof in the office o f the clerk o f the
court setting forth all credits to which the estate is entitled, and
accom panied b y the affidavits o f the claimant, his agent, or attorney,
that the claim is just and w holly unpaid. I f claim be secured b y a
lien the lien shall be particularly set forth. T he claim must be filed
within six m onths from the notice o f the administrator s appointm ent,
or claim ant m ust p ay costs; and i f not filed at least thirty days
before the final settlement o f the estate, it shall be barred, except
that heirs, devisees and distributees shall be liable to the extent o f
the property received b y them , to any unpaid creditor who six m onths
prior to the final settlem ent was insane, an infant, o r ou t o f the
State,— suit to be brought within one year o f rem oval o f disability,
and if upon ^laim o f non-resident creditor, within tw o years o f the
settlement o f the estate.
Affida vit.« m ay be taken before any officer qualified to take acknow l
edgm ents (see above). D ate o f expiration o f o ffice rs com m ission
must be certified b y the officer himself.
A lle n s. Resident aliens who have declared their Intention to
becom e citizens, m ay acquire, hold, and en joy real estate, and m ay
con vey, devise, m ortgage, or otherwise encum ber the same, to like
manner and with the same effect as citizens o f this State. Allens,
whether resident or not, m ay own real estate not exceeding 320 acres
lands in excess o f that am ount they must con vey within five years or
suffer escheat as to such excess.
2000
B A N K IN G A N D C O M M E R C IA L L A W S — IN D IA N A
A s s ig n m e n t s a n d I n s o lv e n c y . A ny debtor m ay make a general
assignment o f all proporty in trust for benefit o f all bona fide creditors
This trust is administered under the direction o f the county court.
D ividends are allowed on all claims allowed b y the trustee or court.
D eb tor is n ot discharged from his liabilities.
A t t a c h m e n t m ay issue against the property o f a non-resident or
foreign corporation, and against any w ho m ay have disposed of, or be
abou t to dispose of, p roperty, to cheat, hinder or delay creditors, or
against a debtor who conceals him self so that sum m ons can n ot be
served upon him or where the debtor is secretly leaving the state.
An affidavit is required, and a b on d to p a y damages if the proceed
ings be w rongful or oppressive. Creditors w ho file under the original
attachm ent, before final judgm ent, are required to furnish a like
affidavit and b on d , and all share pro rata in the proceeds o f the
attached property. T h e wages o f a resident householder, n ot exceed
ing one m onth at any one tim e, are exem pt so lon g as d ebtor remains
in such em ploym ent. It is a m isdem eanor to send claims ou t o f
the State to be collected b y attachm ent, or garnishment, when creditor,
d ebtor, and person ow ing for earnings intended to be reached are all
within the jurisdiction o f the cou rt o f this State. T h e collection o f
claims so sent m ay be enjoined.
B a n k C o lle c t io n C o d e . G iven directly follow ing laws. A d opted
July 1, 1929, A cts 1929 C h. 164.
A „ , .
B a n k s a n d B a n k in g . A ll financial institutions are con trolled b y
the “ Indiana Financial Institutions A c t .”
(1933, c. 40, as amended
b y A cts 1935, C . 5.) T h e Departm ent o f Financial Institutions
has all powers form erly possessed b y the banking departm ent and
is vested with con trol over organization, supervision, regulation,
exam ination and liquidation o f all financial institutions, which term
includes every bank, trust com pany, building and loan association,
credit union, rural loan and savings association, guaranty loan and
savings association, m ortgage guarantee com p any and credit union.
N o bank, trust com pany, building and loan associatiipn, savings
bank or credit union m ay b e organized unless, after investigation and
public hearing, the-Departm ent approves its articles and the establish
m ent o f such institution in the city or tow n where it is proposed to be
A n y existing private bank, bank o f discount and deposit, trust com
pany, loan and trust and safe deposit com pany, building and loan asso
ciation or rural or guaranty loan and savings institution m ay reorganize
under the Financial Institutions A ct, with approval o f tw o-thirds o f
the outstanding shares and o f the D epartm ent.
...
O rganization. T en or m ore persons, a m ajority o f w hom are citi
zens o f Indiana, m ay organize a bank or trust com pany. A rticles o f
incorporation m ust set forth name, purpose, period o f existence, ad
dresses o f principal officers, am ount o f capital stock, par value o f shares,
paid-in capital with which business Will begin, and names and addresses
o f directors and incorporators. N am e m ust include words to indicate
power as bank or trust com pany, and m ay n ot include w ords indicating
powers not possessed.
A rticles m ust be approved after public
hearing b y D epartm ent and filed w ith Secretary o f State.
Bank or trust com pany m ay not begin business until: (a) Articles
approved b y Secretary o f State have been filed in recorder’s office of.
the cou n ty o f loca tion ; (b) am ount o f capital stock prescribed has been
paid in ; and (c) affidavit o f m ajority o f directors, stating that capital
has been paid in, is filed with recorder.
M in im u m C a pita l R equirem ents o f bank or trust com p any are:
$25,000 in cities or tow ns o f less than 3,000 inhabitants: $50,000 in
cities o f 3,000 or m ore and less than 6,000 inhabitants; $100,000 in
cities o f 6,000 or m ore and less than 75,000 inhabitants; $200,000 in
, cities o f 75.000 or m ore inhabitants.
A m en d m en t o f A r ticles . "Articles o f incorporation o f bank or
trust com pany m ay be amended from tim e to tim e and capital stock
increased or decreased.
.
,
. ,
R eserve. Bank or trust com p any must m aintain reserve balance
equal to 1 2 M % o f dem and deposits and 3 % o f time deposits.
S tock. Shares o f a bank or trust com p a n y shall b e o f $100 par
value or o f par value o f such less am ount as provided b y the articles
o f incorporation, b u t n ot less than $10, and m ay have on ly such
preem ptive rights as are stated in the articles. B ank or trust com
pany m a y n ot purchase its own stock, except when sam e is taken on
a previous debt, in w hich case it m ust be resold.
G eneral P ow ers. E very bank or trust com pany has pow er t o :
A ct as fiscal or transfer agent; discount and sell negotiable or nonnegotiable instrum ents; purchase and sell securities without recourse; pur
chase, hold and con vey real estate; act as com m issioner, guardian,
trustee, receiver, executor or adm inistrator; accept property m anage
m ent; receive deposits for safekeeping and in escrow ; b ecom e a m em ber
o f Federal Reserve System and Federal D eposit Insurance C orporation
to m ake loans under the provisions o f the N ational H ousing A ct.
L oa n s and D is co u n ts. T he obligation o f any person to any bank
m ay n ot exceed 10% o f the sound capital except as follow s: N o
lim itation is placed on drafts or bills o f exchange drawn in good
faith against actually existing values, obligations arising out o f
discounts on paper actually owned b y person negotiating, obliga
tions drawn against existing values and secured b y goods in process
o f shipment, or tax anticipation warrants or loans to N ational or
Indiana State Banks. A 15% lim itation applies to obligations
as indorser o f notes other than com m ercial paper o f not m ore than
six m onths owned by person indorsing, obligations o f any person
in form o f notes or drafts secured b y shipping docum ents or w a re
house receipts covering readily m arketable non-perishable staples
or live stock when m arket o f such staples or live stock Is n ot less than
115% o f such obligation or obligations secured b y bonds or notes o f
U nited States, obligations secured b y loans under provisions o f A gri
cultural A djustm ent A ct o f 1938 if C om m od ity Credit C orporation
is under obligation to redeem same. Obligations in form o f bankers’
acceptances, having n ot m ore than six m onths sight to run, if the
accepting bank is secured b y som e adequate security are su b ject to a
9 0% lim itation. T he tota l loans to all directors or com panies in which
directors are interested m ay n ot exceed 15% o f unim paired capital and
surplus and violation o f the sam e'is a felony.
Loans on real estate are lim ited to that within fifty miles o f the
bank, and m ust be secured b y a first lien except for taxes and special
assessments; the am ount o f the loan shall n ot exceed 6 0% o f the ap
praised value and the term o f the loan shall n ot extend b eyon d 16 %
years. I f loan is in excess o f 5 0% o f appraised value or for inore than
5 years a semi-annual reduction o f n ot less than 3 % o f the principal
m ust b e required b y con tract. T he aggregate o f such loans together
with loans on which the bank is liable as guarantor shall n ot exceed
35 per cent o f its deposits or in excess o f its tota l sound capital, which
ever is greater. .
T ru st D ep artm en t. E very bank or trust com p any exercising fidu
ciary powers m ust m aintain a trust departm ent, keeping separate
books o f account and m aintaining all trust securities segregated from
other property o f the bank. A ll trust m oney not directed to be spe
cifically invested m ay b e invested in : (a) Obligations o f the United
States; (b) obligations o f m unicipalities or taxing districts o f Indiana;
(c) bonds, notes or m ortgages with m aturities o f five years or less
secured b y first liens on fee sim ple o f real estate in Indiana worth not
less than tw ice the tota l obligation secured; (d) bonds issued b y
authority o f Federal Farm Loan A ct or Federal H om e Loan Bank A ct,
or H om e Owners Loan A ct or obligations o f N ational H ousing A ct.
N o profit, other than interest at legal rate on a loan, m ay be received
b y any bank or trust com p any directly or indirectly ou t o f the sale
o r purchase to or from any estate. A ll m oney not invested in accord
ance with the A ct is at the risk o f the bank or trust com pany except
trust funds. M on ey awaiting investm ent or distribution m ay be kept
on deposit p rovided sufficient b ook entries show true ownership o f such
m oney in both bank and trust departm ents, b u t no m oney in excess o f
$1,000 m ay be held uninvested for longer than six m onths unless the
trust provides otherwise. On liquidation o f any bank or trust com
pany, all persons beneficially entitled to receive property or proceeds
held b y it in trust have preference and p riority in all the assets over
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general creditors for all uninvested funds, to the extent that such m oney
is com m ingled with general assets and is not d uly accounted for.
E x a m in a tio n s and R ep o rts. A ll financial institutions are subject
to examination w ithout notice and the D epartm ent m ay require sub
mission and publication o f as m any statem ents o f condition as are
deem ed necessary in any year.
C onsolidation or D is p o s itio n o f A s sets. T w o or m ore banks or
trust com panies m ay consolidate if consolidation is approved b y a
m ajority o f the outstanding shares and b y the D epartm ent. A ny
bank or trust com pany m ay sell, lease, exchange or otherwise dispose
o f all its assets if such disposal is approved b y two-thirds o f the out
standing shares and b y the D epartm ent. In either event dissenting
stockholders are entitled to receive the value o f their shares.
V olu n ta ry D is so lu tio n o f a bank or trust com pany must have
approval o f a m ajority o f the directors and o f th e D epartm ent. In
such case, the directors, with approval o f the D epartm ent, appoint a
liquidating agent, w ho winds up the affairs o f the corporation under
supervision o f the Departm ent.
In solven cy or S u s p en sio n . I f any financial institution is insol
vent, or in imminent danger o f insolvency, or fails or suspends opera
tion, the officers o f such institution m ust notify the Departm ent. The
D epartm ent m ay take charge o f the business o f any financial institution,
except a small loan com pany, when such institution : (a) H as violated
its articles, law o f State or regulation o f Departm ent ; (b) is conduct
ing its business in unauthorized or unsafe m anner; (c) is in unsound
or unsafe con dition; (d) cannot with safety continue business; (e) has
an im pairm ent o f capital; (f) has suspended paym ent o f obligations;
(g) has failed for thirty days to com p ly with order o f Departm ent
essential to preserve solven cy; (h) has refused to subm it its records
to Departm ent; (i) has refused to be-exam ined under oath regarding
its affairs; or (j) is insolvent or in im m inent danger o f insolvency.
W hen possession o f the Departm ent has once attached for a n y o f
the foregoing reasons it does not term inate until liquidation unless: (a)
T h e D epartm ent approves resum ption o f business on conditions ap
p roved b y it or with restricted deposits after consent b y 75% o f the
unsecured creditors and depositors or tw o-thirds o f stockholders; or
(b) such institution, b y proceedings instituted within five days after
the D epartm ent takes possession, enjoins such possession; or (c) the
institution has undertaken volu ntary liquidation.
W hen the D epartm ent takes charge o f any such institution it m ust
liquidate and distribute the assets o f such institution. T he circuit,
superior or probate cou rt o f the cou n ty to which the D epartm ent must
m ake application has certain powers with reference to liquidation, al
lowance o f claim s and priorities, etc. T h e D epartm ent is vested with
pow er to affirm or disaffirm leases and to enforce the shareholders’
liability. A fter liquidation proceedings are com plete, the Departm ent
m ust file articles o f dissolution o f the institution.
I n stitu tio n s Other T h an B a n k s or T ru st C om p a n ies. T he Financial
Institutions A ct contains detailed provisions with respect to the form a
tion , m anagem ent, etc., o f various financial institutions other than
banks and trust com panies, such as building and loan associations,
credit unions, etc.
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F o re ig n C orp ora tion s.
A bank, trust com p a n y, or building and
loan association organized under the laws o f any other state, before
transacting business in this state, m ust procure a certificate o f admis
sion from the D epartm ent and the Secretary o f State. B efore such
certificate o f admission is granted, such corporation m ust deposit
$100,000 in m oney or bonds o f the U nited States or o f any state o f the
U nited States or o f any m unicipal corporation o f Indiana to the satis
faction o f the Departm ent, w ith the Departm ent, o f in lieu thereof, file
a written con tract or bon d executed b y a responsible surety com p any to
the approval o f the D epartm ent, b y the term s o f which such surety
com p any agrees that on notice b y registered m ail from the D epart
m ent, it will p ay indebtedness to citizens o f Indiana up to $100,000.
Such foreign corporation m ust also file with the D epartm ent a written
instrum ent agreeing that sum mons m ay issue against it from any
cou n ty in the state b y service on the D irector o f the Departm ent.
N o foreign corporation m ay be adm itted for the purpose o f trans
acting afiy k in d o f business in this state Which a dom estic corporation
is not perm itted b y the laws o f the state to transact, nor m ay any such
corporation hold any real estate in this state, except such as m ay be
necessary for the proper carrying on o f its legitim ate business.
N o foreign corporation adm itted to d o business in this state m ay
have a name which a d om estic corporation with like powers cou ld not
T h e application subm itted to the Departm ent and the Secretary of
State m ust contain a co p y o f the articles o f incorporation, and must
state the name, principal place o f business, states in which it is ad
m itted or qualified to d o business, character o f business, authorized
capital stock and am ount thereof outstanding, am ount o f tangible
property and estim ated total o f tangible prop erty to be em ployed dur
ing current fiscal year and succeeding year, names o f directors and
officers and resident agent o f corporation. T he application m ust be
approved or disapproved b y the D epartm ent in like m anner as in the
case o f dom estic banks and trust com panies. In case o f approval, the
application is filed b y the Secretary o f State and a cértificate o f admis
sion issued. W ithin ten days after admission o f the corporation,
there m ust be filed with cou n ty recorder o f cou n ty wherein principal
office is to be located, a duplicate certificate o f admission.
I f any foreign corporation transacts business in this state, after it
has received, but before it has recorded its certificate o f admission, the
officers and directors participating therein are severally liable for the
debts o f the corporation arising out o f such business. T he Depart
m ent has power at any tim e to interrogate the corporation in matters
pertaining to its business.
A pplication for withdrawal from the state b y any corporation must
be filed with and approved b y the D epartm ent.
T h e certificate o f admission or any foreign corporation m ay be
revoked at any tim e b y the D epartm ent or b y the Secretary o f State
with approval o f the D epartm ent: (a) On failure o f officer or director
to answer interrogatories o f D epartm ent; (b) on failure to file reports;
(c) on failure to maintain a resident agent; (d) on failure to keep
authenticated copies o f instrum ents am ending charter o f corporation
on file with Secretary o f State; (e) on failure to file certificate o f ad
m ission or amendments thereof with cou n ty recorder ; (f) if corpora
tion has not transacted business in state for a year and has no tangible
property in the state; (g) on failure to pay fees required: (h) for
w illful misrepresentation o f m aterial matters in application, affidavits,
or other papers.
Foreign corporations entitled to transact business in the state when
the Financial Institutions A ct becam e effective are subject to the limi
tations o f the act.
C orporation failing to m aintain an agent for service o f process may
be served b y issuing sum m ons to the D irector o f the Departm ent.
Foreign corporation transacting business without procuring a certi
ficate o f admission m ay not maintain any suit or action in any courts
o f the state and such corporation is subject to a penalty not exceeding
$10,000 to be recovered in a suit brought by the A ttorney General.
T a xes on bank shares, surplus, undivided profits and deposits and
on building and loan associations, see Taxation.
F id u c ia r ie s . “ F id u cia ry” includes a trustee under any trust,
expressed, im plied, resulting or constructive, executor, administrator,
guardian, conservator, curator, receiver, trustee in bankruptcy,
assignee for the benefit o f creditors, partner, agent, officer o f a cor
poration, pu blic or private, public officer, or any other person acting
in a fiduciary capacity for any person, trust or estate.
“ Person ” includes a corporation, partnership, or other association,
or tw o or m ore persons having a join t or com m on interest.
“ P rincipal” includes any person to whom a fiduciary as such owes
an obligation.
I f a fiduciary in whose nam e are registered any shares o f stock,
bonds or other securities o f any corporation, public or private, or
com pany or other association, or o f any trust, transfers the same,
such corporation or com pany or other association, or any o f the
managers o f the trust, or its or their transfer agent, is not bound to
BANKING AND COMMERCIAL LAWS— INDIANA
Inquire whether the fiduciary is com m itting a oreacn o f his obligation
as fiduciary in making the transfer, or to see to the perform ance of
the fiduciary obligation, and is liable for registering such transfer
only where registration o f the transfer is made with actual knowledge
that the fiduciary is com m itting a breach o f his obligation as fiduciary
In making the transfer, or with knowledge o f such facts that the
action in registering the transfer amounts to bad faith.
If any negotiable instrument payable or endorsed to a fiduciary as
such is endorsed b y the fiduciary, or if any negotiable instrument
payable or endorsed to his principal is endorsed by a fiduciary em
powered t o endorse such instrument on behalf o f his principal, the
endorsee is not bound to inquire whether the fiduciary is com m itting
a breach o f his obligation as fiduciary in, endorsing or delivering the
instrument, and is not chargeable with notice that the fiduciary is
com m itting a breach pf his obligation as fiduciary unless he takes the
Instrument with actual knowledge o f such breach or with knowledge
o f such facts that his action in taking the instrument amounts to bad
faith. If, however, such instrument is transferred b y the fiduciary
in paym ent o f or as security for a personal debt o f the fiduciary to the
actual knowledge o f the creditor, or is transferred in any transaction
known b y the transferee to be for the personal benefit o f the fiduciary,
the creditor or other transferee is liable to the principal if the fiduciary
in fact com m its a breach o f his obligation as fiduciary in transferring
the Instrument
I f a check or other bill pf exchange is drawn b y a fiduciary as such,
or in the name o f his principal b y a fiduciary empowered to draw
such Instrument in the name o f the principal, the payee is not bound
to inquire whether the fiduciary is com m itting a breach o f his obliga
tion in drawing or delivering the instrument, and is not chargeable
with notice that the fiduciary is com m itting a breach o f his obligation
unless he takes the instrument with actual knowledge o f such breach
or with knowledge o f such facts that his action in taking the instru
ment amounts to bad faith. If, however, such instrument is payable
to a personal creditor o f the fiduciary and delivered to the creditor
in paym ent o f or as security for a personal debt o f the fiduciary, to
the actual knowledge o f the creditor, or is drawn and delivered in
any transaction known b y the payee to be for the personal benefit o f
the fiduciary, the creditor or other payee is liable to the principal if
the fiduciary in fact com m its a breach o f his obligation in drawing or
delivering the instrument
If a check or other bill o f exchange Is drawn b y a fiduciary as such,
or in the nam e o f his principal b y a fiduciary empowered to draw
such instrument in the name o f his principal, payable to the fiduciary
personally, or payable to a third person and b y him transferred to
the fiduciary, and is thereafter transferred b y the fiduciary, whether
In paym ent o f a personal debt o f the fiduciary or otherwise, the
transferee is not bound to inquire whether the fiduciary is cbm m itting
a breach o f his obligation in transferring the instrument, and is not
chargeable with notice that the fiduciary is com m itting a breach o f
his obligation, unless he takes the instrument with actual knowledge
of such breach or with knowledge o f such facts that his action in
taking the instrument amounts to bad faith.
I f a deposit is m ade in a bank to the credit o f a fiduciary as such,
the bank is authorized to pay the amount o f the deposit or any part
thereof upon the check o f the fiduciary, signed with the name in which
such deposit is entered, without being liable to the principal, unless
the bank pays the check with the actual knowledge that the fiduciary
is com m itting a breach o f his obligation in drawing the check or with
knowledge o f such facts that its action in paying the check amounts
to bad faith. If, however, such check is payable to the drawee bank
and is delivered to it in paym ent o f or as security for a personal debt
of the fiduciary to it, the bank is liable to the principal if the fiduciary
in fact com m its a breach o f his obligation in drawing or delivering
If a check is drawn upon the account o f his principal in a bank by
a fiduciary who is em powered to draw checks upon his principal’s
account, the bank is authorized to pay such check without being
liable to the principal, unless the bank pays the check with actual
knowledge that the fiduciary is com m itting a breach o f his obligation
in drawing such check, or with knowledge o f such facts that its action
in paying the check amounts to bad faith. If, however, such a check
is payable to the drawee bank and is delivered to it in paym ent o f or
as security for a personal d ebt o f the fiduciary to it, the bank is liable
to the principal if the fiduciary in fact com m its a breach o f his obliga
tion in drawing or delivering the check.
If a fiduciary makes a deposit in a bank to his personal credit o f
checks drawn b y him upon an account in his own name as fiduciary,
or of checks payable to him as fiduciary* 9r
checks drawn by him
upon an account in the name o f his principal if he is empowered to
draw checks thereon, or o f checks payable to his principal and en
dorsed b y him, if he is em powered to endorse such checks, or if he
otherwise makes a deposit o f funds held by him as fiduciary, the
bank receiving such deposit is not bound to inquire whether the
fiduciary is com m itting thereby a breach o f his obligation; and the
bank is authorized to pay the amount o f the deposit or any part there
of upon the personal check o f the fiduciary without being liable to
the principal, unless the bank receives the deposit or pays the check
with actual know ledge that the fiduciary is com m itting a breach o f
his obligation in making such deposit or in drawing such check, or
with knowledge o f such facts that its action in receiving the deposit
or paying the check amounts to bad faith.
W hen a deposit is m ade in a bank in the name o f tw o or m ore
persons as trustees and a check is drawn upon the trust account by
any trustee or trustees authorized b y the other trustee or trustees to
draw checks upon the trust account, neither the payee nor other
holder nor the bank is bound to inquire whether it is a breach o f trust
to authorize such trustee or trustees to draw checks upon the trust
account, and is not liable unless the circumstances be such that the
action o f the payee or other holder or the bank amounts to bad faith.
In any case not provided for in this act, the rules o f law and equity,
including the law merchant and those rules o f law and equity relating
to trusts, agency, negotiable instruments and banking, shall continue
to apply. (A cts Feb. 23, 1927, effective M a y 16, 1927, Uniform
Fiduciaries A ct.)
B ills o f E x ch a n g e a n d P r o m is s o r y N o te s . N o grace is allowed.
Damages for protest on bills upon any person at any place out at
this State, but within the United States, 6 per cent on Mils drawn
upon any person at any place without the United States, 10 per cent.
The Uniform N egotiable Instrum ent Law has been m force in lnaiana
since 1913. Instruments calling for the paym ent o f m oney containing
a cognovit feature are void. It Is a misdemeanor, punishable b y
fine or imprisonm ent to possess a cogn ovit note. (See -Negotiable
Instruments.)
Cognovit N otes. T he execution. Indorsement and procurem ent o f
such notes, and the taking o f judgm ent thereon otherwise than b y
action o f court upon a hearing after personal service upon the debtor,
are prohibited. (A ct M arch 10. 1927, effective M a y 16, 1927).
B lu e S k y L a w (E nacted 1937). T h e A ct know n as(theJfadiana
Securities Law was effective M a y 6, 1937. Provides for a Securities
Commission. T h e Secretary o f State shall _constitute the Securities
Commission with plenary power to administer the A ct.
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“ Security” shall include any note, stock, treasury stock, bond,
debenture, evidence o f indebtedness, certificate o f interest or par
ticipation, certificate o f interest in a profit-sharing agreement, certifi
cate o f interest in an oil, gas, or mining lease,_ collateral trust cer
tificate, pre-organization certificate, pre-organization, subscription,
beneficial interest in a trust or pretended trust, any transferable snare,
investment contract, or beneficial interest in or title to property or
profits, incom e contracts, contracts for sale o f securities on installment
“ Person” shall Include a natural person, a corporation created
under the laws o f this state or any other state, country,
or subdivision thereof, a partnership, an association, a join t stock
com pany, a trust, and any unincorporated organization.
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2001
*•Sale” shall Include every disposition or attem pt to dispose o f a
security or interest in a security for value
“ Dealer” shall include every person other than an agent, who in
this state engages either for all or part o f his tim e directly or through
an agent in the business o f selling any securities. T he word “ dealer”
shall not include a person having no place o f business in this state,
who sells or offers to sell securities exclusively t o a prom oter or dealer
actually engaged in buying and selling securities nor to banks and
trust companies.
Issuer” shall mean and include every person who proposes to issue,
has issued, or shall hereafter issue any securities. A ny natural person
who acts as a prom oter for and on behalf o f a corporation to be form ed
shall be deemed to be an issuer.
“ A gen t” shall include every natural person, other than a dealer,
em ployed or appointed or authorized b y a dealer or issuer to sell
securities in any manner in this state.
“ F raud ” and “ fraudulent” include any misrepresentations o f a
relevant fact which are intentional or due to gross negligence; any
promise as to future not m ade in good faith; intentional failure to
disclose a material fact.
This A ct shall not apply to the following classes o f securities:
(a) A ny securities issued or guaranteed b y the U nited States or
any territory or insular possession thereof, or b y the D istrict o f Colum
bia or b y any state or political Subdivision thereof, having the power
o f taxation or assessment; or b y any public instrum entality o f a State
or b y any person acting as an instrum entality o f U. S., or any security
issued or guaranteed b y any N ational, or State, or Federal Reserve
Bank.
(b) A n y securities issued or guaranteed either as t o principal,
Interest or dividend b y a corporation owning or operating a railroad
or any other public service utility: P rovided, that such corporation
is subject to regulation or supervision as to the issue o f its own
securities b y a public com m ission o f the U . S. or D om inion o f Canada.
(c) A n y securities issued b y a corporattion organized under the
laws o f this state exclusively fo r educational, benevolent, fraternal,
charitable, or reform atory purposes, and n o t for pecuniary profit.
(d) Securities appearing in any list o f securities dealt in on the N . Y .
Stock Exchange, the N . Y . C urb Exchange or the C hicago Stock
Exchange.
(e) N egotiable prom issory notes or com m ercial paper.
(f) A ny security except com m on stock which has been issued and
in hands o f public without default for at least five years.
T he A ct does not apply to the sale o f any securities at any judicial,
executor’ s, administrator’ s, guardian’ s, or conservator’s sale, or at
the distribution b y a corporation o f capital stock, to its stockholders
as a stock dividend.
T he transfer or exchange b y one corporation to another o f their
own securities in connection with a consolidation or merger o f such
corporations.
N o securities except those exem pted shall b e sold or resold within
this state unless and until such securities shall have been registered by
notification or b y qualification.
Securities entitled to registration b y notification shall be registered
b y the filing b y any registered dealer interested in the sale thereof in
the office o f the Comm ission o f a written statement containing the
follow ing:
N am e o f issuer and name o f state under which it is organized.
Brief description o f the securities including the am ount o f the issue.
Am ount o f securities to be offered in the state.
B rief statement o f the facts which show that the securities fall
within one o f the notification classes.
T he price at which the securities are to b e offered fo r sale and
numerouis ’other specific regulations.
The filing o f such statement in the office o f the Com m ission and the
paym ent o f the fee shall constitute registration o f such security, and .
such security when so registered m ay be sold in this state b y any
registered dealer.
Applicants for registration shall pay to the Com m ission a fee o f
one-twentieth o f one per cent o f the aggregate par value o f the securi
ties to be sold in this state, but in no case shall such fee be less than
$25.00 nor m ore than $150.00.
All securities required by this A ct to be registered before being sold
In this state, and not entitled to registration b y notification, shall
be registered only by qualification, as follow s;
Applications shall be in writing and sworn to upon prescribed form s.
The applicant shall pay to the Comm ission a fee o f one-twentieth
o f one per cent o f the aggregate par value o f the securities to be sold,
b ut in no case shall such fee be less than $25.00.
Upon application for registration by qualification, whether made
b y an issuer or registered dealer, where the issuer is not d om iciled
in this state, there shall be filed with such application the irrevocable
written consent o f the issuer that suits and actions growing out o f
the violation o f any provision or provisions o f this A ct m ay be com
menced against it in the proper court, said consent agreeing that
such service o f process upon the com m ission shall be taken as valid
and binding as if due service had been m ade.
T he Comm ission m ay revoke the registration o f any securities upon
cause, and the Comm ission shall have access to and m ay com pel the
production o f all the books and papers o f such issuer.
N o dealer or agent shall engage in the business o f selling securities
until he has been registered- P rovided that partners o f a partnership
and officers o f a corporation registered as a dealer shall not be required
to register as agents.
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The fees shall be $75.00 In the case o f dealers and $5.00 in the case
o f agents.
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Registration m ay be refused such applicant or registrant upon
cause.
N othing in this A ct shall be construed to relieve corporation from
making reports now or hereafter required b y law to be made to the
Secretary o f State or any other state officer, or paying the fees now or
hereafter to be paid b y corporations.
This A ct shall not be construed to repeal any law now in force regu
lating the organization o f corporations or the admission o f any foreign
corporations.
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An appeal m ay be taken b y any person Interested from any final
order o f the Comm ission to the M arion Circuit C ourt b y serving upon
the Commission within tw enty days from the entry o f such order a
written notice o f such appeal, and executing a bond in the penal sum
° f T he A ct approved July 26, 1920, and amended M arch 9, 1921,
provides various penalties for violation o f the various sections ranging
from a fine o f $500 to a fine o f $2,000 or imprisoned up to 5 years.
C h a tt e l M o r tg a g e s . T h e lien o f a chattel m ortgage that has been
filed is superior to other form s o f liens, allows for sale o f m ortgaged
property if funds applied in paym ent o f debt. Invalid after 3 years
unless extended. R em oval o f property from cou nty does not extin
guish lien. (For new act see C hattel M ortgage A ct o f 1935, c 147.)
F or certain restrictions on the lending o f m oney on m ortgage o f house
hold goods, see statutes. C onveyances as security b y w ay o f Trust
R eceipt are regulated b y the Uniform T rust R eceipts A ct (A cts 1935
c. 206). C onditional Sales are regulated b y the U niform Conditional
Sale A ct (A cts 1935, C, 182) and b y the U niform R etail Installment
Sale A ct (Act® 1935, c. 231).
C o n v e y a n ce s . All conveyances,.m ortgages or leases for m ore than
three years shall be recorded and take priority according to tim e pf
filing as against good faith purchaser, lessee or m ortgagee. Lands in
this State m ay be taken, held, con veyed, devised, or passed by
descent by or from any citizen o f the United States; or b y or from
any alien (see Aliens), with some provided exceptions as to descent
or devise. Lands which m ay have com e b y descent or purchase to
the wife o f an alien, m ay be held, conveyed, devised and passed by
descent b y and from her, notwithstanding the fact o f her residence
with her husband in a foreign state or country.
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BANKING AND COMMERCIAL LAWS— INDIANA
E xcept bona-fide leases for a term not exceeding three years, con
veyance o f lands, or o f any interest therein, m ust be b y deed, sub
scribed, and acknow ledged b y the grantor or b y his attorney in fact.
T he join t deed o f a husband and wife is sufficient to pass the lands
o f the wife. E xcept in cases o f m ortgages, conveyances in trust,
conveyances to husband and wife, and cases o f estates vested in
executors or trustees, as such, and so held b y them in join t tenancy,
all conveyances and devises o f lands, or o f any interest therein, m ade
to tw o or m ore persons, shall be construed to create estates in com
m on, and not in join t tenancy, unless it shall be expressed therein
that the grantees or devisees shall hold the same in join t' tenancy
and to the survivor o f them , or it shall m anifestly appear from tenor
o f instrument, that It was intended to create an estate in join t tenancy.
A deed o f release or quit-claim shall pass all the estate which the
grantor cou ld con vey b y a deed o f bargain and sale. I f it be the
intention o f the grantor to con vey any lesser estate it must be so
expressed in the deed. Liability on lineal and collateral warranties
Is expressly abolished; a covenant or agreement o f any person leaves
heirs and devisees answerable thereon only to the extent o f property
descended or devised to them . A n y con veyan ce o f land worded—
“ A . B . conveys and warrants to C . D . (here describe the premises)
for the sum o f (here insert the consideration),” or “ A . B . quit-claim s
to C . D . (here describe the premises) for the sum of (here insert the
consideration),” — the same being dated, and duly signed and acknow l
edged b y the grantor,— shall, in the one case, be a con veyan ce In fee
simple to the grantee, his heirs and assigns, w ith covenant from the
grantor for him self and his heirs and personal representatives that
he is lawfully seized o f the premises, has good right to con vey the
same, and guarantees the quiet possession thereof, that the same are
free from all incumbrances, and that he will warrant and defend the
title o f the sam e against all lawful claim s; and shall, in the other
case, be deem ed to be a good and sufficient conveyance in quit-claim
to the grantee, his heirs and assigns. A ny m ortgage o f lands worded
— “ A . B . m ortgages and warrants to C . D . (here describe the premises)
to secure the repaym ent o f (here recite the sum for which the m ortgage
is granted or the note o r other evidences o f debt, or a description
thereof, sought to be secured, also the date o f the rep aym ent” — the
same being dated and d uly signed and acknow ledged b y the grantor
— is a sufficient m ortgage to the grantee, his heirs, assigns, executors
and administrators, with warranty from the grantor and his legal
representatives o f title perfect and unincum bered in the grantor.
W hen a deed purports to con vey absolutely any estate in lands, but
is m ade, or intended to be m ade, defeasible b y force o f a deed o f
defeasance, bond or other instrument for that purpose, the original
conveyance shall n ot thereby be defeated or affected as against any
person other than the maker o f the defeasance, or his heirs or devisees,
or persons having actual notice thereof, unless the instrum ent o f
defeasance shall have been recorded, according to law, within ninety
days after the date o f said deed. E very con veyan ce or m ortgage o f
lands, or o f any interest therein, and every lease for m ore than three
years, shall be deem ed fraudulent and void as against any subsequent
purchaser, leasee or m ortgagee in good, faith and for a valuable con
sideration. unless recorded in the recorder’s office o f the cou n ty where
such lands are situated. (See Acknow ledgm ents, M arried W om en.)
W hen either the husband or wife Is o f unsound m ind the party
with the sound m ind can either join in the guardian’s deed or make
his separate deed and the effect would be the same as a join t deed o f
husband and w ife b oth o f whom are o f sound mind.
C o lle c t io n s . U niform B ank C ollection C od e as recom m ended b y
Am erican Bankers A ssociation, see com plete text back o f Laws.
C o r p o r a t io n s . Three or m ore persons m ay form a corporation for
any law ful purpose b y filing articles o f association with the Secretary
o f State and the R ecorder o f the C ounty. Special charters are neces
sary for ‘banks, building and loan associations, insurance, security,
railroad, telegraph, telephone, turn-pike com p any, etc. T h e liability
o f stockholders varies. In banking corporations th6 stockholder is
responsible not only for his original subscription, but for an am ount
equal thereto. In all other corporations he is liable for the subscription
price o f his stock.
A corporation act was passed b y the legislature in 1929, which gives
great liberality. A corporation m ay change its powers, increase or
decrease its capital stock, change the par value o f any class or classes
o f shares o f its capital stock w ith par value, change the num ber o f its
outstanding shares o f any class o f stock into different numbers o f
shares o f said class, increase its Board o f Directors, fill vacancies therein,
hold its m eetings w ithin or without the state, transfer its stock free
o f taxes and m ust report b u t once each year to the Secretary o f State.
This report is m erely a form al one giving am ounts o f stock outstanding,
list o f officers, etc. T h e corporation is assessed for local taxes upon the
value o f its holdings within the State o f Indiana and only up on such
holdings.
Foreign corporations, or their agents, before entering upon the
duties o f their agency in this State shall deposit in the C lerk’s office o f
the C ou n ty where th ey propose doing business the pow er o f attorney
and appointm ent under which they act. T h e y shall also file with the
Secretary o f State an application t o d o business in the State o f Indiana,
nam ing a resident agent therein. Foreign C orporations m ust p a y a
fee o f $10 if proportion o f its stock represented in Indiana is less than
1,000 shares and one cent a share if in excess o f $1,000. T h e y also
agree that the secretary is authorized to a ccep t service o f process in
any suit against them .
C o u r t s a n d J u r is d ic t io n . C ircuit C ourts in all counties, original
general jurisdiction in all civil causes, original general jurisdiction in
all crim inal causes, except in the counties o f Lake and M arion in
which there are crim inal courts, probate jurisdiction in m ost counties,
p robate exclusive and concurrent jurisdiction in civ il m atters, also
appellate jurisdiction in appeals from Justices o f Peace, M a yors o f
cities and B oard o f C ou n ty Comm issioners. Superior C ourts are
established in m an y counties w ith original concurrent jurisdiction
with the circuit courts in all causes except slander and libel, crim inal
causes, p robate m atters and concurrent appellate jurisdiction with
circuit courts. Justices o f the Peace in all townships, jurisdiction
in civ il actions for $200.00 or less, in the township, also jurisdic
tion in p etty crim inal causes. P arty m ay confess judgm ent in
Justice’s court for $300.00. In actions on written obligations for
m oney o f m ore than one party Justice has jurisdiction in township
where either party resides and m ay issue process to any cou n ty in
the state for other parties. Supreme C ourt is highest appellate
court and has no original jurisdiction except in a few specified cases.
A ppellate C ourt has final appellate jurisdiction in m an y cases, no
original jurisdiction. In som e specified classes o f cases defeated
party m ay have cause transferred to Supreme C ourt. B oth Supreme
and A ppellate Courts sit on ly in Indianapolis. M unicipal C ourt.
M arlon C ou n ty (Indianapolis), four judges. Original jurisdiction
concurrent with Superior and Circuit C ourts in all civ il cases founded
on con tract or tort in which debt or dam age or value o f property
sought to b e rem oved does not exceed $500. Jurisdiction irrespective
o f value o f p roperty in possessory actions between landlord and
tenant. Criminal jurisdiction as is now vested in city courts in cities
o f first class. Jurisdiction in cases involving violation o f ordinances
o f cities and tow ns or other m unicipalities.
Courts o f record within their respective jurisdictions shall have
power to declare rights, status, and other legal relations whether or
not further relief is or cou ld be claim ed.
Any person interested under a deed, will, written con tract or other
writings constituting a contract, or whose rights, status or other legal
relations are affected b y a statute, m unicipal ordinance, con tract or
franchise, m ay have determ ined any question o f construction or
validity arising under the instrument, statute, ordinance, con tract, or
franchise and obtain a declaration o f rights, status or other legal
relations thereunder.
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A contract m ay be construed either before or after there has been
a breach thereof.
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A n y person interested as or through an executor, administrator,
trustee, guardian or other fiduciary, creditor, devisee, legatee, heir,
next o f kin, or cestui que trust, in the administration o f a trust, or o f
the estate o f a decedent, infant, lunatic, or insolvent, m ay have a
declaration o f rights or legal relations in respect, thereto.
T h e court m ay refuse to render or enter a declaratory judgm ent or
decree where such judgm ent or decree, if rendered or entered, w ould
not term inate the uncertainty or controversy giving rise to the p ro
ceeding.
A ll orders, judgm ents and decrees under this act m ay be reviewed
as other orders, judgm ents and decrees. (A ct M arch 5, 1927, in effect
M a y 16, 1927).
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D a y s o f G r a c e are no longer recognized.
D e p o s itio n s . D epositions m ay be taken anywhere In the U nited
States without a com m ission, before any judge, justice o f the peace
notary public, m ayor, or recorder o f a city, clerk o f a court o f record,
or com m issioner appointed b y the court to take depositions. P er
son taking deposition must not be o f kin to either party or interested
In the action. W hen taken outside o f the U nited States they shall
be taken pursuant to an order o f the court, under a com m ission, with
such reasonable notice o f the tim e and place o f taking the same as
the court shall require, and they shall be certified and returned b y
the com m issioner in such manner as the cou rt shall direct. N otice
o f the taking o f the deposition should be served upon the adverse
party or his attorney, specifying the cause, the court or tribunal of
trial, the tim e and place o f taking, and the names o f the witnesses.
Reasonable tim e shall be allow ed for the attorney so served to co m
m unicate with the client, and fo r travel to the place o f taking, exclud
ing the day o f service, o f the taking and intervening Sundays. T he d e
ponent shall be first sworn according to law. H e shall then be examined
b y the party producing him, and then b y the adverse p arty, and then by
the officer, if he see cause. T he deposition shall be written dow n b y the
officer, b y the deponent, or b y som e disinterested person, in the presence
and under the direction o f the officer, and after the same has been
carefully read shall be subscribed b y deponent. T he follow ing fact«
ahull be stated in a certificate to be annexed b y the officer: 1. That
the deponent was sworn according to law. 2, B y whom the d ep o
sition was written, and if written b y deponent or som e disinterested
person, that it was written in the presence and under the direction of
the officer. 3. W hether the adverse party attended. 4. T he tim e
and place o f taking, and the officer shall sign and attest the certificate,
and seal the same, if he have a seal o f office. I f he have n o seal, his
certificate shall be authenticated b y the certificate and seal o f the
clerk or p rothonotary or any cou rt o f record o f the cou n ty In which
certificate shall be authenticated b y the certificate and seal o f the
clerk or prothonotary o f any cou rt o f record o f the cou n ty in which
the officer exercises the duties o f his office. T he officer taking the
deposition shall seal the same in a sufficient envelope and him self,
post, or express, or deliver the same to the clerk, o f the cou rt in which
the action is pending, endorsing on the envelope the names o f the
parties and o f the court and o f the witnesses whose depositions are
enclosed. A djournm ents m ay be had from day to d ay after the
deposition has been begun, and for longer periods, upon written co n
sent o f the parties, which written consent must be attached to the
deposition. A djournm ents should be noted at the place in the
deposition when they occur. A narrative form m ay be used. A
witness identifying a written instrument should attach it to his
deposition, m aking it a part o f his answer.
D e s ce n t. T he real and personal property o f any intestate shall
descend to his or her children equally; and posthum ous children
Inherit equally with those born before the death o f the ancestor.
Children o f deceased children take the . share which would have
descended to the father or m other; and grandchildren, and m ore
rem ote descendants, and other relatives, lineal and collateral, inherit
b y the same rule, excepting that if the heirs are all grandchildren
they inherit equally. W here there are no heirs as aforesaid, onehalf o f the estate goes to the father and m other as join t tenants, or
to the survivor, and the other half to the brothers and sisters, and
to the descendants •o f such as are dead, as tenants in com m on. If
there be neither father nor m other, the brothers and sisters, and
the other descendants, take the estate as tenants in com m on; or.
per contra, the father and m other as jo in t tenants o f the survivor.
Kindred o f the half-blood inherit equally w ith those o f the wholeblood in property purchased b y the ancestor; otherwise, as to property
acquired b y gift, devise, or descent. Illegitim ate children inherit
from the m other same as if they were legitimate, and vice versa.
T enancy b y the curtesy ana dow er are abolished, and widows take
one-third o f the real estate in fee sim ple, unless the property is worth
over $10,000, in which case, as against creditors, she takes one-fourth
o n ly ; and where the real estate is w orth over $20,000, one-fifth only
as against creditors, but as against other heirs she takes one-third
In fee sim ple, regardless o f value, except where there is b ut one
child In which case each inherits one-half. A second or subsequent
wife how ever, takes only a life estate In her husband’s lands, if there
be a child or children b y a previous marriage, and none b y such
widow. Other special provisions o f the statute are to o extensive to
set out. T he estate o f a person dying intestate w ithout kindred
capable o f inheriting will escheat to the State fo r the support o f th e
com m on schools. W hen there is no evidence b u t that tenants b y
entirety died sim ultaneously, p rop erty so held is distributed one-half
as if one had survived and the other h alf as if the other had survived;
p rop erty o f jo in t tenants are sim ilarly distributed in like situations
according t o their respective interests.
D o w e r . (See M arried W om en.)
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E x e c u tio n s m ay issue at any tim e within ten years after ju d g
m ent and are returnable in 180 days. F rom a cou rt o f record m ay
Issue to any cou n ty in the State. Are a lien on personal property
within the cou n ty from the tim e th ey are placed in bands or officer.
T he liens upon p e rso n a lp ro p e rty attach in the order In which the
officer receives them . W hen levy is upon real estate the dates o f
the judgm ent con trol the right to participate in the proceeds, and
they must be applied according to their priority. Personal property
taken in execution m ay be left with execution defendant b y the
giving to the officer o f a delivery bond with sufficient surety; d ebtor
m ay b y giving sufficient freehold sureties, have a stay o f execution
on any sum exceeding $100, fo r six months. W here the sum is less
than $100, the stay is not so long, varying w ith am ount o f judgm ent.
Lands sold under execution m ay be redeem ed within one year b y
the owner, m ortgagee or person having a lien thereon, the owner
retaining possession during the redem ption year and being liable for
reasonable rents and profits in case o f failure to redeem .
E x e m p tio n s . Personal p rop erty up to $600 and real p rop erty up
t o $700, nor in any event m ore than $1000 in b oth personal and real
prop erty is exem pt in suits on con tract where d eb tor is a resident
householder. R esident householder is entitled to exem ption as
well when in transit with his fam ily and p rop erty as when perm a
nently settled. T h e d ebtor m ust file a schedule o f all o f his property,
and select the p rop erty claim ed, which is then appraised. C ontract
w aiving exem ption is void . Pension m on ey in transit to pensioner
is exem pt, b u t when received b y him and invested in other property
is no m ore so than any other prop erty. One m o n th s wages also
exem pt if the debtor is still em ployed. N o exem ption o f mechanics
liens or purchase-m oney liens.
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F r a u d . Assignments, In writing or otherwise, o f any property
made or suffered with intent to hinder, or defraud are void as to the
persons defrauded. T h e question o f fraudulent intent is a question
o f fact.
Frauds— Statute of. T h e follow ing contracts, if enforceable in court,
must be’ in writing and signed b y the party to be c h a r e d : 1. T o
charge an executor or administrator, upon any special prom ise, to
answer damages out o f his ow n estate. 2. T o charge any person,
upon any special prom ise, to answer for the d eb t, default, or
carriage o f another. 3. T o charge any person, upon any agreement
or prom ise, m ade in consideration o f marriage. 4. U pon any con -
BANKING AND COMMERCIAL LAWS— INDIANA
tract for the sale o f land (except'loan not exceeding the term o f three
years). 5. U pon any agreem ent n ot to be perform ed within one
year from the m aking thereof. 6. Sale o f goods exceeding $500 in
value, unless part paym ent or part delivery be m ade. 7. U pon
any representation m ade concerning the character, conduct, credit
ability, trade or dealings o f any other person.
G a r n is h m e n t . I f at the tim e an order o f attachm ent issues, or at
any tim e before or afterwards, the plaintiff, or other person in his
behalf, shall file with the clerk an affidavit that he has good reason to
believe that any person nam ed has property o f the defendant in his
possession or under his control, which the sheriff cannot attach b y
virtue o f such ord er: or that he is indebted to the defendant, or has
control or agency o f any m oney, property, credits or eifects; or that
defendant has any shares or interest in the stock o f any association or
corporation, the clerk shall issue a summons to such person, corpora
tion, or association, to appear and answer as garnishee in the action.
From the service o f sum mons the garnishee is accountable to plaintiff
for the m oney, property, etc., in his hands, or due t o defendant. I f
the summons issues before attachm ent, the affidavit must show som e
one o f the causes authorizing attachm ent. T he garnishee is required
to furnish the sheriff, within five days after service, a certificate o f
the property, etc., o f defendant in his hands or due t o him, to be
returned with the sum mons. I f he fails or refuses the court m ay
require him to appear and be examined under oath, or proceed against
him on default to judgm ent. I f it appear b y affidavit that a garnishee
is about to abscond before judgm ent can be had, an order o f arrest
m ay issue and he b e held to special bail. Return o f “ N o property
fou n d ” on an order o f attachm ent does not affect the proceedings
against the garnishee. H e m ay, before judgm ent against the de
fendant, b y delivery o f all the defendant’s property in his possession
to the sheriff, or paym ent o f all m oney due him to the sheriff, or into
court, discharge him self from the suit without costs, and from all
liability to the defendant or the m oney or property so paid or de
livered, not exceeding the plaintiff’s claim.
Clerks o f the circuit courts, sheriffs, justices o f the peace, constables
and all other officers w ho m ay collect m oney b y virtue o f their office,
executors, administrators, guardians, and trustees, are subject to
garnishment as other persons.
The wages o f all householders in the em ploy o f any person or
corporation are exem pt from garnishment and proceedings supple
mental to execution, in the hands o f the em ployer, so long as the
em ployee remains in such em p loy m en t not exceeding tw enty-five
dollars at any one tim e, and the em ployee is allowed no other exem ption
as against garnishment. (Burns’ Ann. S. 1933, §3-505.) Applies to
householders in other jurisdictions. Resident householders still have
six hundred dollars exem ption. (Pom eroy v. Beach, 143 Ind . 511J
S ee also 15, 47, 50, 71, 114.
H o lid a y s . T he legal holidays are: Sundays; January 1 (N ew Y ea r’s
D a y ); February 12 (L incoln’s birth d ay); February 22 (W ashington’s
b irth d ay); G ood F riday; M a y 30 (M em orial D a y ); July 4 (Indepen
dence D a y ); first M on d a y in Septem ber (Labor D a y ); O ctober 12
(Columbus D a y ); N ovem ber 11 (Arm istice D a y ); Thanksgiving D a y ;
Decem ber 25 (Christm as D a y ); and any election day. W hen any
holiday (other than Sunday) com es on Sunday the M on d a y next suc
ceeding shall be the legal holiday; Saturday afternoon is a legal half
holiday in all cities over 35,000 in population. E very Saturday after
12 o ’clock noon shall b e a legal half-holiday for banks and trust com
panies. T he va lid ity o f transactions b y a bank, otherwise legal, are
not affected i f perform ed on a legal holiday. However, banks m ay
at their op tion open a n y legal holiday.
H u s b a n d a n d W ife . (.See M arried W omen.)
I n h e r ita n c e T a x . (See Taxes.)
I n te r e s t. The legal rate is 6 per cent, but interest m ay be taken
In advance. N o agreem ent to pay a higher rate is valid unless the
same be in writing, and in such case it is not lawful to contract for
more than 8 per cent. W hen a greater rate is contracted for. the
contract is void as to all interest in excess o f 6 per cent, is usurious
and illegal, and the excess m ay be recouped b y the d ebtor whenever
it has been reserved or paid before the bringing o f the suit. Interest
on judgm ents runs from the date o f the verdict or finding, at the
rate specified in the original contract, not exceeding 8 per cent, and
If no contract has been m ade 6 per cent is allowed.
J u d g m e n t s o f courts o f record are a lien upon all real estate o f
defendant within the cou n ty for ten years. Judgm ent m ay be
obtained at the first term o f the court, after process has been served
on debtor ten days prior to the first day thereof. Judgment in justice
court becom es a lien on real estate o f judgm ent defendant! rom time
o f filing a transcript in office o f the clerk o f circuit court. A certified
copy o f any judgm ent rendered b y the D istrict C ourt o f the United
States for district o f Indiana m ay be filed with the county clerk.
L ien s. Liens are granted b y statute to attorneys; to persona
holding claims against watercraft on account o f supplies furnished or
work done; also fo r dem ands for damages arising out o f freight con
tracts, or for willfulness or negligence o f the master, owner, or agent,
or out o f any con tract relating to transportation, and for injuries to
persons or prop erty; also to em ployes o f any corporation as against
any o f its corporate property o r earnings for labor done; also to
keepers o f livery stables and all persons engaged in feeding stock, for
the feed and care bestowed upon the same, also to blacksm iths; also to
contractors, sub-contractors, mechanics, journeym en, laborers, and all
persons perform ing labor or furnishing material or machinery for
erecting, laboring, repairing or rem oving any house, mill, m anufactory
or other building, bridge, reservoir, system o f water-works, or other
structure, know n as a m echanic’s lien; also to bailees and tradesmen
for their valid and reasonable charges in the construction, repair,
or alteration o f any article o f value; also to the bailee or keeper o f
personal property for any feed or care bestowed b y him upon such
property; special lien for storage or repair o f m otor vehicles; also to
forwarding and com m ission merchants on goods which m ay have
remained in store for one year or more-- also to all persons, firms
and corporations engaged in the business^ o f storing, warehousing and
forwarding, goods remaining in possession o f such person, firm or
corporation for m ore than six m onths m ay be sold at public auction
to pay amount o f lien; also to landlords upon crops. Persons storing,
furnishing supplies or repairing a m otor vehicle or garage owners
have lien on m otor vehicle which can be foreclosed within one year
from failure o f owner to p ay charges. Judgments rendered in any
county in the State are a lien upon the real estate situated in such
county for a period o f ten years from the rendition thereof, and judg
ments rendered in the federal courts are a lien upon any real estate
In the State for the same period. Provision is made b y statute, how
ever, for the filing in. the cou nty where the real estate is situated o f a
transcript o f any judgm ent rendered in the U nited States courts.
The office o f the clerk o f the circuit court in each cou n ty contam s a
public record know n as the lis pendens record, in which notice o f the
filing o f com plaints to enforce liens are required to be recorded, and
also in cases where real estate is seized b y attachm ent or execution.
Unless so recorded the bringing suits does not operate as a constructive
notice.
L im it a tio n s t o S u its .. A ctions for injury to person and character,
and for statutory penalty or forfeiture, tw o years; against public
officers relating to their official duties, and on public im provem ent
assessments, five yea rs; open accounts and_ contracts not in writing,
for use, rents and profits o f real estate, injuries to and detention o f
property, recovery o f personal property and relief against frauds, six
years; upon prom issory notes, bills o f exchange^ and other written
contracts for paym ent o f m oney, ten years; actions not um ited by
statute, fifteen years; other written contracts, judgm ents o f courts of
record and real actions, tw enty years. Persons under a legal dis
ability m ay sue 2 years after disability rem oved. R e v iv o r: part p ay
ment or new prom ise in writing. E xcept in favor o f sureties, the
statute o f lim itations does n ot run against the State.
M a rried ' W o m e n control their real and personal property. The
husband is liable for the w ife’s debts contracted before marriage to
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2003
the extent o f the personal p roperty he m ay receive from her, and no
further, and her lands are liable for such indebtedness. A married
woman m ay devise her separate estate; m ay sell and transfer her separ
ate personal p rop erty; carry on any business, labor, or service, and
receive the earnings accruing therefrom ; enter into any contract in
regard to her separate personal estate business, labor, or service, and
her separate estate, real and personal, be liable therefor, the same as a
fem me sole; and her husband is not liable for such debts, nor for
indebtedness created b y the wife for im provem ent o f her separate
real estate. She can m ake leases o f real estate fo r terms o f three
years or less, and execute m ortgages to secure purchase m oney, with
out husband joining. She is bound b y covenants o f title in con vey
ances o f her senarate real estate. H er deed con veyin g her real estate,
her husband not joining, is absolutely void . She m ay sue as a fem m e
sole for any damage to her person or character. She js bound in
like manner as principal on her official bond. D isability as to surety
ship has been abolished, therefore, in making loans to married women
It is not necessary for her to m ake an affidavit that the m oney used
Is for her own benefit. She is entitled to hold as exem pt from execu
tion in any suit on contract personal property to the am ount Of $600
and rea r property to the am ount o f $700. A w idow takes one-third
o f her deceased husband’s real estate in fee, and free from all demands
o f creditors, where the estate does n ot éxceed $10,000; one-fourth,
if under $20,000, and one-fifth, if above that am ount. She also
takes a child’s interest in the personalty where the num ber o f children
does not exceed tw o, and where there are m ore than tw o, her interest
shall n ot be less than one-third o f the w hole o f personalty after
paym ent o f debts, and in all cases takes $500 w ithout accounting,
and m ay occup y the dwelling o f forty acres o f her husband’s land for
a year, rent free. B ut the one-third o f her real estate which the
widow takes in fee, can not, upon her marrying again, be effectively
con veyed or m ortgaged b y her, i f there be a m inor child or children, or
their descendants, alive b y the previous marriage. R eal estate which
husband and wife hold b y title m ade to them as husband and wife,
is held as an estate b y entirety; it cannot be taken for the d ebt of
either; is not subject to the lien o f a judgm ent against either, except
in case o f the death o f either or upon d ivorce granted, when the estate
is destroyed and becom es subject to le vy and sale; and a m ortgage
thereof b y them both for a d ebt o f the husband has no legal validity.
M o r tg a g e s. (See Conveyances.)
N e g o tia b le I n s t r u m e n t s . U niform N egotiable Instrum ents A ct
adopted 1913. (See com plete text o f the law follow ing “ D igest of
Banking and Com m ercial Law s.” )
P o w e r o f A tt o r n e y must be executed and acknowledged, and (if
for the conveyance o f real estate, or to affect real estate) recorded. In
the same manner that deeds are m ade.
P r o b a te L a w . (See Administration o f Estates.)
P r o te s t. T he statutory damages OH such protest are 5 per cent
on the principal o f a bill o f exchange, if drawn or negotiated within
this State, upon any person, at any place out o f this State, but within
the United States, and 10 per cent if upon any person, at any place
without the United States.
R e p le v in . W hen any personal property Is wrongfully taken or
unlawfully detained, or, if taken on. execution or attachm ent, is
claimed b y a third party, the owner or claimant m ay bring an action
for possession thereof. H e m ay claim imm ediate delivery upon
affidavit therefor, whereupon the sheriff takes possession o f the
property, and if delivery bond is given on behalf o f the defendant
within twenty-four hours, the property is returned to him, otherwise
the plaintiff m ay give bond and take the prop erty: failing to d o so
It is returned to the defendant. T he plaintiff has tw enty-four hours
in which to file bond. Justices o f the peace have jurisdiction in
replevin suits involving property worth $200 or less. Procedure is
same before justice o f the peace, except that the plaintiff must file
bond in all such cases. Replevin m ay also be had w ithout bond, b y
allowing defendant to retain possession o f property pending suit.
S ales. U niform Sales A ct adopted b y A cts o f 1929.
S u its . (See A ctions.)
T a x e s. T he general fa x law o f Indiana was revised and codified
b y the acts o f 1919. p. 198. Personal property is listed for taxation
between the first day o f M arch and the 15th d ay o f M a y o f each year,
with reference to the quantity held or ow ned on the first d ay o f M arch
in the year for which the property is required to be listed. R ealty is
listed and assessed b y the township assessor. Assessment lists o f
personal propérty are filed with the township assessor. F rom the
assessment o f the township assessor, an appeal m ay be taken t o the
cou nty assessor and the cou n ty board o f review. A n appeal lies from
the cou nty board to the State T a x B oard. Thereafter illegal taxes
will be enjoined b y the courts in accordance with the usual rules o f law.
V alu ation. A ll property m ust be assessed and valued for taxation
purposes at the true cash value thereof. (64-103).
L ien s. Taxes attach as a lien on real estate on M arch 1 each year.
T he lien is perpetual and is not divested b y any sale or transfer. T he
first half o f taxes becom es delinquent if not paid on the first M on da y
in M a y o f the succeeding year, and the second half on the first M on day
o f N ovem ber following. (64-2001,2008).
.
Sales. I f not paid b y the first M on d a y o f February follow ing, the
property, or so m uch thereof as m ay be necessary, will be sold for the
paym ent o f taxes and penalty. Sales o f real estate for taxes are made
on the second M on d a y in February, annually. ((6 4-2 2 0 1,22 1 1 ).
R ed em ption. T he p roperty m ay be redeem ed within 6 months
b y paym ent o f the am ount bid at the sale, with 10 per cent p enalty:
if redeemed after 6 m onths and within 12 m onths, the penalty is
15 per cen t; after 12 m onths and within 2 years, 25 per ce n t; at the
expiration o f Which tim e the purchaser is entitled t o a deed, and n o
redem ption m ay thereafter be m ade. B ut infants and insane persons
m ay redeem within 2 years after rem oval o f their disability. A tax
deed m ay be set aside if any substantial provision o f the law has not
been com plied with, and redem ptions are generally favored b y the
courts, even after a deed has issued. (64-2301, 2314).
Intan gibles. Intangible personal prop erty is taxed b y means o f a
stam p tax (Acts Í933, c. 81. as A m ended A cts 1935, c. 294). ■ ■■
E x em p tio n s. T he property o f the U. 8. and o f this state, and the
property o f any cou nty, city, tow n or township is exem pt from taxa
tion. Generally, and under certain conditions, the follow ing property
is exem pt from taxation: property used for educational, literary,
scientific, religious, fraternal, benevolent, or charitable purposes,
battle grounds, and other historic sites and public libraries. C em e
teries incorporated under the law o f this state, not for pecuniary
profit, and certain funds for the care and maintenance o f cemeteries,
are exem pt. M em bers o f the state m ilitia and every soldier and
sailor in the service o f the U. S. are exem pt from paying poll or road ta x .
A ll bonds and other evidences o f indebtedness hereafter issued b y .
or in the name o f any m unicipality or other political or civ il sub
division o f this state, or b y or in the name o f any taxing district in
this state, for the purpose o f paying the cost o f im provem ent or
m aintenance o f streets, highways, etc., and other im provem ents o f
public benefit, and Which bonds, or other evidence o f indebtedness are
payable from special assessments or special taxes, are exempt) from
taxation. (64-201).
.
.
.,
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In co m e T a x . A tax is im posed on the gross incom e o f all residents
o f Indiana or persons dom iciled here and on all incom e arising from a
business conducted on property located in Indiana (A cts 1937, c. 117).
In h erita n ce T a x .
(1931, c. 75.) T a x is im posed subject to con
ditions and limitations, on all transfers in trust or otherwise o f the
follow ing property or interests therein or incom e therefrom : W hen
transfer is from a resident o f state, real property situated in state, all
tangible personal property except such as has an actual situs without
state and all intangible personal property wherever situated; when
transfer is from a nonresident, all real and personal property within
jurisdiction o f state.
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T he follow ing transfers are taxable: B y w ill; b y statute regulating
descent; m ade in contem plation o f death o f transferor, if m ade within
BANKING AND COMMERCIAL LAWS— IOWA
2004
tw o years, it is presumed t o be in contem plation o f death, in absence
o f contrary showing, m ade b y gift or grant to take effect in pos
session or enjoym ent after death o f transferor; m ade in paym ent o f
debt created b y antenuptial agreement b y its terms payable b y will
or contract at or after death. I f transfer is for a valuable considera
tion ; except love and affection, no tax is im posed on the value up to the
m oney value o f the consideration received b y the transferor, but the
excess is taxed. W here property is held in join t names o f tw o or
m ore persons as join t tenants or otherwise, except real estate held
b y entireties, or is deposited in banks, etc., in join t names and p ay
able to survivor or survivors, exercise o f right o f survivor or sur
vivors is a taxable transfer; except such as m ay have belonged origi
nally to survivor or survivors and never have belonged to decedent.
Proceeds o f insurance on decedent’s life, payable to his estate, are
taxed; but insurance payable t o spme other person and not a part o f
decedent’s estate is not taxed. A transfer b y deed o f trust (before or
after enactm ent o f statute) wherein trustor reserved to him self any
incom e or interest, or reserved powers o f revocation, alteration or
amendment, on exercise o f which property w ould revest in him , is
taxable on his death to extent o f value o f property subject to such
powers and as to which such powers have not been exercised. P rop
erty transferred to executors or trustees in lieu o f com m issions, allow
ances or fees, is taxable on excess over com m issions, etc., which would
be payable in absence o f any such transfer.
Bates o f tax and exem ptions vary according to relationship o f
beneficiary and am ount o f transfer, as follow s:
C la ss A . H usband, wife, lineal ancestor or descendant, legally
adopted child and child to whom transferor stood in acknow ledged
relationship o f parent and child for n ot less than ten years prior to
transfer.
E X E M P T IO N S
W ife .......................... ......................................................
C hild under 18 years o f a g e .....................................
Other members o f C la ss............................................
$15,000
5,000
2.000
BATES
1 per
2 per
3 per
4 per
5 per
6 per
7 per
8 per
10 per
cent not exceeding.......................
cent................................................
cent................ ...............................
cent................................................
cent................................................
cent............................. ..........
cent.....................................
cent...............................................,
cent................................................
$25,000
25.000 to $50,000
50.000 to 200,000
200,000 to 300,000
300,000 to
500,000
500,000 to 700,000
700,000 to 1,000,000
1,000,000 to 1,500,000
Over
C la ss B . Brother, sister, or a descendant o f a brother or sister,
a wife or w idow o f a son, or the husband o f a daughter.
E xem ption. $500. '
BATES
6
8
10
12
15
per cent not exceeding
per c e n t ..........................
per c e n t ..........................
per c e n t ..........................
per c e n t .....................
C la ss C . All others.
E xem ption. $100.
$ 100,000
100.000 to $200,000
200.000 to 500,000
500.000 to 1,000,000
Over
BATES
per cent not exceeding........................
$ 100,000
100.000 to $200,000
per c e n t ....................................................
per c e n t ....................................................
200.000 to 500.000
per c e n t . .......... ........ \ ............................
500.000 to 1,000.000
Over
per c e
n
t ...............................
Bates on previous page stated a p p ly to entire transfer in excess o f
exem ption.
Follow ing transfers are entirely exem pt: T o U . S., any state or
territory or political subdivision thereof, or any corporation, in
stitution, association or trust form ed for charitable, educational or
religious purposes, p rovided property is to be used exclusively for
such purposes in Indiana.
T ax is im posed on full, fair cash value o f property, subject to
exem ptions above stated in case o f transfers b y will or intestate laws.
T a x is payable at tim e o f transfer and is a lien against the land.
Trustees, executors or administrators o f estates are personally liable
for the tax.
T a x is determ ined b y any court having probate jurisdiction, on
appraisement b y cou n ty assessor, or b y inheritance tax appraiser in
counties o f 400,000 or m ore population. Provision is m ade for notice
o f appraisem ent, hearing upon report and rehearing to persons in
terested or State-Board o f T a x Comm issioners. T he Board m ay m ove
for a rehearing within 2 years after entry o f delivery b y the court if
they believe appraisem ent was fraudulently, collusively, or erroneously
made.
T a x on resident decedent’s estate is payable to treasurer o f cou nty
where court having jurisdiction is situated. I f paid within 1 year
after accrual, deduction o f 5 per cent is allow ed; if not paid within 18
m onths, interest at 10 per cent from date o f accrual is assessed.
Determ ination o f tax on taxable transfers from nonresidents is
under exclusive jurisdiction o f T a x Commissioners. Appeal from
appraisement lies to M arion cou n ty circuit court. T a x is payable to
State Board o f T ax Comm issioners. Taxes erroneously assessed may
be refunded on order o f T a x Comm issioners. Person or institution
perm itting stock or personal property or securities to be transferred
w ithout consent o f T a x Comm issioners is liable for the tax and su b ject
to penalty o f n ot m ore than $1,000 in addition.
In case o f contingent or expectant estate where taxes are not
presently payable. T a x Commissioners and A ttorney General m ay
enter into agreem ent with trustees, executors or administrators to
com pound taxes and grant discharges therefor. I f agreement cannot
be reached, tax is held in abeyance and trustees, executors or admin
istrators must give bond for prom pt paym ent.
State Board o f T ax Comm issioners is charged with enforcem ent o f
the act and will provide form s required.
W ills . N o will except a nuncupative will shall affect any estate
unless it be in writing, signed b y the testator or by som eone in his
presence, with his consent, and subscribed in his presence, b y tw o or
m ore com petent witnesses in the presence o f each other. A will made
before marriage becom es void on marriage o f testator. N o nun
cupative will shall be valid when m ore than the value o f $100.00 is
bequeathed, nor unless it is made in the last sickness o f the testator,
and the subject thereof be reduced to writing within fifteen days after
it shall have been declared and proved b y tw o com petent witnesses
who shall have heard the testator, in effect, request some o f those
present to bear witness thereto; and no such nuncupative will shall be
proved after six m onths from the death o f the testator, nor until his
widow and heirs shall have reasonable notice o f the time and place o f
proving the same
A n y soldier or sailor in actual service m ay dispose
o f his persona) estate, in his actual possession, and his wages, b y a
nuncupative will. A n y person m ay contest the validity o f any will
or resist the probate thereof at any time within one year after the will
has been offered for p robate, b u t an infant, an insane person or one
w ho has been absent fro m , the state m ust contest or resist within
3 years. U pon the death or any testator any person interested in any
part o f the estate specified in the will m ay have the will probated. A
will in writing shall be p roven b y one or m ore o f the subscribing w it
nesses, or, if they be dead, ou t o f the state, or have becom e incom
petent from any cause since attesting the will, then b y p ro o f o f the
handwriting o f the testator or o f the subscribing witnesses thereto.
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https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
SYNOPSIS OF
T H E L A W S OF IO W A
RELATING TO
BANKING AND COMMERCIAL USAGES
Bevised by S t a n l e y A. F r i c k , Attorney at Law, Wilson Building,
Bockwell City, Iowa
A ccou n ts. In all instances where any sum o f money is claimed
on an account, the same must be itemized.
If suit is brought on
such an account the items thereof should be consecutively numbered
and the account must be sworn to. Such a sworn statement of
account together with a petition which has been likewise sworn to,
constitutes a prima facie case enabling the creditor to take judgment
thereon in the event the debtor is unable to disprove the items.
A ckn ow led gm en ts. All instruments affecting real estate, includ
ing mortgages, deeds of trust, powers o f attorney relating thereto,
and leases for more than one year, must be acknowledged or the
execution thereof proved and the instruments must be recorded in
the proper office, in order to affect third parties. The same is also
true as to bills of sale of personal property. Conditional sales contracts
or leases must be signed by both vendor and vendee, or lessor and lessee
and acknowledged by one of them, and must be filed the same as
chattel mortgages (see Chattel Mortgages). Articles of incorporation
must also be acknowledged and recorded. Forms of acknowledgments
are prescribed by statute, and must be substantially as follows;
1. In the case of natural persons acting in their own right:
State o f. . . . .................. \aa
County o f .........................J
On this d a y ........ .o f ............A. D . 1 9 . . , before m e,...........................
(Insert title o f acknowledging officer)..................personally appeared
. . . . . . . .to me known to be the person.. named in and who executed
the foregoing instrument, and acknowledged that.............. executed the
same as.......... .. voluntary act and deed.
Notary Public in and for said County
2. In the case o f natural persons acting by attorney:
State o f .............................1 gg
C ou n ty o f ...........................J
On this.......... day o f . . . . . . , A. D . 1 9 . ., before m e...........................
(Insert title of acknowledging officer)............personally appeared. . . .
to me known to be the person who executed the foregoing instrument
in behalf o f ............................ and acknowledged that he executed the
same as the voluntary act and deed of said.................................... ..
N ota ry P ublic in and for said C ounty
3. In the case o f corporations or join t stock associations:
State o f ..............................\gg
C ou n ty o f ......................... J
On th is ........... d ay o f ............ A . D ., 1 9 . . , before m e, a ... .( I n s e r t
title o f acknow ledging office r)........... . in and fo r said cou n ty, person
ally ap p eared................................... to m e personally know n, w ho being
b y m e duly (sworn or affirmed) d id say that he i s ........... (Insert title
o f executing office r)........... o f said (C orporation or a ssocia tion )............
that (the seal affixed to said instrum ent is the seal o f said) or (no
seal has been procured b y the said) (corporation or association) and
that said Instrument was signed and sealed on behalf o f the said
(corporation or association) b y authority o f its board o f (directors or
trustees) and the s a id .......................................... acknow ledged the execu
tion o f said instrum ent t o be the voluntary act and deed o f said
(corporation or association) b y it voluntarily executed.
N o ta ry public in and for said C ounty
(In all cases add signature and title o f the officer taking the a c
know ledgm ent, and strike from between the parentheses the w ord or
clause not used, as the case m ay be.)
A c t io n s . T h e com m on law form s o f pleading are not used,
although the com m on law form s the basis o f procedure. Pleading,
practice, and procedure are statutory, and accord, in the main,
with what is know n as the reform ed, or cod e procedure.
A d m in is t r a t io n o f E sta te s . W hen an executor is not appointed
b y will adm inistration shall be granted to any suitable person or
persons on the request and application o f: 1. T h e surviving spouse.
2. T h e next o f kin. 3. Creditors. 4. A n y other person showing good
grounds therefor.
T o each o f the a bov e classes in succession, a period o f 20 days,
com m encing with the burial o f the deceased, is allow ed within which
t o a p p ly for administration.
A special adm inistrator m ay be appoin ted to preserve property if
for any reason general adm inistration cannot be im m ediately granted.
A dm inistration shall n ot be originally granted after five years
from the death o f the decedent, or from the tim e his death was known,
in case he died ou t o f the state o f Iow a; except, how ever, when personal
prop erty belonging to the estate o f the decedent is discovered after
the expiration o f said five years, adm inistration m ay be gran ted for
the purpose on ly o f m aking p roper disposition thereof.
Claim s against the estate o f a deceased person are payable in the
follow ing order: 1. Charges o f the last sickness and funeral o f the
deceased. 2. A ny allow ance m ade b y the cou rt for the maintenance
o f the widow and m inor children. 3. D ebts entitled to preference under
the laws o f the U. S. 4. P ublic rate and taxes. 5. Claim s filed
within 6 m onths after the first publication or posting o f the notice
given b y the executors or administrators o f their appointm ent. In
this class, claims for labor perform ed within the next preceding 90
days o f the death o f decedent are preferred. 6. A ll other debts.
7. Legacies and the distributive shares, if any.
A ll claims o f the sixth o f the a bov e classes n ot filed and allow ed,
o r i f filed and notice thereof not served within 12 m onths from the
givin g o f the notice o f appointm ent are barred, except as to actions
against decedfent pending in the district or suprem e court at the tim e
o f his death or unless peculiar circum stances entitle the claim ant to
equitable relief.
A ffid a v its . A ffidavits m ay b e taken before any p erson author
ized t o adm inister oaths in the state where taken. Those taken out
o f the state before any ju d ge or clerk o f a cou rt o f record, or before
a notary p ublic, or a com m issioner appoin ted b y the governor o f
this state to take acknow ledgm ent o f deeds in the state where such
affidavit is taken, are o f the same credibility as if taken within the
state. Affidavits m ay b e taken within the state fo r any lawful
purpose, o f one unwilling to voluntarily m ake an affidavit, b y filing
a petition with an officer authorized to adm inister oaths, w ho m ay
cause the person to com e before him and m ake affidavit. This
proceeding is statutory and m ust conform strictly to the statutes o f
Iow a.
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,
Affidavits fo r proving accounts and fo rm : -State o f ............................
C ounty o f ....................ss, I .....................being first d uly sworn, on oath
depose and say that I am (a m em ber o f the firm o f ....................and
that said firm is) the owner o f the account hereto attached, marked
exhibit A , and m ade a part hereof, that the same is correct in all
particulars and that the articles named therein were sold and delivered
to sa id ............. . at the prices and tim es therein named and agreed
upon, and that said articles were reasonably o f the value charged,
and that the said account is due and unpaid. T h a t there is no legal
set o il or credit to the same or any part thereof e x c e p t as h erein stated.
Subscribed and sworn to before m e, b y the s a id ....................this
day. etc.
BANKING AND COMMERCIAL LAWS— IOWA
A lie n s. Non-resident aliens or corporations incorporated under
the laws o f any foreign country or corporations organized in this ,
country, one-half o f the stock o f which is owned or controlled b y non
resident aliens are prohibited from acquiring title to or holding any
real estate in Iowa, but the non-resident alien widow, heirs, or devisees
o f an alien or naturalized citizen m ay hold the same for twenty years,
and if not sold within that tim e, escheats to the State. Aliens m ay
acquire property o f any kind within a city or town or lands not exceed
ing 320 acres or stock in any corporation for pecuniary profit and m ay
alienate or devise the same, but this law does not a ffe ct. personal
property. A lien holder m ay acquire title to the property embraced
in such lien but real estate so acquired must be sold within ten years
after title is perfected in an alien, otherwise it will escheat to the
State.
■ Arrest. N o person can be imprisoned for d ebt on either mesne
or final process, unless in case o f fraud« Debtors, however, m ay be
ordered to appear before a court o f record wherein a judgm ent has
been rendered, and if the d ebtor is about to leave the State, or conceal
himself, he m ay be arrested and com pelled to give bond to appear
before the court for exam ination, and in the meantime, not dispose
o f his property. (See Supplem entary Proceedings.).
A s s ig n m e n ts a n d I n s o lv e n c y . General assignments not valid
unless for benefit o f all creditors, when assent o f creditors is presumed.
The d ebtor must annex to the instrument o f assignment a sworn
inventory and list o f creditors; and such instrument must be acknowl
edged and all o f the papers recorded like a deed o f real estate. The
assignment vests in the assignee title to all property o f the debtor.
Assignee must give bonds, prepare a verified inventory and valuation,
and notify creditors b y mail to file claims within three months.
All claims not filed within three m onths after notice published or
within such extended tim e as the court grants, not exceeding nine
months, including claims not yet due, can not be paid until all claims
filed within said tim e are paid. An assignment does not discharge
the d ebtor from his debts and liabilities, but only entitles creditors
to share equally in bis estate. All claims filed must be itemized
and sworn to.
A t t a c h m e n t s . A n attachm ent, auxiliary to the ordinary p ro
ceedings, m ay be sued out at the com m encem ent or during the progress
o f the proceeding if the petition is sworn to and states one or m ore o f
the following grounds:
1. That the defendant is a foreign corporation or acting as such.
2. T hat he is a nonresident o f the state.
3; T hat he is a bou t to rem ove his property ou t o f the state w ith
out leaving sufficient remaining for the paym ent o f his debts.
4. T h a t he has disposed o f his property, in whole or in part, with
intent to defraud his creditors.
5. T hat the defendant is a bou t to dispose o f his property with
intent to defraud his creditors.
6. T h a t he has absconded, so that the ordinary process cannot
be served upon him.
7. T h a t he is a bou t to rem ove perm anently ou t o f the cou nty,
and has, prop erty therein n ot exem pt from execution, and that he
refuses to p ay or secure the plaintiff.
8. T h a t he is a bou t to rem ove perm anently ou t o f the state, and
refuses to p ay or secure the d ebt due the plaintiff.
9. T hat he is a b ou t to rem ove his prop erty or a part thereof
out o f the cou n ty with intent to defraud his creditors.
10. T h a t he is a bou t to con vert his property or a part thereof
into m oney for the purpose o f placing it beyond the reach o f his
creditors:
11. That he has prop erty or rights in action which he conceals.
12. That the debt is due for property obtained under false pretenses.
Property o f d ebtor m ay be attached for debt not yet due if his
petition states one or m ore o f following grounds: 1. T hat defendant
b about to dispose o f his property with intent to defraud hta creditors.
2. That he b a bou t to rem ove or has rem oved from the state, and
refuses to secure the paym ent o f the debt when it falls due, and which
removal or contem plated rem oval was not known to the plaintiff at
the tim e the debt was contracted. 3. That the defendant has dis
posed o f his property in whole or in part with intent to defraud his
creditors. 4. T h a t the debt was incurred for property obtained under
fa be pretences.
.
Special attachments are permitted in certain cases. On all above cases the plaintiff must file a bond in a penalty at
least double the value o f the property sought to be attached except in
landlord’s attachments on rent accounts, and in any case where
only real property is sought to be attached the bond shall be in an
amount fixed by the court or clerk, usually considerably less.
B an k s a n d B a n k in g . Savings banks and tru^t com panies m ay be
formed b y not less than five persons o f lawful age, a m ajority o f whom
shall be citizens o f the state. T h e minimum paid up capital depends
upon the population o f the city wherein the bank is located.
At least three-fourths o f the directors must be citizens o f thfa state
and all must be shareholders.
N o banking institution organized under the laws o f this state shall
declare or pay any dividend until it has first established a surplus o f
at least tw enty per cent o f its capital except dividends required to be
paid on Class “ A ” preferred stock held b y R . F. C.
Bank drafts are preferred claims against the assets o f the State,
Savings Bank or T ru st Com panies issuing them. (D oes not apply
to private banks.)
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State banks, savings banks, and trust com panies have a prior lien
on their debtors’ shares o f stock for all obligations to the bank subject,
however, to loans against the stock which the bank has acknowledged
by written notice.
State and savings banks and trust com panies have power when so
authorized b y their articles o f incorporation, to act as assignee or
trustee by deed and guardian, executor, or trustee b y will or to be
appointed receiver, assignee, guardian, administrator or other trustee
by any court o f record in this state:
.
National banks m ay exercise the same powers when so authorized
by any law o f the United States.
Any state, savings bank or trust com pany, m ay becom e a m ember
o f the Federal Reserve System .
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It is unlawful for any officer or em ployee o f any bank or trust
com pany to offer for sale or p rom ote the sale o f any stock, real estate,
life insurance, fire insurance, bonds or other securities, unless the
sale o f the sam e shall have been sanctioned and approved by the
Board o f Directors and such approval entered o f record. It is a
misdemeanor for any officer or em ployee to violate the above.
The president and cashier o f every savings bank and every state
bank shall cause to be kept at all times, a full and correct list o f the
names and residences o f the officers, directors, examining com m ittee
and all the stockholders o f the bank. This list shall alst? show the
number o f shares held b y each. Such lists shall be subject to the
inspection o f all the stockholders and creditors o f the bank during
business hours o f every day in which business m ay be legally trans
acted. T he president and cashier shall verify b y oath a copy_ o f the
list and send the sam e to the Superintendent o f Banking within ten
days after each annual m eeting. And the Superintendent _may, if
he desires, require the president or cashier to furnish him with financial
statements o f the stockholders.
.
. ,
In the event any state bank, savings bank or trust com pany holding
a charter to transact business within the state fails to transact business
or perform the duties im posed on it b y the banking law, such charter
may be cancelled on proper hearing b y the District Court.
No person shall be eligible as a director of any savings or state
bank or trust company unless such person owns shares o f stock in
that bank as follows:
(a) In banks whose capital is less than $30,000 he m ust hold at
least $200 worth o f stock at par value.
(b) In banks having a capital o f $30,000 or m ore he must hold and
own at least $500 worth o f stock at par value.
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2005
N o state bank, savings bank or trust com pany shall pay interest
on savings accounts or certificates o f deposit or any other tim e deposit
at a rate greater than 4 per cent per annum payable semi-annually.
N o interest in any event shall be paid upon such tim e deposits for
any period less than three m onths.
If, however, there are any savings accounts or tim e deposits bearing
interest at a rate greater than 4 per cent the same shall be considered
borrowed m oney and shall be so reported to the superintendent o f
banking.
Before any director o f a state bank, savings bank, or trust com pany
acts as such, he must take an oath that he will diligently, faithfully,
and impartially perform the duties im posed upon him b y law. That
he will not violate nor perm it t o be violated any o f the banking law,
and that he is a bona fide holder in his own right o f the number o f
shares required to be owned b y him, and that the same have not been
hypothecated.
T he Board o f Directors must hold at least one m eeting each calendar
m onth. T he State Superintendent o f Banking m ay require, if in his
opinion it would prom ote the banking industry to d o so, that un
secured loans in amounts exceeding $500, shall not be m ade except
where the borrower submits a financial statem ent.
N o executive officer o f any bank or trust com pany shall use directly
or indirectly any m oney o f the bank in excess o f 10 per cent o f the
capital and surplus. N or shall the tota l am ount loaned to all executive
officers o f the bank exceed 25 per cent o f the com bin ed capital and
surplus. N o such loans can be m ade unless the sam e shall first be
approved in writing b y a m ajority o f the board o f directors, exclusive'
o f the party borrowing.
I f any bank officer certifies a check in excess o f the balance on
deposit or issues a certificate o f deposit when the full am ount has
not been deposited, he is guilty o f a misdemeanor. N o officer o f any
bank shall have power to pledge or hypoth ecate any obligations owned
b y the bank unless authorized to d o so b y a resolution o f the board
o f directors. A ny pledging or hypothecation without such authority
is void and the party guilty is liable for imprisonm ent up to tw enty
years.
AH officers and em ployees o f any bank having the care or cu stody
o f any funds or securities o f the bank must furnish a bond subject to
the approval o f the board o f directors.
A ny person know ingly issuing a false financial statem ent to a bank
with intent to defraud respecting his financial condition, shall be guUty
o f a misdemeanor.
W hoever m aliciously or with intent to deceive, makes or circulates
any false report con cerning any bank which tends to Impute an
unsound financial condition o f the bank or cause a general withdrawal
o f deposits, shaU be guUty o f a felony and subject to fine and im
prisonment.
Banks m ay With approval o f Superintendent o f Banking establish
offices in their own cou nty or in counties contiguous^ to the one in
which the bank is located on ly for the purpose o f receiving, depositing,
paying checks, and perform ing other clerical and routine duties m
connection therewith.
T h e superintendent o f banking up on application o f the officers or
directors o f any state bank, savings bank, or trust com pany, or private
bank doing banking business and consent o f the executive council, or
the governor or lieutenant governor, shall have pow er to take over the
management o f any such bank for a period not exceeding tw o years
unless special consent to operate for a longer period is given b y the
executive council.
T he rem edies at law or in equity o f ’any creditor or stockholder
against any such bank or trust com pany are suspended and the statute
o f limitations tolled during the period managed b y the superintendent
o f banking. T h e governing board o f any cou nty, city, tow n, township,
or school district, in its discretion m ay enter into depositors’ agreements
o f unsecured and unpreferred claims for the reorganization, re-opening,
or consolidation o f the bank.
T he banking departm ent, with the approval o f the governor m ay
designate what the officers, directors, and stockholders should be re
quired to pay if the bank is reorganized.
Preferred stock issued b y any bank or trust com pany in this state
shall be included in determining whether such banking institution has
com plied with the m inimum capital requirements provided b y law for
banking institutions.
Banks as depositories o f public fun ds m ust p ay assessments thereon
to the country treasurer o f the cou n ty in which such depository is
located on or before the 10 th o f each m onth, and on or before the
20th o f each m onth cou n ty treasurers shall rem it the am ount o f
such assessments to the state treasurer to be placed b y him in the
state sinking fund for public deposits. T h e assessment periods
com m ence on July 1st and January 1st o f each year and the rate o f
assessment for each such period is fixed b y the state treasurer with
approval o f the E xecutive C ouncil. T he rate o f assessment shall
not be less than one-half o f one per cent per annum on ninety per cent
o f collected daily balances nor m ore than tw o and one-half per cent.
W hen the am ount in the state sinking fun d has reached $500,000.00,
above accrued and contingent liabilities, no assessments shall be
paid until said sinking fun d has been reduced to less than $250,000.00.
State banks, savings banks and trust com panies m ay m ake loans
pursuant to Titles I and I I o f the N ational Housing A ct or amend
ments thereto, and invest in m ortgages insured and in debentures
issued b y the P. H . A. and invest in capital stock and securities o f
national housing associations or similar credit institutions.
A ny banking institution is em powered on the authority o f its board
o f directors or m ajority thereof, with the approval o f the Superin
tendent o f Banking, to enter into contracts, incur obligations and
perform any other acts necessary to take advantage o f membership
in the P. D . I. O. T he P. D . I. 0 . is authorized to make examination
o f banking institutions incorporated under the laws o f the State o f Iowa.
T h e taxable value o f shares o f stock in a state bank, savings bank or
trust com pany shall be o f the assessed value and shall be taxed as
m oneys and credits. Surplus and undivided profits after deduction
o f real estate, is also taxable as m oneys and credits.
B ills o f E x ch a n g e . T he uniform negotiable instruments law is in
effect in Iowa.
B lu e S ky L a w . A com plete system o f law for the regulation o f
the sale o f securities know n as the “ Iow a Securities L a w ” is now in
force.
This act applies to sales and purchases within the State o f
Iow a o f stocks, bonds, notes, debentures and practically all other
evidences o f indebtedness. A co p y o f this law in pam phlet form as
well as all necessary blanks, etc., m ay be obtained free on application
to the Secretary o f State.
C h a tt e l M o r tg a g e s . N o sale or m ortgage o r personal property,
where the vendor or m ortgagor retains actual possession, is valid
against existing creditors or subsequent purchasers without notice,
unless a written instrument conveying same, be executed acknowledged
like conveyances o f real estate, and such instruments, or a duplicate
thereof duly recorded, or filed and deposited with the recorder o f the
cou nty where the property shall then be situated or i f the m ortgagor
be a resident o f the state, then o f the cou nty where the holder o f the
property resides. N o encum brance o f personal property which m ay
be exem pt from execution b y the head o f a fam ily if a resident o f the
State shall be o f any validity unless the same be b y written instru
ment and unless the husband and wife concur in and sign the same
join t instrument.
C o lla te ra l S e cu ritie s . There are special statutory provisions
concerning the pledging o f corporate stock, as security; and also
upon the subject o f sales o f collaterals b y action in court and judicial
sale. Otherwise the subject is governed b y the com m on law.
2006
BANKING AN D COMMERCIAL LAWS— IOWA
C o n d it io n a l S a les. N o sale, contract, or lease wherein the
transfer o f title or ownership o f personal property is m ade to depend
upon any condition, shall be valid against any creditor or purchaser
o f the vendee or lessee m actual possession, obtained in pursuance
thereof, w ithout notice, unless the same be in writing, executed
b y the vendor and vendee, or b y the lessor and lessee, acknow ledged
b y the ven dor or vendee, or b y the lessor or lessee, and recorded or
filed and deposited the same as chattel mortages.
C o n v e y a n c e s . N o particular form is necessary for conveyances
or m ortgages. T he name o f the parties, the description o f the property,
the consideration, the date, signature, and acknow ledgm ent, is all
that is necessary; as between the parties they are valid without
being recorded. T h e wife must join with her husband in conveyances,
and a con veyan ce o f the hom estead is o f no validity unless husband
and wife concur in and sign the same join t instrument- A corporation
executes conveyances under its corporate seal, except where the
corporation has not adopted a seal. Such conveyances must be signed
in the name o f the corporation b y the officers authorized so to d o,
b y the Articles o f Incorporation, or B y-Law s, or b y resolution duly
entered o f record in the minutes o f the corporation, and duly acknow l
ed ged b y such officers, as the act o f the corporation.
T h e legislature has b y statute approved the follow in g form s:
1. Quit claim deed.
F or the consideration o f $ ................I hereby quit claim t o ............ ..,
all m y interest in the follow ing described tract o f real estate: (D e
scribing it.)
2. F or a D eed con veyin g fee sim ple w ithout warranty:
For the consideration o f $ ..................I hereby con vey t o .......................
the follow ing tra ct o f real estate (D escribing it.)
3. For a D eed con veyin g fee sim ple with fu ll warranty: add to
num ber 2 the follow ing:
And I warrant the title against all persons whomsoever.
4. F or a M ortg ag e: add to num ber 2 the follow ing: T o be void
upon condition that I p a y, etc.
O f course, the above instruments m ust be signed b y the grantor,
and if he is married his w ife m ust also sign t o con vey her dower
Interest. I f it is desired that any o f the above instruments be recorded,
then the sam e m ust be acknow ledged.
C o r p o r a t io n s . Private corporations, sole or aggregate, m ay be
form ed for any lawful purpose. B ut there are special statutory
p ro visions which must be com plied with for the organization and
governm ent o f insurance, banking, loan and trust, building and loan,
and railway corporations. In all cases, the articles o f incorporation
m ust be acknow ledged and recorded, in the manner provided by
law, and approved b y the secretary o f state. W ith a few exceptions,
an incorporation »fee o f $25. plus $1 for each thousand dollars o f
capital in excess o f $10,000 m ust be paid, upon the organization
or renewal o f a private corporation. T h e general term o f the life
o f a private corporation is tw enty years, renewable for a like term .
Railroads, savings banks, and a few others m ay last fifty years,
also renewable.
Foreign corporations m ust obtain a perm it to d o business in the
state. T he statute provides in detail w h at the application shall
contain, and m ust p ay to the Secretary o f the State a fee o f $25 upon
$10.000 or less o f m oney and property o f the com pany actually within
the State, and $1.00 for each $1,000 o f such m oney or property within
the State in excess o f $10,000, N o foreign stock corporation doing
business in this state shall m aintain any action in this state upon
any contract m ade b y it in this state, unless prior to the making o f
such contract it shall have procured such perm it. T his prohibition
shall also apply to any assignee o f such foreign stock corporation and
to any person claiming under such assignee o f such corporation or
under either o f them .
T h e Articles o f Incorporation m ay prescribe any figure as the par
Value o f each share o f stock , or the stock m ay be issued, “ W ith out
Par V alue.”
C o u r t s . Term s and Jurisdiction. T he district court has jurisdic
tion o f all actions, civil and equitable, and has criminal and probate
jurisdiction. Superior courts m ay be established b y the vote o f
the peopje in any city o f 4,000 inhabitants. It has jurisdiction to
try all violations o f city ordinances, and the same criminal jurisdiction
as justice o f the peace courts. It has jurisdiction to try and determ ine
civil and criminal appeals and civil writs o f error from justices o f
the peace, situated in the township where the court is located. Has
the same jurisdiction as the district court to try all suits in law and
equity, except grant divorces, alim ony, and separate m aintenance,
and it has no probate jurisdiction. Transcripts from superior and
justice’s courts must be filed in district court to create a lien on real
estate, and are then enforced as judgm ents o f the district cou rt;
justice’s jurisdiction, $100, or, b y written consent o f parties, $300.
T he supreme court has only appellate jurisdiction and holds sessions
at D es M oines, January to M a y, from M a y to Septem ber (less vaca
tion ), and from Septem ber to D ecem ber.
M unicipal C ourt m ay b e established b y the v ote o f people In cities
e f 5,000 inhabitants. It has jurisdiction to try all violations o f city
ordinances, and the same crim inal jurisdiction as Justice o f the Peace
court, and exercise the jurisdiction conferred on the D istrict C ourt
for the trial o f m isdemeanors. It has concurrent jurisdiction with
the D istrict court in all civil m atters involving $1,000 or less, but has
no jurisdiction to grant divorces, alim ony or separate maintenance,
and has no probate jurisdiction. Transcripts must be filed in District
C ourt to create a lien, and appeals are taken direct to the Supreme
Court.
D a y s o f G r a c e . E very negotiable Instrument Is payable at the
tim e fixed therein w ithout grace.
D e p o s itio n s m ay be taken within the State, on notice, and within
or w ithout the State, on com m ission or agreem ent o f parties issued
after notice b y the clerk o f the proper court. W hen to be taken on
com m ission, defendant m ay elect, in writing, d uly served, to cross
exam ine orally; thereupon plaintiff m ay also elect in writing to exam
ine orally. E xceptions m ust be filed within three (3) days, after the
filing o f the deposition, but objections m ay nevertheless be m ade at
the trial for com petency, m ateriality, and relevancy.
D e s c e n t a n d D is t r ib u t io n o f P r o p e r t y . Subject to rights o f
dow er and other charges thereon, and burdens im posed during the
lifetim e o f the decedent, and in the absence o f a valid will, the estate
o f one deceased shall descend In equal shares to his children. The
heirs o f any deceased child shall inherit in same manner as though
such child had outlived his parents. I f the intestate leave no issue
the whole o f the estate to the extent o f $7,500 after paym ent o f debts
and administration expense, and one-half o f the estate in excess of
said $7,500 goes to the surviving spouse and the other half to the
parents. I f no surviving spouse, the whole thereof shall go to his
parents or the survivor o f them ; and so on through ascending an
cestors and their issue, if both parents be dead. Personal property
not necessary to p ay debts is distributed to the same persons, and in
the same proportions as though it were real estate.
D o w e r. T h e surviving spouse is entitled to one-third in value o f
all the legal and equitable estates in real property possessed b y the
deceased spouse at any tim e during the marriage, which have not been
sold on execution or any other judicial sale, and to which such survivor
has m ade no relinquishm ent o f right. A spouse, heir or devisee
feloniously taking or p rocu ring the taking o f the life o f the other
spouse, or decedent, cannot have dow er or inherit pow er or take under
the will o f the decedent. ; (See Lim itations.)
E m p lo y e r s L ia b ility . E m ployers liability and w orkm en’s com
pensation is governed b y statute.
E x e c u tio n s m ay be stayed, according to their am ount, for ninety
days or six m onths, with a few specified exceptions. T he issuance o f
execution m ay be prevented b y filing an appeal bond. Otherwise
execution m ay issue im m ediately after rendition o f judgm ent. A
stay o f execution waives right o f appeal. T he judgm ent is a lien on
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realty within the cou n ty where rendered, or b y transcript, it m ay be
m ade a lien in a n y other cou ntry. E xecutions becom e liens on per
sonal p rop erty on ly from the tim e o f the le vy and seizure. Real
estate is sold on execution su bject to redem ption within one year,
except in appealed cases, or where the interest is a leasehold o f tw o years
or less. Creditors having liens, m ay redeem from the sale after six
m onths and before nine m onths from date o f sale. Personal property
is sold without redem ption.
E x e m p tio n s . T h e head o f a fam ily Is entitled to a hom estead o f
fo rty acres or less o f farm land or half an acre or less in a city or tow n.
W hen a debtor absconds and leaves his fam ily, such property as is
exem pt to him shall be exem pt in the hands o f his w ife and children
dr either o f them . T h e statute provides for numerous exem ptions o f
personalty to the head o f the fam ily including: 1. T h e proper tools,
instruments or books o f the d ebtor, i f a farm er, m echanic, surveyor,
clergym an, lawyer, physician, teacher, or professor, except that no
m otor vehicle shall be held exem pt from any order, judgm ent or
decree fo r damages occasioned b y the use o f said m otor vehicle upon
a public highw ay o f this state. N one o f the above articles are exempt
for the purchase price thereof. 2. A ll m oney received b y a person
as pension m oney whether deposited loaned or invested b y him . 3.
Earnings for his personal services at any tim e within 90 days next
preceding the levy . 4. A n y com pensation due or m ay becom e due
under the W orkm en’s C om pensation A ct.
A p olicy o f insurance on the life o f an individual, in the absence o f an
agreem ent or assignm ent to the contrary shall inure to the separate use
o f the husband or wife and children o f the said individual independently
o f all his creditors. T h e proceeds o f an endowm ent p olicy payable to
the assured on attaining a certain age shall be exem pt from liability
for any o f his debts. A n y benefit or indem nity paid under an accident
p olicy shall b e exem pt to the assured, or in case o f his death to the hus
band or wife and children o f the assured, from his debts. T h e avails of
all policies o f life or accident insurance payable to the surviving widow
shall be exem pt from liability for all debts o f such beneficiary contracted
prior to the death o f the assured, but the am ount thus exem pted shall
not exceed $5,000.00.
There are statutory provisions concerning the creation o f liens on
exem pt real or personal property and the assignment o f exem pt wages.
There is no exem ption to d ebtor under a decree for the support o f
m inors. N or is there any exem ption for the paym ent o f alim ony
unless the party in whose fa vor the decree was rendered remarries.
F r a u d . In actions for fraud, heretofore solely cognizable in a court
o f chancery, the cause o f action shall not be deem ed to have accrued
until the fraud com plained o f shall have been discovered b y the party
aggrieved b y the exercise o f due diligence. In actions brought b y a
judgm ent creditor to set aside a fraudulent conveyance o f property
from one spouse to the other and to subject said property to execution,
either husband or wife m ay be com pelled to testify against the other.
Gross fraud is punishable b y fine or im prisonm ent.
G a r n is h m e n t s . (See A ttachm ents.)
H u s b a n d a n d W ife . (See M arried W om en.)
H o lid a y s . T he legal holidays are: Sundays; January 1 (New Y ear’s
D a y ); February 12 (L incoln’s birth d ay); February 22 (W ashington’s
b irth d ay); M a y 30 (M em orial D a y ); July 4 (In d ep en d en ce-D a y);
first M on d a y in Septem ber (Labor D a y ) ; general election d a y ; N ovem
ber 11 (Arm istice D a y ) ; Thanksgiving D a y ; Decem ber 25 (Christmas
D a y ). For all purposes relating to the presentation for paym ent
or acceptance, and for the protesting and giving notice o f the dis
honor o f hills o f exchange, drafts, bank checks, orders and prom issory
notes, any hank or m ercantile paper falling due on any o f the a bove
nam ed days, shall be considered as falling due on the succeeding busi
ness da y.
I n t e r e s t . B y written con tract, m axim um legal rate, 7 per cent.
Judgm ents draw 5 per cent, or such rate as is fixed b y the contract
on which the judgm ent or decree is rendered, not exceeding 7 per
cent per annum. Open accounts draw 5 per cent after six months
from date o f last item ; m oney loaned, m oney due. .m oney due on
settlem ent o f accounts, bear interest at 5 per cent per annum. C on
tract for m ore than 7 per cent forfeits all interest and costs.
J u d g m e n t s in the district and superior courts m ay be obtained
at first term after suit com m enced, i f undefended. Causes shall be
triable at the first term after legal and tim ely service has been m ade.
Judgm ents o f the district court are liens on real estate ow ned b y
the debtor at the tim e o f rendition, if the lands lie in any other
cou nty, from the tim e o f filing therein an attested co p y o f the ju d g
m ent. Lien also covers all lands which defendant m ay acquire
within ten years from date o f judgm ent, or upon which a levy is
made after-ten or before tw enty years from the date o f the judgm ent,
but this lien dates only from the tim e o f the levy. Judgm ents o f
superior courts and justice o f peace courts becom e liens on real estate
b y filing transcript in district court within cou n ty where obtained,
and becom e liens in other counties in the same manner as if rendered
In the district court.
A judgm ent in an action for the foreclosure o f a real estate m ortgage
or deed o f trust or in any action on a claim for rent or judgm ent as
signed b y the receiver o f the closed bank, or rendered upon credits
assigned b y th e receiver o f th e Closed bank, when the assignee is not
a trustee for the depositors or creditors o f the bank cannot be enforced
nor execution issued thereon and no force or validity is given thereto
except for the purpose o f set off or counterclaim after the expiration
o f a period o f tw o years from the entry thereof unless a voluntary
written stipulation o f the parties continuing it in force for a longer
period is filed in the case.
L ie n s . T hese are m ainly created b y statute and are enforceable
In equity. In a few cases, and under peculiar circum stances, equitable
liens on real estate are established and enforced in equity.
L im it a t io n s . A ctions, according to their subject m atter, have
various periods o f lim itation, fixed b y statute, extending from three
m onths to ten years after the cause o f action accrued. A ctions upon
judgm ents rendered in courts o f record have a lim itation o f tw enty
years. T h e re , are special lim itations barring action for interest in
real estate based on defective trustees, guardians, administrators,
executors and sheriffs deeds; also as to other defects in the title to
real estate.
M a rr ie d W o m e n m ay own in their own right, real and personal
property, and m ay manage, sell, con vey, and devise the same b y
will. N either husband nor w ife is liable fo r the separate debts or
liabilities o f the other incurred before or after m arriage; nor are the
wages, earnings, or property o f either liable for the separate debts o f
the other. C ontracts m ay be m ade b y a wife, liabilities incurred, and
enforced b y or against her, as if unmarried. B oth husband and
wife are liable for the reasonable and necessary expenses o f the fam ily,
and the education o f the children.
M o r tg a g e s . M ortgages m ust be subscribed and acknow ledged b y
the parties creating the lien and recording the same as deeds. The
wife should join in the instrum ent, except m ortgages for purchase
m oney, and m ortgages upon non-exem pt personal property. W hen a
m ortgage is paid off, satisfaction th ereof m ust be m ade on the margin
o f the record, or b y a satisfaction p iece, acknow ledged and recorded.
I f no such satisfaction is entered within 30 days after request in writing,
the m ortgagee forfeits $25.00. T he m ortgagor has one year in which
to redeem real estate after execution sale.
T he owner is entitled to possession and exclusive right to redeem
during this period and the court in its discretion m ay appoint a re
ceiver. T h e incom e shall be paid to the C lerk o f the D istrict C ourt
to b e applied in the follow ing order: 1. C ost o f R eceivership; 2.
Paym ent o f taxes due and to becom e due during receivership; 3. T o
p ay the insurance on buildings on the prem ises or such other benefits
to the real estate as m ay be ordered b y the cou rt; 4. T h e balance
shall be paid and distributed as determ ined b y the court. (See execu
tions, chattel m ortgages, lim itations.)
2007
BANKING AND COMMERCIAL LAWS— KANSAS
N e g o tia b le I n s t r u m e n t s . U niform N egotiable Instruments A ct
adopted A pril 12, 1902.
N o n -r e s id e n t s . A ction m ay be brought against non-residents to
enforce liens on any property within the state; to enforce any d ebt
against a non-resident where action is aided b y attachm ent on prop
erty found within the State. Personal judgm ent cannot in any case
be rendered against defendants, n ot appearing, unless personal
service is had on such defendants within the State. Non-residents
m ay not sell at auction as auctioneers unless reciprocal legislation
exists in the state o f their residence.
N o ta rie s . These officers are appointed and com m issioned b y the
governor, upon filing a bond and paying the fee required b y law.
T hey have pow er to administer oaths, take depositions, and the
usual power o f such officers concerning presentation, demand, protest,
and notice c f protest o f negotiable com m ercial paper, only within the
county in which comm issioned.
A ll notarial com m issions expire July 4, 1939 and are renewable for
three year periods com m encing with that date.
P a rtn e rs h ip s , L im it e d a n d S p e c ia l. Lim ited and special part
nerships are perm itted, but not favored. The statutes on this subject
must be strictly com plied with. A certificate showing prescribed
details and particulars o f the partnership must be signed, acknow l
edged, and filed in the office o f the C ounty R ecorder o f the cou nty in
which the principal place o f business is situated, to be there recorded
and similarly recorded in each cou nty where such partnership has a
place o f business.
There must be an affidavit that the amount stated
in the certificate has been actually Contributed b y each separate partner.
Publication should be m ade o f the certificate and affidavit for six
weeks in tw o newspapers in each senatorial district in which the
partnership is to transact business.
P ow ers o f A t t o r n e y . A power o f attorney to convey, or in any
manner affect real estate, must be acknowledged and recorded. A
revocation o f such pow er must b e acknowledged and recorded in the
same office wherein the original pow er o f attorney is recorded.
R e ce iv e rs . A receiver m ay be appointed on the petition o f either
party to a civil action or proceeding wherein he shows that he has a
probable right to or interest in any property which is the subject o f
the controversy and that such property is in danger o f being lost or
materially injured or im paired. W hen the property o f any person,
partnership, com pany or corporation has been placed in the hands o f
a receiver for distribution, after the paym ent o f all costs, the follow ing
claims shall be entitled to priority o f paym ent. 1. Taxes or other
debts entitled to preference under the laws o f the' U . S. 2. D ebts
due or taxes assessed and levied for the benefit o f the state, cou nty,
or other m unicipal corporations in the state. 3. D ebts owing to
employees for labor perform ed within the 90 days next preceding the
transfer o f such property.
R e c o r d s . A ll instruments conveying or creating liens upon the
real or personal property and all conditional sales must, after having
been signed and acknow ledged, be recorded in the office o f the recorder
o f deeds in the proper cou n ty or counties where the property con veyed
is situated. M ortgages and conditional sales o f personal property
executed b y residents o f the state o f Iow a m ust be recorded in the
county where the maker resides. Unless so recorded, such instru
ments are invalid as to a bona fide purchaser or encumbrancer.
R e d e m p t io n . R edem ption from a sheriff’s sale o f real estate,
whether sold under a general or special execution, m ay be m ade b y
the debtor during a period o f one year and b y a creditor who has a lien
on the propertySold, any tim e after six m onths and within nine m onths
from date o f sale b y paying t o the clerk o f the court the amount pro
vided b y statute, being generally, the amount o f the purchaser’s bid.
with interest at the sam e rate that the judgm ent bears. W ithin the
time nam ed creditors m ay redeem from each other. A fter nine
months, and within one year from the date o f sale the owner o f the
real estate sold has the exclusive right to redeem from such sale, and
in so doing, the d ebtor m ust p ay off the claims o f judgm ent creditors,
who have m ade redem ptions as herein above stated in addition to the
amount originally bid.
R e p le v in . In actions for the recovery o f personal property, the
petition must be verified; and if plaintiff desires immediate delivery
of the property, he shall execute a bond for double the value o f the
property sought to be recovered. The (defendant m ay stay all pro
ceedings and retain the property b y executing a bond to the plaintiff
with sureties to be approved b y the clerk.
S ales. This State has a uniform sales law.
S ales o f G o o d s In B u lk . The sale, transfer or assignment In bulk
of any part o f the whole or a stock o f merchandise and fixtures per
taining thereto otherwise than in the ordinary course o f trade and
in the regular orosecution o f business, is void as against the creditors
o f seller: 1. unless at least seven days before the sale a detailed
inventory is m ade, and 2. unless the purchaser demands and receives
from the seller a written list o f names and addresses o f the creditors
of the seller, with the full amount o f indebtedness due or owing to
each and certified b y the seller under oath to be a full, accurate and
complete list o f his creditors and o f his indebtedness, and 3. unless
the purchaser shall at least seven days before taking possession or
paying the purchase price, n otify personally or b y registered mail
every creditor whose name and address are stated in said list or to
which he has know ledge, o f the proposed sale and o f the price, terms
and conditions thereof.
I
, , ,
The bulk sales law does n ot apply to sales b y executors, admini
strators, receivers, trustees in bankruptcy, or any public officer under
judicial sale. A purchaser not com plying with these provisions b e
comes a receiver and accountable fo the creditors for all merchandise
and fixtures com ing into his possession b y virtue o f the purchase.
S e cu rity fo r C o s t s . Nonresident and corporation plaintiffs m ay,
on m otion o f defendant, be required to file a bond with sureties to be
approved for security o f costs either in Justice C ourt, M unicipal
Court, or D istrict C ourt.
S ta tu te o f F r a u d s . N o evidence except In writing and signed
by the party to be charged or b y his authorized agent, is com petent
relative to the follow ing contracts: 1. In relation to sale o f personal
property, when no part o f the property is delivered and no part o f
the price is paid. 2. In consideration o f marriage. 3. W herein
one promises to answer for the debt, default or miscarriage o f another,
including promises b y executors to pay the d ebt o f decedent from their
own estate. 4. For the creation or transfer o f any interest in lands,
except leases for a term not exceeding one year. 5. Those not to
be perform ed within one year from the making thereof.
S to c k s a n d B o n d s . T he sale o f stocks and bonds is governed by
what is term ed a " B lu e Sky L aw .”
S u p p le m e n t a r y P r o c e e d in g s . W hen an execution has been
returned unsatisfied, plaintiff m ay have an order for the appearance
and examination o f the judgm ent d ebtor; or such order m ay be
obtained after execution has issued upon p roof b y plaintiff s affidavit
or other p roof that debtor has property which he unjustly refuses to
apply to the satisfaction o f the judgm ent. I f any property be found
by such exam ination it m ay b e levied upon; if in the hands o f others
the court m ay require its delivery to satisfy the judgm ent, and
appoint a receiver o f debtors property, forbid the sale thereof and
order E quitable interests in realty to be sold.
T a xes. P roperty shall b e taxed each year, and personal property
shall be listed and assessed each year in the name o f the owner thereof
on the first day o f January.
Real estate assessed every fou r years. N ext assessment in 1941.
A ll p roperty is assessed at 60% o f its actual value and taxed at
actual value. A ll roa d taxes and one-half o f the other taxes levied
are payable w ithout interest or penalty before A pril 1st. T he balance
is payable before O ctober 1st. Delinquent taxes bear interest at
the rate o f. % o f 1 per cent per m onth.
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R eal estate taxes are liens thereon and personal property taxes are
liens upon the owner’s real estate except the hom estead and m ay be
continued as liens from ' year to year b y com pliance with the statute.
Taxes upon stocks o f goods or m erchandise, fixtures and furniture in
hotels, restaurants, room ing houses, billiard halls, m oving picture
shows and theatres are a lien thereon which continues when sold in
bulk and the purchaser is personally liable therefor. T hey are also a
lien upon buildings assessed separate from the real estate.
Taxes assessed on personalty in this state owned by a non-resident is
a lien thereon. Personal p roperty m ay be levied on and sold for taxes
b y a distress and sale. R eal estate is sold for unpaid taxes after notice
b y publication on the first M on d a y o f D ecem ber o f each year subject
to redem ption in three years except when sale is m ade under so called
tax scavenger or public bidder law when less period o f redem ption
exists from the date o f sale b y paym ent to the cou nty auditor the
am ount for which the same was sold and 4 per cent o f such amount
added as a penalty, with 6 per cent per annum on the whole amount
thus m ade from the day o f sale, and the am ount o f all taxes unpaid
and delinquent the first d ay o f April, the interest and costs paid by*
the purchaser, or his assignee for any subsequent year or years with
a similar penalty added as before on the am ount o f the paym ent and
each subsequent year, and 6 per cent per annum on the whole o f such
amount from the day o f paym ent.
T r u s t C o m p a n ie s . D om estic trust com panies are organized under
and governed by the general corporation laws o f the State. Foreign
trust companies doing business in this State are governed and con
trolled b y the general statutes concerning and relating to foreign
corporations doing business in Iow a. (See Corporations.)
T r u s t D e e d s. T h ey must be executed and foreclosed, and consid
ered as mortgages. T hat is, the pow er o f sale on notice is abolished,
and they must be foreclosed b y equitable action.
W a r e h o u s e R e c e ip ts . A n y person, firm, or corporation desiring
to issue elevator or warehouse certificates (or receipts) m ust file a
written declaration with the recorder o f deeds in the cou nty where
his or its elevator or warehouse is situated, setting forth the particu
lars required b y statute, which declaration m ust be recorded b y the
recorder o f deeds. Thereafter he or it m ay issue certificates for
com m odities actually in such elevator or warehouse, but the certifi
cates must conform to the statutory provisions. A register o f
certificates issued must be kept b y the parties issuing them . A
violation o f these provisions, issuing double certificates for the same
property, or selling or encum bering property included in any ware
house receipt, is made a criminal offense. There is also a criminal
statute against issuing false warehouse receipts o r certificates.
W ills. A ny person o f full age and sound m ind m ay dispose o f
his property b y will, subject to the rights o f hom estead and exem p
tion created b y law and the distributive share in his estate given
b y law to the surviving spouse, except sufficient to pay his debts
and expenses o f administration. Also if a testator has spouse, child,
grandchild or parent living he cannot give m ore than 25 per cent o f
his property to a corporation organized for charitable purposes.
W ills, to be valid, m ust be written, witnessed b y tw o com petent wit
nesses, signed b y the testator, or b y som e person in his presence and
b y his express direction. Subscribing witnesses can derive no benefit
from a will, unless there be tw o com petent witnesses besides them .
W ills executed outside o f Iowa, in accordance w ith the laws o f the
State where executed or o f the testator’s dom icile, i f in writing and
subscribed b y the testator are valid in Iowa. I f probated in any
other state or country they shall be adm itted to probate in this
State on the production o f a co p y o f such will, and o f the original
record o f probate thereof, authenticated b y the attestation o f the
clerk o f the court in which such p robation was m ade or o f the probate
judge, under seal, if they have one. A ll wills m ust be probated
before they can be effectual.
SYNOPSIS OF
TH E L A W S OF KANSAS
RELATING TO
BANKING AND COMMERCIAL USAGES
R evised b y D o r a n , K l i n e , C o s g r o v e . J e f f r e y & R
N ational Bank o f T opeka B ldg., T opeka, Kans.
(See card in A ttorneys List.)
u ssell,
A c k n o w le d g m e n t s . (See Deeds.)
A c t io n s . Civil actions are conducted as required b y a code o f
procedure. Security for costs must be given or resident plaintiffs
m ay deposit $15 in lieu o f b on d for cost. Nonresident plaintiffs
m ay b e required to give bond fo r costs.
A d m in is t r a t io n o f E sta te s . P robate courts in each cou nty
have jurisdiction o f estates. Dem ands against the estate are divided
in to the follow ing classes: First, reasonable and necessary funeral
expenses. Second, reasonable sum s fo r necessary expenses o f last
sickness o f decedent including wages o f servants and fo r the appro
priate and necessary costs o f administration. Third, judgm ents
rendered against the decedent in his lifetim e. A ll judgm ents or liens
upon the property o f the decedent shall be paid in the order o f their
priority. Fourth, all other dem ands d u ly proved, p rovided that
debts having preference b y laws o f th e U nited States and demands
having preference b y laws o f this state shall be p a id according to such
preference.
T he executor m ay at the expiration o f nine m onths proceed to pay
the debts and other item s due from the estate according to their
classification i f said executor does n ot have notice o f demands against
the estate o f decedent which will authorize him to represent it in
solvent. E very executor and adm inistrator shall have one year from
the date o f his appointm ent fo r the settlem ent o f the estate. Dem ands
o f creditors against the estate m ust be m ade within nine m onths
from the date o f the first published notice o f the appointm ent o f
said executor or adm inistrator and demands n ot thus exhibited shall
be forever barred. Dem ands payable at a future d ay m ay be allow ed
at the present value thereof or the cou rt m ay order the executor
or administrator to retain sufficient funds to satisfy the same upon
m aturity; or the heirs, devisees, or legatees m ay be perm itted to
give bond to a creditor fo r the p aym ent o f his dem ands according
t o the term s thereof.
i
U pon the filing for record in the probate cou rt o f the proper cou n ty
o f an authenticated co p y o f his letters or other record o f authority
and a certificate that the same are in force, a fiduciary appointed b y
a cou rt o f com petent jurisdiction in another state or cou n try m ay
assign, extend, release, satisfy, or foreclose any m ortgage, judgm ent,
or lien, or collect any debts secured thereby belonging to the estate
represented b y him. T he sale, lease or m ortgage o f any real estate
acquired on execution or ju d icial sale b y a foreign representative
shall be m ade pursuant t o statute.
. . .
N o bank or other corporation unless organized under the laws o f
and has its principal place o f business in this state or is a national
bank located in this state shall be appointed or authorized directly
or indirectly to act as a fiduciary in this state except in ancillary pro
ceedings. In cases o f dom iciliary administration, letters testa
m entary or o f adm inistration shall in no case be granted t o a non
resident o f this state.
A ffid a v its . Affidavits m ay be m ade in or out o f the State b y the
same authority and with like authentication, as depositions.
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BANKING AND COMMERCIAL LAWS— KANSAS
A lie n s. Aliens m ay hold real estate. Rights o f Intestate alien
forfeited to state If alien citizen o f a foreign cou ntry which has no
treaty relations with the United States affecting the rights o f an alien
to hold property in this cou ntry and such alien has no relatives or
next o f kin who are citizens o f the United States.
A r b it r a t io n s . Persons having controversies m ay subm it them to
the arbitration o f any person or persons m utually agreed upon and
m ay make such submission a rule o f any cou rt o f record in the State.
T he parties m ay enter into arbitration bonds conditioned for the
faithful perform ance o f the award. Award to be filed in cou rt agreed
on and judgm ent entered as on a verdict o f ju ry . Parties m ay have
process, orders, and execution as in civil cases.
A rre s t. U pon the plaintiff filing a bond in double am ount o f his
claim, a defendant m ay be arrested in a civil action upon filing an
affidavit with the clerk o f the cou rt that he has assigned, rem oved or
begun to rem ove his property ou t o f the jurisdiction o f the court with
intent to defraud his creditors; or has begun to con vert his property
Into cash, for the purpose o f placing it beyond the reach o f his creditors;
or has property which he fraudulently conceals; or fraudulently con
tracted the debt.
A s s ig n m e n t (V o lu n t a r y ) f o r C r e d ito r s a n d I n s o lv e n c y . Such
assignments m ay be m ade for benefit o f all creditors and should be
acknowledged and recorded in the same manner as real estate co n ve y
ances. Assignee in trust m ust file inventory within thirty days in
office o f clerk o f district cou rt o f cou nty in which assignor resides
and give bond in double am ount o f appraised value o f estate assigned.
Only discharges debtor to am ount o f paym ents m ade.
A t t a c h m e n t . A t or after the com m encem ent o f an action an
attachm ent m ay be had by plaintiff. T he affidavit o f the plaintiff,
his agent, or attorney must be filed, stating the nature o f the claim
that it is just, the am ount affiant believes ought to be recovered,
and the existence o f som e one or m ore o f the follow ing grounds: 1.
T h a t defendant is a foreign corporation or a non-resident o f the State
(but in this case for no other claim than a dem and arising upon con
tract, judgm ent, or decree, unless the cause o f action arose wholly
within the limits o f the State). 2. T hat the defendant absconded
with the intention to defraud his creditors. 3. That the defendant
has left the cou n ty o f his residence to avoid a service o f summons,
4 . T h a t he so concealed him self that sum mons can not be served
upon him . 5. T h a t he is about to rem ove his property or a part
thereof out o f the jurisdiction o f the cou rt with the intent to defraud
his creditors. 6. T h a t he is abou t to con vert his property or a
part thereof Into m oney for the purpose o f placing it beyond the
reach o f his creditors. 6. H e has property or rights in action which
he conceals. 8. Has assigned, rem oved, or disposed of, or is about
to dispose o f his property, or a part thereof, with the intent to defraud,
hinder, or delay his creditors. 9. Or fraudulently contracted or
Incurred the d eb t on which the suit is brought. 10. Or that the
su*t is brought for dam ages from the com m ission o f som e felony or
misdem eanor. 11. Or that the d eb tor has failed to pay for any
article or thing delivered for which b y con tract he was bound to pay
upon delivery. A bond in double the am ount o f plaintiff's claim is
required except where b y the attachm ent affidavit defendant is shown
to be a non-resident o f the State.
B a n k s a n d B a n k in g . There is no constitutional provision relating
to banks, except banks o f issue. Other banks are organized under a
general act. The Charter, in addition to the requirements o f the
law relating to corporations, shall contain the names and places o f
residence o f the stockholders and the am ount o f stock subscribed by
each, and m ay contain such other provisions, not inconsistent with
law, as the stockholders m ay deem proper, and shall be subscribed by
at least five o f the stockholders o f the proposed bank who are residents
o f the State o f Kansas. B oard o f D irectors not less than five nor
m ore than tw enty-five in number, a m ajority o f whom shall be resi
dents o f the cou nty or adjoining counties to that in which the bank is
located. T he word “ S ta te” shall be included in the title. T he full
am ount o f the capital stock must be subscribed before the charter is
filed. T he bank shall transact no business, except the election o f
officers, the taking and approving o f their official bonds, and the
receipts o f paym ents on account o f subscriptions to its capital stock,
until it has been authorized b y the bank com m issioner to com m ence
business. Capital stock shall be subscribed in full before charter is
filed. T he capital stock shall be not less than $20,000 in unincor
porated towns and in cities o f the third class; not less than $30.000 in
cities o f second class; not less than $50.000 in cities o f the first class
with $100.000 required in cities o f m ore than 75,000 population.
M anaging officers o f banks m ust qualify b y ownership o f stock o f par
value o f at least $500.00. N o bank shall em ploy its m oney directly or
Indirectly in trade or com m erce b y buying and selling goods, chattels,
wares and merchandise, and shall not invest in the stock o f any bank
or corporation except federal land banks, and banks m ay becom e m em
bers o f a federal reserve bank m ay d o anything necessary to appro
priate, acquire and m aintain insurance o f its deposits in accordance
with the provision o f any federal law and its amendments authorizing
the insurance o f bank deposits and m ay pay all assessments levied
for such insurance. T he Federal D eposit Insurance Corporation,
created b y Sec. 12B o f the Federal Reserve A ct, as amended, is
authorized and em powered to act without bond as receivor or liqui
dator o f any banking institution, the deposits in which are to any
extent insured b y said corporation and which shall have been closed
on account o f inability to m eet the dem ands o f its depositors. N o
bank m ay . . . m ake any loans on the security o f the shares o f its
own capital, nor be the purchaser or holder o f any such shares, except to
prevent loss upon a debt previously contracted in good faith, nor loan
m ore than 5 per cent o f capital and surplus to any officer, agents, or
em ployees o f bank. A ll such property com ing into the posession o f the
bank in the collection o f debts shall not be considered assets after the
expiration o f six m onths. Banks m ust m aintain a reserve consisting
o f 15 per cent o f am ount o f its dem and deposits and 5 per cent o f
am ount o f Its tim e deposits. One-half o f said reserve shall be in cash
or balances in correspon den t-banks as prim ary reserve; other half
m ay be in certain bonds as secondary reserve. Banks m ay borrow
m oney for tem porary purposes if not in excess o f 100 per cent o f paidup capital and 60 per cen t o f surplus. Banks in liquidation or in
charge o f a receiver m ay borrow in excess o f said percentages as bank
com m issioner should perm it. A ll banks m ay hold, purchase and con
v ey real estate for; (a) Building and furniture necessary in transaction
o f business; (b) Satisfaction o f deb ts: (c) Purchase under judgm ent
or m ortgage foreclosure. R eal estate acquired under (b) and (c)
m ay b e h e l d five years, but. m ust b e sold at public or private sale
within thirty days thereafter, unless Bank Com m issioner grants
extension for not to exceed four years. Officers are personally liable for
paying overdrafts. N o t m ore than 15 per cent o f the capital stock
and surplus can be loaned to any one person, com p any or corporation.
Penalties are provided for false statem ents and for receiving deposits
when the bank is in a failing con dition. Private banks are subject to
the provisions o f the law. Since 1929 all banks must be incorporated.
T h e Bank Com m issioner or d ep u ty must m ake exam ination o f each
bank at least tw ice each year. Four reports per annum are required
and the com m issioner m ay call for others. Has authority to examine
any co-partnership, association or corporation located in or organized
under the laws o f Kansas or any other state, holding as much as
25 Der cent o f any capital stock o f any banking or trust com pany doing
business in Kansas. I f paid up capital n ot less than $100,000 m ay
exercise fiduciary powers. A pplication shall be m ade to Bank C om
missioner and special perm it secured. Bank shall segregate assets so
held and keep separate books therefor. Bank shall not use such funds
in con du ct o f ban k’s business w ithout first setting aside in Trust D e
partm ent U. S. bonds or other securities approved b y the Bank C om
missioner. Shareholders are additionally liable for a sum equal to the
par value o f stock owned and no m ore provided such liability shall not
a p p ly with respect to shares issued b y any bank after M arch 24, 1937.
R especting shares issued prior to M arch 2 4,1937 .banks m ay term inate
such additional liability b y causing notice o f prospective term ination
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t o be published according to statute. B angs m ay now issue pre
ferred stock o f one or m ore classes w ith right o f cum ulative dividend
not exceeding six per cent and with assent o f seventy-five per cent o f
the stock and approval o f the bank com m issioner, said stock carrying
no liability for debts o f bank or any assessment. I f the Bank C om
missioner finds a bank insolvent or violating any banking law. he
shall take charge and m ay appoint a special deputy to handle affairs
o f the bank for a period o f not longer than six m onths, at which time
C om m issioner must appoint receiver, w ho serves under orders o f
District C ourt. Claim s o f creditors m ust be filed with receiver
within one year from appointm ent.
N ational banks by vote o f seventy-five per cent o f stock and after
examination by Bank Comm issioner and approval o f com ptroller o f
currency m ay becom e state banks.
D eputies for Insolvent banks m ay, subject to approval o f bank
com m issioner, borrow m oney and pledge assets. Receivers in charge
o f bank and creditors m ay reorganize the bank if approved by 80
per cent o f depositors, general creditors and Bank Commissioner.
Credit unions are subject to exclusive supervision o f the bank
com m issioner, and m ust file reports on form s provided by com m is
sioner.
B ills o f E x ch a n g e . (See N otes and Bills o f Exchange.)
B ills o f L a d in g . These are governed b y the .comm on law.
B u lk S ale. “ T h e sale or disposal o f any part or the whole o f a
stock o f merchandise or the fixtures pertaining thereto, otherwise
than in the ordinary course o f his trade or business, shall be void as
against the creditors o f the seller, unless the purchaser receives from
the seller a list o f the names and addresses o f the creditors o f the
seller certified by the seller under oath to be a com plete and accurate
list o f his creditors and Unless the purchaser shall, at least seven days
before taking possession o f the property, or before paying therefor,
notify In person or b y registered mail, every creditor whose name
and address is stated in said list, or o f whom he has know ledge, o f
the proposed sale."
In lieu o f notice, seller m ay give to purchaser a bond conditioned
upon the paym ent o f debts due creditors o f the seller and upon which
creditors m ay sue in an am ount equal to present value o f the property
transferred and signed b y at least tw o resident sureties; the bond to
be approved by and filed with the clerk o f the district cou rt o f the
bounty where the property is sold is located before purchaser takes
posesssion or pays.
C h a tt e l M o r tg a g e s . A m ortgage o f personal property, where the
property is not im m ediately delivered to the m ortgagee who retains
actual and continuous possession thereof, is void as against creditors
of the m ortgagor and as against subsequent purchasers and mortgages
In good faith, unless the m ortgage, or a co p y thereof is filed In the office
o f the register o f deeds in the cou n ty where the property is situated,
and if the m ortgagor is a resident o f the state, then also in the cou n ty o f
which he is at the tim e a resident. A m ortgage so filed is invalid
as against creditors or subsequent purchasers in good faith after
tw o years unless within thirty days next preceding the expiration
o f such tw o years and each tw o years thereafter the m ortgagee, his
agent or attorney, makes an affidavit exhibiting the interest o f the
m ortgagee in the property and showing the balance unpaid on the
debt, and files the same in the same manner as the m ortgage. In
case o f default the m ortgagee m ay sell in the manner p rovided in the
chattel m ortgage.
A m ortgage or exem pt personal property Is Invalid unless executed
jointly b y husband and wife where that relation exists unless it be
given for the purchase price o f the m ortgaged chattel
L ivestock pasturing lien, d uly recorded, has priority over other liens.
C o lla te ra ls . G overned b y the com m on law on Bailments and
Pledge.
C o n d it io n a l S a les. C onditional contracts, b y which the owner
ship remains in the party proposing to sell until the purchase price
is paid, are treated as ch attel'm ortga ges and must be filed in the
office o f the register o f deeds in the same manner as such chattel
mortgages but remain in force w ithout the renewal affidavit required
In chattel m ortgages.
C o n t r a c t s . All contracts which, b y the com m on law, are join t
only, shall be construed to be join t and several. T he use o f private
seals in written contracts (except seals o f corporation) is abolished,
and in suits upon written contracts, as to the perform ance o f con
ditions precedent, it is sufficient after setting out the con tract to
allege generally that plaintiff has fully perform ed the con tract.
C o n v e y a n c e s . (See D eeds.)
C o r p o r a t io n s . C hapter 152 o f the 1939 Session Laws o f the
State o f Kansas largely revises the Kansas C orporation Law. C or
porations are form ed under a general statute requiring three or m ore
incorporators. Incorporation is effected b y filing in the office o f the
Secretary o f State articles o f incorporation signed and acknow ledged
b y each incorporator; recording a certified co p y o f the articles with
the R egister o f D eeds for the cou n ty where the registered office o f
the corporation in the state is located, and paym ent o f a $25.00
application fee, capitalization fee and filing and recording fees. T he
capitalization fee is one-tenth o f one per cent o f the authorized capital
stock upon the first $100,000.00; one-twentieth o f one per cent on
all in excess o f $100,000.00. Duration o f corporate existence is limited
t o n ot to exceed one hundred years. E ve ry corporation m ust m ain
tain a registered office in the state and a resident agent w ho m ay be
either an individual or a corporation residing in or located in the state.
T h e nam e o f such corporation m ust be displayed at its registered office.
N o corporation shall com m ence a ctive business until its corporate
existence has been established in the manner outlined above and
the am ount o f capital with which it will begin business as stated in
the articles o f incorporation fu lly paid in; and an affidavit filed in the
office o f the Register o f D eeds o f the cou n ty where the registered
office o f the corporation is loca ted ; and an affidavit signed b y the
Treasurer stating the am ount o f capital which the articles o f incor
poration recite will be paid in before com m encem ent o f business
has been fully paid. T h e nam e adopted m ust indicate the nature
o f the business and shall b e follow ed b y the word “ Incorporated”
or the abbreviation “ In c.” except banks and corporations n o t for
profit. T he articles o f incorporation m ust state the nam e o f the
corporation, the location o f its registered office, the nam e o f its resi
dent agent, the nam e and address o f the registered agent, the nature
o f the business to be carried on, the tota l num ber o f shares o f stock
which tbe corporation shall have authority to issue, the par value
o f each share, or a statem ent that all such shares are to be w ithout
par value if the corporation is to issue on ly one class o f stock . I f
the corporation is to be authorized t o issue m ore than one class o f
stock the articles should also set forth the total num ber o f shares
o f all classes which the corporation shall have authority to issue,
the num ber o f shares o f each class that are to have a par value and
the par value o f each share o f each class or the num ber o f shares
th a t are to be w ithout par value, the consideration therefore and a
statem ent o f all preferences, rights and lim itations w ith respect to any
class or classes o f stock . T h e articles shall also con tain a grant o f au
th ority to the board o f directors to fix b y resolution any such powers,
preferences, lim itations or qualifications on classes o f stock, and shall
set forth the m inim um am ount o f capital with which the corporation
w ill com m en ce business, w hich shall n ot b e less than $1,000.00, the
names and places o f residence o f each incorporator, the duration o f the
corporate existence and the num ber o f directors
Num erous o th er
provisions in the articles o f incorporation are permissible b u t n o t
required. B y-law s m ay be am ended in accordance with provisions
o f the articles o f incorporation or b y the board o f directors su b je ct
to amendment, alteration or repeal b y m ajority vote o f the s to c k
holders. A n annual statem ent shall be m ade b y each corporation
for profit except banking and insurance corporations and buildin g
BANKING AND COMMERCIAL LAWS— KANSAS
and loan associations on or before M arch 31st o f each year on forms
furnished b y the Secretary o f State showing a com plete detailed
statement o f the conditions o f the corporation. Failure to file this
report within ninety days from that tim e works a forfeiture o f incor
poration, and works a penalty for each day the report is delayed.
Dividends m ay be declared from net profits or net assets in excess
o f capital as com puted in accordance with provisions o f the statute.
Corporations m ay borrow m oney and m ay pledge prop erty and
income therefor; cannot engage in agricultural, dairying or horti
cultural business or learned professions.
Corporations (except banks, insurance, building and loan companies
and those n ot organized for profit) must pay an annual franchise tax
on paid-up capital as follow s: N o t over $10,000, $10; over $10,000;
and not over $25,000, $25; over $25,000 and not over $50,000, $50;
over $50,000 and not over $100,000, $100; over $100,000 and not over
$250.000, $125; over $250,000 and not over $500,000, $250; over
$500,000 and not over $1,000,000, $500; over $1,000,000 and not
over $2,000,000, $1,000; over $2,000,000 and not over $3,000,000,
$1,500; over $3,000,000 and not over $5,000,000, $2,000; over
$5,000,000. $2,500.
C o sts. In the D istrict C ourt a bond for costs or a cash am ount
o f fifteen dollars in lieu thereof m ust be deposited b y resident plaintiffs.
Non-resident plaintiffs m ay be required by order o f court to give
additional security for costs. In Justice Courts cost deposits m ay be
$3.00 to $5.00, depending on custom o f Justice. In C ity Courts cost
deposits are custom arily $5.00., nonresident plaintiffs, $3.00 residents.
C o u rts . Term s and Jurisdiction. District courts, holding two to
three terms a year in every county, have general original jurisdiction
In law and equity. - Regular term s o f the probate court are held In
each county on the first M on day in each month and special or adjourned
terms m ay be held as business m ay require. Justice’s jurisdiction in
civil actions for the recovery o f m oney, $300; to recover specific
personal property not valued in excess. $300. The supreme court is
the court o f last resort. C ity courts with jurisdiction in civil actions
for amounts not in excess o f from $300 to $1,000 are established in
the following cities: Arkansas C ity, Atchison, C offeyville, Kansas
City, Leavenworth, T opeka, and W ichita. Procedure corresponds
to that o f justice courts.
D ays o f G r a c e . Abolished.
D eed s. N o .particular form s o f conveyances are required. As
a rule the form used in other States is sufficient. As between
the parties conveyances are valid without being recorded. Deeds
may be valid as against attaching creditors without being recorded.
The wife should join with her husband in the conveyance, and any
conveyance or m ortgage o f the homestead without her uniting in the
same is absolutely void. I f the wife has never resided in the State
her signature is not necessary. Grantors need not attach any seal
or scroll to their signatures, and no witnesses are necessary unless
grantors are unable to write. Corporations convey by deed, sealed
with the corporate seal and signed by president, vice-president, pre
siding m ember, or trustee. T he acknowledgment must be before a
Judge or clerk o f the district court having a seal, a justice o f the
peace, notary public, cou nty clerk, register o f deeds, m ayor or clerk
of an incorporated city. E very notary public shall add to his official
signature the date o f the expiration o f his commission as notary
public. In cases where the acknowledgm ent is made out o f the
State it must be m ade before a court o f record, a clerk, or other
officer having the seal thereof, a commissioner o f deeds for Kansas.
Justice o f the peace or notary public, or before any consul o f the
United States resident in any foreign country or port. Deeds and
mortgages must be recorded in the office o f the register o f deeds o f
the county in which the land is situated, or they will be void as to
subsequent grantees in good faith without notice.
D eeds o f T r u s t in the nature o f mortgages are not used so far as
sale b y the trustee is concerned. (See Trusts, etc.)
D e p o s itio n s . Depositions are taken upon notice to the opposite
party. Courts are also authorized to appoint commissioners to take
depositions. T he depositions m ay be taken before any person author
ized to take acknowledgm ents. Each witness must sign his own
deposition. T he notice must be attached to the depositions and
inclosed with them. D epositions should be taken on the date named
and some portion on each successive day or the officer before whom
the depositions are taken should note continuances or adjournm ents
from day to day. Sundays and national holidays not being regarded.
If taken by interrogatories and cross-interrogatories, under agreement
or otherwise, each interrogatory and cross-interrogatory must be
put to each witness and answered so far as he can answer it, and the
answer written down. I f the depositions are taken before the m ayor,
notary public, or com m issioner appointed as aforesaid, they must
be certified under his official seal. I f before any officer not possessing
a seal, a certificate must be annexed, under the seal o f the county or
the great seal o f the State, that the officer b y whom the depositions
were taken was. at the tim e o f taking the same, such officer as he
represents himself to be in his certiflctae. This should be attached
to the certificate o f the officer (not possessing a seal) who too k the
depositions.
D e s ce n t a n d D is t r ib u t io n . T he homestead is the absolute
property o f the w idow and children— one-half in value to the widow,
the other half to the children, when both survive. The homestead
shall not be subject to forced partition unless the surviving spouse
remarries nor until all the children arrive at the age o f m ajority.
When a resident o f the state dies testate or intestate the surviving
spouse shall be allow ed for the benefit o f such spouse and the de
cedent’s minor children during the period o f their m inority from the
personal property o f which the decedent was possessed or to which
he was entitled at the time, o f death the follow ing: One, wearing
apparel, fam ily library, pictures, musical instruments, furniture and
household goods, utensils and implements used in the home, one
automobile and provisions and fuel on hand necessary for the sup
port o f the spouse and m iner children for one year; T w o, other per
sonal property not exceeding an appraised value o f $750.00. Onehalf o f all Teal estate owned b y husband during coverture, and not
conveyed b y husband and wife, nor sold at judicial sale, and not
necessary to p ay debts goes to the wife in fee sim ple: except o f land
sold by husband whose wife never before such conveyance resided
in the State. Rem aining real estate goes to the surviving children,
and living issue o f prior deceased children, children taking per stirpes,
in equal shares, or, if none, the whole estate goes to the widow. For
want o f wife or child or living issue o f deceased child the whole estate
goes to the parents. T he rules applicable to w idow o f deceased
husband apply to hfisband o f deceased wife. Illegitim ate children
inherit from the m other, and also from the father, if his recognition
has. been general and notorious, or in writing. W hen a child w ould
inherit from either parent, such parent will inherit from the child.
Personal property descends in the same way as real estate except
exempt household furniture is sole property o f surviving spouse.
Property descending b y law or will is subject to an inheritance tax,
varying in percentage according to relationship and am ount. Special
statute provides for administration and distribution o f estate o f
persons dying w ithout know n heir or will. (Chapter 168, Laws. 1835).
D ow er. Dow er is abolished by law. (See Descent and D istri
bution.)
E x e cu tio n s m ay be ordered as soon as judgm ent is obtained if stay
has not been granted or supersedeas given. Executions running to
the sheriff o f the cou nty where the levy is to be m ade, m ay be levied
on property in any county o f the State and issue only out o f court
where judgm ent obtained except where abstract or transcript o f justice
Judgment filed in district court o f same county as that o f the justice
court, execution will issue on said judgm ent only out o f said district
court. There is no stay o f execution in the district court except by
supersedeas bond which m ay be given on appeal. In justice's courts,
by filing bond, stays o f execution are granted as follows. On any
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2009
judgm ent for $20 and under, thirty days; over $20 and under $50,
sixty days; over $50 and not exceeding $100, ninety days; over $100,
one hundred and twenty days. Real estate is only subject to execu
tion issued out o f district court o f county wherein judgm ent rendered
or abstract or transcript from justice o f the peace filed. Executions
are liens on personal property only from time o f levy. Real estate
sold on execution or order o f sale, giving the d ebtor eighteen months
In which to redeem. T he d ebtor is entitled to possession o f the
property and rents and profits, during the period provided for redem p
tion. except in case o f waste. R eceiver m ay be appointed to prevent
waste and may use so much o f rents and profits as are necessary to
repair waste and pay costs o f receivership. Surplus if any to be paid
to judgm ent, d ebtor free from the lien o f any judgm ent.
E x e m p tio n s. Homestead o f 160 acres o f farming^land, or o f one
acre within an incorporated town or city, with buildings, thereon,
appurtenant to the use o f the property as a hom estead, unlimited in
value. T o the head o f a fam ily the follow ing articles o f personal
property; All books, pictures, musical instruments, pews in churches,
burial lots; wearing apparel o f d ebtor and fam ily; beds and bedding,
cooking utensils, stoves and appendages necessary for use o f fam ily;
sewing machine and all other household furniture not exceeding $500;
tw o cows, 100 chickens or other dom estic fow l, ten hogs, one horse
or m ule; yok e o f oxen or in lieu thereof span o f horses or m ules;
twenty sheep; food necessary for support o f stock hereinbefore men
tioned; also one wagon, tw o plows, one drag and other farm ing utensils
not exceeding $300; all provisions and fuel necessary for support o f
fam ily for one year; necessary tools and implements o f m echanic,
miner or other person used and kept for carrying on trade or business,
and in addition thereto stock in trade not exceeding $400; library,
implements and office furniture o f professional man. A lso personal
earnings o f the d ebtor earned during three m onths preceding the
garnishment or attachm ent, and three m onths’ pension m oney, where
such earnings or pension m oney is necessary for the support o f the
debtor’s fam ily, but 10 per cent o f such earnings m ay be required to
be pkid in and applied on the judgm ent.
F o re ig n C o r p o r a t io n s . A foreign corporation seeking to do
business in this State m ust m ake application to the State Charter
Board showing a co p y o f its charter, or articles o f incorporation, the
place where the principal office is located, place where the principal
office in this State is to be located, nature and character o f the
business to be conducted in this state, names and addresses o f officers,
trustees or directors, statement o f assets and liabilities subscribed and
sworn to b y president and secretary o f the corporation, written con
sent that actions m ay be com m enced against it in courts o f this state,
and paying to the State Treasurer the same fees upon the am ount
o f capital invested or used in this state as a dom estic corporation.
A registered office m ust be m aintained in the State with a resident
agent who m ay b e an individual or a corporation.
When it receives a certificate authorizing it to d o business, it is then
subjected to substantially the same provisions, and judicial control
as a dom estic corporation. Annual statements m ust be filed on or
before M arch 31st, giving condition on the 31st o f Decem ber preceding.
I f a foreign corporation fails to file with the secretary o f state the state
ment required b y law within ninety days after the tim e provided for
its right to d o business in the State is thereby forfeited.
A penalty
is imposed o f $100 and in addition $5.00 for each day this report is
delayed. Foreign corporations m ust pay an annual franchise tax on
that portion o f their capital represented b y its property and business in
Kansas on the same basis as dom estic corporations. Failure o f foreign
corporations who transact business in Kansas, other than interstate
com m erce to com ply with this law renders them subject to ouster and
receivership proceedings on the part o f the State but does not now
affect the right o f such foreign corporation to sue in the courts
o f this State. A foreign corporation transacting business in Kansas
with a m ajority o f its property located in Kansas m ust have tw o
directors residents o f the State.
F r a u d . (See Attachm ents, Arrest, and Assignments.!
G a r n is h m e n t . At or after the tim e o f beginning an action to
recover damages founded upon contract, judgm ent or decree, or after
the issuance o f an execution and before it is returned, if the plaintiff
cause to be filed with the clerk an affidavit stating the amount o f his
claim over and above all offsets, that he believes that some person,
naming him, indebted to, or has property in his possession or under his
control belonging to the defendants, and that such defendant has no
property liable to execution sufficient, to satisfy his debt, and that the
indebtedness or property so held is not b y law exem pt from seizure or
sale upon execution, the clerk shall issue a garnishment summons. In
justice courts the affidavit differs from that acquired in district court
actions only in that affiant states that plaintiff is in danger o f losing his
claim, in lieu o f the allegations that the defendant has not property
subject to execution sufficient to satisfy the debt. In the district courts
bond in double am ount claim ed is required on garnishments before
judgm ent, except- where defendant is a non-resident or when garnish
ment is issued on a judgm ent rendered in any court. N o bond re
quired in justice courts. Defendant m ay at or after com plaint is filed
and before judgm ent, release garnishment b y entering into undertaking
with sufficient surety to the effect that they will pay on dem and any
judgm ent rendered against defendant. T he bond shall be not less than
double am ount o f plaintiff’s claim .
N o garnishment shall be issued against salary or wages o f any
persons dropped from public em ergency relief work by obtaining
regular em ploym ent until after the expiration o f 60 days from the
time o f his leaving such relief work.
G u a r a n ty C o m p a n ie s . (See Trust Companies.)
H o lid a y s. T he legal holidays are: Sundays; January 1 (N ew Y ear’s
D a y ); February 12 (Lincoln's b irth d ay); February 22 (W ashington’s
b irth day); M a y 30 (M em orial D a y ); July 4 (Independence D a y ):
first M onday in Septem ber (Labor D a y ); O ctober 12 (C olum bus D ay)
(but does not affect com m ercial paper); N ovem ber 11 (Arm istice
D a y ): Thanksgiving; and Decem ber 25 (Christmas D a y ). If any
o f these days fall on Sunday the next secular or business day is a legal
holiday. Legal or business proceedings had on a holiday, except
Sundays, are valid.
H u s b a n d a n d W ife . (See M arried W om en.)
I n ju n c t io n s . Injunctions m ay be granted by a district court or
by the judge thereof at the beginning o f an action or afterwards. In
his discretion. A bond must be given to protect the defendant
against any loss in case the injunction is wrongfully obtained. In
the absence o f the judge from the cou n ty the probate judge may
grant tem porary injunctions.
I n s o lv e n c y . (See Assignments.)
I n t e r e s t. Legal rate, 6 per cent, but 10 per cent m ay be agreed
upon. Excess o f 10 per cent is forfeited, and in addition thereto there
shall be deducted from the am ount due for principal, with lawful
interest, an amount equal to the interest contracted for in excess of
10 per cent. T he legal interest originally contracted for continues
until the debt is paid, and no additional interest can be charged by
way o f penalty for default except from date o f default. A purchaser o f
a negotiable note in due course takes the note free o f the usurious taint.
J u d g m e n t s . Judgments o f courts o f record are liens on the real
estate o f the d ebtor within the cou nty from the first day o f the term
at which the judgm ent was rendered; but judgm ents b y confession
and judgm ents rendered at the same term during which the action
was com m enced are liens only from the day on which the judgm ent
was rendered. Judgments lose their priority over subsequent judg
ments unless execution is issued and levied within one year after
iudgment. A certified cop y o f the judgm ent appearing o f record in
the district court m ay oe filed in the office ot the clerk o f the district
court o f any other cou nty ana the judgm ent will then be a lien on
real estate in that countv. Abstracts or transcripts o f justice court
judgm ents m ay be filed in the district court or the same cou nty,
are liens on real estate in such county fro m the date o f filing, after
which executions issue only out o f said district cou rt on such judgm ents.
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BANKING AND COMMERCIAL LAWS— KANSAS
J u r is d ic t io n . (See C ourts.)
(¿eases. In farm leases, burdensom e provisions are unlawful and
unenforceable, but a fair and reasonable rent is valid and m ay be
secured b y liens on tota l crops grown on the leased land and on liv e
stock raised on share or lease and on receipts from pasture received
b y tenant.
L ic e n s e . Agents o f Insurance com panies are required to take out
licenses from the superintendent o f insurance. Cities are authorized
t o enact license ordinances and certain classes o f business are required
t o take ou t a license. Transportation o f m otor fuels over highways
m ust b e licensed. T h e owner o f a m otor vehicle, trailer or sem i
trailer m ust have the sam e registered and obtain a certificate o f title
therefor.
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Persons seeking perm ission t o practice the healing art m ust be
licensed, and are required to take an exam ination for license. N o
persons, individuals, firms, co-partnerships, corporations and asso
ciations shall engage in the sale o f any cereal m alt beverage, whether
for wholesale or retail, w ithout having first secured a license. A n y
dealer p rom oting com m unity sale o f livestock m ust be properly
licensed. Operators and chauffeurs w h o drive m otor vehicles upon a
highway m ust be licensed, excepting (1) persons operating a vehicle
in the service o f the arm y, navy, or m arine corps o f the U nited States;
(2) persons driving farm m achinery tem porarily m oved on to high
w a y ; (3) non-resident, 16 years o f age, w ho has in possession a valid
operator’s license issued in his hom e state; (4) non-resident over
18 years o f age w h o has a valid operator’s license, issued in his hom e
state; (5) non-resident,' 18 years o f age, whose hom e state does n ot
require license, m ay operate for a period o f n ot m ore than 90 days,
any calendar year, i f operating d u ly registered vehicle.
L ie n s . M echanics, m aterial-men, and laborers, both original co n
tractors, and sub-contractors, and laborers o f sub-contractors are
entitled to obtain liens upon real estate for labor perform ed or material
furnished in the erection or repair o f any building. Sworn statem ents
item ized as fully as practicable as to the am ount o f the claim, for
w hat and when It was rendered and b y whom , giving names o f con
tractor and owner and description o f property and date o f last m ateria]
furnished, m ust be filed in the office o f the clerk o f the court. Original
con tractor’s lien claim m ust be filed within 4 m onths from date o f
last materials, or labor furnished and others entitled to lien within
sixty days after last materials or labor furnished. Lien claimants
other than original contractors, must give im m ediate notice o f filing
o f lien claim to owner or person in possession o f the premises, where
that m ay be done, otherwise must post notice on the premises.
A ction to foreclose lien m ust be begun w ithin one year a fter filing claim
L ivery-stable keepers, forw arding m erchants and com m on carriers have
liens. (See Judgm ents.) A ttorn eys have lien on papers and funds in
hand for general balance o f com pensation and have lien on m oneys
In hands clients adversary due client in any m atter, action or proceed
ing, in which the attorney was em ployed for services therein from the
tim e o f service on the adverse p a rty, in the manner o f a sum m ons, o f
written notice o f the lien.
Blacksm ith, horseshoer, wagon maker, keeper o f garage or any
other person shall have lien on any goods, chattels, horses, wagons,
autom obiles, etc. for value o f labor and material used thereon as long
as said property remains in his possession. Such person m ay retain
lien b y filing statem ent thereof under oath in office o f Register o f
D eeds within thirty days after parting with possession. Such liens
hold priority over prior recorded chattel m ortgages. Threshers
shall have lien on grain threshed and same must be filed within fifteen
days from com pleting threshing and has priority over prior chattel
m ortgages. A ction m ust be brought within ninety days after filing
o f thresher’s lien or sam e w ill b e deem ed to have been abandoned.
Liens similar to ordinary m echanics lien are given by statute for
m aterials and labor furnished on oil leases in their developm ent,
and are foreclosed in like m anner. A n y person w ho transports oil
field equipm ent under express con tract shall have a lien u p on the in
terest o f owner or operator.
A n y rent due for farm ing land shall b e a lien on crops grow ing or
m ade on the premises. A n y person renting pasture lands under con
tra ct w ith owner for the purpose o f pasturing cattle, horses, sheep or
other livestock shall have a first and prior lien up on all such livestock
t o secure the paym ent o f said lien and said lien shall be prefererd to
th a t o f a n y prior ch attel m ortgage i f said lien is recorded in the cou n ty
where such livestock is pastured before such livestock is rem oved.
T he operator o f a hospital is given a lien upon all causes o f action
accruing to a patient therein or to the legal representative o f such
patient for the reasonable charges fo r hospital care necessitated b y
the injuries giving rise t o such causes o f action.
L im it a t io n s o f S u its . An action for the recovery o f real p roperty,
sold on execution or b y executors, administrators, or guardians,
brought b y the execution d ebtor, or the heirs, ward, or guardians,
within five years after the deed Is recorded. Other actions for
recovery o f real property, within fifteen years, except recovery o f prop
erty sold for taxes or actions for forcible entry and detention or forcible
detention which m ust be brought in tw o years. On official bonds
and contracts in writing, five years. Contracts not in writing, three
years. Trespass, detinue, replevin, Injuries n ot arising on contract,
and relief on the ground o f fraud, tw o years. A ction for libel, slander,
malicious transaction, or false im prisonm ent upon a suit for penalty
or forfeiture, one year. A ction for any other relief n ot before
p rovided for, five years. In any case founded on con tract, part
paym ent, or an express written acknow ledgem ent or prom ise, renews
the contract. T he statute runs from the date o f such renewal. C on
tractual limitations differing from the statutes are void.
M a rr ie d W o m e n . T he real and personal property ow ned b y a
wom an at the tim e o f her marriage, and any property which com es
to her b y descent, devise, or bequest, or gift o f any person except her
husband, remains her sole and separate property notwithstanding her
marriage, and is not subject to the disposal o f her husband or liable
for his debts. M arried wom en m ay sell and con vey their real and
personal property and enter into any contract with regard to the
same in the same manner and to the same extent as a married man
m ay in relation to his property. She m ay sue and be sued in the
same manner as if she were single. She m ay carry on any trade or
business, perform labor or services for her separate account, and her
earnings or proceeds from labor, trade, or business remain her separate
property, and m ay be used and invested b y her in her own name.
H er husband Is not liable for her debts incurred in her separate busi
ness undertakings b y virtue o f the marriage relation. She m ay also
contract with her husband with the same effect as though the married
relation betw een them did not exist.
M in e s a n d M in in g . T h e law provides for the appointm ent o f a
mine inspector with authority to require m ine owners to provide
certain facilities for the health and safety o f persons em ployed and
com pel proper ventilation, regulate excavations, air courses, etc.
This law is quite elaborate and violations o f the safety provisions o f
the act— resulting in injury to em ployees, usually results in liability
even where the Kansas W orkm en’s Com pensation A ct does not
apply, on the part o f the mine operator to the em ployees because o f
the positive duty resting on the operator to com p ly with such statutory
provisions.
M o n o p o lie s a n d U n fa ir T r a d e . A n y retailer or wholesaler who
shall advertise, offer to sell or sell m erchandise at less than cost to
said retailer or wholesaler (as defined b y the A ct) shall be gu ilty o f a
m isdem eanor su b ject t o a fine o f n ot m ore than $500. A dvertising,
offering to sell or sale o f merchandise, either b y retailers or wholesalers,
at less than cost (as defined b y the A ct) w ith intent o f unfairly avert
ing trade from a com p etitor or otherwise injuring, im pairing or pre
venting fair com petition, is unfair com petition, Contrary to the p olicy
o f the A ct, where the result o f such advertising, offer or sale is to tend
to deceive any purchaser or p rospective purchaser or to substantially
lessen com p etition or unreasonably restrain trade or tend to create a
m on op oly in any line o f Commerce. T he A ct does n ot a p p ly t o sales
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at retail or wholesale where (a) m erchandise is sold in bona fide clear
ance sales; (b) perishable m erchandise sold to forestall lo ss ; (c) m er
chandise im perfect or dam aged or being discontinued as advertised,
m arked and sold as such ; (d) m erchandise sold u p on final liquidation
o f a n y business; (e) p rice o f m erchandise is'm a d e in go o d faith to
m eet p rice o f a com p etitor in same loca lity ; (f) m erchandise is sold
b y an officer actin g under order o f co u rt; (g) m erchandise is sold for
charitable purposes or relief agencies; (h) m erchandise is sold on con
tra ct to departm ents o f governm ent or governm ental institutions.
P rovisions o f the A ct d o n o t a p p ly to grain and feed dealers.
M o r tg a g e s . A m ortgage o f real estate, to be valid as against
subsequent bona-fide purchasers without notice, must be duly ac
knowledged and recorded in the office o f the register o f deeds o f the
cou n ty where the land is situated. M ortgages m ay be valid as against
attaching creditors w ithout recording. M ortgages m ay be discharged
on m argin o f record b y m ortgagee or attorney or assignee b y duly
acknow ledged pow er o f attorney or assignment in presence o f register,
or b y satisfaction entered on the instrument when copied on the
margin b y the register; or b y an independent release duly acknowledged
and recorded, w ife must join in all m ortgages except those for
purchase m oney, except in cases where she has never been a resident
o f the State. M ortgages are foreclosed b y suit only. B y an act
o f the Legislature which to o k effect M a y 18, 1893. real estate sold
under foreclosure o f m ortgage is su b ject t o eighteen m onths
period o f redem ption. P eriod o f redem ption m ay b e extended as the
cou rt m ay fix, b u t not b eyon d January 15, 1937, and p rovided m ort
gagor pays rental ordered b y cou rt. C orporation m ortgagor m ay
agree for a shorter period o f redem ption or m ay w h olly w aive it.
I f the m ortgage foreclosed is on abandoned prop erty or n ot occupied
in good faith and the cou rt so finds, six m onths .on ly is allow ed for
redem ption. This act does n ot a p p ly to m ortgages executed prior
to the date the act to o k effect. W hen a m ortgage is, assigned the
assignment should b e acknow ledged and recorded. (P or Form s,
see D eeds: see Executions.)
(F or M ortgages on Chattels, see C hattel M ortgages; see E xecu
tions.)
N e g o t ia b le I n s t r u m e n t s . T h e U niform N egotiable Instruments
A ct adopted. (See com plete text o f this law follow ing “ D igest o f
Banking and C om m ercial L aw s.” )
N o ta rie s . N otaries are appointed b y the G overnor and serve for
four years. T h e y give bond in the sum o f $1,000 and are required
to affix the date o f the expiration o f their com m ission to all certifi
cates.
N o te s a n d B ills o f E x ch a n g e . U niform N egotiable Instrum ent
A ct to o k effect June 8, 1905.
P a r tn e r s h ip s . L im ited or special partnerships m ay be form ed
for any legal purpose except banking or insurance. Such partnerships
m ay consist o f one or m ore persons who are general partners, and
one or m ore who contribute a specific am ount o f capital and shall
be called special partners. T he special partners are n ot liable for the
debts o f the partnership b eyond the am ount contributed b y them
respectively but the names o f the special partners m ust n ot be used
in connection with the business. Such a partnership Is form ed b y
executing a certificate stating the name, the nature o f the business,
the names o f the general and special partners, and their place of
residence, and the am ount o f capital contributed b y each special
partner, and the perioa when the partnership is to com m ence and
term inate. T h e certificate m ust be acknow ledged, filed and recorded
in the office o f the cou n ty clerk in cou n ty o f principal p lace o f business
and copies in clerk's office o f all other counties where partnership
m aintains a p lace o f business.
P o w e r o f A t t o r n e y . (See Deeds.)
P r o b a te L a w . (See A dm inistration.)
P r o t e s t. (See N otes and Bills.)
R a ilr o a d s . E v e ry railroad organized or doing business in the
State has the pow er to transport persons, property and m ail b y high
w ay, air or water.
R e c o r d s . (See D eeds.)
R e d e m p t io n . (See M ortgages.)
R e p le v in . The plaintiff in an action to recover the possession o f
specific personal property m ay claim the im m ediate delivery o f the
same b y filing affidavit and giving bond double the sworn value of
the property. P roperty replevined must be held b y the officer taking
it tw enty-four hours, during w hich tim e the party from whom the
property is taken m ay give bond to the plaintiff for not less than
double the am ount o f the value thereof conditioned for the return
o f the same or Its value in case it shall be adjudged the plaintiff is
entitled thereto, and thereupon m ay have the property returned to
him.
S e c u r it ie s . N o securities n ot exem pt can be sold within the
State unless such securities have been registered b y notification and
those b y qualification are classified under the statute. Registration
b y notification is secured b y filing' in the office o f the C orporation
Com m ission a statem ent with respect to such securities contain
ing the follow ing: N am e and location o f issuer, loca tion o f issuer’s
principal place o f business, and principal office in this state, if any;
b rief description o f the security including am ount o f the issue; the
am ount o f securities to be offered in this state; price at which securities
are to be offered for sale; rate o f com m ission to be p aid; a b rief state
m ent o f facts which shows the security falls within one o f the classes
in the Kansas law. Financial statem ent o f issuer as o f current
date; incom e statem ent o f issuer for that fiscal period; co p y o f the
security. Registration b y qualification is required o f those securities
n ot entitled to registration b y notification, and is secured b y filing
w ith the C orporation Com m ission a co p y o f the security to be sold,
a statem ent o f assets and liabilities o f the issuer including the total
am ount o f such securities and any: interest or lien authorized or
issued b y such person or com p a n y; the nam e o f the fiscal agent or
broker with a statem ent o f the financial standing o f such agent;
a statem ent showing gross and net earnings o f issuer; a statem ent
o f inform ation relative to the character o f security and earning
pow er o f issuer; a statem ent showing plan o f business; charter and
by-laws if issued b y a corporation or articles o f association if issued
b y partnership; a statem ent showing price at which security is p ro
posed to be sold including am ount fo r com m ission, location o f issuer’s
principal business office and office in this state (see N o te “ A ” ),
and all other m atter as m ay b e required b y the C orporation C om
mission. F or registration o f such securities, a fee o f one-tenth o f
one percent o f the am ount o f the aggregate value o f the securities
sought to be registered, up to $100,000, plus one-tw entieth o f one
percent o f the am ount in excess o f $100,000, and n o t exceeding $400,000, and one fortieth o f one percent on,th e am ount in excess o f $400,000, b u t in no case greater then $500 fo r each issue. T h e C orporation
Com m ission m a y prescribe a m axim um to be registered at any one
tim e. T h e C orporation C om m ission, after investigation and ex
am ination m ay grant or deny perm it t o sell securities registered with
it, or cancel p reviou sly granted perm its. T h e C om m ission m ay order
an appraisal o f all assets o f any business issuing securities fo r sale in
the state, said appraisal to b e m ade b y three appraisers appointed b y
the Com m ission. A ll b ooks o f account o f persons and corporations
within the A ct are subject t o exam ination b y the-C orp oration C om
mission. Semi-annual statem ent o f financial con dition m ust be filed
w ith the Com m ission. License is required o f all brokers doing busi
ness in this state and any such broker m ust file in the office o f the
C orporation C om m ission a b o n d in the sum o f n o t less than $5,000.
A gents and salesmen m ust also be registered and p a y a fee o f $10.00.
P rovided that, for licenses granted after Septem ber 1st, the fee shall
b e $5.00. B roker’s license fee is $100. P rovided, any license issued
on or after June 1st o f a n y year, fee shall b e com p u ted at rate o f $10
per m onth fo r rem aining p eriod o f fiscal year. Renewal fee, $50.
General accounts and books o f brokers su b ject to exam ination and
audit b y C orporation Comm ission.
N O T E “ A ” — C o p y o f the security to b e sold, am ount and par
value o f securities or num ber o f no par shares to be offered in the state.
BANKING AND COMMERCIAL LAWS—-KENTUCKY
S ervice. All service o f process Is made b y the sheriff or b y co n
stables, or b y some one specially authorized In any particular case,
and must be issued in the name o f the state with the seal o f the officer
Issuing the same affixed.
S u its . (See A ction s.)
T a xes. A ll taxes are due on the first day o f N ovem ber o f each
year, and if ha lf o f the same are n o t paid on or before the 20th day
o f D ecem ber, a ten per cent per annum interest charge on said first half
is added, and if not paid b y June 20 all unpaid taxes draw interest at
ten per cent. I f half o f the taxes are paid b y Decem ber 20, paym ent
o f the remaining half m ay be deferred until June 20 o f the succeeding
year w ithout penalty. Paym ent o f taxes in full on or before Decem ber
20 entitles payer to 2 per cen t discount on last half o f taxes. W hen the
tax upon real estate is delinquent it is sold for taxes on the first Tuesday
in Septem ber follow ing. A fter sold it bears interest at the rate o f 10
per cent per annum and the sam e rate upon subsequent taxes paid and
indorsed on th e tax certificate. Lands bid off for taxes b y cou n ty at
tax sale o f Septem ber, 1940, or prior years, and held b y cou nty, m ay
be redeem ed any tim e prior to September 1, 1941, b y paying delin
quent taxes, w ithout penalties, costs or interest. M ortgagor m ust
pay interest o f 6 % from date o f redem ption b y a m ortgage holder.”
The tax lien attaches t o real estate on N ovem ber 1, in the year in
which the tax is levied. A fter land is sold for taxes, it m ay b e re
deem ed within fou r years from date o f sale. T he interest o f a m inor
m ay be redeem ed at any tim e within one year after he attains his
m ajority, and idiots and insane persons m ay redeem within five years
after the sale.
N o tax certificate issued for delinquent taxes for which no tax
deed shall have been taken out shall be a lien on such real estate after
the expiration o f five years from the date o f sale, providing that when
ever any extension o f the tim e for redem ption is secured b y statute,
the lien o f the tax certificate shall be extended for a like period.
The state imposes an inheritance ta x and incom e tax.
The state im posed the “ Kansas Retailers Sales T a x ,” effective
June 1, 1937. D irect sales tax, payable b y thé purchaser, m ust be
collected b y the person m aking a sale and reports are required to be
made to tne State T a x Commission. The tax directs those engaged
in the business o f selling tangible personal property at retail to charge
and collect a tax at the rate o f (a) 2 % from the gross receipts received
from the sale o f tangible personal property at retail; (b) 2 % on gross
receipts from telephone and telegraph services excepting interstate
telephone or telegraph services; (c) 2 % upon gross receipts from sale
•or furnishing o f gas, water, electricity and heat; (d) 2 % upon gross
receipts from sale o f meals or drinks ; (e) 2 % upon gross receipts from
sale o f admissions to place o f amusement, excepting fairs, educational,
religious and charitable activities. Purchaser o f business is required
to withhold sufficient am ount o f purchase price to p ay taxes until
seller produces receipt therefor.
A registration fee o f 25 cents on each $100 o f the principal debt
secured b y real estate m ortgage must be paid to the Register o f
Deeds when such m ortgage is filed for record and thereafter such
real estate m ortage and the note which it secures is not subject to
taxation.
T r u s t C o m p a n ie s . -Trust com panies m ay be organized with a
capital o f not less than $100,000 and issue preferred stock o f different
classes carrying no liability or assessment and m ay receive m oneys in
trust and execute any trust com m itted to them, either b y any person or
by order o f any court, and m ay execute or guarantee any bond required
by law to be given in any proceeding in court, and act as agent for
the investment o f m oney, and for the purpose o f issuing, registering,
transferring or countersigning certificates o f stock, bonds or other
evidences o f debt, act as guardian and guarantee the fidelity and per
formance o f d u ty o f persons holding public offices or private trusts,
and certify and guarantee title to real estate and sell all kinds o f
negotiable paper, and receive deposits from banks and other trust
companies or pu blic officers and with approval o f banking board trust,
com pany m ay receive deposits subject to check. T h ey are required to
keep on hand 25 per cent o f deposits subject to check and 10 per cent
of tim e deposits, in the same manner as state banks. Each director
must be a stockholder in the sum o f not less than $1,000. Trust com
panies are under the supervision of, and subject to, examination b y the
bank com m issioner, and the provisions o f the banking law relating to
impairment o f capital, insolvency and shareholders’ liability, and the
duty o f the bank com m issioner in such cases. Trust com panies m ay
own and hold real estate for : (a) Suitable building for transaction o f
business; (S) That which is acquired through collection o f debts,
“ but the real estate so owned shall not exceed 50 per cent o f the
capital o f the com pany for a longer periodHhan six months. W henever
the value o f real estate so owned shall exceed 50 per cent o f the capital
o f the com pany, it m ust be reduced to the proper lim it within five
years” unless Bank Com m issioner grants an extension which cannot
be for m ore than tw o years.
T ru sts a n d P o w e r s. A ll trusts concerning lands must be created
in writing except such as arise b y implication o f law.
W a reh ou s e R e c e ip ts . Practically the Uniform “ Warehouse
Receipts A c t .”
W ills. A n y person o f full age and sound mind and m em ory, hav
ing an interest in real or personal property, m ay give and devise the
same to any person b y last will and testament lawfully executed,
subject, nevertheless, to the rights o f creditors and the estate given
a spouse b y statute. W ills must be in writing, signed at the end by
the testator, or another in his presence and by his express direction,
and subscribed in his presence and at his request by tw o or more
com petent witnesses who saw him subscribe or heard him acknowledge
It. Wills executed w ithout the State in the manner prescribed b y the
law either o f the place where executed or o f the testator’s dom icile or
of the State o f Kansas are declared legally executed. Compliance with
these requirements should appear in the witnessing clause. A will
executed, proved, and allowed in another State, in the court o f
original probate, according to the laws o f that State, m ay, relative
to property in this State, be admitted to record in the probate court
of the cou n ty in which such property is situated, b y producing an
authenticated co p y o f the will and order o f probate adm itting it to
probate b y the proper court o f the cou nty and State o f which
deceased died a resident, after due publication o f notice thereof
Every will, when adm itted to probate, shall be filed in the office o f
the probate cou rt and recorded. N o will shall be effectual to pass
real or personal property unless it shall have been d uly adm itted to
probate.
SYNOPSIS OF
T H E L A W S OF KENTUCKY
RELATING TO
BANKING AND COMMERCIAL USAGES
Revised b y W o o o w a h d , D a w s o n & H o b s o n , A ttorneys at Law.
1805-26 K en tu cky H om e Life B ldg., Louisville, K y .
(See C ard in A ttorneys’ List)
A c k n o w le d g m e n t s . Deeds executed within the State m ay be
acknowledged before the clerk o f the proper county court or a notary
public, or m ay be acknow ledged before and proven b y tw o subscrib
ing witnesses. Deeds executed without the State and within the
United States m ust be acknow ledged before the clerk o f a court or
•his deputy, notary public, m ayor o f a city , secretary o f state, com
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2011
missioner o f deeds, or judge o r a court, or before a justice o f the
peace; if executed without the United States must be acknowledged
before a foreign minister, consul or secretary o f legation o f the United
States, or the secretary o f foreign affairs, or notary public o f the
nation in which the acknowledgm ent was m ade or jud ge or clerk o f
a superior court o f the nation where the deed shall be executed,
attested in either case b y the officer’s seal o f office. W hen the acknow l
edgment is taken, the officer m ay sim ply certify that the deed was
acknowledged before him, and when it was done. A ll deeds m ust
show a source o f grantor’s titie
A c t io n s . Actions are com m enced b y filing petition and causing
summons or warning order to be issued. A n action in the circuit
court requires a deposit o f $5.50 to cover p robable cost and tax.
A d m in is tr a t io n o f E sta te s . An administrator m ust be a resident
o f the state prior to appointm ent. A n executor should be a resident
or intend to becom e a resident imm ediately upon appointm ent. Either
m ay be rem oved if he m oves from the state. Inventories o f the
estate must be filed within three m onths o f qualification and settle
m ent within tw o years and as often thereafter as the cou rt requires.
A fifidavits. A n affidavit m ay be read to verify a pleading; to prove
the service o f a summons, notice, or other process in an action ; to
obtain a provisional rem edy, an exam ination o f a witness, a stay o f
proceedings or a warning order or upon a m otion. A n affidavit m ay
be m ade: 1. In this State, before a judge o f a cou rt, or a justice o f the
peace, examiner, notary public, clerk o f a court, or m aster-com m ission
er. 2. Out o f this State, before a com m issioner appointed b y the
governor o f this State; or before any other person em powered b y a
com m ission directed to him b y consent o f the parties or b y order o f
the court, or before a judge o f a court, a justice o f the peace, a m ayor
o f a city, or notary public.
A p p e a ls. Appeals m ay be taken from m agistrate’s cou rt to
quarterly court regardless o f the am ount in volved : from the quarterly
court to the circuit court when the am ount, exclusive o f interest and
costs, exceeds Tw enty-five D ollars; from cou n ty cou rt to the circuit
court when the am ount, exclusive o f interest and costs, exceeds
T w enty-five D ollars; from the circuit cou rt to the cou rt o f Appeals
in all cases in which the title to land or the right to enforce a statu
to ry lien is involved and in all cases where the am ount in controversy,
exclusive o f interest and costs, amounts to $500 or m ore, as a m atter
o f right, b u t when the am ount in controversy exceeds $200 and is
less than $500, the granting o f the appeal is option al with the court
o f appeals.
A s s ig n m e n ts a n d I n s o lv e n c y . A deed, o f Assignm ent for the
benefit o f creditors vests in the assignee the title to all o f the assignor’s
property except such as is exem pt b y law. E very voluntary assign
ment m ade b y a debtor to any person in trust for his creditors shall
be for the benefit o f all the creditors in proportion to their respective
claims.
A tt a c h m e n t s . T he writ m ay issue against a defendant who Is a
foreign corporation or non-resident o f the State; or has been absent
from the State four m onths; or has left the State with intent to
defraud creditors; or has left his cou nty to avoid service o l sum mons;
or so conceals himself that summons cannot be served; or is about to
rem ove, or has rem oved his property or material part ou t o f the
State not leaving enough to satisfy claim o f plaintiff or defendant’s
creditors; or has disposed or is about to dispose o f his p roperty, with
fraudulent intent to cheat, hinder or delay creditors. A lso in action
tor m oney due upon contract judgm ent or award, if defendant have
no property in State subject to execution, or not enough to satisfy
plaintiff and collection will be endangered b y delay in obtaining judg
ment and return o f nulla bona. A lso in action for personal property
ordered to be delivered to plaintiff which or part thereof has been
disposed of, rem oved, or concealed, so that order o f delivery can not
be executed. Affidavit as prescribed b y civil cod e and bond required,
except no bond or affidavit required in action upon nulla bona return.
B a n k C o lle c t io n C o d e . E ffective June 18, 1930. G iven directly
follow ing Laws.
B a n k s. F ive or m ore persons m ay incorporate a bank. T he
m inimum capital requirem ent is $25,000 in cities o f 7,500 or less;
not less than $50,000 in cities in excess o f 7,500 b u t less than 25,000;
not less than $100,000 in cities in excess o f 25,000 bu t less than 100,000;
not less than $200,000 in cities whose population exceeds 100,000; and
if such banks engage in business o f trust com p any or title insurance
com pany, the am ount o f capital shall be at least double. W hen
m inimum capital stock is paid in full, and in addition thereto a surplus
o f 20 per cent o f the m inim um capital shall be paid and in the cu stody
o f the directors the bank m ay d o business. N o dividends m ay be
paid to stockholders until there is a surplus fund equal to 10 per cent
o f the capital stock. I f any officer or director o f a bank shall receive
or assent to the receiving o f deposits after know ledge o f the bank’s
insolvency, such officer or director shall be /individually responsible
for such deposits and be gu ilty o f felony. A ll banks and trust com
panies are under supervision o f the D irector o f the D ivision o f Bank
ing which is under the supervision o f the D epartm ent o f Business
Regulation. This departm ent m ust m ake periodical examinations
and reports o f all banks and trust com panies, the fees fo r such exam i
nations to be paid b y the institution examined. N o bank m ay perm it
any person to becom e indebted to it in a sum exceeding 20 per cent
o f the capital actually paid in and actual surplus unless secured
b y good collateral or m ortgage on property, th e cash value o f which
above all other encum brances exceeds such indebtedness. I f bor
row er is a director o f officer o f the bank he m ay not becom e indebted
to it in excess o f 10 per cent o f its paid up capital stock without
first securing the excess b y a m ortgage or pledge o f prop erty double
in value the amount o f such excess. In no event m ay the indebtedness
o f any person exceed 30% o f the ban k’s paid up capital and actual
surplus. Stockholders in banks, trust com panies, and com bined banks
and trust com panies are liable individually for all contracts and
liabilities o f such corporation, equally and ratably, and n ot one for the
other, to the extent o f the par value o f their stock, in addition to the
am ount o f such stock and a transfer o f stock does not release liability
provided the action to enforce such liability shall be com m enced within
tw o years from the tim e o f the transfer. This liability term inated
on July 1, 1937, as to such banks as published notice thereof.
The uniform bank collection code has been adopted.
A ny bank or trust com pany, or com bined bank and trust com pany,
heretofore or hereafter organized under the laws o f this C om m on
wealth. m ay issue non-assessable preferred capital stock, o f one or
m ore classes, to which the double liability shall n ot apply. Such
preferred capital stock m ay be considered as part o f the m inimum
“ capital stock ” , and in the case o f existing corporations shall be
issued in the manner now p rovided for increasing capital stock.
T he holders o f such preferred capital stock shall be entitled to receive
such cum ulative dividends at a rate not exceeding 6 per cent per
annum and shall have such votin g and conversion rights, and such
control o f management, and such preference over the holders o f
com m on stock in the event o f liquidation, as m ay be p rovided in
the original or amended articles o f incorporation under which said
stock is issued. N o issue o f preferred stock shall be valid until the
par value o f all stock so issued shall be paid in.
A n y bank or trust com pany or com bined bank and trust com pany,
organized under the laws o f this Com m onw ealth, m ay subscribe for
and own stock o f the Federal R eserve Bank within the Federal reserve
district where such bank is located and m ay take any steps necessary
to becom e a m em ber o f such Federal Reserve Bank.
A ny bank or trust com pany organized under the laws o f this C om
m onwealth is hereby em powered upon authority o f a m ajority o f
its board o f directors to d o anything necessary to acquire insurance
o f its deposits in the Federal D eposit Insurance Corporation, estab
lished pursuant to Section 12 B o f the Federal Reserve act, as amended,
and to acquire stock or securities o f such corporation, and to enter
into and take advantage o f all contracts, rights and privileges which
m ay at any tim e be available to said bank or trust com pany pursu
ant to said Federal A ct.
2012
BANKING AND COMMERCIAL LAWS— KENTUCKY
N o Bank shall perm it any one person to becom e indebted to it,
either as principal or surety, in excess 2 0 % o f its capital and surplus
unless good collateral pledged. I f borrow er is director or officer, the
lim itation is 10% o f paid up capital stock. In no event shall the in
debtedness o f any one person exceed 3 0% o f capital and surplus.
B lu e S k y L a w . K en tu cky’s Blue Sky Law is a com prehensive
regulation o f the sale o f corporate securities. B efore transacting
business in K entucky, investm ent com panies m ust file a detailed
statement o f their organization and financial condition with the
D irector o f the D ivision o f Securities who has the pow er to investi
gate, approve or disapprove any such business proposed. N on
residents m ust appoint the Banking C om m issioner as agent for service
o f process
Dealers and salesmen m ust obtain licenses from the
D irector o f the D ivision o f Securities.
C h a tt e l M o r tg a g e s a n d D eed s o f T r u s t . M ortgages, deeds o f
trust, conditional sales contracts m ust be recorded to be valid against
a purchaser for a valuable consideration w ithout notice or against
creditors. It is a penal offense for any person to sell or rem ove from
the state any personal property on which there is a recorded m ortgage
with the intent to prevent the foreclosure o f the m ortgage. T o be
valid, an assignment o f any chattel m ortgage m ust be filed or recorded
in the same manner as the original m ortgage.
C h e c k s . A n y person who with intent to defraud shall m ake or
draw or utter or deliver any check, draft, or order for the paym ent
o f m oney upon a n y bank or depository, know ing at the tim e o f such
m aking, drawing, uttering, or delivery that the maker or drawer has
not sufficient funds in or credit with such bank or other depository
for the paym ent o f such check, draft or order in full upon its presenta
tion ; or who after having m ade, uttered or delivered any check, draft,
or other order for the paym ent o f m oney upon any bank or other
depository shall withdraw or cause to be withdrawn, the m oney or
any part thereof to the credit o f the maker o f such draft, check or
other order for the paym ent o f m oney without leaving with such
bank or other depository a sum sufficient to cover such check, draft,
or other order for the paym ent o f m oney, shall be guilty o f a mis
dem eanor, if the am ount o f such check, draft or order be under
T w en ty Dollars, and if the am ount o f such check, draft or order be
for T w en ty Dollars or over, he shall b e gu ilty o f a felony. T he
m aking, drawing, uttering or delivering o f such check, draft, or order
as aforesaid, shall be strong prima facie evidence o f intent to defraud.
C o lle c t io n s . Uniform Bank C ollection C ode as recom m ended by
Am erican Bankers Association, see com plete text back o f Laws.
C o n t r a c t s . A seal or scroll is in no case necessary to give effect
to a deed or other writing. All unsealed writings stand upon the
same footing with sealed writings, having the same force and effect,
and the same actions m ay be founded upon them. T he State or
cou nty seal, or the seal o f a court, corporation, or notary to any
writing has not, how ever, been dispensed with.
C o n v e y a n c e s . (See Acknow ledgm ents.)
C o r p o r a t io n s . Form ed under the general laws for transaction of.
any lawful business. Special regulations prescribed for foreign co r
porations doing business in the State, and for banking, building and
man, trust, insurance, and railroad com panies. Cum ulative voting
for the election o f directors prescribed. Stockholders in guaranty
com panies, investm ent com panies and insurance com panies are
, liable equally and ratably, and not one for the other, for all con*
tracts and liabilities o f corporation, to extent o f the am ount o f their
stock at par value in addition to am ount o f such stock ; but per
sons holding stock, as fiduciaries, are not personally liable, but estates
in their hands are in same manner and to same extent as other stock
holders, and no transfer o f stock operates as a release, o f any such
liability, existing at tim e o f transfer, provided action to enforce
the liability be com m enced within tw o years from time to the transfer.
For liability o f stockholders in banks and trust com panies, see Banta,
supra
Articles acknowledged and recorded like deeds in county in
which principal place o f business is situated, and a cop y thereof filed
and recorded in the office o f the secretary o f State. A fter such filing
and recording, and paym ent to State o f license tax o f one-tenth o f 1 per
cent on its capital stock, corporation is deemed organized; but, before
transacting business other than with its own stockholders, at least 50
per cent o f stock must in good faith be subscribed payable at such
times as board o f directors m ay require
T h e issue o f no par value stock is perm itted where provided for in
the articles and such stock is deemed fu lly paid when consideration
determ ined on b y board o f directors is paid. But for purposes o f co r
poration license or franchise taxes value is fixed at St00 00
A ll foreign corporations, except insurance com panies which are now ,
or hereafter shall be, authorized to d o business in this state, m ust file
certified copies o f their articles o f incorporation and amendments
thereto in Office o f Sec. o f State and p ay a filing fee o f $25.00 plus 25c
for each 100 words for recording same. Such corporation must on or
before July 1, 1941, and annually thereafter file a statem ent o f exist
ence with the Sec. o f State form as prescribed b y him. and p ay a fee
A gt. for serving process m ust be verified before July 1, 1941.
Fee, $1.00.
,
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C o u r t s . General civil and criminal Jurisdiction is vested in cir
cuit courts which hold terms in each cou nty as provided by statute.
C re d its . A person who shall know ingly in person or through any
agency make any false statem ent in writing with intent it shall be relied
upon, respecting his financial condition, or means or ability to pay,
for the purpose o f procuring delivery o f personal property, the pay
ment o f cash, the making o f a loan or credit, or extension o f credit,
and procures upon faith thereof either or any o f the things or benefits
m entioned, shall be guilty o f a felony and upon con viction, shall
be confined in the penitentiary not less than one nor m ore than five
years
D a y s o f G r a c e . (See N otes and Bills o f exchange.)
D e p o s itio n s . D epositions m ay be taken in this state before an
examiner appointed b y a Judge o f a circuit court, a Judge or Clerk o f
the cou rt, Justice o f the Peace or N otary Public. D epositions m ay
be taken out o f this state before a C om m issioner appointed b y G o v
ernor o f this state, or any other person em powered b y a com m ission
issued to him b y consent o f the parties or order o f co u rt; or before
a Judge o f a cou rt, a Justice o f the Peace, M ayor o f the city or N otary
P ublic.
I f deposition is taken on interrogatories, neither party is
allow ed to be present, either in person or b y counsel. T h e officer s
certificate m ust state when and where the deposition was taken, that
the witness was d u ly sworn before giving it and that it was written and
subscribed b y him in officer’s presence or was w ritten b y officer in
presence o f witness and read to and subscribed b y witness in presence
o f officer, and the parties present in person or b y attorney.
D e s c e n t a n d D is tr ib u t io n o f P r o p e r ty .
The real estate o f a
person dying intestate shall descend in parcenary to his kindred, male
or fem ale, in the follow ing order, v iz .; (1) T o his children and
their descendants; if none, then (2; to his father and m other equally
If b oth be living; if either be dead, the whole estate descends to the
on e living; if b oth be dead, then (3) to his brothers and sisters and
their descendants; if none, then (4) one m oiety o f the estate shall
pass to the paternal and the other to the maternal kindred, in the
follow ing order: (5) to the grandfather and grandmother, or which
ever may be living; if b oth are dead,' then (6) to uncles and aunts
and their descendants: if none, then (7) to great urandfather and
great grandmother, and so on In other cases without end, passing
to the nearest lineal ancestors and their descendants. (8) I f there
is no kindred to one o f the parents, the whole shall go to the kindred
o f the other. I f there is neither paternal nor maternal kindred, the
whole shall go to the husband or wife o f the intestate, or if he or
she be dead, then to his or her kindred as if he or she had survived
the intestate and died entitled to the estate. W hen any or all o f a
class first entitled to take are dead, leaving descendants such descend
ants shall take per stirpes, that is to say, by representation, the shares
o f their respective deceased parents. Collaterals o f the half blood
shall inherit only half as m uch as those o f the whole blood. In making
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title b y descent, it shall be no bar to a party that any ancestor,
through whom he derives his descent from the intestate, is or has
been an alien. Bastard can inherit in the descending line only from
the m other and her kindred, and can transmit inheritance in the
descending line only to the m other and her kindred.
D o w e r. (See Husband and W ife.)
E sch e a ts . Land held by a corporation for m ore than 5 years,
which is not proper and necessary to carrying on its legitimate business
becom es subject to escheat. Land held by a non-resident alien for
more than 8 years becom es subject to escheat
D em and Bank deposits are deem ed abandoned if no com m unication
received thereto for 10 years. N on-dem an d deposits, 25 years.
E x e cu tio n s may Issue upon judgm ent any time uutn collection of
It is barred by lim itation, but no execution shall issue on any ju d g
ment, unless ordered by the court, until after ten days from rendition.
Execution constitutes lien on property o f d ebtor from time it reaches
hands o f p r o p e r officer
Provided that such lien shall be void as to a
purchaser for valué w ithout notice unless and until notice o f such exe
cution shall be filed in the office o f the C ounty Clerk. Execution m ay
be replevied for three m onths, any tim e before sale under same, b y
defendant giving to the officer an obligation (replevin bond) payable to
plaintiff, with good security for the am ount thereof, interest and costs.
A judgm ent to enforce a lien cannot be replevied. N o replevy allowed
upon judgm ent against any collecting officer, attorney at law, or
agent, for a delinquency or default In executing or fulfilling duties
o f his office or place, or for falling to pay over m oney collected by
him, in such capacity, nor against a principal b y his surety, nor upon
a debt due by obligation having the force o f a judgm ent, nor upon
judgm ent for specific p roperty, o r for the property or its value. I f
land sold does not bring tw o-thirds o f appraiser’s valuation, defend
ant and his representatives have right to redeem within a year from
the d ay o f sale, b y paying purchaser or his representatives original
purchase m oney and ten per centum per annum interest. Land in
which the execution defendant has a legal or equitable title or a co n
tingent remainder, a defeasible fee, m ay be taken and sold under
execution.
E x e m p tio n s . The follow ing property o f persons with a family
resident In this Com m onw ealth, shall be exem pt from execution,
attachm ent, distress, or fee bill, nam ely: T w o work beasts, or one
work beast and one yoke o f oxen; tw o plows and gear; one wagon
and set o f gear, or cart or d ra y; tw o axes, three hoes, one spade, one
shovel; tw o cow s and calves; beds, bedding and furniture sufficient
for fam ily use; one loom and spinning wheel and pair o f cards; all
the spun yarn and m anufactured cloth manufactured b y the fam ily
necessarv for fam ily use; carpeting for all fam ily room s In use; one
table; ail books not to exceed seventy-five dollars in value; tw o
saddles and their appendages tw o bridles; six chairs; or so many
as Shall n ot exceed ten dollars in value; one cradle; p oultry on hand
npt to exceed one hundred dollars in value; ten head o f sheep, not to
-exceed tw enty-five dollars in value; all wearing apparel; sufficient pro
visions, including breadstuff and anim al fo o d to sustain the fam ily for
one year; provender suitable for live stock, if there be any such stock,
n ot to exceed seventy dollars in value; and if such provender be not on
hand, such other property as shall not exceed such sum in value; all
washing apparatus, n ot to exceed seventy-five dollars in value; one
sewing m achine, and all fam ily portraits and pictures; one cooking
stov e and appendages, and other cooking utensils not to exceed in
value tw enty-five dollars; ninety per centum o f the salary, wages, or
incom e earned b y labor, o f every person earning a salary, wages. Or
incom e o f seventy-five dollars or less per m onth, p rovided that the
lien created b y service o f garnishment, execution, or attachm ent, shall
only affect ten per centum o f such salary, wages, or incom e, earned at
the tim e o f service o f process; o f the salary, wages, or incom e earned
b y labor, o f every person earning a salary, wages or incom e in excess
o f seventy-five dollars per m onth, sixty-seven and one-half dollars per
m onth and no m ore shall be exem pt.
T ools o f a m echanic, not exceeding one hundred dollars in value
libraries o f ministers o f the Gospel, professional libraries o f lawyers
professional libraries and instruments' o f physicians and surgeons, not
to exceed in value five hundred dollars. In addition to personal
property there is for actual bona fide housekeepers with a family
resident In this Com m onw ealth a homestead exem ption o f so much
land including the dwelling house and appurtenances owned by
d ebtor as shall not exceed in value one thousand dollars. This
does not extend to a m ortgage on or purchase m oney due for the land
or for debts or liability existing prior to the purchase o f the land, or
o f the erection o f the im provem ents thereon.
Persona) property or m oney on hand or In bank to the amount of
*750.00 shall be exem pt from distribution and sale and shall be set
apart by the appraisers o f the estate o f an intestate to his widow and
infant children, or. i f no w idow , to his infant children or child surviving
him. T h e appraisers shall state in their appraisem ent the m oney or
the articles and value o f each set apart b y them to the widow, or in
fants. separately to the articles appraised for sale, but if the widow be
present at the tim e o f the appraisem ent, or any one authorized b y her in
writing <b«- max m a t e he? -¡election out of the o r o t ic r f? apnrai“««i to
th e am ount o f said $750.00 and said appraisers shall so report. These
provisions also a pply to cases where the husband dies testate, and.
the w idow renounces the provisions o f the will in the tim e prescribed
b y law*
H o lid a y s . T h e legal holidays are: Sundays; January l (N ew
Y e a r’s D a y ); January 19 (R obert E. L ee’s b irth d ay); February 12
(IJncoln’s birth day); February 22 (W ashington’s b irth d ay); M a y 30
(M em orial D a y ): June 3 (C onfederate M em orial D a y ); July 4 (ind e
pendence D a y ); the first M on day in Septem ber (Labor D a y ) ; O cto
ber 12 (C olum bus D a y ); N ovem ber 11 (Arm istice D a y ); Thanksgiving
D a y and all days appointed b y President o f the United States or by
the G overnor o f this State as o f days o f fasting and Thanksgiving;
and D ecem ber 25 (Christm as D a y ). A ll such legal holidays shall
be treated as Sunday. If any o f those days named as holidays shall
occur on Sunday, the next d ay thereafter shall be observed as a holiday.
H u s b a n d a n d W ife . M arriage gives to the husband, during
the life o f the wife no interest in any o f the wire’s property. She
has full power to con tract and to bind herself and her property,
except that she can not bind herself to answer for the debt, default,
m isdoing o f another, except as to property set apart for that pur
pose b y m ortgage. She may sell and dispose o f personal property
as if unmarried, b u t m ay not sell or con vey real estate unless her
husband unites in the contract, or con veyan ce unless em powered
to d o so by decree o f court, in case o f insanity, con viction o f felony,
or abandonm ent b y the husband. A fter the death o f either husband
or wife the survivor shall have a life estate in one-third o f , all the
realty o f which the decedent was seized in fee sim ple during the
coverture unless such right shall have been forfeited or relinquished.
Such survivor has also absolute title to one-half the personality
o f the decedent left after the paym ent o f debts. A bandonm ent
and living in adultery b y either party, or divorce works a forfeiture
o f these rights.
I n te r e s t. T he lawful rate o f interest is 6 per centum per annum,
and contracts for a greater rate are void as to the excess o f interest.
T he C ourt o f Appeals has refused repeatedly to allow attorneys fees
to be collected. U nder Sections 883 1-14, etc., a com pany engaged in
m aking loans o f $300.00 or less m ay obtain a license from the D irector
o f D ivision o f Banking and legally charge 3
per m onth on the un
paid balance, on loans o f less than $150.00. and 2 14% per month on un
paid balance on loans o f m ore than $150 00 not exceeding $300.00.
J u d g m e n t s . A judgm ent does not constitute a lien on property
In this State. All judgm ents bear Interest from their dates. Judg
m ent can be kept alive for 15 yea ri additional b y having execution
Issued at any time within 15 years after date o f judgm ent. (See
E xecutions and Lim itations.)
L im it a t io n s .
T he following are the periods within which actions
must be brought, the tim e com m encing to run from the accrual or
the cause o f action. F ifteen years: A ctions to recover real p roperty;
BANKING AND COMMERCIAL LAWS— LOUISIANA
Actions upon judgm ents and written contracts, except negotiable
instruments actually negotiated. Seven years: Actions b y senior
patentees against junior patentees, who have held possession for seven
years. Five years: Actions Upon merchants’ accounts for goods sold*
actions upon verba) contracts; upon a liability created by statute;
actions for trespass to real or personal property or for damages for
withholding sam e; ^for the specific recovery o f personal property*
actions upon negotiable instruments, though as to the makers o f an
undiscounted note it is fifteen years and as to sureties seven yearsactions upon accounts between merchants, and actions for relief from
fraud or mistake and all other actions not arising on contracts and not
included in the 1 and 2 year statutes. One year: Actions for injury
to person or character and for breach o f promise o f marriage.
M e r c h a n d is e in B u lk . W hen any one who shall buy any stock
o f goods in bulk or fixtures before he shall deliver to the vendor the
purchase price or any prom issory note therefor shall obtain from the
vendor a verified written statement o f all the creditors o f the vendor
together with their addresses and the amount o f indebtedness due
to each, also an accurate inventory o f the*stock or fixtures to bo
purchased and making it the duty o f the vendor to furnish such
statement under oath. U pon receiving such a statement the pur
chaser shall notify, personally or by registered mail, each o f the
creditors o f said vendor as appears on the list, o f the proposed sale,
the price to be paid therefor, the conditions o f the sale and a co p y o f
the statem ent furnished b y the vendor. This notice shall be given
or sent at least ten days before the com pletion o f the sale. I f any such
purchaser fails to obtain a verified statement from the vendor or to
give the notice to the creditors as above or to see that the proceeds
o f the sale are prorated am ong creditors according to dignity o f their
claims then such sale or transfer shall be fraudulent and void and
shall operate as a general assignment for the benefit o f the Creditors
o f the vendor and the purchaser shall at the suit or option o f the
creditor be held liable to the creditors for the fair value o f all property
so bought or sold, provided, however, such suit must be brought
within four months.
N e g o tia b le I n s t r u m e n t s . The Uniform Negotiable Instruments
Law .was approved M arch 24, 1904, (See com plete text following
‘ ‘ Digest o f Banking and Com m ercial Laws.” )
N otes a n d B ills o f E x ch a n g e . The uniform negotiable instru
ments law was approved M arch 24, 1904. Section 1 declares that an
instrument to be negotiable must conform to the following require
ments. (1) It must be in writing and signed by the maker or
drawer. (2) M ust contain an unconditional promise or order to
pay a sum certain in m oney. (3> M ust be payable on demand, or
at a fixed or determ inable future time. (4) M ust be payable to the
order o f a specified person or to bearer. (5) Where the instrument
Is addressed to a drawee, he must be named or otherwise indicated
therein with reasonable certainty. Days o f grace are abolished.
The signature o f any party m ay be made by an agent duly authorized
in writing thus differing from the uniform negotiable instruments
law as enacted elsewhere. E very negotiable instrument is payable
at the time fixed therein; when the day o f maturity falls upon Sunday,
or a holiday, the instrument is payable on the next succeeding business
day. T he N egotiable Instruments Law has been amended and
enlarged b y Acts o f 1930 which should be consulted by those interested.
Pow er* o f A t t o r n e y . Powers o f attorney to convey or release real
or personal property m ay be acknowledged, proved and recorded in the
proper office in the manner prescribed for recording conveyances. If
the conveyance made under a power is required by law to be recorded
or lodged for record to make the same valid against creditors and pur
chasers. then the power must be lodged or recorded In like manner.
P ro te s t. Where any negotiable instrument has been dishonored
it may be protested for non-acceptance or non-payment as the case
may be: but protest is not required, except in the case o f foreign bills
of exchange. It is the safer practice to protest in an cases, because
in all cases notice o f dishonor is necessary to charge parties secondarily
liable
S ales. On M arch 24,1928 the uniform sales act drawn b y Professor
Williston was enacted w ithout change from the original as drawn by
Professor W illiston
T axes. State and C ounty taxes are due on M arch 1st annually
unless otherwise provided. Assessments are made b y the state and
counties as o f July 1st in each year for taxes for the following year.
The Sheriff is collector o f state, county and school district taxes.
Municipalities select their own collector.
M unicipal taxes are due at different dates as m ay be fixed b y the
municipal governm ent. .
All taxes on real estate are a lien thereon from the date o f assessment.
The state gasoline tax is 5 cents per gallon.
The state has an incom e and an inheritance tax.
U n c la im e d B an k D e p o s its . Every bank organized under the
laws o f K entucky or doing business under any law o f K entucky, must
annually, in January, publish in at least tw o issues o f a newspaper
published in the C ounty in which the bank is located, a statement
under oath o f its Cashier, o f all deposits made with it and o f all the
dividends and interest declared and payable by it which, at the date
o f such statem ent shall have remained unclaimed b y any person
authorized to receive the same for five years, giving the time when,
and the name of, the person b y whom the deposit was made and the
name o f the person in whose favor the dividend or interest was declared
and when and from what source derived, (see escheat)
W ills. Any person o f sound mind and over twenty-one years of
age may make a will. W ills must be in writing with the name of
the testator subscribed thereto either by himself or by some other
person in his presence and by his direction. If not wholly written
by the testator the subscription must be made or the will acknowledged
by the testator in the presence o f tw o witnesses, who shall subscribe
their names in the presence o f the testator. The will o f a person
domiciled out o f this State is valid as to personalty, if executed accord
ing to the law o f the dom icile; but to be valid as to lands, it must be
executed as required b y the law o f this State. T he county court
has exclusive original jurisdiction over the probate o f wills. H olo
graphic wills are valid.
SYNOPSIS OF
TH E L A W S OF LOUISIANA
RELATING TO
BANKING AND COMMERCIAL USAGES
Revised b y M e s s r s . S c h w a r z . G tjste , B a r n e t t & R e d m a n n
A ttorn eys a t Law , Canal B ldg., N ew Orleans.
(See Card in A ttorneys’ List.)
A c c o u n t s . (See Acknowledgm ents.)
A c k n o w le d g m e n t s . The uniform foreign (A ct 154 o f 1916), and
domestic (A ct 226 o f 1920) acknowledgm ent laws have been adopted.
Acknowledgm ents m ay be taken within the state by a notary
public or by a recording officer.
Acknowledgm ents m ay be taken In the United States, outside o f
the state, b y any judge, justice o f the peace, notary, com m issioner for
Louisiana, or by any officer authorized to take acknowledgm ents
where he acts.
Acknowledgm ents m ay be taken in foreign countries by any am
bassador, minister, envoy or charge d ’affairs of-the United States, in
the country to which he is accredited, or before any officer o f the
United States, a notary public, or a commissioner or other agent o f
Louisiana authorized to take acknowledgments, if such officers have
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2013
an official seal, and are com m issioned or accredited to act where the
acknowledgment is taken.
Any Commissioned officer o f the arm y or navy o f the United States
is authorized to take acknow ledgm ents in any foreign country in which
he m ay be serving. (A ct 192 o f 1918.)
All acknowledgments taken within the United States must be
witnessed b y tw o witnesses over the age o f fourteen years, who must
subscribe the certificate of-acknow ledgm ent. I f the party making
acknowledgment be blind, three witnesses are required. Witnesses
are not necessary when acknowledgm ents are taken outside o f the
United States. T he officer taking the acknowledgm ent must not act
as a witness. W hile a female m ay act as a witness, this is o f doubtful
advisability.
T he acknowledgment o f a m arried woman m ay be taken as though
■he were single, separate exam ination being unnecessary.
N o authentication is required o f certificates o f acknowledgments
taken in the state, or taken in foreign countries, or taken in the United
States by notaries public, or com m issioners for Louisiana, under their
official seals. Certificates o f acknowledgm ents taken in the United
States before other officers m ust be authenticated b y a certificate o f
a secretary o f state as to the capacity o f the officer.
Authentication for use out of the state may be by the secretary of
state, whose fee is one dollar, or by any clerk of a court of record,
civil district or federal court, whose fee is fifty cents.
A c t io n s . Coinmenced by petition setting forth cause o f action,
articulated in numbered paragraphs, signed by plaintiff or his attorney
and duly sworn to. Plaintiff must give resident security for costs or
make deposit to cover same if dem anded. (See A ct 300 o f 1914
regulating pleadings and practice as amended b y act 27 o f 1926.).
After filing o f petition, defendant is cited to appear ten days after re
ceipt o f citation in District Courts and Justice o f Peace courts outside
o f city o f New Orleans. One day additional for every ten miles his
residence is distant from court. D elay in no case to exceed fifteen days.
In city courts o f New Orleans, defendant must appear three days after
receipt o f citation. N either day o f service nor day on which answer
must be filed is included in delay. I f defendant fails to appear, jud ge
ment by default is rendered against hitrL In district courts such judge
ment is confirmed tw o judical days after preliminary entry o f default.
In Justice o f Peace courts judgm ent o f default is confirmed the same
day as that on which default is entered.
A d m in is tr a t io n o f E states b y executors, administrators, or tutors
who are ex-officio administrators— also b y dative executors— where
there is no heir present or agent o f heir, public administrator takes
charge in New Orleans. A non-resident executor o f a will must in all
cases give b on d ; a resident need not unless required b y creditors.
Administrators and executors o f other states must open succession o f
deceased in the courts o f this State, and be recognized as such here
before they can sue or be sued or transfer property in this State. Stock
in local corporations m ay be transferred b y non-resident executors,
etc., without the necessity o f securing an order from the local court, but
no transfer can be made until the inheritance tax is adjusted. N o
debts can be paid b y administrator without authorization o f probate
court. T he administrator or executor presents to the court an
account or tableau o f distribution setting forth the paym ents and
disbursements he proposes to make. Parties interested are notified
by publication to show cause*within ten days why the account so filed
should not be approved. A n y party interested m ay oppose the
account by opposition in writing at any tim e within the said ten days
In absence o f opposition account is hom ologated upon production o f
satisfactory evidence by administrator or executor, and the funds
ordered distributed in accordance therewith.
Claims against estates should be presented in writing to the adm in
istrator or executor. Should he approve the same in writing-, no
further action is required except to see that the claim is placed upon
his account when filed. Should he decline to recognize the claim,
creditor m ay file suit against succession representative and obtain a
judgm ent to be paid in ordinary course o f administration. I f there
is no danger o f prescription, creditor m ay await filing o f account and
then oppose same if claim is not included.
A ffid a v its . (See Acknowledgm ents.)
A lie n s. N o alien who is ineligible to citizenship o f the United
States may bold land or any real right. Aliens m ay not vote.
A r b itr a tio n . Agreements to subm it to arbitration recognized by
law. ‘ ‘ Louisiana A rbitration a ct” adopted A ct 262 o f 1928. Arbi
trators must be sworn, otherwise decision is not binding. State board
o f arbitration o f labor troubles established. (Act 139 o f 1894.)
A ss ig n m e n ts a n d I n s o lv e n c y . State insolvent laws superseded
b y National Bankruptcy act.
A t t a c h m e n t . W rits o f attachm ent issue on application o f credi
tor, under oath, when d ebtor abou t permanently leaving state, without
possibility in ordinary course o f obtaining or executing judgm ent
previous to departure, or when such d ebtor has already left state
permanently, when the d ebtor resides out o f the state; when he
conceals himself to avoid being cited ; when he has m ortgaged, assigned
or disposed of, or is about to m ortgage, assign, or dispose o f his prop
erty, rights, or credits, or som e part thereof, with intent to defraud
his creditors or give an unfair preference to some o f them : and when
he has converted, or is about to convert, his property into m oney
or evidences o f d ebt with intent to place it beyond the reach o f his
creditors, or, if debt not due. is about to rem ove his property out
o f the State. Creditor must furnish bond equal to the am ount claimed
to be due. with at least one solvent surety, residing within the juris
diction o f the court, conditioned for paym ent to any party injured by
issuance o f writ o f all damages sustained b y him in case it is decided
that the attachm ent was wrongfully obtained. (A ct 119 o f 1916).
Bond for $250 is sufficient if d ebtor resides outside o f state but bond
m ay be increased to am ount o f claim upon order o f court at demand
o f debtor. Garnishment may be had as an accessory either to a writ
o f attachm ent or fieri racias Attachm ent may now issue for an offense,
quasi offense or tort if defendant is non-resident (A ct 215 o f 1920).
B a n k s . C apital S tock and S u rp lu s R equirem ents. Savings banks
must have a capital stock o f $30,000.00, all fully paid, in towns o f
less than 15,000 population; or $50,000.00 in towns o f more than
15,000 population, and less than 30,000 population; or $100,000.00 in
towns o f m ore than 30,000 population. Corporations carrying on
general banking business must have capital o f $25,000.00 in towns- o f
less than 3,000 population; or $50,000.00 in towns o f m ore than 3,000 .
population and less than 30,000 population; or $100,000.00 in towns
o f more than 30,000 population. Surplus o f all banks must be 50%
o f the capital stock.
R eserve. A cash reserve o f 2 0% o f the demand deposits is required,
4 % to be kept on the premises or on deposit in the Federal Reserve
Bank in cash. F or the remainder o f the liabilities for demand depos
its, an amount equal thereto in discounted paper or bonds, stocks,
etc., should be maintained as reserve.
In corp ora tors. N o t less than seven persons are required to form
a corporation for the purpose o f carrying on general banking business.
N ot less than five persons m ay form a savings or trust bank.
D irectors. There must be a board o f directors o f not less than five,
nor more than 30 members, the m ajority o f whom must be citizens
o f Louisiana, owning at least $100.00 o f stock.
Supervision-— E x a m in a tio n and R ep o rts. A State Bank Com m is
sioner is appointed by the Governor with the consent o f the Senate,
who examines the banks twice each year, and reports thereon to the
Legislature at the com m encem ent o f each session. In addition all
banks must file sworn reports with Comm issioner four times each year.
L o a n L im itations. Loans cannot be made to one borrower for
m ore than 2 0% o f the bank’s capital stock and declared surplus.
H owever, loans secured b y good collateral m ay be made to one bor
rower for one-half o f the capital and declared surplus, and loans to
one borrower o f an amount not greater than the capital and declared
surplus m ay be made when the loan4s secured b y the pledge o f obliga
tions o f the U. S. or o f the State o f Louisiana. Loans to any em
ployees are prohibited.
B A N K IN G A N D C O M M E R C I A L L A W S — L O U IS IA N A
2014
K in d s o f B a n k s. Com panies organized under the banking laws
o f this state consist o f banks o f deposit, discount, exchange and circu
lation, sayings banks, safe deposit and trust banks.
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B ra n ch B a n k s. N o banking association or savings bank with
capital stock o f less than $50,000 capital m ay locate or operate branch
offices. T h e tota l num ber o f branch banks perm itted any one bank is
determ ined according t o a scale dependent upon the capital o f the bank.
S tockh older’s L ia b ility . N o stockholder is liable for m ore than the
unpaid portion o f the original purchase price o f his stock. A ct « o . i» u
o f 1934 authorizes banks o f this State t o con tract for Federal D eposit
Insurance. T h e act further provides that upon assuming the powers
o f receiver or liquidator o f a bank in this State, the Federal D eposit
Insurance C orporation shall have the right and pow er t o enforce the
individual liability, under the laws o f this State, o f each stockholder
o f any such banking institution, when it ascertains that the assets
th ereof will b e insufficient to p a y its debts and liabilities.
C h a tt e l M o r tg a g e s . A s prov id ed b y A ct 198 o f 1918, as am ended,
any kind o f m ovable p rop erty m ay be m ortgaged for debts, for m pney
loaned, future advances or t o guarantee contractual obligations.
T h e act o f m ortgage m ay be passed before a N ota ry P u b lic and tw o
witnesses, or b y p rivate A ct d u ly acknow ledged b y one o f the parties
thereto or a witness before a N ota ry P u b lic (I f acknow ledged b y
witness n o right o f executory process), and m ust be recored m Parish
where p rop erty is situated and parish where m ortgagor resides in
order to affect third persons w ithout notice. C hattel so m ortgaged
cannot b e transferred from one parish o f the State into another w ith
ou t written consent o f m ortgagee. Inscription o f ch attel m ortgage
m ust be renewed within five years.
• C o lla te ra ls must be delivered to b e effectual. A ct 9 o f 1914
makes it a felony for a custom er o f bank to wrongfully dispose o f
collateral security pledged to bank. U niform Bills o f L ading law
obtains. (A ct 94 o f 1912.)
C o n d it io n a l S a le . A ct 119 o f 1918 m akes lawful a conditional
sale o f tank cars providing for retaking o f car b y conditional vendor
w ithout right o f redem ption being given to vendee, all paym ents, of
such date o f retaking being forfeited. A ct 111 o f 1894 provides for
conditional sale o f railway equipm ent. Other conditional sales o f
m ovable property are ineffective as betw een the parties or innocent
third persons.
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C o n v e y a n c e s . AH agreements affecting real property m ust b e
in writing, and transfers and m ortgages, etc., must be recorded in
the place where the p roperty is situated to affect the rights o f third
persons. D eeds are m ade under private signature or b y act passed
oefore a notary public in the presence o f tw o witnesses. B oth vendor
and vendee sign, though signature o f vendee is not essential, as any
act o f acceptance will answer. T he notary in Parish o f Orleans pre
serves the originals o f deeds passed before him and certified copies
given b y him are received as evidence 'in the courts. E ve ry notarial
deed should contain (1) date o f act and place where it was passed. (2)
names and surnames and qualities o f contracting parties, (3) descrip
tion o f the property, etc., (4) price o f transfer and terms a nd con ditions.
(5) T h e m arital status, o f all parties must be given. M arried wom en
m ay now dispose o f separate property w ithout authorization o f husband
or cou rt. T h e husband acts alone m the sale o f com m unity p rop erty;
the signature o f the w ife being unnecessary. Either husband or w ife.
If husband refuses to d o so, m ay designate fam ily hom e b y registration.
I f so designated, w ife’s signature necessary to pass title.
C o r p o r a t io n s . A n y num ber o f persons, exceeding six, m ay form
them selves into corporations for literary, scientific, religious, and
charitable purposes; for works o f public im provem ent, and generally
all works o f public utility and advantage; and any num ber o f persons,
not less than three, m ay form them selves into a corporation fo r the
purpose o f carrying on m echanical, m ining, or m anufacturing business,
.except distilling or m anufacturing intoxicating liquors, w ith a capital
not less than $5,000 or m ore than $1,000,000. A ny num ber o f per
sons n ot less than three, m ay form them selves into a corporation on
com plying with the general corporation laws, for one purpose or carry
ing on any lawful business or enterprise n ot otherwise specially pro
vided for, except banking and insurance, hom estead and building
and loan associations. B y act 250 o f 1928 the corporation law o f
Louisiana has been largely revised, generally along the lines o f tne
uniform corporation law b ut w ith distinctive features. T h e act is
effective as from January 1st, 1929. T h e legislature can not p a s, a
special a ct conferring corporate powers. C orporation com m itting a
trespass or dam age m ay be sued at place where it occurred. [A ct 130
o f 1926.1 (See A ct 154 o f 1902 for form ation o f corporations for works
o f public im provem ent.) A ct 120 o f 1902 provides for organization,
etc., o f local and foreign building and loan or hom estead associations.
N o corporation can declare dividends out o f its capital stock. Annual
meetings o f corporations m ay be held anywhere within or without
the state.
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Foreign C orporations m ay be licensed and taxed b y a m ode differ
ent from that p rovid ed for hom e corporations. N o dom estic or fo r
eign corporations shall d o any business in this State w ithout having
one or m ore know n places o f business and an authorized agent or
agents in the State upon w hom process m ay b e served. All corpora
tions (except m ercantile corporations) dom iciled out o f the State and
doing business in the State in default o f filing with the secretary o f
state a declaration o f the place o f its loca lity or d om icile together with
a resolution authorizing the appointm ent o f an agent together with
a power o f attorney appointing an agent in the State upon whom
service o f process m ay be m ade, m ay be sued upon any cause o f action
in any parish where the right o f action arisos ana such corporation
must show its principal place o f business and the places o f business
it proposes to have in Louisiana.
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Foreign corporations must file in office o f secretary o f state a written
declaration setting forth and containing the place or locality o f its
dom icile, the places in the State where it is doing business, and the
name o f its agent or other officer in this State upon whom.process! m ay
be served. (A ct 54 o f 1904 am ended b y A ct 284 o f 1908. A ct 284
o f 1908 am ended b y A ct 243 o f 1912. See A ct 194 o f 1912.)
A ct 107
of 1922 requires foreign corporations doing business in this state to
pav a tax o f one-tw entieth o f 1 per cent on th© am ount o f the capital
stock em ployed in this state. A ct t o operate .prospectively only.
Foreign C orporations are denied the right to sue m the courts or this
state unless qualified t o d o business herein. (A ct 27 o f 3rd E xtra
• Session o f 1935.)
As to non trading corporations, see Act 259 o f 1914.
A ct N o . 16 o f 1934 provides for the cancellation o f the charter or
any corporation failing to m ake any report or Pay. ap y * a* a s ,PJ.?'
vided b y law. A ct N o . 18 o f 1934, as am ended b y A ct N o. 25 o f the
First E xtra Session o f 1934, provides for the levyin g o f a franchise
tax on corporations doing business in this state, and Provides for
annual report b y them . A cts N os. 12 and 23 o f the T hird Extra
Session o f 1934 provid e that dom estic and foreign corporations are
required to keep detailed b ooks showing stock, ownership, transfers
o f stock, assets, liabilities, and business transaction in Louisiana.
C o u r t s . Term s and Jurisdiction. In parishes other than Orleans;
Justices’ courts, concurrent with D istrict courts up to $100. 2.
D istrict courts, concurrent with justices’ courts, up to $100, exclusive
for all civil matters over $100, and in all probate m atters and appellate
jurisdiction in all civil m atters in justices’ courts.
1 C ity courts, exclusive up to $100. C oncurrent with C ivil D istrict
cou rt from $100 to $300. 2. C ivil D istrict cou rt, concurrent up to
$300, exclusive over $300. Justices and city courts open at all times.
In parishes other than Orleans, district courts shall hold continuous
sessions during ten m onths o f the year. In parish o f Orleans, civil
district court sits during 9 and J-S m onths o f the year, but shall remain
open on all legal days during the whole year for granting interlocutory
orders, issuing writs, trials o f rules to quash same, tryin g proceedings
instituted or on appeal therein b y a landlord for the possession of
•leased property, partition proceedings, and for such special probate
and insolvency business, as the courts en banc m ay b y rule determine.
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Federal Reserve Bank of St. Louis
On all am ounts up to $2,000 Inclusive, and m suits ror damages or
death caused b y wrongful injury, an appeal m ay be taken to the
court o f appeals, fro m the city and district courts respectively, and
on all am ounts over $2,000, except suits fo r damages or death caused
b y wrongful injury, to the state supreme court. A n appeal lies on
b oth law and ‘ facts. Appeals fro m the city courts shall be tried de
n ov o, except suits fo r am ounts betw een $100 and $300.
D a y s o f G r a c e . Abolished.
D e p o s itio n s . T o take testim ony o f witness residing out o f parish
or State it is necessary to file m otion d uly sworn to showing non-resi
dence and m ateriality o f evidence. W ritten interrogatories are pre
pared and served on opposite party, o r his counsel, w ho has three days
in which to cross. Comm ission then issues, directed to some proper
officer, with interrogatories and cross interrogatories annexed, who
must cause witness to appear before him to answer under oath the
direct and the cross interrogatories. H e should reduce answer to
writing, read same to witness and cause witness to sign sam e. T he
officer then prepares a process verbal o f the whole, attaches it to the
com m ission, interrogatories, etc., and should return same to the court
Issuing the com m ission within the tim e fixed therein for taking the
deposition. T h e deposition o f a fugitive f rom justice is not admissible
in evidence. (Also see A ct 176 o f 1910 and 98 o f 1926.) T h e uniform
foreign depositions act has been adopted (A ct 34 o f 1922).
A n additional m ethod o f taking depositions o f witnesses residing out
o f the parish, b u t in the state, or residing o u t o f the state is provided
b y A c t N o . 143 o f 1934.
D e s c e n t . I f one dies leaving no descendants, but a father and
m other and a brother and sister, or descendants o f these last, the
succession is divided into tw o equal parts, one goes to father and
m other, the other to brothers and sisters or their descendants. I f
either father or m other o f deceased dies before him , the portion which
would have been inherited b y such deceased parent goes to the.
brothers and sisters o f the deceased, or tneir descendants. I f deceased
left neither descendants nor brothers nor sisters, nor descendants from
them, nor father n or m other, but on ly other ascendants, they Inherit
to the exclusion o f all collaterals. I f ascendants in paternal and
maternal lines are all o f the same degree, the estate is divided Into
tw o parts, one goes to ascendants on the paternal and the other to
ascendants on the m aternal side. I f there is in the nearest degree
b u t one ascendant in the tw o lines such ascendant excludes all other
ascendants o f a m ore rem ote degree- I f one dies leaving no descen
dants, and his father and m other survive, his brothera and sisters,
or their descendants, take half o f his estate. I f the father or m other
only survive, brothers and. sisters, or their descendants, take threefourths. I f one dies leaving no descendants nor fa th e r nor m other,
his brothers and sisters, or their descendants, take all the estate.
T h e partition o f the half and three-quarters, or the w h ole o f the suc
cession falling to brothers and sisters, as a bov e set forth, is m ade in
equal portions, if th ey are o f the same m arriage; if they are o f different
m arriages, the succession is equally d ivid ed betw een the paternal and
th e m aternal lines o f the deceased, the Germaine brothers and sisters
«■■airing part in th e tw o lines, the paternal and m aternal brothers and
sisters each in their respective lines o n ly ; if there are brothers and sis
ters on one side only, th ey inherit the w hole succession to the exclusion
o f all other relations o f the other line. I f deceased died without de
scendants, leaving neither brothers nor sisters, nor descendants from
them nor m other nor father, nor ascendants in the paternal or ma
ternal lines, his succession passes to his other collateral relations, the
one nearest in degree excluding the others. W hen the deceased has
left neither lawful descendants nor law ful ascendants, nor collateral
relations, the law calls to his inheritance either the surviving husband or
wife, or his Or her natural children, or the State. I f natural m other
left no law ful children or descendants, her natural children, acknow l
edged b y her, inherit to the exclusion o f her father and m other and
other ascendants or collaterals o f law ful kindred. N atural children
inherit from their natural father, w ho has acknow ledged them , when he
has left no descendants nor ascendants, nor collateral relations, nor
surviving wife, and to the exclusion only o f the State. D onations
inter vivos or m ortis causa cannot exceed two-thirds o f the property
o f the disposer if he leaves at his decease a legitim ate child, one-half
if he leaves tw o children, and one-third if he leaves three or m ore.
I f he leaves no descendants but a m other or father or both , cannot
exceed tw o-thirds. T he remaining half, third or fourth, as the case
m ay be is the legitim e o f the child or children and father and for
m other. T a x : T o descendants, etc., 2 per cent from $5,000 to
$20,000. 3 per cent above $20,000. T o collaterals, 5 per cent on
$1.000 to $20,000, 7 per cent a bov e $20,000. T o strangers 5 per
cent from $500 to $5,000, 10 per cent above $5,000. E xem ptions:
$5,000 for direct descendant, ascendant, or surviving spouse, $1,000
to collaterals, $500 to strangers. Bequests to educational, religious
or charitable institutions located within the state are exem pt.
B . C . C . 9 1 5 am ended to read, “ W hen either husband or w ife shall
die, leaving neither a father nor m other nor descendants, and with
ou t having disposed b y last will and testam ent o f his or her share
o f the com m unity property, such undisposed o f share shall be inherited
b y the surviving spouse in full ownership. In the event the deceased
leave descendants his or her share in the com m unity estate shall
be inherited b y such descendants in the m anner p rovided b y law.
Should the deceased leave no descendants, b u t a father and m other,
or either, then the share o f the deceased in the com m unity estate
shall be divided in tw o equal portions, one o f which shall go to the
father and m other or the survivor o f them , and the other portion shall
go to the surviving spouse.
N o te : T his article controls com m unity p rop erty; for inheritance
o f separate property b y surviving spouse see above.
D iv o r c e . (See Separation from B ed and B oard.)
D o w e r . (See M arried W om en .)
T.
E m p lo y e r s L ia b ilit y A c t . There is a general E m ployers Liability
A ct in the State setting forth special com pensation for various Injuries.
E x e c u tio n . P roperty taken under a writ o f fieri facias m ust be
advertised and appraised, and can not be sold fo r less than two-thirds
o f the appraised value, until it has been re-advertised. Advertise
ments o f m ovables three tim es in ten days— o f real estate once a
week fo r thirty days. I f two-thirds o f appraised value Is n ot bid,
property must be re-advertised for fifteen days, and sold on a credit
tor tw elve m onths for whatever it will bring. T here is no redem ption
o f property sold under execution or m ortgage. N o stay o f execution
is given except on appeal, and execution m ay Issue at any tim e after
the delay fo r appealing suspensively has expired. A ct 113 or 1900
authorizes sheriffs and, constables to put purchaser o f seized property
in possession. On proper petition the court can order an examination
o f a judgm ent debtor as to his assets and liabilities. (A ct 198 o f 1924,)
E x e m p tio n s . T o head o f fam ily, real estate if owned and occupied
as a residence, together with certain furniture, stock, implements,
provisions,-etc., the property n ot to exceed $2,000, means or property
o f wife deducted from exem ption o f husband. I f
property exceeds
$2 000 in value, it m ay be sold. Beneficiary entitled to $2,000 of
proceeds. N o registry required in parishes other than Orleans,
Surviving spouse or m inor child or children m ay claim benefit o f this
exem ption. W id ow or m inor children surviving, entitled to $1,000 out
o f deceased husband’s estate, if in necessitous circum stances, b y pre
ference over all other debts except those secured b y vendor s privilege,
conventional m ortgage, and expenses incurred in selling the property.
Sheriff or constable cannot seize linen and clothes belonging to debtor
or his wife, nor his bed, bedding or bedstead, nor those o f his fam ily,
nor his arms and m ilitary accoutrem ents, nor the tools and Instru
ments and books and sewing machines, necessary tor the exercase or
his or her calling, trade or profession b y which he or she makes a living,
nor shall he, in any case, seize rights o f personal servitude, o f use
and habitation, o f usufruct to the estate o f a m inor child, nor the
incom e o f d otal property, nor m oney due fo r salary o f a P ublic Officer,
nor the cooking stov e and utensils o f said stove, nor the plates, dishes,
knives and forks, and spoons, nor the dining table chairs, nor wasn-
B A N K IN G A N D C O M M E R C IA L L A W S — L O U IS IA N A
tub. nor smoothing irons
belonging to debtor, nor
on by any member o f the
to debtor for family use.
and/ironing furnaces nor family portraits
musical instruments played or practiced
family, nor any poultry or fowls belonging
Also proceeds o f life, health and accident
S f p o i i ^ ^ c f s f o M g i l ! ) * secured by pledge 0f poUcy or rl« ht8
In the case o f all other laborers wage earners, artisans, mechanics,
engineers, firemen, carpenters, bricklayers, secretaries, bookkeepers
clerks, employees on a commission basis, or employees o f any nature
or kind whatever, whether skilled or unskilled, 80% o f the wage
salary, commission or other compensation thereof cannot be seized’
or garnisheed, but only 20% o f such compensation shall be subject
to such seizure or garnishment, and in no case shall the seizure or
garnishment infringe upon a minimum o f $60 per month o f such
salary, wage, commission or other compensation, which said $60 per
month shall always be exempt. (Act. 183 o f 1932.)
Act No. 2 o f the Second Extra Session of 1934 provides for the relief
of debtors who are unable to meet their obligations for the time
being, by petitioning to the State Bank Commissioner who shall act
as the Debt Moratorium Commissioner, with the power to suspend
all laws or parts o f laws relative to the enforcement o f public and
private debts, after notice and hearing to the creditors. Extended
by Act 121 o f 1938.
F ra u d . Fraud vitiates o f contracts. See A ct 114 o f 1912. M is
demeanor to purchase goods, wares or merchandise on credit and dis
pose o f same with intent to defraud and so forth. Unlawful to sell
stock o f goods, wares, m erchandise and fixtures in bulk out o f usual
course o f business w ithout com plying with “ bulk Sales L a w .” See
Act 270 o f 1926.
G a r n is h m e n t . W ages earned out o f this State and payable out
of this State, shall be exem pt from attachm ent or garnishment in all
cases where cause o f action arose out o f this State, and it shall be the
duty o f garnishees in such cases to plead such exemptions unless the
defendant is actually served with process. (A ct 165 o f 1904.) (See
Attachment and E xem ptions.)
H o lid a y s. T h e legal holidays are: Sundays; January 1 (N ew Y ear’s
D a y): January 8 (B attle o f N ew Orleans); January 19 (R obert E.
Lee D a y ); February 22 (W ashington’s birthday); G ood Friday; M a y
30 (National M em orial D a y ); June 3 (Confederate M em orial D a y );
July 4 (Independence D a y ); A ugust 30 (H uey Long’s B irth d ay ); the
first M on day in Septem ber (Labor D a y ); October 12 (Christopher C o
lumbus D a y ); N ovem ber 1 (All Saint’s D a y ); N ovem ber 11 (Arm istice
D a y ); Thanksgiving D a y ; Decem ber 25 (Christmas D a y ); Inauguration
Day in the C ity o f Baton R ouge. A nd every Saturday from 12 o ’clock
noon until 12 o ’clock midnight, to be known as a half-holiday; and
in the parishes o f Orleans, St. Bernard, Jefferson, St. Charles and
St. John the B aptist and in all municipalities o f the State o f Louisiana
where the governing authority o f the same so declare b y ordinance
duly adopted. M ardi Gras; and whenever January 1, January 8,
February 22, June 3, July 4, O ctober 12, N ovem ber 1, N ovem ber 11
and December 25 fall on a Sunday, the succeeding day shall be a legal
holiday; and all prom issory notes, bills o f exchange and com m ercial
paper maturing on Sunday, a legal holiday, or legal half-holiday,
which, b y law or com m ercial usage, are required to be protested for
non-payment, shall b e deem ed to be, and shall be, due and payable
on the first day, not a Sunday or legal holiday or legal half-holiday,
succeeding the d ay o f its m aturity: and in com puting the delay
allowed for giving notice o f non-acceptance or non-payment o f bills
of exchange or prom issory notes or other commercial paper, the days
of public rest or legal holidays or legal half-holidays, shall not be
counted; and if the d ay or days next succeeding the protest for nonacceptance or non-paym ent shall be days o f public rest or legal holi
days or legal half-holidays, then the day next follow ing shall be
computed as the first d ay after protest. Provided, however, for the
purpose o f protecting or otherwise holding iiable any party to any bill
of exchange, check or prom issory note which shall not have been paid
before 12 o ’clock noon on any half-holiday, a demand or acceptance
or payment m ay be m ade, and notice o f protest or dishonor thereof
may be given, on the next succeeding secular or business day. P ro
vided further, that nothing in this A ct shall in any manner effect the
validity o f the paym ent, certification or acceptance o f a check or other
negotiable instrum ent, or any other transaction, b y a bank in this
State because done or perform ed on any holiday or half-holiday, if
such paym ent, certification, acceptance or other transaction could
have been validly done or perform ed on any other day. A ct 285 o f
1940.
H u sb a n d a n d W ife . (See M arried W om en.)
In terest. Legal rate is 5 per cent, but 8 per cent m ay be agreed
upon In writing. I f higher than 8 per cent is charged, it is reducible
to 8 per cent. I f paid, ft m ay he sued for and recovered within two
years. 2 14 % per m onth m ay be charged on loans o f $300.00 and under.
(Small Loan A ct as am ended b y 108 o f 1940.)
J u d g m e n ts recorded in the oilice o f the parish recorder becom e
mortgages from date o f record upon all real estate o f the debtor, and
may be thus recorded in any parish where d ebtor owns real estate.
They are valid for ten years, when they must be renewed
Liens o r P r iv ile g e s. T he following have special privileges, viz.;
1. Lessor's privilege. 2. Privilege o f the creditor on the thing
pledged. 3. Privilege o f a depositor on the price o f a thing deposited.
4. Privilege for expenses incurred in preserving thing. 5. Privilege
of the vendor o f m ovable effects so long as they are in the possession
of the vendee. 6. Privilege o f the innkepeer on the effects o f the
traveler. Privileges resting upon imm ovables are as follows, viz.:
1. The vendor on the estate b y him sold, for the paym ent o f the
price or so much o f it as is unpaid, whether it was sold on or without
a credit. 2. Architects, .undertakers, bricklayers, painters, master
builders, contractors, sub-contractors, journeym en, laborers, cartmen, and other workmen em ployed in constructing, rebuilding, or
repairing houses, buildings, or making other works. 3. Those who
have supplied the owner or other person em ployed b y the owner,
his agent, o r sub-contractor, with materials o f any kind for the con
struction or repair o f an edifice or other work, when such materials
have been used in the erection or repair o f such houses or other works.
(Art. 3252.) Privilege on crops to be recorded (A ct o f 1890.) The
vendor o f an agricultural product o f the Unitea States has a five days’
privilege for unpaid purchase price in preference to all others. Privi
lege granted em ployes in saw mills etc. (A ct 145 o f 1888. amended
by Act 52 o f 1910 and A ct 23 o f 1912.) Laborers have lien on oil and
gas wells, rigs and machinery for wages. (A ct 171 o f 1928.) W idow
and children left in necessitous circumstances are entitled to an am ount
in husband’s or father’s succession sufficient to make $1.000 inclusive
of property already possessed by them. This privilege primes all
others except vendor’s privilege, that for expenses o f selling property
and conventional m ortgages, representing m oney actually loaned for
not less than one year at not exceeding 6 per cent for interest, dis
count and charges.
L im it a tio n o f A c t io n s . lim ita tio n o f actions, or prescription,
under the law o f Louisiana is a manner o f acquiring ownership o f
property, or o f discharging debts b y the effect o f time and under the
conditions regulated b y law
Of the prescription by which the ownership o f property Is acquired.
He who acquired an im m ovable in good faith and b y a just title pre
scribes for it in ten years, provided he has had continuous and
uninterrupted possession during that time. This runs against minors
in twenty tw o years from birth and all others excepted b y law. A ct
161 o f 1920.
The ownership o f im m ovables Is prescribed for b y thirty years
without any need o f title, and without reference to good faith, pro
vided there has been continuous and uninterrupted possession as
owner during this time.
. H a person is possessed in good faith, and b y a just title o f a m ovable
during three years without interruption he acquires the ownership
by prescription, unless the thing was stolen or lost.
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W hen the possessor o f any m ovable whatever has possessed it for
ten years without interruption he shall acquire the ownership o f it
without being obliged to produce a title, or to prove that he did not
act in bad faith.
Prescription runs against all persons unless they are included in
some exception established b y law.
M inors and persons under interdiction cannot be prescribed against
except in certain cases provided b y law.
Husbands and wives cannot prescribe against each other.
O f the prescription which operates a release from debt. Various
actions are prescribed b y one year. Am ong these m ay be mentioned
those o f masters and instructors for lessons wnich they give by tbe
m onth. T hose o f inn keepers, on account o f lodging and board which
they furnish. T hose o f retailers o f liquors. T hose o f workmen,
laborers and servants, for the paym ent o f their wages, and actions
for injurious words, whether verbal or written. Those for damages
caused b y animals, and all actions for damages or torts.
This prescription runs against minors and interdicted persons,
reserving, how ever, to them their recourse against their tutors and
curators.
A ctions b y or against com m on carriers for collection or recovery
o f freight charges or for loss o f or damage to freight are prescribed by
tw o years from date o f shipment.
T he following actions are prescribed b y three years, to w it: First—
T hat for arrearages o f rent charges, annuities and alim ony, or for hire
o f m ovables and imm ovables. Second— That for paym ent o f m oney
lent. Third— That for the salaries o f overseers, clerks, secretaries
and o f teachers who give lessons b y the year or quarter. Fourth— That
o f physicians, surgeons and apothecaries for visits, operations and
medicines. Fifth— T hat o f parish recorders, sheriffs, clerks and
attorneys for their fees and emoluments. Sixth— T hat on accounts
o f merchants. Seventh— That on all other accounts. Eighth— Tax
Inscriptions. N inth— Licenses. Tenth— Inheritance taxes as against
purchasers and third persons in good faith.
T his prescription runs against minors and interdicted persons,
reserving to them, however, their recourse against their tutors and
curators.
Four years’ prescription applies to special action— as action o f minor
against tutor respecting acts o f tutorship; o f minor for rescission o f
judgm ent; action o f lesion.
T he following actions are prescribed by five years, to w it: Actions
on bills o f exchange, notes payable to order or bearer, except bank
notes. T hose oh all effects negotiable or transferable b y endorsement
or delivery, and those on all prom issory notes negotiable or otherwise.
Inheritance taxes as against heirs in five years from opening o f suc
cessions.
This prescription runs against minors and Interdicted persons,
reserving to them, however, their recourse against their tutors and
curators.
Second— Actions for the nullity or rescission o f contracts, testam ent
or other acts.
T hird— Actions for the reduction o f excessive donations.
Fourth— Actions for the rescission o f partitions.
A ny and all informalities o f legal procedure connected with or
growing out o f any sale at public auction o f real or personal property
m ade b y any sheriff o f the parishes o f this State, licensed auctioneer,
or other persons, authorized b y an order o f the courts o f this State,
to sell at public auction, shall be prescribed against b y those claiming
under such sale after the lapse o f tw o years from the tim e o f making
said sales, except where minors or interdicted persons were part
owners at the time o f making it, and in the event o f such part ownership
b y said minors or interdicted persons, the prescription thereon shall
accrue after five years from the date o f public adjudication thereof.
A ct 231 o f 1932.)
A ll personal actions, except those above enumerated, are prescribed
b y ten years.
Actions for im m ovable property, or for an entire estate, as a suc
cession, are prescribed b y thirty years.
L im it a t io n .o n T o r t A c t io n s . All actions on torts are prescribed
b y one year.
L im it a tio n s t o S u its .
Prescription — A ccounts stated and
acknowledged in writing are prescribed only b y ten years. (A ct of
1888.) Personal actions one year: action for torts o f all kinds; for
injury to or non-delivery o f merchandise shipped on vessels; for fees
Of justice, notary, or constable; for innkeepers’ accounts; for accounts
o f retailers o f liquors; for wages o f laborers or sailors; for freight; and
for tuition by m onth. Three years: A ction for arrearages o f rent
charges, or hire o f m ovables or im m ovables or m oney lent; for salaries
o f overseers, clerks, or tuition by quarter or year; for fees o f physicians
apothecaries, attorneys, sheriffs, clerks, and recorders; on open
accounts o f merchants, whether wholesale or retail, and others. Four
years: * A ctions b y minors against their tutors, counting four years
from m ajority. F ive years: A ction on bills o f exchange or promis
sory notes, counting from m aturity, and for nullity o f contracts or
wills; for recision o f partitions; to set aside public and judicial sales
for Informalities. T en years: All other actions; the right to a usu
fruct or servitude, all judgm ents, whether rendered within or without
the State, but judgm ents m ay be revived before lapse o f ten years,
and are then good for ten years from date o f revival. Prescription of
ten and thirty years now runs against minors, interdicts and married
women (A ct 161 o f 1920). Husband and wife can not prescribe
against each other. Prom ise to pay or paym ent on account will
interrupt prescription. Only written prom ise to pay will revive
when prescription has accrued.
L im it e d P a r tn e r s h ip s . (See Partnership.)
M a rr ie d W o m e n . A ct 132 o f 1926 and A ct 283 o f 1928 provide
th a t a married woman, whether a resident o f this state or not, shall be
com petent to contract debts, purchase, sell and m ortgage, and to bind
and obligate herself petsonally and with reference to her separate and
paraphernal p rop erty; to appear in cou rt and to sue and be sued ; to sell,
alienate or otherwise dispose of, and to m ortgage and pledge, or other
wise encumber, her separate and paraphernal property for the benefit o f
herself, her husband or any other person, and to bind and obligate her
self personally or as surety for her husband or any other person; and
that such rights m ay be exercised without the necessity o f obtaining the
authority o f her husband or the jud ge; provided, however, that the
rights granted by said act shall not apply to married women under
the age o f eighteen years or to married women who are interdicted,
nor shall anything therein contained be deem ed or construed to affect
in any way the statutes of this state establishing and regulating the
matrimonial com m unity o f acquets and gains and prescribing what
shall be deemed separate property o f the spouses. .Revenues o f all
separate property administered b y the husband, and all property
acquired by either husband or wife after marriage, except by donation
or inheritance constitute part o f com m unity, unless bought with the
separate means o f either and as a separate acquisition. W ife has no
dower in her husband's real estate. T he wife can have no claim upon
the property o f.th e husband to the prejudice o f third parties, unless
recorded. W here one o f the spouses is agent for the other, he or she
m ay be witness for the other in a matter connected with that trans
action. A ct 157 o f 1916 permits but does not com pel one spouse to
be a witness either for or against the other in any civil proceeding.
A fter dissolution o f marriage b y death or d ivorce the survivor is
entitled to one-half o f all property remaining after paym ent o f debts,
acquired during marriage, and in case o f death, if there is issue,
the usufruct o f the other half, unless this half is disposed o f b y will
o f deceased spouse. W ife cannot be a witness to husband’s will.
(See “ Liens and Privileges.” )
M o n o p o lie s o r T ru sts are regulated and rights are given against
them similar to those existing under Federal Law. T he state author
ities m ay take action and the individual m av recover threefold damages
sustained. See Acts Nos. 11 and 12. extra session 1915.
M o r tg a g e s can be foreclosed at any tim e after m aturity o f the
debt, by instituting a regular suit and obtaining judgm ent thereon, or
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B A N K IN G A N D C O M M E R C IA L L A W S — M A IN E
If the act im ports a confession o f judgm ent in favor o f the holder, he
can apply to the cou rt for an order directing the sheriff to seize and
sell the property. All mortgages must be recorded before they cap
have anv effect as against third parties. Trust deeds are not legal,
except as provided under “ T ru sts.” There is no redem ption p f prop
erty sold under mortgage. All tacit m ortgages have been abolished
since 1870. In making sales or giving a m ortgage upon his property,
it is not necessary for the husband to obtain the signature of the wite.
except as affecting the homestead and fam ily home. A m ortgage
resulting from recording a judgm ent cannot1 have that effect until
after adjournm ent o f court. IA ct 1888.J Lessee, sub-lessee or
assignee o f lease or sub-lease m ay m ortgage his Interest in such lease
or sub-lease, together with his interest in buildings, etc., upon leased
premises: provided, such m ortgage shall not affect, diminish or destroy
lessor's privilege. Leases and contracts to explore for oil, gas and
minerals m ay be m ortgaged. (Act. 232 o f 1910.1
A ct 118 o f 1934 authorizes the issuance o f an order for executory
process when there is a variance between an act o f m ortgage and the
note, or notes issued in connection therewith, due to clerical error.
A ct 121 o f 1934 authorizes administrators and executors to transfer
p roperty, encumbered with m ortgages in excess o f the value o f such
property, to the holder o f such m ortgage. A ct 159 o f 1934 provides
for a general suspension on all foreclosures o f m ortgages o f real estate.
A ct N o. 199 o f 1934 provides that m ortgages on rural real estate shall
not cover or affect the live stock and im plem ents and m achinery used
in the farming thereof.
N e g o t ia b le I n s t r u m e n t s . U niform N egotiable Instrum ents A ct
adopted Aug 1, 1904, A ct. N o. 64 o f 1904. (See com piate text follow
ing “ Digest o f Banking and Com m ercial Laws.” ) Sec. 85 or the
negotiable instrumentis act was amended b y A ct N o. 89 o f 1 0 2 6 ,
abolishing days o f grace and providing that when the day o f m aturity
falls upon Saturday, Sunday, or a holiday, the instrument is payable
on the next succeeding business day which is not a Saturday. This
amendment further provides that instruments payable on dem and
m ay at the option o f the holder be presented for paym ent before
12 o ’clock noon on Saturday, when the entire d ay is not a holiday,
however, said holder shall not be guilty o f neglect for failure to present
on Saturday. Sec. 132 o f the negotiable instruments act was amended
b y A ct N o. 189 o f 1908, providing that the acceptance o f a bill must
be in writing
P a rtn e rs h ip , L im it e d a n d S p e c ia l. Stipulations that one shall
participate in the profits and shall not contribute to losses is void,
both as regards partners and third persons. Partnerships are divided
as to their ob ject Into com m ercial and ordinary partnerships. C om
mercial partnerships are such as are form ed: 1. F or the purchase
o f any personal property, and the sale thereof either in the same
state or changed b y m anufacture. 2. For buying or selling any
personal property whatever, as factors or brokers. 3. F or carrying
personal property or passengers for hire, in ships, vessels, or in any
other vehicle o f transportation. (A ct 150 o f 1932.) There is also a
species o f partnership which m ay be incorporated with either o f the
other kinds, called partnership in com m endam . It is formed by con
tra ct, by which one person or partnership agrees to furnish another per
son or partnership a certain am ount, either in property or m oney, to be
em ployed by the person or partnership to whom it is furnished, in
his or their own name or Arm. on condition o f receiving a share In
the profits. In the proportion determ ined b y the contract, and o f being
liable to losses and expenses to the am ount furnished and no m ore.
Partner In com m endam cannot bind other partners by his act. P art
nership In com m endam must be made in writing: must express amount
furnished or agreed to be furnished ; m ust state whether it be received
in goods or m oney, e tc.; the proportion o f profits which partner is to
receive and expenses and losses he is to b ear; must be signed b y
parties in presence o f at least one witness and recorded in full within
Blx days in m ortgage office. I f branch houses are established the con
tract must be recorded In parish where branches are located. If
partner in com m endam allow his name to be used, or if he take any
part in the business o f the partnership, be will be liable as a genera)
partner. Ordinary partners are not bound In solido for debts of
partnership, and no one o f them can bind his partners unless they
have given him power to d o so: each Is bound for his share o f the debt
In proportion to the number o f partners. Com m ercial partners are
each liable for the entire debts o f the partnership.
P ow ers o f A tt o r n e y . M ay be written or oral. M a y be either
general for all affairs or special for one affair only. One conceived In
general terms confers only power o f adm inistration; to sell, m ortgage
or d o any other act o f ownership, the power must be express and
B y U U lH I.
P r o b a te L a w . There is no special probate court. D istrict courts
are vested with probate jurisdiction. Successions are opened upon
petition o f interested persons in the parish where the deceased resided,
if he had a dom icile or fixed place o f residence In the state: in the parish
where he left his landed property, if he had neither dom icile nor
place o f residence In the state: or in the parish in which it appears
from the inventory thav his principal property was situated, if he
left property in several parishes; in the parish where he died. If he
had no certain dom icile nor any Hxea oroperty. I f presum ptive heir
does not begin legal proceedings to settle succession within ten days
after death o f “ de cu jus,” creditors m ay demand that he state whether
he accepts or rejects succession, or If no heirs appear, that a curator
ad hoc he appointed to settle the estate
T h e judge appoints an
administrator when deceased leaves no will. Administrators must
render annua) accounts, and are allowed 2 J4 per cent on the inven
tory as commissions. A ttorneys at law are appointed to represent
absent heirs. Properties acquired during marriage are presumed to
be com m unity property, and surviving spouse is owner o f one-half.
When either husband or wife dies, leaving no ascendants or descend
ants. and without having disposed by will o f his or her share In the
com m unity, such undisposed o f share shall be inherited by the surviving
spouse In full ownership. (See Successions).
P r o t e s t. (See N egotiable Instrum ents.)
S e p a r a t io n fr o m B ed a n d B o a rd . M a y be claim ed reciprocally
for: l. Adultery
2. When spouse condem ned to infamous pun
ishment. 3. Habitual Intemperance, excesses, cruel treatm ent, or
outrages, when such renders living together insupportable. 4. Public
defam ation o f one spouse by the other. 5. Abandonm ent. 6.
Attempt o f one spouse against life o f other
7. W hen one spouse
charged with infam ous offense actually flees from justice.
Judgm ent o f D ivorce “ a vinculo m atrim onii” can be obtained
Immediately for first tw o causes. For other causes it is necessary
first to obtain judgm ent o f separation “ a mensa et th o ro ." A fter
ludgroent o f separation from bed and board, if there has been no
reconciliation, party in whose favor judgm ent is rendered can obtain
final d ivorce one year after finality o f judgm ent o f separation
Party
against whom judgm ent is rendered m ust wait one year and sixty days
W hen marriage is celebrated outside o f state parties cannot obtain
divorce In state on grounds occurring outside o f state, except, as pro
vided b y C. O. Art. 142, as amended b y Act N o. 1 o f the Second Extra
Session o f 1934. when the wife shall have been dom iciled in Louisiana
prior to the marriage. D iv orce m ay now be obtained if b oth parties
have lived separate for tw o years*, A ct 430 o f 1938.
T a x e s . Taxes on real estate cannot be enforced until the expira
tion o f the year for which they are levied and after legal notices to
delinquents and advertisem ent. Lands sold for taxes are redeem able
w ithin three (3) years, b y the owner, his agent, or heirs, or a n y creditor,
on p aym ent o f the purchase m oney, with 5 per cent interest plus I
per cent per m onth, and costs, and all subsequent taxes paid. Lands
sold for taxes due prior to 1880 are n ot redeem able. State taxes are
5 14 mills on actual value, parish taxes n ot exceeding 4 mills. C ity o f
N ew Orleans taxes are 2 1 J4 m ills on 85 per cent o f actual value plus
7 mills (Orleans Parish S chool B oard) on 100 per cent o f actual value,
other m unicipal taxes not to exceed 7 mills. Delinquent state taxes
bear interest at 2 per cent a m onth, city taxes, 10 per cen t a year.
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A ct N o. 21 o f 1934, as amended b y NA ct N o . 2 o f the First Extra
Session o f 1934, and as amended b y A ct N o. 7 o f the Second Extra
Session o f 1934, provides for a state incom e tax o f 2 % on the first
$10.000. 4 % on the next $40.000. and 6 % on any am ount in excess of
$50.000; allow ing the follow ing exem ptions: $1,000 for a single person,
$2,500 in the case o f the head o f a family or married person living
with husband or wife, and $400 for each additional dependent. The
act also provides for a tax o f 4 % upon the net incom e o f every cor
poration, in excess o f $3,000.
T r u s t s . A ct 81 o f 1938. A llow s Trusts to b e established for a
period o f ten years.
W ills. There are four different kinds o f wills, v iz.: T he olo
graphic, nuncupative by public act, nuncupative by private act, and
m ystic (or sealed) will. T he olographic will must be wholly written,
dated and signed by the testator, and m ay be m ade within or with
out the State. N uncupative will by public act is written by a notary
In presence o f three witnesses, over the age o f 16 years com plete,
not insane, deaf, dum b or blind, residing In the place where will
is executed, or five witnesses not residents o f the place, at the dictation
o f the testator. N uncupative will by private act and m ystic wills
are subject to many formalities which m ay be best obtained b y refer
ence to C ivil C ode Ar^s, 1581-1587 both inclusive. All persons
o f sound mind over sixteen years o f age m ay dispose o f their property
by will. Wills executed without the state given force and effect
provided same be in writing and subscribed by testator and follows
form o f place where executed, or o f testator’s dom icile. (See act 176
of 1912.)
SYNOPSIS OF
THE L A W S OF MAINE
RELATING TO
BANKING AND COMMERCIAL USAGES
Revised b y P tjlsife b & L u d d e n ,
68 M aine St., L ew iston, M e.
(See Card in A ttorneys’ List.)
A c k n o w le d g m e n t s . (See Deeds.)
A c t io n s . A t law begun by writ, under com m on law practice, but
containing declaration. Suits In equity are begun b y bill o f com
plaint. filed with clerk o f court and subpoena Issued by him, or may
be inserted in writ o f attachm ent and served b y cop y o f bill and writ
or sum mons. On m otion non-resident plaintiffs required to give se
cu rity fo r costs. A n affidavit in actions brought on an item ized ac
count, m ade before a N ota ry P ublic having a seal makes a prim a facie
case, if without the State authority o f N ota ry m ust be certified by
clerk p f cou rt o f record.
A d m in is tr a t io n o f E sta te . (See Estates o f Deceased Persons.)
A ffid a v its . Affidavits m ay be made before a notary public or
justice o f the peace. In some court matters authority o f magistrate
must be proved by certificate o f clerk o f a court o f record.
A lie n s . Aliens may hold and con vey real estate and personal
property. W ills o f aliens may be proved and allowed In this State.
W idow o f a citizen o f United States who was an alien when she married
him has right o f descent in his estate (but see Married W om en).
A s s ig n m e n t s . C om m on law assignments for the oenefit of
creditors may be-m ade, and after four months will be good against
bankruptcy proceedings. Assignments o f wages must be recorded
in tow n clerk's office in tow n where assignor is em ployed. Invalid
unless em ployer has notice.
A t t a c h m e n t . All property not exem pt attachable on mesne proc
ess as o f course without affidavit; security for costs by indorser of
writ only If creditor is non-resident; lien by attachm ents in the order
in which they are made continue for thirty days after judgm ent
(extended where execution is delayed, appeal from taxation o f costs
Is taken, or decision o f law cou rt certified down in vacation), within
which time levy may be made. Personal property may be appraised
and sold on mesne process to avoid expense, depreciation or loss,
on request o f either party and proceeds held by officer In lieu o f the
property foreign attachm ent (garnishment), known as trustee process,
attaches property by or debt due from trustee unless: 1. D u e on
negotiable paper. 2. M on ey collected on process b y officer. 3.
In hands o f public officer. 4. D ue on contingency. 5. Trustee
liable to execution on sam e. 6. T w en ty dollars wages, for personal
labor o f the debtor, wife or minor child within one m onth, and $10
exempt In all cases. 7. In certain cases m oney due on life and
accident policies, and from fraternal beneficiary associations. (See
C reditors' Bills.)
B a n k s . K inds perm itted: Savings Banks, T ru st Com panies and
Loan and Building Associations.
Savings B anks. M a y be organized and certificate o f authority
issued b y the bank com m issioner. N o capital stock and operates
solely for the benefit o f depositors. Under the supervision and
exam ination of, and required to report to, the bank commissioner.
M u st not pay over 2 )4 % dividends semi-annually. M ust pay
one-h alf o f 1% o f net earnings to reserve until it equals 5 % . Sub
je ct to varying loan limitations.
T ru st C om pan ies.
M ay be organized under the general statutes
on approval o f the bank com m issioner. M u st report to and subject
to exam inations and supervisions by the bank commissioner. Capital
stock m ay be assessed to m eet deficits. D irectors and the officers
personally responsible for loans illegally granted. M ust carry 10%
o f annual net earnings to surplus until it am ounts to one-half of
capital stock. M ay have branches.
Li a n and B u ild in g A s so cia tio n s. M a y be incorporated and sub
je ct to the same supervision b y the bank com m issioner as Savings
Banks.
M a y issue perm anent shares or serial m aturing shares.
Under the general management o f a board o f directors. Shares fully
paid for not subject to assessment.
C o lla t e r a ls
(S ee M o r tg a g e s .)
C o n d itio n a l S ales, C o n s ig n m e n t s . N o agreem ent that persona)
property bargained and delivered to another shall remain the property
or the seller until paid for, is valid unless in writing and signed by the
person to be bound. Such agreement In whatever form it may be.
Is not valid except as between original parties, unless recorded In the
office o f the clerk ot the town In which the purchaser resides at the
time o f the purchase
Alls uch property whether said agreements
are recorded, or not shall be subject to redem ption. This does not
apply to goods consigned for sale.
C o n v e y a n c e s . (Soe Deeds.)
C o r p o r a t io n s . Three or m ore persons m ay rorm a corporation to
carry on any lawful business excepting banking, insurance, construct
ing and operating railroads, savings banks, trust com panies, or cor
porations intended to derive profits from the loan or use o f m oney,
and safe deposit com panies, but corporations m ay be form ed under
the general law for the construction and operation o f railroads oursiae
the State o f M aine. Corporations for other purposes, excepting for
municipal purposes, and where the o b jects o f the corporation can not
be attained without special acts, are also form ed under general laws.
Organization becom es void unless corporation begins business within
two years. C orporation m ay capitalize to an unlim ited am ount ana
may Increase or decrease the am ount o f their capital or the par value
o f the shares. N o portion o f capital is required to be paid in; stock
m ay be issued for property or for services and in absence o f fraud
B A N K IN G A N D C O M M E R C I A L L A W S — M A IN E
the Judgment o f the directors as to the value o f such oroDertv or
services is conclusive, the stock thereupon becom ing ihlfy paid
Only original subscribers and takers o f stock are liabll on sanie to
« t e n t o f unpaid par value and then only for debts contracted during
their ownership o f stock, and action to enforce such liability m Z be
com m enced within tw o years and can be maintained only by a judgment creditor o f the corporation who shall have begun proceedinls
to obtain such Judgment against the corporation during Phe owner
ship o f such stock or within one year after Its transfer b f such stock
holder s recorded on the corporation books. Dlrectore must be
stockholders or m em bers o f another corporation which Is a irtocktwlder
If corporation fails for six months to elect dlrectore court m aTap point'
Corporations must pay to the State upon organization a fee as fob
lows: $10 for each $100,000 stock up to $1,000 000 sliding scale above
Other fees for organization are: attorney-genOTafs
$5• reels toi
o f deeds $5, secretary o f state $5. The ahnuTl franchise tax Is as
follow s: $5 provided authorized capital does not exceed S50 000*
« c e e d l o r $50.000 ancI up to S200P00, $ fo : exceed?ng $200 000
and up to $500,000, $50; exceeding $500.000 and ud to $1 000 000
and the further sum o f $50 per $l,000°000 o r T n f p l J A h ^ e o f
in excess o f $1,000,000. Corporations which have suspended busi
ness tem porarily and have been excused from filing returns o f amount
o f capital stock, etc., a£e B°t liable for franchise tax. Meetings
o f stockholders m ust be held within the State. Clerk must be resi
dent and keep stockholders records in the State. His records are
open to Inspection b y stockholders but not b y mere creditors. W ith
the exception o f banking corporations no public reports are required
to the secretary o f state showing names and residences
o f officers and am ount o f capital stock. Delivery o f certificate o f
stock to bona fide purchaser or pledgee for value together with written
transfer o f same or written power o f attorney to sell, assign, and
transfer same, signed by owner o f certificate, transfers title against
all parties, roreig n corporations have practically same rights as
domestic, but are required to file cop y o f charter with secretary o f
state, also a cop y o f the by-laws, and are also required under severe
penalties to file certificate showing among other things the names
o f officers, am ount o f capital stock authorized, amount issued and
amount paid in; also must file certificate showing any change in above
particulars. Such corporations must also appoint a resident o f M aine
having an office or a place o f business in the state, to be its attorney
on whom process m ay be served in any legal proceeding. Corporations
m ay dispose o f their franchises or consolidate on m ajority vote o f the
stockholders; m ay sue and be sued, and have generally the powers o f
individuals. Public service corporations are subject to a Public
Utilities Com m ission.
C r e d ito r s ’ B ills. Bill in equity may be maintained to reach
property o f debtor which cannot be reached b y process at law, and
Is not exem pt from attachm ent; also property conveyed in fraud of
creditors and property secreted so that it is not repleviable.
D ays o f G r a c e . (See Negotiable Instruments.)
D eed s. Any owner o f real estate having right o f entry m ay con
vey it by deed. N o estate greater than tenancy-at-will can be created
except in writing. Deeds must be acknowledged by a grantor or
one o f them or by an authorized agent, executing the same, before
a justice o f the peace, notary public having a seal, or woman qualified
to take acknow ledgm ents: outside the State, and in the United States,
before a clerk o f a court o f record having a seal, notary public; or
commissioner o f deeds for this State, and in a foreign country before
a notary public, or a consul or minister o f the United St.ites, but if
magist rate acting outside o f State has no official seal, bis authority and
the genuineness o f his signature must be authenticated by the secre
tary o f state or the clerk o f a court o f record in county where he resides.
Unacknowledged deeds cannot be recorded. No special form of
acknowledgm ent required. Deeds must be recorded to be valid
against parties without notice o f the conveyance. Deeds must be
under seal, but witness is not required for validity although usual
to have one. Leases for m ore than two years should be acknowledged
and recorded to be effectual except between the parties. Trusts
concerning real estate can be created only in writing, except those aris
ing by im plication o f law.
D e p o s itio n s . Depositions may be taken by disinterested Justice
o f the peace or notary p ublic; may be taken when deponent is unable
through age, infirmity, or sickness to attend at place o f trial; when
deponent resides out of, or is absent from the State; when deponent
resides in town other than that in which trial is to be held, etc. D ep o
sitions so taken may be used in all civil suits or causds, petitions for
partition o f land, libels for divorce, prosecutions for the maintenance
o f children, petitions for opinions in trial before courts o f arbitrators,
referees and cou nty commissioners, and in cases o f contested senatorial
or representative elections. Depositions or affidavits may also be
taken In applications for pensions, bounty, or arrears o f pay under
any law o f the United States. Courts may issue commissions to
take depositions out o f the State, or they may be taken out o f State
by a justice, notary, or other person empowered, but in the latter
case it Is within the discretion o f the courts to admit or reject them.
D es cen t a n d D is tr ib u t io n o f P ro p e rty . (See Estates o f D e- D ow er. Abolished by laws o f 1895, chap. 157, taking effect as
to persons not then married. M a y 1, 1895; as to others, Jan 1, 1897.
Wife or husband may bar the right by Inheritance to one-third or
one-half, as the case may be o f realty by joining in the other's deed,
or by sole deed, or by ante-nuptial settlement, or by jointure. Either
refusing to join in other's conveyance (or If Incapacitated with no
guardian in this state, other being a non-resident) may be barred of
Inheritance upon application to supreme judicial court and decree
after bearing. (See Estates o f Deceased Persons.)
E sta tes o f D ecea sed P erson s. One year after notice o f ap
pointment allowed creditors to present claims and suit must be
begun and service o f process made within twenty months after such
notice o f appointm ent. Allowance to widow and minor children,
made by court from estate. Non-resident executor or administrator
must, appoint attorney. Tim e o f demand or notice extended for absent
creditor if further assets, but prior payments not disturbed thereby.
N o administration granted after twenty years. The real and personal
estate o f a person deceased Intestate (except ing wild lands conveyed by
him) being subject to the payment o f debts descends according to the
following rules: 1. If he leaves a widow and Issue, one-third to
the widow. If no issue, one-half to the widow. And If no kindred,
the whole to the widow. And to the widower shall descend the same
shares in his wife’s real and personal estate. There shall likewise
descend to the widow, or widower, the same share In all such real
estate o f which the deceased was seized during coverture, and which
has not been barred, or released, as herein provided. I d any event,
one-third shall descend to the widow or widower free from the pay
ments o f debts. 2. T he remainder o f which he dies seized, and If
no widower, or widow, the whole, together with all wild lands shall
descend In equal shares to his children, and to the lawful issue o f a
deceased child b y right o f representation. If no child is living at
the time o f his death, to all his lineal descendants; equally. If all are
the same degree o f kindred; If not, according to the right o f repre
sentation. 3. I f no such issue, it descends to his father and m other
in equal shares. 4. I f no such issue, or father, it descends one-balf
to his m other. I f no such issue or mother, it descends one-balf to
his father. In either case, the remainder, or if no such issue, father
or mother, the whole descends in equal shares to his brothers and
sisters, and when a brother or sister has died, to his or her children
or grandchildren by right or representation. 5. I f no such issue,
father, brother or sister, it descends to his m other. I f no such Issue,
mother, brother or sister, it descends to his father. In either case,
to the exclusion o f the issue o f deceased brothers and sisters. 6. If
no such issue, father, m other, brother or sister. It descends to his next
o f kin in equal degree; when they claim through different ancestors,
to those claiming through a nearer ancestor. In preference to those
claiming through an ancestor m ore rem ote. 7. W hen a m inor dies
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2017
unmarried, leaving property inherited from either o f bis parents. It
descends to the other children o f the same parent, and the Issue o f
those d eceased; in equal shares if all are o f the same degree o f kindred;
otherwise, according to the right o f representation. 8. If the
Intestate leaves no widower, widow or kindred, it escheats to the
State. An illegitimate child is an heir o f its parents who interm arry;
also o f its mother, also o f its father, who adopts it or acknowledges
It before a magistrate; and in any case where the child is treated as
an heir it inherits from the lineal and collateral kindred o f the parent,
and they from it. (See Wills.)
E x e m p tio n s fr o m A t t a c h m e n t a n d E x e c u tio n . Homesteads,
not exceeding in value $500, when duly registered; debtor's apparel,
necessary furniture for fam ily, not exceeding In value $200; bed and
bedding for each two persons; fam ily portraits, bibles, school books
In use; State statutes; library. $150; regular pew ; cook stove and
Iron warming stoves; charcoal, twelve cords o f wood., five tons an
thracite coal, fifty bushels bituminous coal, $10 worth o f lumber
wood, or bark; produce o f farms till harvested; barrel o f flour, thirty
bushels o f corn and grain, potatoes for fam ily, one-half acre o f flax
and manufactures therefrom for fam ily; tools o f trade, and materials
and stock. $50; sewing machine, $100; pair working cattle, or pair
mules, or one or two horses, $300; hay to keep them ; harness for
each horse and mules. $20 horse sled or ox sled. $20; dom estic fowl,
$50; watch, $10; wedding ring, $10; tw o swine, one cow and one heifer,
if no oxen, horse or mule, tw o cow s; ten sheep, their w ool, their lambs
until one year o ld ; hay to keep them and cattle; plow , cart, truck or
express wagon, harrow, yoke with bows, ring and staple, tw o chains,
m owing machine; fishing boat o f tw o tons; d ebtor m ay elect if he has
more than is exempt. Life and accident policies are exem pt from
creditors, except any excess o f $150 per year prem ium paid witbin
tw o years, except suits, for necessaries. (See A ttachm ent.)
F o re ig n J u d g m e n t . A ction o f debt lies on a foreign judgm ent
and record o f it is prima facie evidence o f indebtedness. Is conclusive
except for fraud when given b y court having jurisdiction o f parties
and subjept matter.
F ra u d . Usual com m on law rules as to what constitutes fraud,
fraudulent representations, e tc.; also statutory penalties for fraud,
cheats, etc. Court o f equity has power to afford relief. Statutory
provisions to prevent sale in bulk o f part or whole o f stock o f m er
chandise in fraud o f creditors.
F ra u d s an d P e rju rie s . N o action shall be maintained upon any
contract to charge an executor or administrator upon any special
promise tc answer damages out o f his own state; nor to charge
any person upon any special promise to answer for the debt, default,
or misdoings o f another: nor to charge any person upon an agree
ment made in consideration o f marriage nor to charge any person
upon any contract for the sale o f lands, tenements, or hereditaments,
or o f any Interest therein; nor to charge any person upon any agree
ment that is not to be perform ed within one year from the making
thereof; nor to charge any person upon any contract to pay a debt
after discharge therefrom under bankrupt laws o f the United States
or assignment or insolvent laws o f this State; unless the promise,
contract, or agreement or some memorandum thereof is in writing
and signed by the party to be charged, or his agent. N o action shall
be maintained on a m inor s contract unless ratified by him in writing
after becom ing twenty-one years o f age, except the contract be for
necessaries or real estate where he has received title and obtained
benefit. N o contract for sale o f goods, etc., o f $30 or m ore in value
Is valid unless purchaser accepts or receives a portion o f the goods
or gives something to bind the bargain, or in part paym ent thereof,
or some memorandum is made and signed b y party charged or his
agent. Contracts whereby one becom es agent for sale o f lands becom e
void in one year unless tim e for term ination definitely stated.
G a r n is h m e n t . (See Attachm ent.)
H o lid a y s . T he legal holidays are: Sundays; January 1 (New
Y ea r’s D a y ); February 22 (W ashington’s birth d ay); A pril 19 (Patri
ots) ; M a y 30 (M em orial D a y ); July 4 (Independence D a y ); the first
M on day in Septem ber (Labor D a y ): N ovem ber 11 (Armistice D a y );
Thanksgiving D a y ; Decem ber 25 (Christmas D a y ); and days o f pub
lic fast or thanksgiving and A rbor D a y appointed by Governor and
Council.
H u s b a n d a n d W ife . Each m ay hold and deal with property
individually, subject to right o f descent in real estate. (See Estates
o f Deceased Persons.) Husband pot liable for debts o f wife con
tracted before marriage, nor afterward in her own name, nor for her
torts. Equity Court has special jurisdiction o f disputes between
husband and wife relating to property. After petition to and decree
by probate court either may convey real property as if sole, and other
is barred o f all right by descent where deserted without jiist cause
or if actually living apart for just cause, and desertion or living apart
has continued one year
I n te r e s t. Six per cent or any other rate agreed upon In writing;
Judgments, same rate; accounts and debts not on time bear Interest
from demand. Special rate in tim e notes does not continue after
maturity, unless so provided; nor after judgm ent in any case; no usury
laws. On loans for less than $300 securea by mortgage or pledge
o f personal property, the rate shall not exceed 3 i t per cent per month.
Loans negotiated in this state by agent o f non-resident borrower with
intent to evade usury laws o f state where borrower resides are voida
ble.
J u d g m e n t s . A t law; b y general order at end o f term on all cases
where verdict or default, unless stayed b y proceedings for new trial,
or continued for judgm ent by plaintiff; in equity, only by decree
signed by justice. N o lien except by virtue o f attachm ent on mesne
process (q. v.) and where specially provided by law.
L ie n s . (Voluminous Statute Provisions, for M echanics, Material
Men. H otel and Boarding-H ouse Keepers, Stable Keepers. Agister,
etc.).
L im it a tio n o f A c t io n s . Six years; debt on unsealed contract or
liability (except ju d gm en ts); actions upon judgm ents out o f State of
court not o f record; for arrears o f rent; o f account, assumpsit, or
case on contract or liability express or im plied, waste; trespass qu.
cl. and d. b. a .; replevin; case, except slander and libel. Four years;
against sheriff. T w o years: assault and battery, false Imprisonment,
slander libel and penalty. One year' escape, scire facias and on
recognizance. Eighteen m onths: stolen bonds and coupons, except
by owner. Tw enty years- witnessed notes, bank bills, specialties,
real action, other judgm ent and all other personal actions. Suit
begun when writ was made. Incapacity o f plaintiff, death o f either
party before or Within thirty days after expiration o f time, fraudu
lent concealm ent o f action, absence from State when cause accrues
or residence out o f the State and absence afterwards, extends time.
Actions barred where both parties lived are barred here. New
promise must be in writing or part paym ent must be made, to extend
time. Against executors and administrators, twenty months after
filing o f affidavit o f notice given o f appointm ent o f executor or admin
istrator, unless further assets or claim not matured. Against heirs
or devisees, one year after claim accrued; rem edy in equity, if not
prosecuted within time limited and If without culpable neglect.
L im ite d P a rtn e rs h ip . M a y consist o f one or m ore general part
ners and one or more special. Special shall contribute specific amount
o f capital or property at cash value, and be not liable for debts beyond
that amount. General partners must transact the business.
M a rrie d W o m e n have same rights and liabilities as to property
contracts and all suits as men. W ife’s property not liable for her
husband’s debts, nor his liable for her prior debts, nor for others made
on her credit. She m ay sue and be sued as if sole. M ay not be
partner o f husband aDd not liable for fam ily expense except b y express
promise. (See Arrest, also Dow er, also Estates o f Deceased Persons,
also Husband and W ife.)
B A N K I N G A N D C O M M E R C I A L -L A W S — M A R Y L A N D
2018
M o r tg a g e s . O f real estate executed and acknow ledged as deeds
and must be recorded as to third parties; con vey fee with condition
o f defeasance. Foreclosed without possession b y serving or adver
tising notice, or b y possession obtained peaceably, or b y consent, or
b y suit. R edem ption in one year from notice or possession; power
o f sale .m ortgages n ot authorized b y statute and n ot m uch used.
Suprem e or Probate courts m ay authorize a m ortgage b y a person in
possession o f an estate subject to a contingent remainder, executory
devise, or pow er o f appointm ent, and such m ortgage is binding on all
parties. C hattel m ortgages unless and until possession taken and
retained b y m ortgagee to b e good against third parties m ust be
recorded in tow n clerk’s office where m ortgagor resides when m ortgage
Is given; or, if any o f m ortgagees are nonresidents, then in registry
o f deeds In cou n ty where m ortgagee resides, when m ortgage is given.
M ortgage on household furniture must state am ount o f loan, interest
rate, and cost o f procuring loan. Agreem ents, whether in form o f
note, lease, conditional sale, etc., or otherwise, that chattels bargained
and delivered shall remain property o f seller till paid for, must be in
writing and recorded as chattel m ortgages; such mortgages and notes
foreclosed b y sixty days’ notice to m ortgagor or assignee o f record,
or, if out o f State, b y publication; redem ption in sixty days. C ol
laterals pledged on notes, etc., or for the perform ance o f anything,
after failure to pay or perform b y the pledgor, m ay be sold b y the
pledgee, he first giving written notice to the pledgor o f the proposed
sale, or if his residence is unknown, b y publication o f notice once a
week for three successive weeks in a newspaper in the city or tow n
where the pledgee resides, recording said notice and affidavit o f service
o f same in the clerk’s office o f city or tow n where the pledgee resides,
and after the expiration o f the sixty days from the tim e o f said record
ing.
N e g o t ia b le I n s t r u m e n t s . U niform N egotiable Instrum ents A ct.
P u b lic Laws 1917, Chap. 257. (See com plete text follow ing “ Digest
o f Banking and C om m ercial Law s.” ) D ays o f grace abolished.
Falling due on Sunday or bank holiday payable and presentable
fo r paym ent on secular or business d a y next succeeding. I f holiday
falls on Sunday then follow ing M on d a y is deem ed bank holiday.
On notes payable at fixed p lace on dem and at or after a tim e certain,
no recovery unless dem and proved there before suits usual dem and
and notice to charge indorser; notarial protest proves it; W aiver
o f dem and and notice, acceptance o f bill, d raft, or order m ust be
in writing and signed. R ecovery from indorser w ithout suing maker.
R ate o f damages on protested bills o f 100 or m ore payable in this
cou n try, 1 to 9 per cent according to place. N egotiable paper pre
sum ed to b e taken in p aym ent o f d eb t or liability for which it is
given, unless creditor would thus lose security he otherwise would
have had
I f n ote reads “ I prom ise to p a y ” a ll signers are jo in tly and
severally liable.
P a r t n e r s h ip . Personal property o f partnership, or Interest o f
partner therein, exem pt from attachm ent on mesne process, or seizure
on execution for any individual liability or such partner; but is statu
tory provision for reaching same after judgm ent. Partners in m ercan
tile enterprise must file sworn certificate with city or tow n clerk
where business to be carried on . showing names and residences o f
partners, nature o f business and partnership name. (See L im ited
Partnership.)
P o w e r s o f A t t o r n e y . Usual com m on law rules.
P r o b a te L a w . (See Estates o f D eceased Persons.)
P r o t e s t . (See N egotiable Instrum ents.)
R e p le v in . G oods or chattels wrongfully taken o r detained m ay
be replevied b y ow ner or party entitled to possession. R eplevin bond
m ust be double the value o f property replevied. I f dismissed w ith
ou t trial, suit m ay be brought on the bond, in which spit title m ay be
show n to m itigate damages.
T a x es m ay be collected b y arrest, distress, or suit. On real estate
they are a lien; proceedings to enforce b y sale'begin upon non -pay
m ent for eight m onths; non-resident owners have tw o years from sale
t o redeem b y paying tax, costs, and 8 per cent interest from d ay o f
sale; residents, tw o years with 8 per cent interest from d ay o f sale
on w hole sum o f tax and costs. C ollector m ay give notice to resident
after eight m onths after com m itm ent, and if not paid within eighteen
m onths o f filing the notice, right o f redem ption lost. Land on which
taxes are unpaid, sold on first M on da y in February in year succeeding
the year in which tax was assessed ; sale is o f smallest fractional part o f
interest to one w ho will p ay taxes, interest, and costs therefor. State
tax assessed b y board o f state assessors on gross receipts o f railroads
and express com panies, and telegraph and telephone lines, collected b y
suit. C orporations, other than those especially provided for, p ay a
franchise tax o f $5.00 if authorized capital does not exceed $50,000.00;
o f $10.00 If capital does not exceed $200,000.00; o f $50.00, if capital
does not exceed $500,000.00; o f $75.00, if capital does not exceed
$1.000,000.00; and the further sum o f $50.00 for each $1,000,000.00,
or fraction thereof, in excess o f $1,000.000.00. Foreign corporations
pay annual license fée o f $10. Inheritance tax ranging from 1 to 7
per cent, according to degree o f relationship and am ount o f bequest,
$500 exem pt in all cases, and $10,000 exem pt in case o f certain near
relatives. Special exceptions and exem ptions from assessment, and
special provisions for taxing personal property situated here but
owned ou t o f the State. R eal estate m ortgages exem pt. (See
Banks.)
W a g es. W eekly paym ent required in m ost industries. (See
Assignments, A ttachm ent.)
W a r e h o u s e R e c e ip ts . H older deem ed true ow ner so far as to
give validity to contract for sale o f m erchandise covered, or to protect
one acting on faith o f such ownership; but one taking from agent as
security for antecedent d ebt gets no greater right than agent. T itle
to property passed b y endorsem ent, but not in blank, to purchaser
or pledgee in good faith. Property in warehouse m ay be attached
as that o f person nam ed in receipt, or o f last endorsee shown b y books
o f warehouseman. C om m on law rules prevail generally.
W ills . W ills must be in writing signed b y the testator, or at his
request b y som e person in nis presence, and subscribed in his presence
b y three witnesses not beneficially interested, in presence o f each other,
m ay be made b y any person o f age and o f sound mind, and m ay dispose
o f all property. W ills executed In another State or cou ntry according
to laws thereof, m ay be proved and allowed In this State in the cou nty
where the testator had his residence at time o f decease; if proved
w ithout this State (at his dom icile), m ay be allowed in any cou nty
here where he has property. W idow or widower m ay within six
m onths waive provision in will o f deceased husband or wife and claim
same share in property as would have had in case deceased died
intestate. (B ut see Husband and W ife.)
N uncupative will must be reduced to writing within six days, or
proved by testim ony within six months, from tim e words spoken.
N o letters In such till fourteen days after decease o f testator. N ot
effectual to dispose o f m ore than $100.00 worth o f property unless
proved b y three witnesses who acted at testator's request.
SYNOPSIS OF
THE LAW S OF MARYLAND
R E L A T IN G T O
BANKING AND COMMERCIAL USAGES
R evised b y B l a d e s & R o s e n f e l d , A ttorneys at Law.
1206-1207 Fidelity Building, Baltim ore.
(See Card in A ttorn eys’ List.)
i n g e n e r a l.
F lack's A nnotated C od e— E dition o f 1939 . (tw o
volum es) em braces the P ublic General Laws o f M aryland and, b y an
A ct o f the General Assem bly, has been legalized and m ade evidence
o f the law. Especial reference to statutes in the follow ing, is, there
fore, unnecessary.
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A c k n o w le d g m e n t s m ay be taken within the United States before
any N ota ry P ublic and are sufficient if attested m erely b y the signa
ture and notarial seal o f the N ota ry . N o estate o f inheritance or
freehold, or any declaration or lim itation o f use, or any estate in
land abov e seven years, shall pass or take effect unless the deed con
veying the sam e shall be executed, acknow ledged b y all grantors and
recorded, and no deed o f real or leasehold p roperty shall be valid for
the purpose o f passing title unless acknow ledged b y all grantors and
recorded. Such deeds m ay be acknow ledged b y the grantor or
grantors wherever they m ay happen to b e at the tim é o f execution
o f the instrum ent. I f acknow ledged in the cou n ty or city within
which the land or any part o f it lies, the acknow ledgm ent m ay be
m ade before a notary public, a justice o f the peace for such city or
cou n ty, a jud ge o f the Orphans’ C ourt o f such city or cou n ty, a judge
o f the C ircuit C ourt for the cou n ty, or (if the land lies w h olly or partly
in B altim ore C ity and the acknow ledgm ent is there m ade) before a
ju d ge o f the Supreme Bench o f B altim ore C ity . I f acknow ledged
within the State, but out o f the co u n ty or city wherein the real estate
or any part o f it iies, the acknow ledgm ent m ay b e m ade before a
notary public, any ju d ge o f the C ircuit C ourt for the circuit in which
the grantor m ay be, or any judge o f the Orphans' C ourt o f the cou nty
in which the grantor m ay be, any jud ge o f the Supreme Bench o f
Baltim ore C ity , any jud ge o f the Orphans’ C ourt o f said city , or
before any justice o f the peace for the cou n ty or city where the grantor
m ay be at the lim e o f the acknow ledgm ent, the official character o f
such justice being certified to b y the clerk o f the C ircuit C ourt for the
cou n ty or o f the Superior C ourt o f B altim ore C ity (as the case m ay
be) under the clerk’s official seal. I f acknow ledged without this
State, b ut within the U nited States, the acknow ledgm ent m ay be
m ade before a N ota ry P ublic, a jud ge o f any C ourt o f the United
States, a jud ge o f any cou rt o f any State or territory having a seal,
or before a com m issioner o f deeds for this State. I f acknow ledged
without the U nited States acknow ledgm ent shall be m ade before an
am bassador, minister, en v oy or charge d ’affaires o f the U nited States,
in the cou ntry to which he is accredited or before any one o f the follow
ing officers com m issioned or accredited to act at the place where the
acknow ledgm ent is taken, and having an official seal, v iz .: any con
sular officer o f the U nited States; a notary pu b lic; or a com m issioner
or other agent o f the State o f M aryland having pow er to take acknow l
edgm ents to deeds. In all cases, the official seal o f the officer or C ourt
taking the sam e must be affixed to the certificate o f acknow ledgm ent.
There are no special provisions as to acknow ledgm ents b y married
wom en. C orporations acknow ledge either b y attorney appointed for
that purpose in the b o d y o f the instrum ent itself, or b y the President
or V ice-president o f the C orporation , w ithout such appointm ent.
A ll conveyances acknow ledged prior to June 1st. 1939, in which such
acknow ledgem ent is defective are validated b y chapter 44 o f the A cts
o f 1939. (See C onveyances.)
A d m in is t r a t io n o f E sta te s . T h e Orphans’ C ourts o f the Counties
and the Orphans’ C ourt o f B altim ore C ity are the courts o f probate.
W here decedent leaves a will, letters testam entary are com m itted te
the,executor or executors (m ale or fem ale) named in the will, if any are
nam ed. Letters testam entary or o f adm inistration will not be granted
to any person under the age o f eighteen years or o f unsound m ind, or
con victed o f any infam ous crim e nor to any person not a citizen o f the
U nited States. A non-resident o f M arylan d m ay be appointed as the
personal representative o f a decedent resident o f M aryland only when
the State o f his or her residence extends reciprocal privileges to resi
dents o f M aryland. In granting letters o f administration where decedent
dies w ithout leaving a will, or leaving a will, does n ot nam e an executor
or executors, certain persons are preferred to others. T h e order o f pre
ference follow s: 1. Surviving spouse, or child, or children (in discretion
o f the C o u r t ); 2. G randchild; 3. Father; 4. M oth er; 5. Brothers and Sis
ters; 6. N ext o f kin. W here one o f a class o f persons is entitled the ap
pointm ent is in the discretion o f the C ourt. Relations Of the w holeblood are preferred to those o f the half-blood in equal degree, and rela
tions o f the half-blood are preferred to those o f the whole-blood in a
rem oter degree. A single wom an is preferred to a married wom an in
equal degree. 7. I f there be no relations who qualify, letters o f adminis
tration shall be granted to the largest creditor applying fo r the same.
8. I f there shall be none o f the first five groups above nam ed, or if these
b e Incapable or refuse to act, and if the sixth and seventh groups neglect
t o a pply, the appointm ent is in the discretion o f the C ourt. B ond is re
quired with tw o sureties, or one o f certain surety corporations authorized
b y the law o f M aryland to qualify up on such bonds. W hen testator re
quests in will that executor therein appointed be excused from giving
bond, then bond shall be given only in such am ount as the cou rt shall
consider sufficient to secure paym ent o f debts o f deceased. Six m onths’
notice to creditors m ust be given b y publication in as m any news
papers as the Orphans’ C ourt shall direct (usually one) before the
estate is distributed. Personal property o f the decedent m ust be
appraised, an item ized inventory thereof filed in the Orphans’ C ourt,
and distribution thereof m ade through the Orphans C ourt. A ll
sales m ade b y the personal representative m ust be authorized and
ratified b y the Orphans’ C ou rt which appointed him. T he personal
representative must within tw elve m onths o f his appointm ent file
in the Orphans’ C ou rt o f his appointm ent a detailed account o f
his administration, and if such first account does not show the estate
to be fu lly administered, further accounts m ust b e filed at six-m onth
intervals until the estate is fu lly administered. A b o v e provisions
also applicable t o “ estates o f persons absent and unheard o f for
above seven years ” w ho after due p ro o f are declared b y the Orphans’
C ourt to be “ ju d icially d e a d ” and letters testam entary or o f admin
istration are granted on such estate as i f the absent person were
actually dead,. T he rights o f such absent person are protected b y
requiring the legatees or distributees t o give bond conditioned to
repay sum s received b y them with interest, if such absent person
should be in fact alive at the tim e distribution is m ade.
A ffid a v its . (See A cknow ledgm ents.) N o particular form neces
sary, but whoever can take an acknow ledgm ent can take an affidavit.
A ffidavit o f m ortgagee always required in a m ortgage as to the bonafldes o f m ortgage consideration. (S ee'M ortgages.)
A lie n s . Aliens, not enemies, m ay take and hold lands, tenem ents,
and hereditaments acauired b y purchase, or to which they would, if
citizens, be entitled by descent; and m ay sell, devise or dispose o f the
same, or transmit the same to their heirs, as fu lly and effectually, and
in the same manner, as if b y birth, they were citizens o f this State.
A r b it r a t io n . A ny cause in the law courts or Orphans' Courts
o f this State (in their respective spheres) m ay, b y rule o f cou rt and
b y consent and agreem ent o f the parties thereto, be subm itted and
referred to the award and arbitram ent o f any person or persons, and
the C ourt ipay give judgm ent on the award o f the person or persons
to whom such submission and reference shall be m ade as o f the term
to which said award shall be returned and award execution thereon as
upon verdict, confession or non-suit. B y agreem ent, disputes between
em ployer and em ployee m ay be subm itted, fo r arbitration, to any
judge or justice o f the peace, or if the parties so elect, to a group o f
arbitrators appointed b y such judge or justice o f the peace, the deter
m ination o f such judge, justice o f the peace or o f the arbitrators
appointed b y them to be filed as a judgm ent o f the cou rt presided over
b y the jud ge or iustice o f the peace to whom the dispute was sub
m itted for arbitration. An agreement to arbitrate, as distinguished
from a case actually subm itted for arbitration, cannot be specifically
enforced.
A t t a c h m e n t s for d ebt or for liquidated damages can be obtained
in all cases when the defendant is a non-resident or has absconded,
affidavit being first m ade b y the plaintiff to the correctness o f bis claim
and the fact that the defendant is a non-resident or has absconded.
T h ey m ay be also obtained In connection with an original process when
the creditor or som e one in his behalf shall give bond in double the
am ount o f the debt, with sureties to be approved b y the clerk, and
m ake affidavit before the clerk o f the C ourt 'where the suit is brought
that the defendant is bona fide indebted to the plaintiff in the sum
claim ed, and that the plaintiff know s or has good reason to believe that
BANKING AND COMMERCIAL LAWS— M ARYLAND
the d ebtor has absconded or is about to abscond from the State, or
that the defendant has assigned, disposed of, or concealed, or is about
to assign, dispose of, or conceal, his property, or som e portion thereof,
with intent to defraud his creditors, or that the defendant fraudu
lently con tracted the d ebt or incurred the obligation; or that the
defendant has rem oved or is about to rem ove his property, or some
portion thereof, out o f this State, with intent to defraud creditors
and the attachm ent m ay be maintained, although the debt or obliga
tion upon which the action is brought m ay not have matured, but the
date o f the m aturity o f the debt or obligation must be set forth in
the affidavit. A claim ant m ay have the attached property released
b y filing à bond in double the amount o f the appraisement. Any
kind o f property or credits belonging to the defendant, in the plaintiff’s
own hands or in the hands o f any one else m ay be attached. There
Is a special provision for capital stock o f a corporation. T h e certifi
cate itself m ust be seized. Credits not due m ay be attached, but
wages, hire or salary not due cannot be attached, and $100 o f wages,
hire, or salary due shall always be exempt. Im prisonm ent for debt
Is abolished. D efendant m ay be sued in the city or cou n ty o f his
residence or that o f his place o f business. In addition to attachm ents
against non-residents or absconding debtors for debt (i. e., a liqui
dated sum ) attachm ents m ay be issued against such debtors in cases
arising from contracts when the damages are unliquidated, and in
actions for wrongs independent o f contract, but in such cases no
attachm ents can be issued until a declaration is filed setting ou t
specially and in detail the breach o f the contract com plained o f or the
tort actually com m itted, verified b y the affidavit o f the plaintiff or
some one in his behalf, and until a bond shall be filed similar to the
bond required in attachm ents for fraud. A ll papers in attachm ent
proceedings can be amended as in any other actions at law. I f neither
the Defendant nor Garnishee appear condem nation m ay be had upon
filing bond to be in force for period o f six months, accounting from the
return o f the attachm ent.
B a n k C o lle c t io n C o d e . ’ E ffective June 1, 1929. Follow s directly
after Laws.
B a n k s. A ny num ber o f persons, not less than five, citizens o f the
United States and a m ajority o f them citizens o f this State, m ay asso
ciate to establish a bank upon the terms and conditions and subject to
the liabilities prescribed in A rticle Eleven o f the C ode. T he capital
stock for any bank shall n ot be less than twenty-five thousand dollars
($25,000.00) in cities, towns, or villages having up to fifteen tnousand
(15,000) inhabitants, and shall n ot be less than seventy-five thousand
dollars ($75,000.00) in cities, towns, or villages having m ore than
fifteen thousand (15,000) and up to fifty thousand (50 000) inhabitants,
and shall not be less than one hundred thousand dollars ($100,000.00)
in cities, towns and villages having m ore than fifty thousand (50,000)
and up to one hundred and fifty thousand (150,000) inhabitants,
and shall n ot be less than five hundred thousand dollars ($500,000.00)
in any city, tow n or village having m ore than one hundred and fifty
thousand inhabitants (150,000); the number o f inhabitants in each
case to be ascertained or determ ined b y the last Federal or State
enumeration; and no bank shall start business until all o f the capital
stock p rovided for in its charter and an additional sum equal to 2 0%
thereof, as surplus shall have been paid for in full in m oney and no
paym ent shall b e regarded as m ade b y the delivery o f any note,
security or prop erty o f any kind as a substitute"for m oney, except
as otherwise provided b y law. Provided that the above shall not
apply to any person, co-partnership, incorporated bank, or other
incorporated institution engaged in the banking business in this State
on A pril 21, 1933, except in such cases where said person, co-partner
ship, incorporated banks or other incorporated institution doing a
banking business shall thereafter undertake to establish a branch or
branches outside o f the city , tow n or village in which they were
then located. In such a case the foregoing provisions relative to
capital and surplus shall be com plied with, b y adding to the capital
and surplus o f the parent institution, the am ount that w ould be
required if such branch or branches were separately incorporated.
And provided, further, that in estimating such addition to the capital
and surplus o f th e parent institution, credit shall be given for the
amount that the existing capital and surplus o f such parent insti
tution exceeds the am ount thereof required b y law ; and provided
further, that no branch shall be established b y any bank, in the
city, town, or village, where said bank is located, until said bank
conforms to the requirem ents, as to the m inimum am ount o f capital
stock for banks in said city, tow n or village.
E very bank (other than a savings bank without capital stock)
shall keep on hand at all times a reserve o f at least 15 per cent o f its
demand deposits and o f at least 3 per cent o f its tim e deposits.
These reserves m ay be kept as cash on hand, or on deposit in such
bank or banks, or trust com pany or trust companies o f the State o f
M aryland, or elsewhere, o f good standing, as the board o f directors
or executive com m ittee b y resolution m ay direct; in addition to the
above m ethods o f keeping reserves, the reserve o f at least 3 per cent
o f tim e deposits m ay be kept in the form o f direct obligations o f the
United States G overnm ent, or the State o f M aryland. E very trust
com pany shall keep on hand at all times a reserve o f at least 15 per
cent o f its dem and deposits (not including any deposits m ade b y the
C ity o f Baltim ore and secured b y the counter deposits o f Baltimore
C ity stock). O f this 15 per cent, 10 per cent shall be kept on deposit
in such bank or banks, or trust com pany or trust com panies o f good
standing, either in the State o f M aryland or elsewhere, as the board
o f directors or executive com m ittee m ay direct, and the other 5
per cent m ay be kept in the same manner as the 10 per cent, or in
the form o f registered or cou pon bonds or public stock o f the United
States, or the State o f M aryland, or o f Baltim ore C ity, or o f the
bonds o f any cou n ty or m unicipal corporation o f this State which
shall be approved b y the Bank Commissioner. E very trust com pany
shall also keep on hand at all tim es a reserve o f at least 3 per cent
o f its tim e deposits; which reserve m ay be kep t in the same form as
time deposits o f banks are required to be kept as set forth above..
Cash item s shall not be considered as a part o f the reserve required
to be kept by either banks or trust companies, b u t cash actually on
hand held b y a trust com pany shall be considered as a part o f the
10 per cent reserve above m entioned.
N o savings institution or savings bank incorporated after 1910
could have any capital stock, but m ust be a mutual association.
Such “ association for carrying on the business'of savings banking m ay
be form ed b y any number o f persons, not less than fifteen, citizens o f
the United States, and a m ajority o f them citizens o f this State, who
shall enter into articles o f association which shall specify the ob ject for
which the association is form ed anc\ shall state: T h e name b y which
the savings institution is to be known, the village, town or city and
county where sucb institution is to be located, the names and resi
dences o f the members thereof, the date on which it is proposed to
com m ence operations, the number o f directors proposed to manage
the association's affairs, which shall not be less than five, who m ust
be members o f the association, and the names and residences o f the
directors who shall serve the first year.” The articles o f association
shall be presented to the Bank Commissioner for examination. H e will
make an investigation and will either approve or refuse the form ation
o f the savings institution.
The banking laws o f M aryland provide for the appointm ent o f a
Bank Com m issioner with broad powers for the examination o f all
banking institutions in this State other than N ational Banks. W hen
ever capital is reduced b y impairm ent com m issioner m ay require
Bank to m ake such deficiency good within sixty days, and upon its
failure to d o so m ay take possession o f property and business o f such
institution and retain until affairs are finally liquidated, or until
a reorganization has taken place which will fully p rotect depositors
and creditors. This also applies where the business is conducted in
an unsafe or unauthorized manner. E very banking and trust insti-,
tution shall have the right o f perpetual succession until forfeiture.
E very bank and trust com p any shall make to the Bank Commissioner,
not less than three reports during thè calendar year, at such times as
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Federal Reserve Bank of St. Louis
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the Bank Comm issioner shall require. A t least once a year the bank or
trust com pany shall report to the Bank Commissioner, on call b y him , a list o f its stockholders. T he Bank Comm issioner shall have a right
to call fo r special reports, whenever in his judgm ent the same are
necessary.
Banks are perm itted to establish and operate branches within the
State after having first obtained the approval o f the Bank Com m is
sioner. N o bank or trust com pany m ay have any affiliate or closely
allied corporation, or own controlling stock in any other corporation.
Stockholders o f every bank and trust com pany were form erly held
individually responsible, equally and ratably, and n ot one for another,
fo r all contracts, debts and engagements o f every such corporation,
to the extent o f the am ount o f their stock therein, at the par value
thereof, in addition to the am ount invested in such stock. B y an A ct
o f the General Assem bly o f M aryland (Chapter 81, A cts o f the Regular
Session o f 1937) this liability does n ot a p p ly with respect to stock
originally issued b y any bank or trust com pany subsequent to N ovem
ber 23, 1936. Such responsibility, with respect to all outstanding
stock issued b y any bank or trust com pany, shall cease three m onths
after such bank or trust com pany shall cause a notice o f such pros
pective term ination o f responsibility to be published in a newspaper
published in the city, village or cou n ty in which the bank or trust
com pany is loca ted ; provided that such bank or trust com p any shall
certify to the Bank Comm issioner the fa ct o f such publication. In
the event o f the term ination o f the individual responsibility o f stock
holders as above provided, such bank or trust com pany is required to
transfer to surplus at the close o f a fiscal period, either annually or
semi-annually, not less than 10% o f its net earnings, until such surplus
shall equal and thereafter continue to equal 100% o f its capital. _
E very bank, savings institution and trust com pany is specially
granted the pow er and authority, if the action is approved b y a vote
o f a m ajority o f its B oard o f D irectors, to becom e a m em ber o f the
Federal D eposit Insurance Corporation.
B lu e S k y L a w . N o preliminary reports or qualifications are
required and only if it shall appear to the Attorney^ General o f M a ry
land that in the issuance, sale, prom otion, negotiation, advertisem ent
o f securities within the State o f M aryland, any person, partnership
or corporation, is em ploying or is abou t to em ploy any device, schem e
or artifice to defraud, or for obtaining m oney or property b y means
o f any false or fraudulent pretense, representation or prom ise, the
said A ttorney General m ay require said person, partnership or cor
poration to file with him a statement in writing under oath o f all the
facts'concerning the same. From the action o f the A ttorney-General,
there is an appeal t o the courts, with final resort to the C ourt o f Appeals.
T he Law also provides that any person, partnership or corporation
having been served with any order o f the A ttorney General, or having
knowledge o f the issuance o f said order and while said order remains
in effect, either as originally issued or as m odified who shall execute
or carry on any schem e or device against which said order baa been
issued, or w ilfully attem pts to d o so, shall be guilty o f a misdemeanor
and, upon con viction, shall be fined not m ore than $10,000 or impris
oned not m ore than tw o years or be subject to b oth fine and imprison
m ent, in the discretion or the C ourt.
C o lle c tio n s . Uniform Bank C ollection C od e as recom m ended by
American Bankers Association, see com plete text back o f Laws.
C o n t r a c t s . T he normal condition o f all persons is one in which
they are capable o f m aking any con tract. T he fourth and seventeenth
sections o f the Statute o f Frauds are in force in M arylan d. It is no
longer necessary to show that the consideration for a special prom ise
to answer for the d ebt o f another is in writing. A citizen can not
m ake a contract with an alien enem y during the continuance o f hos
tilities, but aliens, not enemies, m ay con tract and hold real property
as fully as citizens. T he later cases decide contract o f infants t o be
voidable and not v o id ; and they are capable o f ratification b y infants
on arrival at age o f twenty-one. T h e contracts o f infants for neces
saries are binding upon them . T h e contract o f a lunatic is voidable
and not void. A married wom an m ay engage in business, contract,
sue and be sued upon contracts and torts, as if unmarried. All
gam bling contracts are void .
C o n v e y a n c e s . N o estate in or title to any land lying within this
State, for any period above seven years shall pass or take effect unless
the deed con veyin g the sam e shall be executed, acknow ledged and
recorded. Such, deed shall be signed and sealed b y the grantor, and
attested b y at least one witness. Unless the contrary intention
appears, every deed is construed to pass the whole estate o f the
grantor. Deeds o f real estate should be recorded within six m onths
from date In cou n ty, or in B altim ore C ity , where land lies. W here
there are tw o or m ore deeds con veyin g the same lands, the deed first
recorded shall be preferred if m ade bona fide and upon good and
valuable consideration
A scroll with the w ord “ sea l” therein b y
way o f a seal, is sufficient, as “ (signed) John D o e (Seal).” T he
D eed o f a b od y corporate must b e signed in the corporate name by
the President or a V ice President, and the official C orporate seal
impressed on the deed, the seal to be attested b y the Secretary o f the
corporation.
C o r p o r a t io n s are organized under the authority o f A rticle 23 o f
F la ck ’s C ode where m ost liberal provisions are m ade fo r general
incorporation, including such features as stock without par value,
issuance o f stock for considerations other than cash, convertibility
o f stock from one class to another class, cum ulative voting, stock fully
paid and non-assessable, convenient amendment and consolidation,
etc. E very dom estic corporation having capital stock, except rail
road corporations, building associations and co-operative associations,
shall before the tim e o f incorporation p a y for the use o f the State a
bonus tax for its authorized capital stock at the follow ing rates, to w it:
Tw enty cents for every thousand dollars o f its authorized capital
stock where such authorized capital stock am ounts to $1,000,000.00 or
less, but in no case less than $20.00.
A n additional bonus tax o f $150.00 for every m illion dollars or
fractional part thereof on am ount o f stock in excess o f $1,000,000.00
and not in excess o f $5.000,000.00.
An additional bonus tax o f $20.00 for every m illion dollars or frac
tional part thereof in excess o f $5,000,000.00.
F or purposes o f above provisions as to bonus tax, stock without par
value shall be treated as if its par value were $100.00 per share.
Corporations have perpetual succession, m ay carry on business any
where, m ay issue bonds and secure them b y m ortgage o f all property in
cluding franchises. A foreign corporation before doing business in this
State must pay a fee o f $25.00 and file with the State T a x Comm ission o f
M aryland: (1) A n officially certified co p y o f its charter or certificate o f
incorporation; (2) Annually therafter a report to be filed on or before
M arch 15th in every year subscribed and sworn to b y its president or
treasurer (or a m ajority o f its board o f directors) and accom panied b y a
fee o f $1.00 for filing such a report, showing (a) the corporate nam e; (b)
the names and addresses o f its president, treasurer, secretary, and
members o f its board o f directors; (c) its main office in this State and
its principal office in the State o f incorporation; (d) the am ount o f
authorized capital stock and the am ount issued, and the num ber and
par value o f the shares, and the names and addresses o f the cor
poration’s shareholders in this State, and the number o f shares held
b y each; and in such annual report shall be given such inform ation
as m ay be required b y the State T a x Com m ission in order to enable
it to determ ine the am ount o f capital em ployed in M aryland as o f
January 1st o f the year for which such report is filed; (e) the name
and address o f its agent resident in this State, service o f process
upon whom shall bind the corporation until the appointm ent o f a sub
stitute is duly certified to the State T a x C om m ission. E very officer
and every agent o f such foreign corporation which fails to com p ly
with the above provisions, shall be subject t o crim inal prosecution,
and while such failure to com p ly shall not affect the validity o f any
contract m ade with such non-com plying corporation, no suit can be
maintained in the Courts o f this State b y such corporation until com
pliance with abov e provisions. B oth dom estic and foreign corpora
tions must p ay t o the State an annual franchise tax, the am ount o f
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BANKING AND COMMERCIAL LAWS— M ARYLAND
which varies, if a dom estic corporation, with the am ount o f capital
stock o f sucn corporation issued . outstanding a n d /or subscribed for,
and if a foreign corporation with the am ount o f capital em ployed b y
it in this State as o f the preceding first o f January. T h e franchise
tax is payable on or before the first o f August in each year. T he
penalty for failure to pay the franchise tax, b y the dom estic corpora
tion , is forfeiture o f its charter, and b y the foreign corporation is
forfeiture o f the right t o 'd o business in the State.
N o corporation m ay interpose the defense o f usury in any action
at law or in equity. There is no period o f lim itations in this State
on judgm ents against foreign corporations. M aryland corporations
m ay hold stockholders’ m eetings outside o f this State under certain
conditions.
' C o u r t s . T h e Circuit C ourts o f the counties have com m on law
Jurisdiction in all cases involving m ore than $50.00, and in all cases
Involving title to la n d ; and equity jurisdiction in all cases involving
m ore than $20.00. T h e Circuit C ourt o f Baltim ore C ity and the Cir
cuit C ourt N o. 2 o f Baltim ore C ity have exclusive equity jurisdiction
in the city. T h e Superior C ourt o f B altim ore C ity , the C ourt o f
C om m on Pleas o f B altim ore C ity , and the Baltim ore C ity C ourt have
concurrent com m on law jurisdiction in Baltim ore C ity in cases in v o lv
ing m ore than $100.00. All records pertaining to the transfer o f title
to land in Baltim ore C ity are in the custody o f the Clerk o f the Superior
C ourt o f Baltimore C ity , and in the counties, in the custody o f the
clerks o f the various C ircuit Courts o f the counties. All such records
are open to the public. T h e Orphans' C ourt o f Baltim ore C ity , and
the Orphans’ C ourt o f each cou n ty have exclusive probate jurisdiction.
In the counties justices o f the peace have com m on law jurisdiction
to the am ount o f $100.00 (concurrently with the Circuit Courts from
$50.00 to $100.00). In Baitim ore C ity the People's C ourt has juris
d iction up to $100.00 and suits on small claims in Baltim ore C ity
are brought in this C ourt instead o f before the individual justices o f
the peace.
D e p o s itio n s . W hen the courts are satisfied, b y affidavit or other
wise, that there are material and com petent witnesses residing with
out the State, they will direct that a com m ission be issued to take
the testim ony o f such witnesses. T h e com m issioners are selected b y
the cou rt, and must qualify before som e person authorized to adm in
ister an oath in the state where they reside. T h e depositions, duly
certified by the comm issioners, shall be adm itted as evidence at the
trial o f the cause, subject to the same objections and exceptions as
the sam e testim ony would be if the witness had been personally present
in cou rt and there exam ined. Parties have the right to be present
when the testim ony is taken under the com m ission, and m qst receive
reasonable notice o f the tim e and place. Interrogatories and crossinterrogatories m ay be annexed to the com m ission or the witness m ay
be examined b y counsel. T h e testim ony o f non-resident witnesses or
parties to a cause m ay also be taken before a com m issioner, notary
public or ju stice o f the peace upon giving notice o f not less than five
days to tile opposite party o f the tim e and place, when and where the
testim ony o f such non-resident witnesses is proposed to be taken, and
the name o f the com m issioner, notary pu blic or justice o f the peace
before whom the same is proposed to be taken, together with the names
o f the witnesses proposed to be exam ined. D epositions shall be signed
by the witnesses, and signed and sealed b y the officer taking the same
and returned to the C ourt in which the case is pending.
D e s c e n t a n d D is tr ib u t io n o f P r o p e r t y , A s to descent, see
C ode 1939, Art. 46, and as to distribution, C ode 1939, Art. 93. T he
Rule in Shelley’s case has been abolished b y C h. 144, A cts 1912,
C od e 1939, A rt; 93, $ec. 348.
D o w e r . T h e com m on-law right o f dow er exists in M aryland, and
extends to equitable estates. B y act 1898, the husband’s dower
was created; an estate o f the husband in his wife's estates o f inherit
ance. exactly equivalent to the w ife's dow er in her husband’s estate.
A devise or bequest o f real or personal property to the wife or husband
shall be construed to be in lieu o f dow er in lands or share o f personal
estate, respectively, unless otherwise expressed in the will. If the
widow or widower renounces form ally in writing, how ever, such pro
vision m ade for her or him b y the will within six m onths after the
grant o f adm inistration on the estate o f the deceased husband or
wife, the dow er right and the share o f personal property remain undis
turbed. “ T h e surviving husband or widow shall be barred o f his
or her right o f dow er in real or personal estate, unless within six m onths
after the first grant o f letters testam entary, he or she shall file a
written renunciation.”
(See M arried W om en.)
E x e c u tio n s m ay issue and judgm ents may be renewed or revived
b y scire facias at any tim e within tw elve years from date o f judgm ent.
In the circuit courts for the counties there is a stay until the first Thurs
day o f the term succeeding the rendition o f the judgm ent, provided the
judgm ent is obtained at the second term after the defendant is sum
m oned. There is no sta y upon judgm ents rendered in the courts o f
Baltim ore C ity or b y justices o f the peace In the city or counties, but
execution m ay issue forthw ith. T he defendant m ay stay the execution
b y superseding with sureties for six months. C op y o f docket entries o f
judgm ent when recorded in another cou n ty makes the judgm ent a
lien there.
E x e m p tio n s . N o hom estead law. W earing apparel, books and
tools (not kept for sale) and $100 o f m oney, land or goods, and $500
payable to the debtor as life, health, or accident insurance are exem pt
from execution, except (1) on judgm ents for breach o f promise to
marry or seduction and (2) aggregate exem ptions not to exceed $500
and (3) not applicable to any but actual bona fide residents o f this
State.
F o r e ig n C o r p o r a t io n s . (See C orporations.)
F o r e ig n J u d g m e n t s . Judgm ents o f the courts o f other states
certified under the A ct o f Congress, are proper causes o f action against
any person subject to the process o f the courts o f this State.
F r a u d . When any false representation is made by one to another
with the intent to defraud, and the defrauded party, thinking the
alleged fraud to be true, acts upon it, any con tract thus made can
not be enforced. But If the injured party knows such representations
to be false it can not be said to bave influenced his con du ct. For
general doctrine in this State see M cA leer vs. Horsey 35 M d . 439.
G iving checks or drafts w ithout provision for acceptance is prima
facie evidence o f intent to defraud, and is punishable as a crim e
unless such provision is made within ten days. E very person buying
merchandise in bulk shall dem and and receive from the vendor a
written statem ent under oath containing the names and addresses
o f all creditors with am ount o f indebtedness at least ten days before
the sale is consum m ated. T h e vendee at least ten days before con
sum mating such sale shall notify all o f said creditors either personally
or by registered mail o f such proposed purchase and is required to
see that the purchase m oney is applied to the paym ent o f the vendors
debts shown on said statem ent. A sale or transfer o f goods in bulk
without such notice shall as to all subsisting creditors o f the vendors
be void.
Special provisions o f criminal law ap p ly to the m aking o f false
financial statements.
G a r n is h m e n t s . (See A ttachm ents.)
H o lid a y s . Saturdays after tw elve o'clo ck noon (except in C aro
line, Howard and T a lb ot C ounties); Sundays: January 1 (N ew Year’s
D a y ); February 22 (W ashington’s b irth d ay ); M arch 25 (M aryland
D a y ); G ood Friday; M a y 30 (D ecoration D a y ); July 4 (Independ
ence D a y ); the first M on da y In Septem ber (Labor D a y ); Septem ber
12 (D efenders’ D a y ); O ctober 12 (C olum bus D a y ); N ovem ber 11
(Arm istice D a y ); Decem ber 25 (Christmas D a y ); aH days o f general
and congressional elections throughout the State. W hen any o f
these days falls on Sunday the ensuing M on d a y is a legal holiday.
All special days that m ay be appoin ted or recom m ended b y the
G overnor o f this State or the President o f the U nited States, as days
o f thanksgiving or fasting a n d prayer, or other religious observance,
or for the general cessation o f business, shall also be regarded as legal
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holidays. All bills, drafts, checks and notes presented for paym ent
or acceptance on these said days shall be deemed to bé presented for
acceptance or paym ent on the secular or business days next suc
ceeding such holiday.
H u s b a n d a n d W ife.
(See D ow er, and M arried W om en .) In
this State the husband is not liable for w ife’s ante-nuptial debts
or contracts. Husband is liable for necessaries o f wife. Husband
has same interest in w ife's estate as wife has in husband’s estate.
M arried wom en are expressly authorized to becom e partners and to
contract with husband. Either can relinquish interest in other's
real estate b y join t or separate deed, or b y'agen t or attorney properly
constituted. T h e w ife’s property is p rotected b y the Constitution
from the debts o f the husband.
I n t e r e s t. T h e legal rate o f interest Is 6 per cent per annum. A
person proved guilty o f usury forfeits the excess over the aggregate
o f the real sum lent and 6 % interest thereon. Judgments bear interest
from the date o f the verdict. A corporation cannot plead usury.
Licensed loan brokers m ay charge 3 H % per m onth on loans up to
$300.00
J u d g m e n t s are liens for tw elve years from the date o f rendition
on any interest o f the defendant in real or leasehold property within
the cou nty where rendered. They can be transferred from one county
to another b y sending a co p y o f the docket entries to the clerk for
record. T h e lien com m ences from the date o f the entry o f the docket
entries b y the clerk. Judgm ents are not liens on m ortgages or other
personal property until execution has issued and the writ is in the
hands o f the sheriff.
L ie n s . (See Judgm ents.) M echanics’ Liens. E very building
erected, repaired, rebuilt, or im proved to the extent o f one-fourth
o f its value is subject to a lien for work done or materials furnished
for or abou t the same, except that there are no liens for materials
furnished in B altim ore C ity . E very m achine, wharf, or bridge,
constructed or repaired is subject in like m anner as buildings are, to
a lien. All boats or vessels are subject to a lien for materials fur
nished or work d one in building, repairing, or equipping the same.
Garages are given lien for storage and accessories. T o secure the
lien and lay foundation for enforcing it, the material man must within
six m onths after the last work has been furnished, file a claim in the
circuit cou rt fo r the cou nty, or in the C ircuit C ourt for B altim ore C ity,
as the case m ay be. T he liens are enforced b y scire facias or b y bill
in equity.
L im it a t io n s o f S u its . A ccoun ts and notes are barred after three
years, sealed instruments after tw elve- years; judgm ents tw elve years
except against foreign corporations (no limitations)'. A verbal prom ise
or acknow ledgm ent will revive a d ebt barred b y the statute.
M a r r ie d W o m e n . M arried w om en m ay hold and dispose o f their
property law fully as if unmarried, but husband must join in con vey
ances o f real estate to release his dow er interest. M arried wom en m ay
engage in business, con tract, sue, and be sued upon contracts and for
torts, as if unmarried. M arried wom an is alone liable for ante-nuptial
debts and contracts. H usband is still liable for necessaries. W here
husband or w ife is adjudged a lunatic upon inquisition, and the finding
remains in force, other spouse m ay con vey after acquired property by
separate deed, as if unmarried. Surviving spouse is also allowed ahead
o f creditors $75 if no m inor children, $150 i f children. Surviving spouse
is entitled to (a) one-third o f net personal estate if there are children or
one-h alf thereof if there are no children b u t a surviving parent, or
$2,000.00 and one-h alf o f the residue if there are neither children nor
parents b u t a brother or sister or descendant o f a brother or sister
surviving, and (b) the sam e share in net real estate or at option o f
surviving spouse in lieu o f share o f real estate surviving spouse, either
husband or wife, m ay elect to take dow er rights which are one-third
o f real estate for life ahead o f creditors unless dow er rights have been
specifically waived or w aived b y join in g in deeds. (See H usband
and W ife, and D ow er).
,
M o r tg a g e s are executed, acknow ledged, and recorded the same as
deeds, and are not valid against creditors unless recorded within six
m onths after date. There must be an affidavit made by the m ort
gagee or his agent at any tim e before recording, that the consideration
is true and bona fide. I f m ade b y agent, he m ust, in addition, make
oath that he is the agent o f the m ortgagee. A like affidavit is required
to chattel m ortgages, and absolute bills o f sale, both o f which must be
recorded within tw en ty days. T h e lien o f a m ortgage m ay be barred b y
ceasing to p ay interest or any installment o f the principal for tw enty
years. T h e y m ay be foreclosed at any tim e after the debt becom es
due and before the lien is barred.
N e g o t ia b le I n s t r u m e n t s . T he U niform N egotiable Instruments
A ct adopted. (See com p lète text follow ing “ D igest o f Banking and
Com m ercial Laws.)
N o te s a n d B ills o f E x c h a n g e . N egotiable instruments are
defined b y A rticle 13 o f F la ck ’s 1939 C ode, which repeals all laws,
inconsistent therewith.
Section 20 provides as follow s: “ A n in
strum ent t o be negotiable m ust con form to the follow ing require
m ents: 1. I t m ust be in writing and signed b y the maker or drawer.
2. It m ust contain an unconditional prom ise or order to p ay a sum
certain in m oney. 3. M u st be payable on dem and, or at a fixed
or determ inable future tim e. 4. M u st be payable to order or to
bearer; and 5. W here the instrum ent is addressed to a drawee he
m ust be named or otherwise indicated therein with reasonable cer
tain ty .” Its negotiability is not affected b y a seal, or b y a provision
which authorizes the sale o f collateral securities in case the instru
m ent be not paid at m aturity, or authorizes a confession o f ju d g
m ent if the instrum ent be not paid at m aturity; or waives the bene
fit o f any law intended for the advantage or the p rotection o f the
obligor; or gives the holder an election to require som ething to be
d one in lieu o f paym ent o f m oney. It is n ot necessary that paper
should be made payable at a bank or any fixed place. T o charge
indorser, notice o f non-paym ent and o f protest m ust at once be given to
him. T h e tim e o f m aturity is regulated b y Art. 13 o f the C od e as fol
lows : “ Section 104 : T im e o f M a tu rity. E very negotiable instrum ent is
payable at the tim e fixed therein w ithout grace. When the day o f
m aturity falls upon Sunday, or a holiday, the instrument is payable
on the next succeeding business da y. Instruments falling due on
Saturday are to be presented for paym ent on the next succeeding
business da y, except that instruments payable on dem and m ay, at the
option o f the holder, be presented for paym ent before 12 o'clo ck noon,
on Saturday, when that entire d ay is n ot a holid a y.” Legal holidays.
(See H olidays.) B y act 1898, C h. 198, it shall be lawful for banks
and bankers in the city o f B altim ore to close their doors for business
at 12 o 'clock noon, on each and every Saturday In the year, and every
Saturday in the year, after 12 o'clo ck noon, shall be a legal half
holiday, so far as regards the presenting for paym ent or acceptance,
and the protesting and giving notice o f the dishonor, o f bills o f exchange
and other negotiable paper, and for these purposes shall be considered
as the first day o f the week, or Sunday, and all negotiable paper shall
be deem ed to be presentable on the secular d ay next succeeding.
P o w e r o f A tt o r n e y . E very p o w e r 1o f attorney authorizing an
agent or attorney to sell and con vey any real estate, shall be attested
and acknow ledged in the same manner as a deed, and recorded prior
to or with the deed executed in pursuance o f such power o f attorney.
A corporation shall have power to appoint an attorney for the same
purpose, under its corporate seal. Such power o f attorney shall be
deemed to be revoked when the instrument containing the revocation
is recorded in the office in which the deed should properly be recorded.
P r o b a t e L a w . (See Adm inistration o f Estates and W ills.)
P r o t e s t is usually m ade b y notary public. N ota ry must keep
register o f protests. A protest o f notary public is prim a facie evidence
o f non-acceptance or non-paym ent, and o f the presentment o f said
note for paym ent, or o f said bill for acceptance or paym ent, at the
tim e and in the manner stated In the protest, and the protest shall also
be prima facie evidence that such notice has been sent or delivered in
the manner therein stated. (See N otes and Bills o f E xchange.)
BANKING AND COMMERCIAL LAWS— MASSACHUSETTS
R e p le v in Is a rem edy to recover specific goods and chattels to the
possession o f which the plaintiff is entitled. Also the proper rem edy to
recover possession o f goods distrained unlawfully. B ond must be given
to the State o f M aryland, and any party having an interest in the
property, m ay, upon breach o f any covenant in bond, maintain an
action in the nam e o f the State for his or her use.
S ales a n d N o tic e s . A cts 1910, C h. 346, adopts the Uniform
Sales A ct. (A rt. 83, secs. 19 to 96 incl.)
T a xes. T h e cou nty commissioners o f the several counties o f the
State, and the M a yor and C ity Council o f Baltimore C ity are directed
to levy a tax annually upon real and personal property situated within
the State. T he C ounty a n d /or C itv tax on Banks located and in
business anywhere in'M aryland is uniform ly 1 p er cent o f the value o f
its capital stock. T h e property o f religious, charitable, benevolent,
and educational institutions, and cem etery com panies is exem pt from
taxation. O n tim ely application exem ption m ay be had for m anufac
turer’s tools and m achinery in actual use from M unicipal taxation in
Baltimore C ity and in som e o f the Counties. C ollectors m ay sell
property to com pel paym ent o f overdue taxes, upon giving due notice
of sale, and com plying with other requisites o f statute, and any person
interested in property m ay redeem within tw elve calendar m onths
from date, and in default o f redem ption, title to property vests in
purchaser
T r u s t C o m p a n ie s (See also B a n k s ). F ive or m ore persons
citizens o f the U nited States, and a m ajority o f them citizens o f this
State, m ay form a corporation to be known as a trust com pany. T he
capital stock o f such corporation m ust be at least seven hundred
and fifty thousand dollars; provided, however, that a corporation
with a capital o f not less than tw o hundred thousand dollars m ay be
organized in a city containing m ore than one hundred thousand and
less than tw o hundred fifty thousand inhabitants, and a corporation
m ay be organized with a capital o f not less than one hundred and
fifty thousand dollars in a city containing m ore than twenty-five
thousand inhabitants and less than one hundred thousand inhabitants,
and with a capital o f at least one hundred thousand dollars in a city
or town the population o f which does not exceed tw enty-five thousand
inhabitants, the num ber o f inhabitants in each case to be ascertained
or determined b y the last Federal or State enumeration, and no trust
com pany shall start business until all o f the capital stock provided
for in its charter and an additional sum equal to 20% thereof as a
surplus, shall have been paid for in full in m oney and no paym ent
shall be regarded as m ade b y the delivery o f any note, security or
property o f any kind as a substitute for m oney, except as otherwise
provided by law.
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.
.
In the event that any trust com pany hereafter establishes a branch
or branches outside o f the city, tow n or village in which it is now
located, it shall add for each branch established, to its paid-in-capital
the following sums and tw enty per cent (2 0% ) thereof as additional
surplus; the sum o f tw enty-five thousand dollars in towns or villages
having less than fifteen thousand (15,000) inhabitants; seventy-five
thousand dollars in towns, villages or cities having m ore than fifteen
thousand (15,000) and up to fifty thousand (50,000), inhabitants, and
not less than one hundred thousand dollars in towns or cities having
more than fifty thousand and less than one hundred and fifty thou
sand inhabitants; and not less than five hundred thousand dollars in
cities having m ore than one hundred and fifty thousand; the number
of inhabitants in each case to be ascertained or determined b y the last
Federal or State enumerations; unless the surplus and paid-in capital
of such trust com pany is already sufficient under the present conditions
of the law to provide the surplus and capital required b y a trust com
pany hereunder doing business in the city, town or village in which
it m ay be located, and for branches in cities, towns or villages in which
it proposes to establish branches; provided, however, that no branch
shall hereafter be established b y any trust com pany, in the city, town
or village where said trust com pany is now located and engaged in
business, until said trust com pany conform s to the requirements
herein provided as to the minimum amount o f surplus and caDital
stock for a trust com pany in said city, town or village.
U n ifo r m S ta te L a w s. Intended for adoption b y all the States
and adopted b y M arylan d: 1. Aeronautics; 2. Air Licensing; 3. Bank
Collection C od e; 4. Bills o f Lading; 5. C old Storage; 6. D eclaratory
Judgements; 7. E xtradition o f Persons o f Unsound M in d ; 8. Federal
Tax Lien Registration; 9. Fiduciaries; 10. Flag; 11. Foreign A ck
nowledgments; 12. Foreign Depositions; 13. Foreign E xecuted W ills;
14. Fraudulent C onveyance; 15. Interparty Agreem ent; 16. Judicial
N otice o f Foreign Law ; 17. Lim ited Partnership; 18. Negotiable
Instruments; 19. Partnership; 20. P roof o f Statutes; 21, Sales; 22.
Stock Transfer; 23. W arehouse R eceipts; 24. M achine Gun A ct;
25. N arcotic D rugs; 26. Veterans’ Guardianship; 27. Criminal Extra
dition; 28. Fresh Pursuit; 29. T o secure the Attendance o f Witnesses
from w ithout a State in Criminal Proceedings; 30. Principal and
Income.
S
0
W ills o f land or personal property, and any codicil thereto, m ust
be in writing, signed b y the testator, or som e one else for him, in his
presence, at his request, and witnessed b y tw o or m ore credible wit
nesses as and for last will and testament o f the testator, in the presence
o f all the witnesses thereto. N uncupative wills invalid except in
case o f disposition o f personal property b y soldiers in actual m ilitary
service or mariners at sea. E very will or other testamentary instru
ment executed without this State in the m ode prescribed b y law,
either o f the place where executed or o f the testator s dom icile, or
according to the form s required b y the law o f this State shall be
deemea to be legally executed, and shall be o f the same force and effect
as if executed in the m ode prescribed b y the law o f this State, Pro
vided, said last will and testament is in writing and subscribed b y
the testator; and if the testator was originally dom iciled in M aryland,
although at the tim e o f m aking the will or at the tim e o f his death
he m ay be dom iciled elsewhere, the said last will or testamentary
instrument so executed shall be adm itted to probate in any orphans
court o f this State; and when so adm itted shall be governed b y and
construed and interpreted according to the law o f M aryland, w ithout
regard to the lex dom icilii, unless the testator shall expressly declare
a contrary intention in said will or testamentary instrument. N o
will, testament, codicil, or other testamentary paper shall be subject
to caveat or other ob jection to its validity after the expiration o f one
year from its probate. W hen a person is unheard o f for above seven
years, and supposed to be dead, the Orphans* Court m ay grant letters
testamentary or o f administration, as the case m ay be, on his estate.
SYNOPSIS OF
THE L A W S OF MASSACHUSETTS
RELATING TO
BANKING AND COMMERCIAL USAGES
R evised b y V a l m o r e O. C o t e , A ttorney,
412-414 K im bell Building,
N orth Adam s, Mass.
(See C ard in A ttorn ey's List)
A c c o r d a n d S a t is fa c t io n . An accord is an agreement whereby
one o f the parties undertakes to give or perform, and the other to
accept in satisfaction o f a claim , liquidated or in dispute, and arising
either from contract or from tort, something other than or different
from what he is or considers himself entitled to ; and a satisfaction is
the execution o f such agreement.
■ ,
*
.
W here the claim is undisputed, and is, settled only in part, such
part paym ent is without consideration and the balance can be collected.
This, however, can be remedied b y taking a release under seal which
purports a consideration in full settlement o f the entire claim . In
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2021
order to take advantage o f a suit pending in court because o f accord
and satisfaction, it must be specially pleaded in the defendant's answer.
However, in case o f a disputed claim, the acceptance o f a smaller
sum in lieu o f the entire claim is a valid consideration and therefore
is a full release on the entire claim.
A c c o u n ts . Ex parte affidavit on claims and accounts is o f no
value. T hey must be established b y evidence produced in court
after suit brought either b y testim ony, deposition, or other material
evidence.
A c k n o w le d g m e n t s a n d D e e d s . Acknowledgm ents may be m ade
before any justice o f the peace, notary public or special commissioner
in the State: when the acknow ledgm ent is made b y any person with
out this State and within any other state, territory or district o f the
United States, it m ay be made before any officer o f such state, terri
tory or district authorized by the laws thereof to take the p roof and
acknowledgment o f deeds, and when so taken there shall be attached
to the certificate o f acknowledgm ent a certificate o f the secretary of
the state or territory in which such officer resides, under the seal o f the
state or territory, or a certificate o f the clerk o f a court o f record o f such
state, territory o f district, in the cou nty in which such officer resides,
under seal o f said court, certifying as to the authority, o f such officer
to take acknowledgments and as to the genuineness o f his signature.
In deeds where there is m ore than one grantor, the acknowledgm ent
o f one o f them is sufficient. Official taking acknow ledgm ent on in
struments relating to real property and to be recorded, m ust state
date o f expiration o f his com m ission before it can be accepted for
recording.
.
,
,
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N o separate acknowledgm ent o f wife joining in a release o f dower
necessary. Conveyances o f land are made b y deed under seal executed
b y the grantor or attorney having authority therefor. Original
power o f attorney to execute sealed instrument must be sealed; to
sign deed or instrument requiring acknow ledgm ent power o f at
torney m ust also be acknow ledged and recorded with the deed or
instrument. A conveyance in fee, for life or a lease, for a term ex
ceeding seven years, shall not be valid, except as against the grantor
and persons having actual notice o f it. unless recorded in the county
registry district in which the real estate is situated. Deeds should be
under seal. N o subscribing witness is necessary. Release o f dower,
homestead and other interests must be explicitly stated in deed,
b od y o f deed must state that party releasing is the wife or husband or
grantor, for identification as such, w ife’s or husband’s joining m deed
merely, being insufficient. H usband and wife m ay m ake con vey
ances o f real estate to each other except b y w ay o f m ortgage, as if
unmarried, but no such conveyance shall have any effect, either in
passing title or otherwise, until the deed describing the property to' be
transferred is duly acknowledged and recorded In the registry o f
deeds for the district where the land lies. A n y interest in real estate
m ay be transferred b y a person to him self jointly_ with another per
son or persons in the same manner in which it might b e , transferred
b y him to another person, except a conveyance to him self and his
wife as tenants b y the entirety. N o interest in land except an estate
at will can be created except b y instrument In writing and acknowledged
or b y operation o f law.
A c t io n s . There are three classes o f actions: contract, tort, and
replevin. Actions at law are begun b y writs issued in blank form by
the clerks o f the several courts. N o declaration need be inserted in
the writ, except in cases o f arrest on mesne process or o f an attach
ment o f a vessel. Suits in equity are begun by filing a bill o f com plaint
with the Clerk o f the Superior C ourt upon which a subpoena or order
o f notice is issued b y the clerk o f the court, or b y original w rit as at
law where no imm ediate relief b y restraining or m andatory order or
injunction is sought. Actions begun b y trustee process m ust be
brought in the country or district in which the trustees or one o f them
resides or has his usual place o f business. (See Trustee Process, infra.)
A d m in is tr a t io n o f E states. Administration or probate is to be
taken out in county where deceased last resided. Executors or adminIstrators are required to give a bond o f about double the value o f the
personal estate. An executor will be exem pt from giving sureties if
testator so directs and all heirs-at-law and n ext-of kin assent to same.
An administrator will be exem pt if all persons interested m this State
except creditors consent. In case a non-resident is appointed ex
ecutor or administrator, he must appoint a resident agent. There are
public administrators in each cou n ty to whom aam im stration is
granted upon estates o f persons who die intestate leaving property,
and not having any husband, widow, or heir in this State. Ancillary
administration may be granted upon the estate o f a non-resident who
dies leaving property in this State. E very administrator and executor
shall file an inventory within three m onths. N otice o f a debt, and
demand for its paym ent should be given to an executor or adminis
trator within six m onths after his appointm ent and the debt should
be paid after six months and within one year o f the appointm ent.
N o suit can be brought by a creditor against an executor or adminis
trator within six months after his giving bond, except on a claim not
affected b y the insolvency o f the estate. N o suit can be brought
against an executor or administrator after one year from tim e o f his
giving bond, unless he has received new assets after the expiration ot
the one year, or unless further time is allowed b y court, and in either
event, unless the estate Is still open and the executor or administrator
has not been discharged. A creditor whose claim does not accrue
within the one year m ay cause assets to be reserved to answer to his
claim
W hen the estate is insufficient to pay all claims, the executor
or administrator shall represent the estate insolvent and com m issioner
will be appointed to receive p roof o f claims, or the C ou rt m ay receive
and act upon the claims. Claims for funeral expenses, last sickness,
and charges o f administration, are priority Claims in insolvent estates.
E xecutors and administrators shall render an account at least once
a year. Com pensation executors and administrators m ay now be
apportioned b y C ourt betw een principal and incom e (1941).
A lie n s have the same rights and liabilities as citizens do, only
so during the continuance o f peace betw een the country o f the alien
and bur own country. W hen war exists between the respective
nations, the alien cannot sue but m ay be sued by a citizen or this
country. Ordinarily contract rights are suspended during the oper
ation o f war unless the alien is within our territory, then he m ay be
sued as a bove stated.
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A rre s t. Right o f arrest exists Irrespective o f dom icile o f either
narty. T he d ebtor may be arrested and imprisoned on execution
after the same is obtained, if the execution is not otherwise satisfied,
and the debtor has property which he conceals and fails to surrender
to his creditors, and he fails to-m ake a fair and full disclosure o f his
property and his ability to pay m oney in reference to the debt owed
by him after the creditor has cited him in the District Gourt where
Supplementary Process is had, and after the examination by the
creditor or his attorney It is found that he has m oney or property and
w on’t pay, then the Judge m ay order weekly payments or place the
debtor in jail for contem pt o f court b y reason o f his failure to obey
the court orders generally. If no assets are discovered the d ebtor will
be discharged and the proceedings dismissed. T he creditor may,
one year from date thereof, cite the debtor into court once again and
examine him anew as to his assets, property, and ability to pay on the
debt.
A s s ig n m e n ts for benefit, o f creditors. A voluntary assignment to
trustees for benefit o f creditors can n ot be avoided by creditors who
assent thereto, except b y proceedings in bankruptcy begun within
four months or b y p roof o f fraud. I f there is property in excess of
the claims o f creditors who have assented, the excess in hands o f the
trustee can be reached by trustee process. As a matter o f procedure
the assignee usually waits the full four m onths from date o f assign
ment before making distribution amongst assenting creditors.
W here C laim s A r e A ssign ed .
T he assignee, at com m on law, by
virtue o f the assignment could sue on the contract, but only so in
the name o f his assignor where no written assignment appeared.
B y Statute.
I f the assignment is evidenced by a written d ocu
ment, then b y virtue o f the statute nereon, the assignee has an election
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BANKING AND COMMERCIAL LAW S—MASSACHUSETTS
o f remedies, to wit, sue in his own name, or in the nam e o f his assignor,
on the contract so assigned.
A n assignment is considered a legal chose in action, and the assignee
m ay p rov e a claim in bankruptcy in his own right and name, provided
the assignment is m ade prior to the institution o f b an kruptcy proceed
ings, subject, how ever, to all defences and to all rights o f counter-claim ,
recoupm ent, or set-off to which the d eb tor w ould have been entitled
if the action had been brought b y the assignor. T h e assignee's
rights and liabilities are those o f the assignor purely, and it should be
rem em bered that the assignee is not considered as a holder in due course
o f trade, as a holder o f a, negotiable instrum ent. T h e assignee steps
into the shoes o f the assignor and all personal defences available against
the assignor are good as against the assignee.
W h ere W a ges A r e A s sig n ed .
B y virtue o f Statute, future wages
o f a person m ay be assigned for a period o f tw o years from the date
o f the assignment only, and it shall be valid to all intents and pur
poses, if the docum ent is form ally executed, the consideration shown
in apt words, rate o f interest, signed b y the parties thereto, and a cop y
delivered to the assignor b y the assignee. Three-fourths o f the weekly
wages o f the assignor shall be exem pt from assignment and no assign
m ent shall be valid which does not so state on its face. N o such
assignment shall be valid when m ade b y a married m an unless the
written consent o f his wife is attached thereto. Assignment n ot valid
unless cop y thereof is delivered to assignor b y assignee at the date o f
execution o f same. A standard form o f assignment m ay be foun d in
Chap. 154 o f the General Laws. Assignm ent m ust b e in standard
form : . N o t valid unless accepted in writing b y the em ployer o f
assignor.
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F u tu r e E a rn ed W ages m ay be assigned for a period o f on ly one
year, where the assignment is given as security for a loan o f m oney
less than $300 in am ount. T h e em ployer must accept the order o f
the assignment b y a writing attached to the assignment and recorded.
I f the assignor is married, then it is necessary to a valid assignment
o f his wages that the wife b y written consent agrees to the assignment
and such written consent m ust b e attached to the assignment. Ten
dollars o f the assigned wages m ust be exem pt and m ust be so stated on
the face o f the assignment when recorded in order to be valid.
N o tic e to T h ird P e r s o n s or C reditors W h en .
U ntil the assign
m ent is placed on record at the C ity Hall, m the office o f the C ity
Clerk or T ow n Clerk, in the place where thé assignor lives, or if he is
a non-resident o f the State, then in the city or tow n where he is em
p loyed . t o be effective against attaching creditors.
N o assignment o f future earnings shall be valid against a trustee
process unless before service o f the writ on the alleged trustee, the
assignment has been d u ly placed on record where the assignor resides
at the tim e o f such record.
A t t a c h m e n t . All real estate, goods, and chattels n ot exem pt,
m ay be taken in attachm ent on the original writ and held as security
for judgm ent, except that lands and tenements can not be attached
in suits involving less then $20, exclusive o f interest and costs. A t
tachm ents m ay b e m ade in suits b y or against non-residents as well
as in suits b y or against residents. A fter attachm ent o f property o f
a non-resident on an original writ, i f service cannot be m ade on
defendant, affidavit m ust be m ade o f that fact to cou rt ; cou rt then issues
order o f notice for service on non-resident b y publication. N o bond
is required to m ake an attachm ent. E xcep t that attaching officer m ay
require plaintiff to give him a bond to protect him in an attachm ent
o f personal. p roperty. Shares o f stock in corporations cannot be
attached except b y : bill in equity. A ttachm ent o f shares o f stock
is n ot valid against a bona fide transfer although n ot recorded in b ook
or corporation. D eb tor m ay dissolve attachm ent b y furnishing bond
with sureties to p a y judgm ent obtained or value o f property attached
determ ined b y appraisal. This is so in all except cases o f attachm ent
in cases in rem. D eb tor against w hom judgm ent is rendered m ay be
subjectëd to sworn exam ination touching this property under the
Supplem entary Process Statute. A n attachm ent is dissolved b y
death o f the defendant if adm inistration is granted upon his estate
upon application m ade within one year after his death. L e vy must
be m ade on execution obtained b y attachm ent on real estate within
30 days from date o f judgm ent. I f not levied upon within that
tim e, new seizure m ust be m ade on the execution, interest seized to be
as o f date o f new seizure, subject to intervening encum brances or
attachm ents.
A ttachm ent o f m otor vehicle registered in Massachusetts on
mesne process in con tract action m ust be consented to b y endorse
m ent on w rit, b y ju stice o f cou rt where action is com m enced. .
K eeper o f attached personal property can be appointed on ly b y
permission o f C ou rt issuing w rit, permission to be endorsed on writ.
I f seizure is m ade on an execution, officer m ay appoin t keeper w ith
ou t perm ission o f cou rt, b u t costs o f keeper discretionary with cou rt
if point is raised.
B a n k s. T he banking business is extensively regulated b y statute.
In general, savings banks, co-operative banks, trust com panies, or
other corporations or persons doing banking business in Massachusetts
are subject to supervision o f com m issioner o f banks. (General Laws,
ch. 167, ch. 168, ch. 169, ch. 170, ch. 172) and amended b y Chapter 349
o f the A cts and R esolves o f the Com m onw ealth year 1934. N o foreign
banking association or corporation shall transact business in M assa
chusetts until it has received certificate from board o f bank incor
poration. For extensive provisions relative to Savings Banks, see
Gen. Laws, ch. 168, 1932 T . E d. and its numerous amendments
since 1932.
Savings banks m ay take m ortgages for tim e loans u p t o 6 0% o f
value o f real estate for periods o f from 3 to 20 years, if quarterly p ay
m ents on principal, am ounting annually to 2 % o f the original loan, are
required. U p to 70% o f value if quarterly principals are required to
3 % annually o f original loan, n ot to exceed $25,000. E xtended to
D e c . 31, 1945.
Savings banks m ay loan u p to $500. on a n y one parcel o f real estate
on which it holds m ortgage, on unsecured n ote o f owner, fyut o n ly for
répair, alteration or rehabilitation o f p rop erty: m ust p rovid e fo r re
p aym ent in three years m axim um term in equal m onthly installments
t o begin one m onth from date. This A c t (1941) passed to save ex
pense o f sm all m ortgage loans where eq u ity is adequate a bov e first
m ortgage. T y p e o f su ch loans cann ot exceed t % o f deposits o f bank.
Em ergency Law, passed M arch 24, 1939, makes ineligible for sav
ings banks, and savings departm ents o f other banks, bonds or other
securities o f railroad com panies which, as shown b y its reports to the
I. C . C . has failed to earn a net inconre as defined b y the Com m ission
fo r 3 o f the 5 fiscal years next p receding d a te o f investm ent. Bank
m ay n ow consent t o settlem ent, m odification or readjustm ent o f any
investm ent and a ccep t substitutes pursuant to reorganization or
otherwise.
N o dividend t o /b e declared on savings deposits where incom e o f
ban k for period is less than 1 % n et after required am ount set apart
for guarantee fun d.
T he trust com pany is the prevailing form o f banking institution.
Fifteen or m ore persons associating b y written agreem ent m ay, upon
com pliance with statute, becom e a trust com pany. A greem ent o f
association must set forth corporate name, purpose, city or town in
M assachusetts where business is to be transacted, am ount and classes
o f its capital stock and num ber o f shares into which it or any class is
to be divided. N otice o f intention to form trust com pany shall be
given to board o f bank incorporation, and such notice m ust be pu b
lished. Unless the board issues a certificate that pu blic convenience
and advantage will be prom oted b y establishment o f such a trust
com pany, no further proceedings, shall' be had, but after one year the
application m ay be renewed. A fter the first m eeting o f the sub
scribers the clerk and m ajority o f board o f directors execute in dupli
cate articles setting forth co p y o f agreem ent o f association, names o f
subscribers and names and residences o f officers, date o f first meeting
and successive adjournm ents thereof, if any. W hen the whole capital
stock has been issued, a new list o f the stockholders, w ith the name.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
residence and post-office address o f each, and the number in each class
o f shares held b y each shall be filed with the Board o f Bank incorpora
tions, which list shall be verified b y the Clerk o f the C orporation. The
articles are filed with the secretary o f state, with filing fee o f one twen
tieth o f 1 per cent o f capital stock, and certificate o f incorporation
issues. B efore business can be com m enced a certificate authorizing
such m ust be obtained from board o f bank incorporation. (Gen.
Laws, ch. 172, section 11). A director o f trust com pany m ust hold
at least capital stock o f a par value in the aggregate o f not less than
$1,000, the. same to be unpledged, and m ajority o f directors m ust be
citizens o f and resident in M assachusetts. E xcept in smaller munic
ipalities capital stock o f trust com pany m ust be not less than $200,000;
shares par value o f $100 each. Entire capital stock m ust be paid in
in cash. T he form er double liability o f the com m on stockholders of
trust com panies has been elim inated. Com m issioner o f banks has
extensive pow er to require returns and to supervise and examine.
Savings departm ents m ay be established, and are governed b y laws
as strictly was savings banks. T he kinds o f business which m ay be
d one are prescribed b y statute w ith considerable detail. B y A ct of
1939, Ch. 244, requirem ents fo r establishm ent o f trust com pany
branches have been lightened. Requirem ents also lightened fo r bank
taking over a trust com p any as a branch.
Banks m ay p a y to a m inor funds deposited in his nam e, unless in
violation o f written agreem ent to which bank is a p arty.
Em ployees or officers o f a bank are liable to fine or imprisonm ent
If they receive a deposit know ing that such bank is insolvent.
A n Em ergency Law was also enacted and ap p roved M a y 12, 1932,
incorporating T h e Central C redit Union Fund Inc. fo r the purpose
o f a relief measure necessary for the imm ediate preservation o f the
pu blic convenience. B y assisting such C redit U nions as becom e
members thereof, when they are tem porarily in need o f cash or hold
investm ents which cannot be readily liquidated, b y m aking loans
to them or any o f them , and it shall have the rights and powers and
b e subject t o the duties and obligations hereinafter provided in
Sections 2 t o 7 o f this act. R efer to C hapter 216 o f the A cts and
R esolves o f M assachusetts 1932. B y-law s o f credit unions m ay under
certain conditions provide fo r release o f endorser on death o f borrower
in personal loans. Fund, Tnc. m ay b ecom e m em ber and invest in
shares o f M ass. C redit Unions. C redit U nions m ay use u p to 10%
o f a con tingent fu n d in any year t o cancel loans o f deceased m em
bers, where no estate even when endorsed.
A n Em ergency Law was enacted and approved M arch 2, 1932,
creating T h e C o-operative Central Bank, m aking all T h e C o-operative
Banks now established under the laws o f the Com m onw ealth and
subject to the provisions o f Chapter 170 o f the General Laws, member
banks thereof as p rovided in C hapter 45, Sections 1 to 11.
C o-operative banks m ay borrow fro m any source fo r specific purpose
o f securing fu n ds to m ake real estate loans. Requires v o te o f threefifths o f all directors and consent o f B ank Com m issioner. Constitutes
p riority d ebt u p on assets o f bank. R ate on interest on real estate
loans m ay now b e fixed b y its directors on loans b y C o-operative
Banks.
T h e purpose o f the central bank was to prom ote the elasticity and
flexibility o f the resources o f the co-operative banks o f the com m on
wealth b y centralizing their reserve fun ds; b y A ct o f 1934 amended
b y A ct o f 1938, Central Bank establishes fund fo r insurance o f shares
o f m em ber coop era tive banks. C entral Bank m ay loan to a n y member
bank u p to 10% o f m em ber ban k’s assets.
T h e deposits b y the m em ber banks, together w ith any surplus
which m ay hereafter b e accum ulated b y the central bank, shall
con stitu te its capital structure.
T h e central bank shall be exem pt from all State and local taxation,
except in respect to any real estate owned and, or used b y it for its
corporate purposes.
A n Em ergency L aw was passed and approved M arch 2, 1932,
creating T h e M u tu al Savings Fund Inc. for the purpose o f pro
tectin g deposits in Savings Banks, as p rovided in Chapter 44, Sec
tions 1 to 9 o f the 1932 A cts and R esolves o f M assachusetts. The
enactm ent o f this law will enable the C orporation to assist such
m em ber banks when they are tem porarily in need o f cash or bold
investm ents which cannot readily b e liquidated, b y m aking loans to
them or any o f them secured b y the pledge o f m ortgages or other
securities legally held b y such m em ber banks. A n y savings bank
hereafter established during said term under the authority o f said
C hapter 168 shall u p on its organization becom e a m em ber bank.
Fund, In c. n ow has executive officer and quarters at B oston and Bank
Com m issioner m ay furnish Fund, In c. inform ation relating to any
m em ber bank and advise with Fund, In c. directors.
B anking corporations and M orris plan banks doing business under
special banking certificate granted b y authority o f Ch. 172A added
b y A ct o f 1935, are under supervision o f com m issioner o f banks.
Such banking com panies m ust fulfill requirem ents o f special a ct as
to capital and as to population o f place where business place is located;
law gives such banking com panies broad banking powers. Loans by
com m ercial departm ents o f trust com panies for term o f m ore than
3 years, m ust provid e for 2 % annual repaym ent o f principal, to com
m ence n ot less than 2 years after date o f note.
B ills a n d N o te s . T he law o f negotiable Instruments is governed
b y the N egotiable Instrum ents Law, as am ended, where applicable;
In other cases b y the law m erchant. A person becom ing a party
to a non-negotiable prom issiory note payable on tm e, b y signature
In blank on the back thereof, is entitled to notice o f non-paym ent
same as an indorser. A depositary o f funds, subject to withdrawal by
check or dem and draft m ay p ay a check or dem and draft drawn on
It b y a depositor having funds on deposit to pay same, notwithstanding
his death, upon presentation within ten days after its date. I f waiver
o f dem and, presentment protest and dishonor is intended b y endorser,
this m ust appear abov e his endorsem ent. R ecent Supreme Court
decision holds th a t i f such waiver b y m ore than one endorser, words
m ust appear and be repeated over the signature o f each endorser or
words above first endorsem ent m ust clearly state that each o f the en
dorsers so waives.
Protest o f bill, note or order d uly certified b y notary public under
his band and official seal is prim a facie evidence o f facts, stated in
such protest and o f giving notice to drawer or indorser.
There are various statutory provisions bearing upon the validity
o f the notes o f m unicipalities o f this C om m onw ealth. W here a nego
tiable Instrument is not payable on dem and, presentment must be
made on the d ay it falls due. W here it is payable on dem and present
m ent must be m ade within a reasonable tim e after its issue.
An accom m odation party to a negotiable instrum ent is liable thereon
to a holder in due course notwithstanding such holder at the tim e of
taking the instrument knew him to be only an accom m odation party.
W hen the day, or the last day, for the perform ance o f any act, includ
ing the making o f any paym ent or tender o f paym ent, authorized or
required b y statute or b y contract falls on Sunday or on a legal holi
day, the act m ay be perform ed on the next succeeding secular or busi
ness day, unless it is specifically authorized or required to be performed
on Sunday or on a legal holiday.
E very negotiable instrum ent is payable at the tim e fixed therein
without grace, except that three days o f grace shall b e allowed upon a
draft or bill o f exchange m ade payable within M assachusetts at sight
unless there is an express stipulation to the contrary. W here the day,
o f m aturity falls upon Saturday, Sunday, or a holiday, instrument is
payable on next succeeding business d a y which is not a Saturday.
Instruments payable on dem and may, at option o f holder, be presented
for paym ent before tw elve o ’clock noon on Saturday when that entire
day is n ot a holiday; provided how ever that no person receiving any
check, draft, bill o f exchange or prom issory note payable on demand,
shall be charged with any neglect or omission o f duty or incur any
liability, for not presenting for paym ent or acceptance or collection
such check, draft, bill o f exchange, or prom issory note on a Saturday;
provided also that the same shall be duly presented fo r paym ent,
acceptance, o r collection on the next succeeding business day.
BANKING AND COMMERCIAL LAWS— MASSACHUSETTS
Under certain circum stances the original named payee o f order
paper m ay be a holder in due course.
Law allows only tw o days for “ making good ” bad checks after
receipt o f notice. Failure t o p a y within that tim e is prim a facie
evidence o f intent to steal or defraud.
N o bank shall be liable to a depositor, or to the drawer o f a bill o f
exchange upon the bank, for an am ount charged to or collected from
Him on account o f paym ent b y such bank o f a negotiable instrument
upon which the signature o f any party is forged, or which is m ade,
drawn, accepted or indorsed w ithout authority, or which is materially
altered or the am ount o f which is raised; unless within one year after
return o f such negotiable instrument to such depositor or drawer,
he shall n otify the bank in writing that, as the case m ay be, the instru
ment was m ade, drawn accepted or indorsed without authority, that
signature o f a party to instrum ent is forged, or that instrument has
been m aterially altered, o r that the am ount has been raised.
B ills o f L a d in g . T he so-called U niform Bills o f Lading A ct Is in
force, and has been held constitutional b y the Supreme Judicial
Court. A bill in which it is stated that the goods are consigned or
destined to a specified person is a non-negotiable or straight bill. A
bill in which it is stated that the goods are consigned or destined to
the order o f any person nam ed in such bill is a negotiable or order bill.
A non-negotiable bill cannot be negotiated, and indorsement o f such
a bill gives transferee no additional right. A negotiable bill m ay be
negotiated b y indorsem ent o f person to whose order goods are deliv
erable b y tenor o f bill. Such indorsement m ay be in blank or to a
specified person. I f indorsed to a specified person it m ay be nego
tiated again b y the indorsem ent o f sucn person in blank or to another
specified person. Subsequent negotiation m ay be m ade in like man
ner. A negotiable bill m ay be negotiated b y any person in possession
o f sttme, how ever such possession m ay have been acquired if, b y the
terms o f the bill, the carrier undertakes to deliver the goods to the
order o f such person, or if at tim e o f negotiation bill is in such form
that it m ay be negotiated b y delivery. Indorsem ent o f bill does not
make indorser liable for any failure on part o f carrier or previous in
dorsers o f the bill to fulfill their respective obligations. A n y pro
vision in an order bill that it is non-negotiable shall be void.
Bills o f Sale. A bill o f sale o f personal property intended for
security must be recorded, the recording provisions as to m ortgages of
personal property being applicable. See Chattel M ortgages. Ch. 255
o f General Laws.
Blue S k y L a w . A cts o f 1921, ch. 499. approved M a y 27, 1921.
entitled P rom otion and Sale o f Securities. A ct does not apply to con
tracts valid and effective before act became effective. Certain secur
ities are exem pted. A ct defines at length what is meant b y security
and sale. Persons dealing in securities within operation o f act must
be registered and inform ation specified must be furnished Public
Utilities Comm ission. Certain classes o f sales and certain securities
are exem pted from operation o f A ct. Annual license fee for broker,
$50, for salesman, $2. A ct does not lim it any statutory or com m on
law right o f any person to sue civ illy or right o f state to punish for
violation o f any law. Com m ission has power o f inquiry, o f sum mon
ing witnesses and o f suspending certain sales. A ct has imm unity
provisions. V iolation o f act punishable b y fine o f not m ore than
$5,000 or im prisonm ent not m ore than tw o and one-half years or
both.
Scope o f law extended b y A cts 1924, ch. 487, which should be
consulted.
C hattel M ortgages. C hattel mortgages must be recorded in the
records o f the city o f tow n where the m ortgagor resides when the
mortgage is m ade, and in the city in which he then transacts business,
every m ortgage, must be recorded within fifteen days o f the date,
until recorded the m ortgage is not valid except between the parties
and record subsequent to tim e lim ited is void. I f m ortgagor resides
in own city or tow n and m ortgaged personal property is located or
kept in another, record m ust also be m ade in city or tow n where prop
erty then is.
I f record in tw o places is required, and mortgage
is recorded in one place within fifteen days, it m ay be recorded in
other place within ten days after date o f first record. The m ortgage
shall not be valid as against a person other than the parties thereto
until so recorded.
A m ortgage o f after-acquired property is good as against an attach
ing creditor where possession o f the after-acquired property; is obtained
before attachm ent thereof is m ade and subsequently retained b y the
mortgagee. A m ortgage is good , however, between the parties,
thereto, although unrecorded and no actual or constructive delivery
of the property takes place. M ortgage does not cover after-acquired
personal property unless m ortgage has adequate provision, including
“ after-acquired p rop erty.”
A Chattel M ortgage m ay be foreclosed b y notice delivered per
sonally or b y publication, and notice with p roof thereof must be
recorded where the m ortgage was recorded. A fter sixty days, the
foreclosure becom es com plete if the condition is not performed.
Chattel M ortgages m ay be assigned. Assignment should be recorded.
Upon perform ance o f the conditions therein contained the m ort
gagor is entitled to a release.
Where the m ortgagor defaults, then the m ortgagee m ay sell the
goods at public auction b y giving notice, in accordance with the time
as specified in the m ortgage, or advertising sale for three successive
weeks in a local newspaper in said C ity or Tow n. T he proceeds o f
the sale are applied to repay all sums secured b y the mortgage and
all costs and expenses incurred b y reason o f the sale. T he surplus,
if any. shall be forthw ith paid to the m ortgagor.
C ondition al S ales o f personal property are valid in this juris
diction and the vendor m ay retain title for the unpaid purchase price
therefor. It is usually a written form al docum ent. It need not be
recorded and will be good generally as against an attachm ent o f the
property in the hands o f the conditional vendee, except b y special
statute. Lien notes, and conditional sales contracts providing the
paym ents already m ade shall be forfeited or considered as rental o f
property, are void in M assachusetts.
W here the sale o f personalty consists o f household furniture, or
other household property, then if title still remains in tne vendor till
the last paym ent has been m ade, the vendee must be given thirty
days notice in writing b y the vendor as to the breach o f condition o f
sale before the goods or furniture can be repossessed, and also attached
thereto b y the vendor to said written notice must be an itemized
statement showing am ount due. I f fifty per cent o f the purchase
price has been paid on the con tract when the vendee so requests,
the vendor must sell the goods at public auction and the proceeds
shall pay the vendor his balance due, and any surplus over and above
this shall forthwith be paid t o the vendee.
T o be valid, co p y o f conditional sale contract o f furniture or house
hold property m ust be delivered b y vendor to conditional vendee at
the tim e o f the sale.
Acts o f 1937, ch. 112 require recording o f notice o f conditional
sale o f elevator apparatus or m achinery for validity as against m ort
gagees, purchasers or grantees o f real estate. This includes heating
apparatus or other apparatus which the vendor wishes to keep separate
from the realty. V endor m ust also (Acts 1937, ch. 245) record date
of final paym ent within 90 days and a sworn statement o f the a ccou nt
and name o f second owner o f the real estate.
A cts o f 1937, ch. 315 require vendor o f household furniture,
jewelry, etc., on conditional sale, to em body all articles sold in a single
written contract. Requires such vendor to note all paym ents with
remaining balances, on the note, contract or receipts. Requires all
finance charges to be inserted in advertisements, offering conditional
sales. Penalty, fine $100 to $500. E ffective August 16, 1937.
C o n d itio n a l S ales C o n t r a c t s o f personal p roperty simplified and
additional safeguarding o f interests o f vendors, see Ch. 509, A cts o f
1939, too lengthy to be summarized. This A ct makes void certain
contracts w h ic h 'd o n ot com p ly with new law and further imposes
penalties for violation. C om petent counsel should be taken before
any such contracts are discounted or assigned. W hile law is simpli
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2023
fied, it is m ade clear and in som e respects makes im portant changes
too numerous t o be set ou t here. C onsult counsel.
*
C o r p o r a tio n s . B y special a ct o f 1903, chapter 437, the law o f
business corporations was revised and as amended, and now codified
in General Laws, applies to all corporations organized in this com m on
wealth for the purpose o f carrying on business within the com m on
wealth for profit, except the follow ing: Banks, savings banks, co - .
operative banks, trust com panies, surety or indem nity companies,
safe deposit companies, insurance companies, railroad or street railway
companies, telegraph or telephone companies, gas or electric light,
heat or power companies, canal, aqueduct or water companies, ceme
tery, or crem atory companies, or any corporation which now have or
m ay hereafter have the right to take or condem n land, or to exercise
franchise : in public ways, provided that corporations, form ed for
purpose o f dealing in real estate shall state the term o f the duration
o f the corporation, such term n ot to exceed fifty years.
Tnree or m ore persons m ay associate together and form a corporation
for carrying on any lawful business not included in the a bove provisions
Such a corporation must have a capital o f not less than $1,000, if
having shares only with par value. Shares with par value m ust be
o f par value o f at least $1.00. There is no m aximum limit. Business
corporations m ay create shares o f stock with or without par value,
and corporations with stock with par value m ay, b y appropriate
proceedings, change such stock to stock without par value. T he
stock m ay be divided into tw o or m ore classes with such preferences,
voting power restrictions and qualifications as m ay be fixed b y the
agreement o f association. U pon due organization o f the associ
ates and filing a co p y o f the agreement o f the association and articles
o f organization with the commissioner o f corporations and on
paym ent o f a fee o f one-twentieth o f 1 per cent o f total am ount o f
authorized capital stock with par value, and five cents per share
for all authorized shares w ithout par value, but in no case less than
$50, a certificate o f incorporation is issued b y the secretary o f state.
T he capital stock m ay be issued for cash, property, tangible or in
tangible services or expenses, b u t not for notes. T he am ount o f
capital stock m ay be increased from tim e to tim e. T he corporation
must have not less than three directors, president, clerk and treasurer.
T he directors, treasurer, and clerk are elected b y the stockholders.
T he president is chosen b y and from the board o f directors. T he clerk
must be a resident o f the com m onwealth. M eetings o f stockholders
must be held within the com m onwealth, but directors m ay meet
within or without the com m onwealth.
V oting b y proxy is per
m itted, but no proxy dated m ore than six m onths before the
meeting named is valid. A ny corporation m ay hold, purchase, con
v ey mortgage or lease such real or personal property as the purposes
o f the business m ay require. One stockholder holding 1/10 interest
can com pel calling o f special m eeting o f stockholders o f business
corporation. I f proper corporatei officer refuses to call meeting,
three or m ore stockholders holding in the aggregate 1-10 the interest
m ay apply to justice o f the peace to issue warrant to one o f appli
cants to call such a special or other legal meeting.
E very such corporation is required to file an annual report o f its
condition, and if its capital stock is over $100,000, shares w ithout par
value being taken as o f $100 in value, to file a written statement
under oath b y an auditor. It is also required to m ake an annual
return to the tax commissioner.
E very foreign corporation which has a usual place o f business
here, or is engaged here perm anently or tem porarily in the construc
tion, erection, alteration or repair o f a building, bridge, railroad, rail
way or structure o f any kind, shall before dom g business here appoint
the com m issioner o f corporations, its attorney fo r the service o f proc
ess, such authority to continue as long as any liability remains out
standing against it in this com m onwealth, and shall file with the
commissioner o f corporations a co p y o f its charter, articles or certifi
cate o f incorporation, by-laws, and a certificate setting forth its
name, location o f principal office, names and addresses o f its officers,
date o f its annual meeting, amount o f its capital stock authorized and
issued, the num ber and par value o f its shares, the am ount paid
thereon, and details o f any paym ent th ereof n ot m ade In m oney.
Such corporations are required to file annual statements with the
commissioner o f corporations showing their condition. I f it fails to
file a co p y o f the charter, by-laws, etc., as above, it cannot maintain
any action started b y it in any court in this State. This has to be
pleaded b y a Plea in A batem ent, or m ay b e otherwise specifically
pleaded, in each action, b y the defendant, if he, or it wishes to set up
such a defense against the action or suit brought b y such a corporation.
C o u r t s . Term s and Jurisdiction. Trial justices m ay severally
hold courts within the counties for which they are appointed, and
shall have original jurisdiction, exclusive o f the superior court, o f all
actions o f contract, tort, or replevin, where the d ebt or damages
demanded or value o f the property alleged to be detained does not
exceed $100, and concurrent jurisdiction with the superior court o f
such actions where such am ount exceeds $100 and is less than $300.
D istrict courts m ay in their respective counties have original juris
diction, exclusive o f the Superior C ourt, o f actions o f contract, tort
or replevin, in which the d ebt or damages dem anded or the value o f
the property alleged to be detained does n ot exceed $100 and have
original and concurrent jurisdiction with the Supreme C ourt o f actions
o f contract, tort replevin in which the d ebt or damages dem anded or
the value o f the property alleged to b e detained is m ore than $100.
T he form er lim itation upon the jurisdiction o f district court (o f cases
under $3000) has been rem oved and the district courts now have con
current jurisdiction with the superior court over all actions o f contract
or tort, with no m aximum or lim itation in am ount. T h e supreme
judical court has original jurisdiction in equity m atters and m ay on
appeal hear all matters o f law determ ined b y the probate court, and
determine questions arising under wills. Superior court has juris
diction where the amount claim ed exceeds $20. M unicipal cou rt o f
the C ity o f Boston has jurisdiction concurrently with superior court
in the cou nty o f Suffolk, in actions where the d ebt does not exceed
$5,000 provided one or m ore o f the defendants resides or has his
usual place o f business in the cou n ty o f Suffolk. T he Land C ourt has
exclusive original jurisdiction for registering titles to real estate under
the Torrens system, and foreclosing tax and m unicipal lien titles under
statutory provisions. Probate C ourt decree as well as Land C ourt
can vest title in cases involving title to real estate owned b y deceased
person and in cases where jurisdiction is in P robate C ourt, that C ourt
can m ake declaratory decrees affecting title to real estate.
T he Probate Courts have jurisdiction over administration o f estates
o f deceased persons, matters o f adoption, guardianship, conserva
torship, trusts under wills and written instruments, petitions for
separate support, and o f partition o f land, and divorce. There is a
P robate C ourt and Registry o f Probate in each county. It has juris
diction o f insolvency cases under statute. In Land Registration Cases,
Land C ourt m ay fix fees o f guardian ad litem where minors involved.
E qu ity jurisdiction is lodged in the Superior C ourt and in Supreme
Judicial Court. B y statute Probate Courts have jurisdiction in equity
in certain special matters connected with estates and petitions before
the same court.
Small Claims Procedure. General Laws o f M assachusetts, C h a p
ter 218, Section 21, provides for a sim ple, inform al and inexpensive
procedure, for the determ ination, according to the rules o f substantive
law, o f claims in the nature of- contract or tort, other than slander
and libel, in which the plaintiff does not claim as debt or damages
m ore than $50. and for a review o f judgm ents upon such claims when
justice so requires. Small Claims C ourt m ay now defer paym ent or
order paym ent o f judgm ent in installments and to enforce b y contem pt
proceedings. T he procedure is n ot exclusive, b u t is alternative to
the form al procedure for causes begun b y writ. T he m ethod o f pro
cedure is very sim ple and does away with the requirement o f attorneys
and enables the creditor to file his own papers in court at a minimum
cost. Service is made b y registered letter sent out b y the Clerk o f
the D istrict Court. The expense is about $1.25 fo r each claim .
2024
BANKING AND COMMERCIAL L A W S -MASSACHUSETTS
D e a t h . W here a person is absent and unheard from for a period
o f seven years, said person is presumed to be dead in legal theory.
T he estate o f such an absentee is administered and held b y a receiver
appointed b y the P robate C ourt o f the cou n ty where he was last
dom iciled.
D e p o s itio n s . Taking o f such Is governed b y statute and rules of
courts. T he com m ission issued to take depositions contains full
Instructions to magistrate how to proceed.
D e s ce n t a n d D is tr ib u t io n o f P ro p e r t y o f D e c e d e n t s . After
deducting w idow ’s allowance and allowances for m inor children,
and paym ent o f debts and expenses o f administration, the remaining
personal and real estate is distributed as follow s: I f deceased leaves
no Issue, surviving husband or widow shall take $5.000 and one-half
o f remaining real and personal property. T h e real estate m ay be
sold to pay the surviving spouse the $5,000, if necessary. I f deceased
leaves issue, surviving husband or w idow shall take one-third o f re
maining real and personal property. I f deceased leaves no kindred,
surviving husband or w idow shall take whole o f remaining real and
personal property.
A husband on death o f wife shall hold for his life one-third o f all
land owned b y her at any tim e during coverture, estate known as
tenancy b y curtesy. W ife is entitled to low er at com m on law. But
in the event o f testate' estates, in order to be entitled to such curtesy
or dow er election and claim therefor must be filed in registry o f probate
within six m onths o f approval o f bond o f executor or administrator,
and such election is a waiver o f the interests on real property above
m entioned. Probate C ourt assigns dow er or curtesy. Bights o f
curtesy which exist on February l , ■1919, m ay be claim ed as a bove
provided, b u t in such case husband shall take no other interest in real
or personal property o f wife, and except as above preserved curtesy
at com m on law is abolished.
Subject to all the above, the rest and residue o f intestate property
Is distributed as follow s: 1. In equal shares to children and issue of
any deceased child b y right o f representation; if there is no surviving
child, then to the other lineal descendants if all are in same degree o f
kindred, otherwise b y right o f representation. 2. I f intestate leaves
no Issue, then in equal shares to father and m other. 3. I f no issue
nor m other, then to father. 4. I f no issue or father, then to m other.
5. I f no issue, father or m other, then to brothers and sisters and to
issue o f deceased brothers or sisters b y right o f representation; if
no surviving brother or sister, then to Issue o f such equally if all In
same degree o f kindred to intestate, otherwise b y right o f represen
tation. 6. I f he leaves no issue, no father, m other, brother or sister
or issue o f deceased brother or sister, then to next o f kin in equal
degree, but if there are tw o or m ore collateral kindred in equal degree
claiming through different ancestors, those claiming through nearest
ancestor are preferred. I f intestate leaves no kindred, husband or
widow, estate escheats to com m onwealth.
; E x e c u tio n s can not issue until tw enty-fou r hours after judgm ent
rendered, and an original execution must be issued within one year
after plaintiff is entitled to sue out the same. Original executions in
all courts are returnable within tw enty years; when satisfied in full,
within ten days o f date o f satisfa ction 'of same in full.
E x e m p tio n s . Hom estead, if recorded, to the value o f $4,000 is
exem pted. Necessary wearing apparel o f fam ily, certain specified
articles o f household furniture, and $300 w orth in addition thereto,
library, $50; tools and implem ents, $100; stock, $100; boats and
fishing tackle, etc., $100; one cow , six sheep, one swine, and tw o tons
o f hay, sewing machine, pew in church, etc. M aterials and stock
designed and necessary for carrying on his trade and intended to be
used or w rought therein, not exceeding $100 in value, f Shares in
co-operative associations n ot exceeding $20 in value, funds o f railroad
relief societies, assessment insurance benefits, uniforms, arms, and
equipm ents o f militia officers.
F a c t o r ’ s A c t . A fa ctor or other agent intrusted with possession
o f merchandise or o f bill o f lading consigning m erchandise to him with
authority to sell the same shall be deem ed the true owner o f such
merchandise, so far as to give validity to any bona fide con tract of
sale made b y him. B ona fide consignees from shippers in lawful
possession have liens for advances or securities to shipper. B ona fide
pledges from consignees or factors are also protected.
F ra u d s , S ta t u t e o f . N o action can be brought to charge an
executor or administrator as such on a special promise, to charge any
person upon a special prom ise to answer for debt, default or m isdoing
o f another, upon an agreem ent m ade on consideration o f marriage,
upon a contract for sale o f any interest in land, upon an agreement not
to be perform ed within a year, to charge a discharged debtor, unless the
promise, contract or agreem ent or som e m em orandum th ereof is
signed by the party or b y his authorized agent. N o agreem ent to
make a will, or to devise or to give a legacy is binding unless in writing.
N o con tract o f sale o f personal property o f $500 or over is actionable
unless there is part paym ent, acceptance and receipt o f part o f the
goods, or som e m emorandum in writing signed b y party to be charged
or his agent.
G ift s b e tw e e n H u s b a n d a n d W ife . G ifts o f personal property
and conveyances o f real estate, other than mortgages, between husband
and wife shall be valid to same extent as if they were sole.
G u a r d ia n s . Probate C ourt m ay now authorize investm ent o f funds
o f w ard in life insurance endow m ents or annuity contracts. C om
pensation o f guardian m ay now be apportioned b y C ourt between
principal and incom e (1941).
H o lid a y s . T h e legal holidays are: Sundays; January 1 (N ew Y ear’s
D a y ); February 22 (W ashington’s b irth d ay ); April 19 (P atriot’s
D a y ); M a y 30 (M em orial D a y ); July 4 (Independence D a y ); first
M on da y in Septem ber (Labor D a y ), O ctober 12 (C olum bus D a y );
N ovem ber 11 (Arm istice D a y ); Thanksgiving D a y (Last Thursday in
N ovem ber in M assachusetts); D ecem ber 25 (Christmas D a y ); or the
d ay follow ing when any o f such dates (except L abor D a y ) falls on
Sunday. A cts o f 1941, C hapter 91 m akes M a rch 17 (E vocu tion D ay)
and June 17 (B unker H ill D a y ) as to Suffolk C ou n ty only, legal holi
days.
I n fa n t s . Age o f m ajority, m ale and female. Is tw enty-one. Infant
is liable for his torts and on con tracts for necessaries. H e m ay
repudiate or ratify all contracts after reaching m ajority. During
m inority, he m ay sue b y next friend, often called prochain ami.
I n s o lv e n c y . Insolvency law suspended b y N ational B ankruptcy
A ct. A cts o f B an kruptcy: ( l ) Fraudulent con veyan ce in order to
hinder, delay, or defraud his creditors; (2) W here insolvent has trans
ferred his property to one or m ore o f his creditors with intent to prefer
him or them ; (3) W here insolvent has suffered or perm itted a creditor
to obtain a preference through legal proceedings and not having dis
charged such preference at least 5 days before sale or other disposition
o f the property affected; (4) M a d e general assingment for benefit o f
creditors; (5) Being insolvent applied for a receiver or trustee o f his
property, or because o f insolvency, a receiver or trustee put in charge
o f his prop erty; (6) A dm itted in writing his inability to pay his debts
and a willingness to be adjudged a ban krupt; (7) W hile insolvent per
m itted attachm ent, lien, etc., on his property and has not vacated the
same within .thirty days therefrom . (1927 and 1928 am endm ents.)
I n t e r e s t . Legal rate is 6 per cent. Loans o f less than one thou
sand dollars. Interest shall not be charged exceeding eighteen per cent.
Small loan business ($300.00 or less) maximum rate 3 % per month
on unpaid balances. N o t m ore than seven per cent can be charged
on bonds Issued b y corporations. It shall be lawful to pay, reserve,
con tract for any rate o f interest or o f discount except as above.
J u d g m e n t s . A judgm ent or d ecree o f a court o f record o f the
United States or o f any state thereof shall be presumed to be paid
and satisfied at the expiration o f tw enty years after it was rendered.
L e a se s . In leases o f real estate for term o f seven years or m ore,
no longer necessary to record entire lease including private term s to
the p ublic. C hapter 85 o f A cts o f 1941 provides for recording o f
m ere “ n otice” o f lease only. C onsult the A ct for m odified require
m ents.
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L im it a t io n o f S u its . C ontract express or Implied and not under
seal and not otherwise lim ited, six years; real actions, those upon an
attested note, if suit is brought b y original payee or his executor or
administrator, and personal actions on contracts not limited, twenty
years. Absence from the State prevents the running o f the statute
o f lim itations as to a defendant until he com es into the State. I f
the person entitled to bring an action is a m inor or is Insane or impris
oned when the right to bring such action first accrues, such action
m ay be com m enced within the tim e hèreinbefore limited after the
disability is rem oved. T he statute does not run against those residing
out o f the State, but if the State in which debtor resides has a statute
o f limitations, sam e w ould run against this d ebt as for an action on
said d ebt where the debtor resides. See also Adm inistration of
Estates.
M a rrie d W o m e n . T h e real and personal estate o f a married
woman, acquired at any tim e, remains her sole and separate property,
not su bject to the control o f her husband, nor liable for his debts.
M arried women m ay carry on trade o r business, make contracts, sue
and be sued, in all m atters relating to their separate p roperty, and
such contracts are not binding upon the husband. W ife carrying
on business on own account must record certificate with city or town
clerk; neglect to d o this renders her property so em ployed liable for
husband’s debts, and renders husband liable for her debts thus con
tracted.
M a r r ie d W o m e n . A married w om an is also liable join tly with
her husband for debts due to the am ount o f $100 in each particular
case for necessaries furnished with the know ledge or consent to her
self and her fam ily where she is possessed with property valued at
$2.000 or more.
W ork and labor perform ed b y a married wom an for a third person
other than her husband and children shall be deem ed, in the absence
o f any agreement in writing to the contrary, to be perform ed on her
sole and separate account. She m ay pledge her husband's credit
for her support, b u t m ay also be personally liable for her purchases.
M e c h a n ic ’ s L ie n s . S ubject covered b y statute. General Laws
C b . 254.
M o r tg a g e s o f R e a l E s ta te . Pow er o f sale m ortgage is un iver
sally used. Foreclosure is regulated b y statute, requiring publication
once each week for three successive weeks in same newspaper published
In tow n or city where real estate is situated, first publication to be not
less than 21 days from date o f Sale b y P ublic Auction, and sale bars
redem ption. Because o f requirem ents o f Soldiers and Sailors R elief
A ct o f 1940, State Legislature has prescribed sim plified procedure for
foreclosure a uthority under the Federal A ct, in State C ourts. M o rt
gages m ay also be foreclosed b y entry and peaceable possession for
three years.
P robate C ourt has jurisdiction in eq u ity to issue injunction restrain
ing foreclosure i f it will hinder proper adm inistration o f an estate;
to issue on petition o f executor, etc. o f the estate.
U pon paym ent or perform ance o f condition, m ortgagee liable in
tort for all damages caused b y his neglect or refusal to discharge
m ortgage within seven days from date o f request therefor. Gen.
Laws, C . 183, S. B B . Until D ecem ber 31, 1941, new m ortgages m ay
be taken b y banks to include overdue interest, taxes etc.
N e g o t ia b le I n s t r u m e n t s . T he Uniform N egotiable Instruments
A ct adopted. (See com plete text follow ing “ D igest o f Banking and
C om m ercial L aw s.” )
R e a l E s t a te ; F r a u d u le n t C o n v e y a n c e s are a ground for civil
arrest generally. An equitable action lies to recover property that
has been so con veyed fraudulently. Special attachm ent on original
w rit or b y order o f cou rt m ay be made o f realty which has been
fraudulently con veyed b y a d ebtor in fraud o f his creditors.
Agreem ent for sale o f real estate m ust be acknow ledged. G ood for
ninety days only after deed delivery date unless suit brought mean
while to enforce agreement.
R e p le v in A c t io n s are the form s o f actions at law b y which a party
can obtain possession o f specific goods or chattels unlawfully taken
or wrongfully detained from the rightful owner or person who Is
entitled to its possession. B efore the replevin writ can be served,
a bond for double the value oí the property to be replevied must be
delivered to the officer before he will proceed to act under the writ.
S ales o f P e rs o n a l P r o p e r t y . U niform Sales A ct adopted in
1908, is now Gen. Laws ch. 106. T here is a Bills o f Lading statute.
(Gen. Laws ch. 108),' and Gen. Laws ch. 105 relates to warehouse
receipts. As to sales o f $500 or over, see Frauds, Statute of. Sales
o f merchandise in bulk are fraudulent unless the provisions o f Gen.
Laws ch. 106, sec. 1, are com plied with. D elivery o f a bill o f sale is not
constructive delivery o f the goods. D elivery o f possession o f goods
sold is essential as to third persons w ithout notice who purchase same
goods for value, or as to attaching creditors w ithout notice. Vendor's
retention o f possession after sale is prim a facie evidence o f fraud.
As to conditional sales, see that to p ic supra.
S ta t u t e s . General revision and consolidation o f statutes effective
January 1, 1921 under title o f General Laws. E xce p t such as are
declared to b e em ergency laws, statutes take effect 90 days after
passing, under Am endm ent to A rticle X L V I I I o f M assachusetts
C onstitution, 1941.
S to c k t r a n s fe r . This subject is covered b y Stock Transfer A cl
as codified in General Laws.
S u its . C ivil actions in general, except those concerning land (if
one o f the parties lives in the State), must be brought in the county
where one o f them lives or has his usual place o f business. But In
lower courts venue depends on residence or place o f business o f defen
dant. This Is so in all cases except those cases involving damages
arising out o f operation o f a m otor vehicle on the highways o f M assa
chusetts; as to these, original jurisdiction o f such cases is in D istrict
C ourts, b u t either party m ay rem ove to Superior C ourt. W here
all parties are non-resident, action m ay be brought in any county.
A ttachm ent o f prop erty owned b y defendants residing ou t o f State
m ay be made sufficient to give jurisdiction for a special judgm ent
in suit after notice published b y order o f court. Such notice to be
given within one year from the entry o f the suit. Persons com morant iu Stale m aj also ne arrested on mense process aud held to
bail. This, how ever, can be d one on ly upon special order o f court
upon plaintiff’s application for arrest, on a civil debt. A non-resident
plaintiff is usually required to furnish indorser for costs. See also
A ctions, supra.
C ivil process cannot be served on the L o rd ’s D a y, except such
process as m ay be served b y publication, in which event same m ay be
puplished in a newspaper published on L ord ’s D ay.
T a xes assessed upon land shall with all incidental charges and fee«
be a lien thereon from January 1st, in the year o f assessment. Such
lien shall term inate at the expiration of tw o years from O ctober 1st
in said year. If the estate has in the m eantim e been alienated and the
instrum ent alienating the same has been recorded, otherwise it shall
continue until a recorded alienation thereof; b u t if while such lien is
in force a tax sale or taking has been m ade and the deed or instrument
o f taking has been d u ly recorded within sixty days, b ut the sale or
taking is invalid b y reason o f any error or irregularity in the proceed
ings subsequent to the assessment, the lien shall continue for ninety
days after a release, notice or disclaim er, has been d uly recorded, or
fo r ninety days after the sale or taking has been finally adjudged
invalid b y a cou rt o f com petent jurisdiction. There shall be no lien
fo r taxes reassessed- if the property is alienated before the reassess
m ent. Said taxes if unpaid for fourteen days after dem and therefor,
m ay, with said charges and fees, be levied b y sale or taking o f the
real estate if the lien thereon has not terminated. B y recent A ct, city or
tow n m ay acquire tax title b y mere taking (this was enacted to relieve
heavy expense o f tax sales o f sm all lots and land o f little value).
U pon certification b y State T a x Comm issioner, these lands are o f low
value. T aking to be recorded at R egistry o f D eeds, costs $1.00.
BANKING AND COMMERCIAL LAWS— MICHIGAN
Owner o f tax title has benefit o f all covenants running with the land
subject to and together .with assessments and restrictions then existing.
E xcept where lands have been certified as o f lands o f low value, owner
o f the tax title does n ot acquire absolute title until tax title foreclosed
in Land C ou rt; petition to foreclosure can be brought tw o years after
sale or taking, n ot before.
M ortgagee m ay at any tim e p ay overdue taxes and have same
added to m ortgage debt. Interest on overdue taxes now 4 % .
Petition for abatem ent o f taxes must be filed with assessors not
later than O ctober 1 o f year in which they are assessed
The m atter o f enforcing the paym ent or collection o f taxes is one
concerning which there is a considerable b od y o f statute law which
cannot be briefly summarized.
T ru s te e s . Investm ents. See Guardians, supra.
T ru ste e P rocess . All personal actions except replevin, and actions
of tort for malicious prosecution, slander, libel, or assault and battery
may be begun b y trustee process and goods, effects, or credits of
defendant in hand o f a third person m ay be attached and held to
satisfy final judgm ent. B u t certain actions with ad dam num o f
m ore than $1,000, can be com m enced b y trustee process on ly upon
the filing o f bond with sureties to indem nify defendant for costs and
damages b y reason o f trustee attachm ent, bond to be approved b y a
justice o f the C ourt. B ond prem ium taxable as costs. This new
A ct should be consulted in cases where ad dam num over $1,000 in
trustee process.
In trustee process, if attachm ent o f wages is desired, permission
endorsed in writing on the writ m ust be obtained from a justice o f
the cou rt where action com m enced. See also A ctions, supra.
W a r e h o u s e m a n a n d W a r e h o u s e R e c e ip ts . The Warehouse
Recipts A ct as codified into Gen. Laws is in force. Chap. 105.
W ills . E very person o f full age and sound mind including married
women m ay make a w i l l . W ill must be signed b y testator, or b y some
person in his behalf, b y his express direction, and be attested and
subscribed b y three or m ore com petent witnesses in his presence. A
will executed in m ode prescribed b y the law either o f place where
will is executed or o f place o f testator’s dom icil, shall be deemed
legally executed and shall be o f same force and effect as if executed
in m ode prescribed b y laws o f Massachusetts provided will is in writing
and subscribed by testator. As to waiver o f provisions o f will by
husband or wife, see D escent and Distribution, supra, also General
Laws ch. 190. section 15.
A will m ay be revoked in the identical manner in which the statute
requires a will to be revoked. W ill m ay be revoked b y destruction
such as burning, tearing, cancelling, or b y obliterating it with a
. manifest intention to revoke the same, and it m by be revoked by a
formal written instrum ent b y a later will or b y a codicil.
Ordinarily marriage operates by statute as a revocation o f a will
unless the will was m ade in contem plation o f the com ing marriage.
W itn e ss e s. A ny person, although a party, m ay testify In any
proceedings, except that neither husband nor wife m ay be com pelled
to testify to private conversations with each other, or be com pelled to
testify in a crim inal proceeding against the other. The defendant in
a criminal proceeding m ay testify, at his own request and not other
wise, and once he takes the witness stand in a criminal proceeding or
matter, he waives all his privileges even where the desired testimony
tends to incrim inate him, and the privilege not to give testim ony has
been waived.
The neglect or deliberate refusal o f a defendant to take the stand
and testify in his own behalf shall not be a presumption or be even
considered against him, and the prosecution shall not com m ent to the
jury upon the defendant’s failure to take the stand.
B ow ever, where the wife is necessary to explain certain acts, or
omissions in a criminal m atter against her husband, if she refuses to
take the stand in his defence, the district attorney is not barred from
com m enting to the ju ry as to w hy she failed to testify for and behalf
of her husband.
The com m unications o f a client to his attorney as a legal adviser
are privileged and is a personal privilege belonging to the client. The
attorney over the ob jection o f his client cannot take the stand and
testify as to private conversations disclosed to him as an authority
on the laws o f the Com m onw ealth. However, if the client takes the
stand he m ay be interrogated as to what he told his lawyer, pro
vided such evidence is otherwise admissible under the rules o f evidence
generally.
SYNOPSIS OF
THE LAWS OF MICHIGAN
RELATING TO
BANKING AND COMMERCIAL USAGES
Revised b y H e n r y W ttnsch and E r n e s t W ttnsch , 706-710 D im e
Bank Bidg. A ttorneys at Law, Detroit, M ichigan.
(See Card in A ttorneys’ List.)
A c k n o w le d g m e n t s o f real estate instruments m ay be before one
or the following officers: 1. W ithin this State: Any judge, clerk
or com m issioner o f any court o f record, notary public, justice o f the
peace or master in chancery. The official should certify that "O n
this day before me personally appeared........... ...... ., to me known
to be the person or persons who executed the foregoing instrument
and acknowledged that he (or they) executed the same as his (or
their) free act and d eed.” N ota ry’s certificate must show date of
expiration com m ission. Such instruments must have tw o subscribing
witnesses. 2. In any other state, territory, or district o f the United
States: Same officials as described above or any officer authorized
by the laws o f such state, territory, or district, or before a com
missioner appointed b y the Governor or this State for that purpose.
Any- such' instrument m av be executed according to the laws o f any
such other state or territory. I f officer has no seal, certificate o f the
Clerk o f the cou n ty or district, or o f the Secretary o f State within
which taken shall be attached. 3. In any foreign cou n try : notary
public, or minister plenipotentiary, minister extraordinary, minister
resident, charge d'affairs, or com m issioner or consul o f the-U nited
States, appointed to reside therein. T he name o f the officer must be
typed or printed under signature.
A d m in is t r a t io n o f E s ta te s : I n P r o b a te C o u r t o f E a c h C o u n t y .
Claims are passed on b y judge o f probate or referees. Hearing on
same to be not less than tw o m onths nor m ore than four months
after first publication o f order for same. Order im m ediately on
approval bond. On application o f creditor within eighteen m onths
o f time originally fixed, jud ge m ay allow one m onth additional. All
claims barred if not dem anded within tw o years after t im e s e t for
paym ent same. I f no proceedings, all claims barred within six years
o f death.
Adminstration o f estates is granted: First to w idow or husband
or next pf kin, or grantee o f one o f them , or such person as above
m ay request. I f above incom petent or neglect apply within thirty
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days, judge m ay appoint whom deems proper, or public administrator,
but m ay not appoint creditor or one whose interest adverse to estate.
Creditors, however, m ay petition for appointm ent o f som e other
person. N on-resiaent administrators and executors appointed in
other states, territories, or foreign countries cannot sue as such In
this State without procuring administration in this .State.
A ffid a vits m ay be taken by any judge, master in chancery, clerk
o f court, justice o f the peace, police magistrate, notary public, or
circuit court commissioner. A ny oath authorized, or required to be
made, without the State for use in judicial proceedings here, must be
authenticated by judge o f a court having a seal, and the genuineness
o f such judge’s signature, existence o f the cou rt, and that such judge
is a m ember thereof, certified Dy the clerk o f the court under the seal
thereof. I f in any other state or territory, m ay be taken before a
commissioner appointed b y the governor o f this State, or any notary
public or justice o f the peace authorized b y the laws o f any such state
or territory to administer oaths therein.
In actions at law affidavits o f amount due on open and stated
accounts, attached to and served with process as com m encem ent of
suit make a prima facie case, unless denied b y the defendant’s affidavit
died and served with plea.
A lie n s. M a y inherit or purchase and hold and con vey personal
and real estate.
A rrest. B y writ o f capias in personal actions in tort and in actions
for m oney collected b y any public officer; also b y warrant allowed
by any justice o f the peace or jud ge o f a court o f record, under the
fraudulent debtor’s act, when the creditor has com m enced suit or
obtained judgm ent and the debtor has disposed o f or concealed, or is
about to dispose o f or conceal property liable t o execution or the
debt was fraudulently contracted.
A s s ig n m e n ts for the benefit o f creditors are void unless made
without preferences; must com prise all o f assignor’s property not
exempt from execution. T he circuit court in chancery has super
visory jurisdiction o f such assignments.
A tt a c h m e n t s . Writs m ay be issued from justice and circuit courts
on affidavit showing: d ebt due on express or implied contract, and
either that the d ebtor has absconded or is about to abscond from
the State or has assigned or disposed o f or is about to assign and
dispose o f his property with Intent to defraud his creditors; or is a
non-resident or tbe state, or a foreign corporation. M a y issue from
the circuit court for debt not due but to becom e due, upon satis
factory showing to the circuit judge, but in such cases judgm ent can
not be taken until debt is due. M a y issue in actions o f tort against
non-residents in certain cases.
B a n k C o lle c t io n C o d e . 1931. P ub. A ct. 240. p. 414. Omits
§19. E ffective A ugust 27, 1931. G iven directly follow ing Laws.
B a n k s. 1 : Incorporation o f:
Banks. K inds o f Banks
Permitted.
Com m ercial,
Savings
Industrial, Trust Com panies; Safety and Collateral D eposit C om
panies, Credit Unions, C ooperative Savings Associations, Building
and Loan Associations. Finance Companies, Small Loan Business,
Tontine, Bond, Certificate and Investm ent Companies.
Supervising Authority is vested in the Banking D epartm ent, the
head o f which is the Comm issioner.
Duties: A — Exam ine each bank annually, and as m any times
as requested b y tbe bank. B— In case o f an im pairm ent o f the
capital, levy a stock assessment. O— M ake an annual report to the
Governor o f the financial status o f active and closed banks. D — R e
ceive liquidation, incorporation, consolidation proceedings, etc.
E— W ith the A ttorney General apply for appointm ent o f receivers.
Officers and Directors. D irectors: N o t less than five nor m ore,than
fifteen, elected b y stockholders until successors appointed.
A ppoint
officers,; prescribe by-laws, and exercize general banking business
through officers. M u st file oath with Comm ission and be bonded.
M ust be stockholders to extent o f $1,000 par or m ore ($300.00 if
capital $25.000.00 or less). M u st m eet once a m onth, examine loans.
A ppoint examining com m ittee to report to them once every six months
on condition o f bank. Various new civil liabilities for excess loans, etc.
Officers: President, vice-presidents, cashier or treasurer, and other
officers. A lso vice-presidents w ho are not members o f the board.
All officers must be bonded. T h ey con du ct the general business.
Incorporators. A n y number o f persons, not less than five (5), m ay
associate to establish com m ercial and savings banks.
Capital Stock and Surplus. T h e am ount o f capital stock is graded
and shall not be less than $25,000 to $500.000 according to the popu
lation o f the city or village where located. Also graded with a mini
mum depending on average minimum deposits.
Requirements.
All capital m ust b e paid in before com m ence busi
ness and surplus equal 2 0% capital. Before declare dividends must
carry 10% net profits for the period to surplus until surplus equals
capital.
_ .
. . .
,
Reserves. M u st carry one o f 12% m certain legal reserve banks.
(M a y carry such proportion o f 12% in U. S. Bonds, or U. S. guaran
teed, as tim e and savings deposits are to total deposits.) I f member
Federal Reserve governed b y Federal Reserve Act.
Examinations and Reports. Banks must make three reports per
annum and as m any special ones as requested to the Banking D epart
ment, showing resources, assets and liabilities. A lso must report
within ten days after declaration o f a dividend, the amount o f the
dividend, the amount carried to surplus, and the net earnings.
T he Banking department m ust examine one or m ore times per
annum the cash bills, collaterals or securities, books o f account,
condition and affairs o f each bank under the law, and also as many
times as requested b y tbe bank.
Loan Limitation. Loans to any one person not to exceed one-tenth
capital and surplus, but with tw o-thirds vote o f directors may be
raised to one-fift