Full text of Rand McNally Bankers Directory : Final 1942 Edition : Digest of Banking and Commercial Laws

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

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Federal Reserve Bank of St. Louis

Dates of Regular Meetings of Legislatures
f Alabama, Second Tuesday in May, 1943, and every odd year.
.. January_____________.„Every odd year.
Alaska, A Territory
Every odd year.
..January ____________
Arizona ____ ____
..January_____________ „E very odd year.
Arkansas.________
..January__ ____________ Every odd year.
California - __ _____
..January__________ . . . .Every odd year.
Colorado ------------„January _____________— Every odd year.
Connecticut______
Every odd year.
..January____________
Delaware------------District of Columbia_____Congress of the U. S.___ Third day of January in
each year.
Florida____ ___ __ ____ April..._________
Every odd year.
♦Georgia__\_1_______
.January or July _--- -Every odd year.
Hawaii___ r,___________ February______________ Every odd year.
Idaho__ _____ ________.January____ __ ....____ Every odd year.
January___________ Every odd year.
Illinois___ ________
Indiana —________
January__________ Every odd year.
Iowa_____ 1________
.January______________Every odd year.
Kansas______________ .January____ __________ Every odd year.
Kentucky. ____________ January_________
Every even year.
Louisiana____________ May______ ....--------------Every even year.
Maine__ ______ _____ ..January
— l------ Every odd year.
Maryland_____ _______ January.______________Every odd year.
Everyodd year.
Massachusetts___ ____ January
Michigan__________
January------Every odd year.
Minnesota__ . . . _____ -January-------------Every odd year.
M is s is s ip p i___ ______ January______________ Every even year.
Missouri_____________.January_______.'1----------Every odd year,
_January _____ ,________ .Every odd year.
Montana----------„January_________
Every odd year.
Nebraska— .____
„January_____________ .Every odd year.
Nevada _.»-------„January__________
Every odd year.
New Hampshire.
..January
____________
Every year.
New Jersey..— __
„January
__.__
Every
odd year.
New Mexico___
__January
________
Every
year.
New York.__
Every odd year.
„January__ _______
North Carolina__
..January ______________ Every odd year.
North Dakota—__
„January____ ___________ Every odd year.
Ohio__ ________
—January______________ Every odd year.
Oklahoma______
_January_______
Every odd year.
Oregon_________
..January
_____ Every odd year.
Pennsylvania___.
__January
__ _— Every year.
Philippine Islands
„January _______________Every year.
Rhode Island----__January _____ —-------- Every year.
South C a ro lin a „January______ :_______-Every odd 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
even
year.
Virginia
——
„January___
________
„
.E
v
ery
odd
year.
Washington-----West Virginia, 2nd Wednesday in January___ Every odd year.
Wisconsin .¿ „ „ „ „ „ -- J a n u a r y —__ L-----.„ „ „ E v e r y odd year.
W yoming____________ January „ „ „ „ „ — — Every odd year.
*Note: Organization session lim ited to ten days beginning second Monday in January. Regular
sessions lim ited to sixty days beginning the second Monday after July 4 or prior to that time, if the
Legislature at the organization session so votes. In both 1933 and 1935, the Legislature voted to hold
the tegular session of sixty days immediately following organization session.
f Organization session second Tuesday in January next succeeding the election of legislators not
longer than ten days, ho other business.

1970

Anoilte/i


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Federal Reserve Bank of St. Louis

For the g re a te r convenience o f D irecto ry users,
the List o f Bank Recom m ended A tto rn eys is b o u n d
se p a ra te ly , a n d a co p y m ailed to a ll su b scrib ers
sh ortly a fter d e liv e ry o f the D irectory.

We

o re

constantly

en d e a v o rin g

to

m ake

the

BLUE B O O K o f g re a te r service a n d convenience
to users a n d / we b e lie v e , this new arran gem en t
o f the A tto rn ey Section w ill m ake the D irecto ry
less bulky a n d th ere fo re e a sie r to ha n d le a n d use.

W e also b elieve that users o f the A tto rn ey List
w ill fin d that, com piled in a se p a ra te b o o k , it will
b e m ore convenient, efficien t a n d servicea b le.

1971

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

INTEREST RATES—NOTES AND ACCEPTANCES—GRACE
STATUTES OP
Notes and
Notes
Rate
Legal
Acceptances
Open
and
Holidays
STATES
by
Rate of
Due on
W
ritten
Ac­
falling on
interest Contract
Notes,
Sight
counts.
Con­
Holi­ Half
Sunday
AND
tracts.
are
days. Days.
Bills.
Drafts,
observed
TERRITORIES.
Are payable
the day—
and
protestable
Per
cent.
Per ct.
Years. Years.
the day—
No
grace
After
3
6
After After
No grace
8
6
__
_ ____
Alabama _
No grace No grace
After
6
8
After After
8
6
Alaska___
_
_
_ .
A fter
No grace No grace
3
6
After
8
e
Arizona__ ___
_
_ _ _
3
5
After After
A fter
No grace No grace
10
6
Arkansas___ ___
7
After
4
After
No
grace
2Y
No
grace
10
*
After
6
No grace No grace
6
Colorado 1 .................... ...............................
6 Any ratei After
6
After A fter
After
6
12
No grace No grace
Connecticut
6
After A fter Z
6
After
3
No grace No grace
6N
Delaware ................... ............
.......
6
After After
After
3
3
No grace No grace
8
6
District of Columbia
_
_ .. .
A
rter
After
5
3
1C(M)
After
No
grace
No
grace
Florida
... ......... ...................................
8
6
After After
4
After
No grace No grace
8E
Georgia .....
. ' .. .
... .
.
.
7
After A fter
After
No grace No grace
8
12
After A fter
4
5
(c)
No grace No grace
6
8
Idaho
......
10
5
A fter
No grace No grace
7(m) After A lter
Illinois __
.. .
5
After A fter
10a
6
A fter
No grace No grace
8
.... ___ .
6
Indiana _ ..
. _
10
5
After
No grace No grace
Iowa
.. _ .....
. .
7(m) After After
5
d
After
5
After
3
10
No grace No grace
Kansas
_ ............................
6
On
After
5-15
After
5No grace No grace
6
6®
Kentuckv
_
......
After A fter
5-10
3
8X
A fter
No grace No grace
5
Louisiana
__ _
6-20
6
A fter
No grace No grace
6
Any rate After After
Maine
3-12
3
After
6
6(e) (M) After A fter z
No grace No grace
Maryland. . . .
6
61
Any ratei A fte rl ▲ fieri
6
A f te il No grace Grace
Massachusetts_________ ___ ___ __________
After A fterZ
6
6
After
7
No grace No grace
5
Michigan_________ ______________________
After A fter Z
6
6
8
.......... .
Minnesota. ....
6
A fter
No grace No grace
After A fte rl
6
(c)No grace Grace
3
8
(C)
6
Mississippi________________________
__ __
After After
lCp
5
8
After
6
No grace No grace
Missouri____________________________ ___ __
After
After
8
10
After
No
grace
5
6
No grace
M ontana_________ __ ___
5
4
Nehraska
.
9(k) After A fter
After
6
No grace No grace
After
6
12
4
7
After
Nevada.________ __ ____
No grace No grace
6
6
After
6 Any rate H After After
No grace Grace
New Hampshire___ __ ____________ ______
6
6B After A fter Z
6
After
6
No grace Nograce
New Jersey__ _________ ____ s_______ __ ___
After After
6
12
New Mexico.
._ .
4
6
After
No grace No grace
et-B1 After After
6
6
After
New York________ ________________________
6
No grace No grace
6
After
3
3
North Carolina_________ ___
6
A fter
No grace No grace
7
6
After A fter
6
4
After
North Dakota______ _______________________
No grace No grace
8
After After
15
6
After
Ohio____ __________________________ ____
6
No grace No grace
10
5
After A fter(f ) A fter (h) No grace No grace
3
Oklahoma__________________________________
6
10
6
After A fter
After
6
Oregon___________________________________
6
No grace No grace
6
6U
After After
6
Pennsylvania______ __________________ _____
A fter
6
No grace No grace
♦
10
A
fter
Philippine Islands _
_______
After
A
fter
6
6
No grace No grace
Puerto Rico________________ _____ _
6
12
A fter
No grace
A fter
6
Rhode Island____ ___________ „ _________
A fter After
A fter
6
V
6
No grace Grace
6
7
A fter A fter
A fter
6
South Carolina______________________________
6
No grace No grace
6
After
South Dakota_______________________________
8
After A fter
6
6
No grace No grace
6
After After
After
6
Tennessee________________ ________________
60
6
No grace No grace
4
Texas. ___________________________________
2
10
After
Aft e rl After*
6
No grace No grace
6
U ta h ______________________________________
A fter
4
10P A fter After
6
No grace No grace
6-14
Verm ont______—______ 1____ a___. . . _____ ____
After
6
6
A fter After
6
No grace No grace
6JSl A fter A fter
5
Virginia____________________________________
After
3
6
No grace No grace
Washington ._ ......................
6
6
No grace
3
After
12
After
10
A
fter
6A
A
fter
West Virginia___ ___ ________ ___________
After
5
No
grace
6
No grace
6
Wisconsin____
_
_____ ___ ___
6
After
No grace No grace
6
A fte r'
10
10
After
Wyoming__________________________________
After After
8
10
No grace No grace
7
Alherta __
..... ._
5
8
6
A fter
After
Grace
Grace
Rritish Colombia
6
6
After
After
Grace
Grace
5
Vi anitnha
.. .............
5
6
A fter
Grace
6
A fter
Grace
After
6
New Brunswick___ ______________ __ ___
6
Grace
Grace
5 Any ratei After
Nova Scotia
.. ._ ......... .....
. (
6
s
Grace
Grace
After
Ontario
.... _ .
g
8
6
A fter
Grace
Grace
Prince Edward Island .............
g
After
6
6
Grace
Grace
A fter
Ouebec
__ ' _
_
__ ___ ____
5 Any ratei After
5
5
Grace
Grace
Saskatchewan
Any ratei After
Grace
K
After - Grace
5
(* )

(t)
( l)

S e e la w s , in d e x e d

in

back

o f th is

o f $ 5 ,0 0 0

v o lu m e .

( ® ) S e c tio n 8 8 3 -1 -1 4 o f th e K e n tu c k y S ta tu te s p ro v id e t h a t a p e tty lo a n c o m p a n y ,
p r o p e r ly lic e n s e d m a y le n d n o t e x c e e d in g $ 3 0 0 .0 0 o n a n i n t e r e s t r a t e o f 3 ) 4 %
p e r m o n t h o n a n y p a r t o f t h e u n p a i d p r i n c i p a l b a la n c e n o t i n e x c e s s o f $ 1 5 0 .0 0
a n d 2 )4
p e r m o n th o n th e re m a in d e r.

%

( ♦ ) 12%

w h e n th e re is s e c u rity : 1 4 %

w h e n th e re is n o s e c u r ity .

(•)

T e x a s " in s tr u m e n ts fa llin g d u e S a tu
th e n e x t s u c c e e d in g b u s in e s s d a y . e x
m a y , a t th e o p tio n o f th e h o ld e r, b e
n o o n o n S a tu r d a y , w h e n th a t e n tire

(* )

D e b ts c h arg ed
y e ars.

on

la n d

a lth o u g h

(■ ) C o u r t s o f R e c o r d — 1 0 y e a r s .

(a)

r d a y a re to b e p re s e n te d fo r p a y m e n t o n
c e p t th a t in s tru m e n ts p a y a b le o n d e m a n d
p r e s e n t e d f o r p a y m e n t b e f o r e 1 2 o ’c l o c k
d a y is n o t a h o lid a y .”
s e a le d

in s tru m e n ts a re

o u tla w e d

in

te n

J u s tic e C o u rt— 6 y e a rs .

N o te s : 1 0 y e a r s . C o n tr a c ts in w ritin g o th e r th a n f o r p a y m e n t o f m o n e y :

(b) N o
(e)

b y

20 y e ars.

lim ita tio n s o n J u d g m e n ts o b ta in e d in th is s ta t e a g a in s t f o re ig n c o rp o r a tio n s .

3 d a y s o f G ra c e a llo w e d o n D r a f ts o r B ills o f E x c h a n g e m a d e s e p a r a t e w ith in
t h is S t a t e a t s ig h t , u n le s s th e r e is a n e x p re s s s ti p u la t io n to t h e c o n tr a r y .
(D e c.
2741.
C o d e 1 9 3 0 .)

(d ) N o p ro v is io n e x c e p t b a n k s m a y p a y c h e c k s a n d d r a f ts o n S a tu r d a y a fte r n o o n
o r le g a l h o lid a y .
(e ) A c o rp o r a tio n m a y a g re e to p a y a n y r a te o f I n te r e s t a n d m a y n o t p le a d u s u r y .
(f)

W h e n S a tu r d a y is n o t o th e rw is e a h o lid a y p r e s e n tm e n t fo r a c c e p ta n c e m a y b e
m a d e b e f o r e 1 2 : 0 0 o ’c l o c k n o o n o n t h a t d a y .

(g )

L ic e n s e s u n d e r S m a ll L o a n A c t ( $ 3 0 0 .0 0 m a x im u m ) .
S ta te B a n k in g D e p a rtm e n t d e te r m in e s a n d f ix e s r a t e s b u t c a n n o t e x c e e d 3 )4 % p e r m o n th o n u n p a id
p r in c i p a l b a l a n c e o f $ 1 0 0 .0 0 o r le s s o r 2 ) 4 % in e x c e s s o f $ 1 0 0 .0 0 .

(h ) J a n u a r y 1 , F e b r u a r y 2 2 , J u ly 4 , D e c e m b e r 2 5 a r e th e o n ly h o lid a y s f a llin g o n
S u n d a y to b e o b s e r v e d t h e d a y f o llo w in g .
(1)
(k )

8 y e a r s o n s p e c ia ltie s : 1 5 y e a r s -o n
L im ita tio n ).

a c tio n s o f C o v e n a n t o f s e is in .

(S ta tu te s o f

S ee “ C h a tte l L o a n s ” u n d e r N e b ra s k a L a w s.

(m )

U n d e r t h e S m a ll L o a n A c t lic e n s e e s m a y c h a r g e in te r e s t a t n o t to e x c e e d 3 %
p e r m o n th u p o n a n y u n p a id b a la n c e o f t h e p r in c ip a l o f t h e lo a n n o t e x c e e d in g
$150 an d 2%
p e r m o n th o n a n y p a r t o f th e lo a n in e x c e ss o f $ 1 5 0 a n d n o t
e x c e e d in g $ 3 0 0 .
(n )
A ju d g m e n t o f a c o u r t o f r e c o r d is a lie n o n r e a l e s ta t e f o r t e n y e a r s a f te r
th e r e n d itio n th e re o f.
( p ) A ll a c tio n s o n c o n tr a c t s , o th e r t h a n o n w r i tte n
c o n tra c ts fo r p a y m e n t o f
m o n e y o r p r o p e r ty o r o n c o n v e n a n ts o f w a r r a n ty o r s e is in c o n ta in e d in a
d e e d , m u s t b e c o m m e n c e d w ith in fiv e y e a r s .
(x ) B e c o m e s d o r m a n t f iv e y e a r s a f t e r r e n d it io n o f t h e J u d g m e n t, o r th e I s s u a n c e
o f t h e l a s t e x e c u tio n , o r t h e filin g o f t h e l a s t c e r tif ic a te o f ju d g m e n t w ith t h e
C le rk o f C o u r ts in a n y c o u n ty , w h ic h e v e r d a te m a y b e la te r , a n d m a y b e
r e v iv e d w ith in tw e n ty -o n e y e a r s a f te r b e c o m in g d o r m a n t.


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Federal Reserve Bank of St. Louis

Judg­
ments.

Sealed
Instru­
menta
wit­
nessed.

Years.

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
7L
20
20(n)
5
15
10
20
12(b)
201
10
■ 10
7
10G
10
5-101
6
20
20
7
20
10
10
26x
5
10
20T
101

5
10
20
10
&
1»
10
20
12
20
10

20
20
10-201
10
10
8
8
10
6
10E
10-20
5
10
20
10
20
20
20
20
30

20
8-20
201
10
4
6
8-15(j)
10
6D
10
10-20
10
6R
20
6E
20
20
20
20
5-30

6
10
S
6
20
18
20
10
6
IS
5
10
20J
10

(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.
(2?1) 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 Loan 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) Statute of limitations temporarily suspended as regards Bills and Notes.
(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 W
contracted.
(R) Except charges on land when it is ten years.
(S) No statute: common law presumption of payment applied.
(T) Must be revived every five years after entry, to retain lien on real estate.
(U) Small loan Licensees 3% per month up to $150.00; and 2 % per month upon balance
over $150.00. Loan period 18 months, interest at 6% on unpaid balances after is
months. Loan not enforceable if Act is violated.
(V) Licensees under Small Loan Act may loan up to $300.00 and charge interest,
not In advance, at 3% per month on unpaid principal balance. Loans maae
in violation of interest statutes are usurious and can not be collected.
(W) Note under seal does not have to be witnessed to be good for twenty years.
Without seal, good for five years.
(X) Under small money lenders act, interest on loans up to $300.00 may oe
charged at the rate of 2)4 % per month. Act No. 108 of 1940.
(Y) Except book accounts.
, .
(Z.) Demand instrument may, at option of holder, be presented before 12 o cioc*
noon on Saturday unless such Saturday be a whole holiday.

S a t u r d a y is a h a l f h o lid a y o n ly d u r i n g J u n e , J u l y a n d A u g u s t i n c itie s o f 2 5 ,0 0 0 .
W h e re i t is a h a lf h o lid a y , p r e s e n ta tio n fo r a c c e p ta n c e m a y b e g iv e n o n th e
n e x t s e c u la r o r b u s in e s s d a y .
A n y r a te a g re e d u p o n In w ritin g is le g a l o n c o lla te r a l d e m a n d lo a n s
a n d o v e r.

LIMITATIONS

1972

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
2143.
For Tabulated Information, for quick reference in regard to Interest Rates, Days of Grace,
and Statutes of Limitations, see page opposite.
poraneously with the execution of the m ortgage. All assignm ents by
a debtor m ade with in ten t to hinder, delay, or defraud creditors are
void. All deeds of assignm ent for the benefit of creditors shall, a»
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
judgm ent confessed, attach m en t 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 paym ent or a r
security for a debt shall be deemed a general assignment.
A tta c h m e n t process will issue upon affidavit by the creditor or hi*
agent of the am ount due and th a t the debtor absconds, or resides,
out of the S tate, or secretes him self so th a t process cannot be served
upon him, or is about to rem ove out of the S tate, or has or is abo u t to
fraudulently dispose of his property, or fraudulently withholds money, chattels, or effects which are liable to the satisfaction of his debts;
plaintiff m ust give bond in double the am ount claimed. A ttachm ents
will issue for th e following dem ands: 1. To enforce the collection of
a debt, w hether it be due or not, a t the tim e the attachm ent is taken
out. 2. For any m oneyed dem and, the am ount of which can be
certainly ascertained. 3. To recover damages for a breach of con­
tra c t when th e dam ages are not certain or liquidated. 4. W hen
th e action sounds in dam ages m erely in following cases, viz.; 1. W here
defendant is a non-resident. 2. W hen 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 of his property or fraudulently withholds
same. One non-resident m ay sue o ut an attachm ent against another
non-resident by making oatb th a t the defendant has not sufficient
property w ithin the S tate of his residence wherefrom to satisfy th e
debt. A ttachm ents m ay be sued out in aid of a pending suit when
any of the above grounds exist by m aking affidavit and executing
bond. G arnishm ent process will issue in aid of attachm en t in all
such cases. G arnishm ent m ay be dissolved by giving bond. In all
cases of attachm ents sued out by a resident solely upon the ground
th a t the defendant is a non-resident, the attach m en t m ay issue with­
out giving bond, b ut if defendant appears and pleads, bond m ust be
given or the attach m en t dismissed.
B a n k s. S tate Banks of discount and deposit m ay be established1
by individuals or corporations, b u t before organization m ust obtain
perm it from Superintendent of Banks. Before issuing perm it Super­
intendent of Banks m ust investigate as to public necessity of bank in
com m unity where sam e is proposed and th e fitness and character o f
individuals proposing to organize bank, or if corporation, th e character
and fitness of stockholders proposing to incorporate bank. Appeal'
from Superintendent’s refusal to issue perm it m ay be taken to S ta te
Banking Board.
Paid capital stock of s ta te banks shall be n ot less th a n 25,000 in
cities of less th an 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.
Reserves. Cash reserve of 15% of dem and deposits required to b e
m aintained; three-fifths of which am ount m ay consist of balances
due by banks and bankers.
Reserve of 10% of n et earnings required to be set aside annually
u ntil surplus equals 20% of capital stock. Dividends in excess o f
90% of net earnings prohibited until such surplus equals 20% o f
th e capital stock.
T here is no stockholder’s liability in Alabam a, other th a n am ount
subscribed to capital stock; in other words, if th e subscriber has paid
for his capital stock, there is no liability.
Subject to th e foregoing, banks are incorporated under th e general
banking incorporation laws of th e S tate.
T here is no provision of law for the establishm ent of banks of issue.
Open depositors and savings depositors are on equal footing in th e
event of insolvency.
Banks are prohibited from receiving, directly or indirectly, a greater
ra te of interest th a n 8% .
S tate Banks are under th e jurisdiction and control of Superintendent
of Banks, subject to review by S tate Banking Board.
Examinations and Reports. Exam ination of bank by superintendent
required to be m ade a t least twice each year provided, however, only
one annual exam ination required of bank, deposits in which are
insured by Federal D eposit Insurance Corporation. All banks
required to m ake reports on call of superintendent a t least twice a yearLoan Limitations. Loans to officers and employees prohibited
w ithout approval of B oard of D irectors of Loan Com m ittee; and in
no event to be in excess of 20% of capital surplus and undivided
profits.
Loans in excess of 20 % of capital unim paired surplus and undivided
profits to any one person, firm or corporation prohibited. Loans,
exceeding 10% of capital surplus and undivided profits m ust be am ply
secured. Loan lim itations do n ot apply to bona fide loans m ade on
security of agricultural, m anufactured, industrial products, livestock
or other liquid securities having a m arket value and for which th e re
is a ready sale in open m arket, title to which by appropriate tran sfer
is taken in th e nam e of th e bank, in which event n ot more th a n 80%
of m arket value shall be loaned thereon.
L im itations do n ot apply to bonds of th e U nited States, or this
sta te or th e several counties, districts of m unicipalities thereof.
Loans on stock of own bank prohibited.
Branch B anking. Recent A ct perm its banks having capital and
surplus in excess of one million dollars and in counties in excess o f
250,000 inhabitants to establish branch banks in such counties.
According to present population th is applies only to Jefferson C ounty.
B ills of L a d in g . Uniform bill of lading act in force. Bills to
specified person non-negotiable. Bills to order of are negotiable.
B lu e Sky L aw . I t is unlawful to sell or offer for sale in this
S tate any speculative securities w ithout first obtaining perm it from
the S tate Securities Commission.
C o lla te ra ls. Receipt m ust be given if dem anded. Pledges or col­
laterals not transferable w ithout transfer of the debt; after two days
notice in writing collaterals m ay be sold, by advertising for five days
a t public outcry.
C o n d itio n a l S ales are good between the parties, b ut void where'
personal property delivered to vendee as against ourchasers for a,
valuable consideration, m ortgages, judgm ents creditors, and land­
lords w ith liens w ithout notice, unless in writing and recorded in theoffice of th e probate judge.
Conditional contracts of sales m ust be recorded in office of the
Judge of P robate of th e county in which the property is located,
to be valid against subsequent purchasers, judgm ent creditors, or
m ortgagees w ithout notice, except in counties having a population

SYNOPSIS OF

THE LAW S OF ALABAMA
RELA TING TO

BANKING AND COMMERCIAL USAGES. ,
Revised by B a l l a r d & B a l l a r d , A ttorneys a t Law, F irst N ational
Bank Bldg., M ontgom ery. Ala.
(See card in A ttorneys List)
A ck n o w le d g m e n ts or proof of real estate instrum ents m ay be
taken before one of the following officers: 1st. W ithin this State,
Judges of th e suprem e court, court of appeals and circuit courts and
the clerks of such courts, chancellors, registers in chancery, judges of
the courts of probate, justices of th e peace, and notaries public. The
official should certify th a t the person signing th e conveyance is known
to him and acknowledges th a t “ being inform ed of the contents of the
conveyance he executed the sam e voluntarily on the day th e same
bears d a te .” 2d. Outside of S tate—Judges and clerks of any federal
court, judges and clerks of any court of record in any state, notaries
public, or commissioners appointed by the governor of this S tate or
commissioners of deeds for th e sta te wherein the acknowledgment is
taken beyond th e lim its of the U nited States, by th e judges of any
court of record, m ayor or chief m agistrate of any city, town or borough,
or county, notaries public, or by any diplom atic, consular, or com­
mercial agent o f th e U nited States. Foreign officers m ust attach
official seal which fact m ust appear in certificate. For forms of
deeds see “ Conveyances.”
A ctio n s. All ordinary suits a t law are commenced by suing out
a summons which m ust be accom panied by a com plaint stating the
cause of action. N on-resident plaintiffs are required to give security
for costs. W hen two or more persons are jointly bound by judgm ent,
bond, or agreem ent, th e obligation is several as well as joint.
A ctio n s o n A c c o u n t. Suits upon open accounts m ay be accom­
panied by item ized, verified statem en t of the account, which when
died with th e summons and com plaint m ay be admissible in evidence
to prove th e account unless its correctness is denied under oath by
defendant w ithin th e tim e allowed for pleading. Such statem ents
must be sworn to by a person having knowledge of the correctness
of the account and m ust show th a t the am ount is due and unpaid
after allowing all offsets and counter claims and when sworn to out•lde State, m ust bear official seal of officer.*
A cce p ta n ce. Unconditional promise in writing to accept a bill
before or a fter drawn is good in favor of all who take it upon faith
thereof for value. The holder m ay decline a qualified acceptance and
treat the bill as dishonored; if he takes qualified acceptance draw er
and endorsers are discharged.
A C h e ck is a bill of exchange on a bank payable on dem and;
must be presented within reasonable tim e after issue and if dishonored,
notice m ust be given or draw er is discharged to the extent of loss
caused by delay; does n ot operate to assign any p art of draw er’s funds
In bank, and bank is n ot liable unless it accepts or certifies. If holder
has check certified th e draw er and endorsers are discharged. The
making, uttering, drawing, or delivery of a check, draft, or order
upon which paym ent is refused upon due presentation because of
lack of funds shall be deem ed prim a facie evidence of intent to de­
fraud and p arty m ay be convicted of a misdemeanor.
The present negotiable instrum ent law of Alabama, consisting of
198 sections w ent in to force A ugust 26, 1909 (Acts 1909, page 156).
Its provisions do n o t apply to instrum ents m ade prior thereto, and
is su bstantially uniform negotiable Instrum ents Act. T he act so
m aterially changes th e law in th is S tate as to suggest th e propriety
of special exam ination in any doubtful case.
A d m in is tr a tio n of estates is had in th e probate courts of dece­
dents’ residence. All claims m ust be presented by filing a verified
statem ent thereof in th e office of th e Judge of P robate in which
letters are granted within six m onths after granting of letters testa­
m entary or of adm inistration. Adm inistration of in testate is granted,
1st: To th e husband or widow; 2d: T he next of kin entitled to share
in the distribution of th e estate; 3d: T he largest creditor of th e intestate
residing w ithin th is S tate; 4 th : T he C ounty or general adm inistrator;
5th: Such other person as th e judge of probate m ay appoint. There
can be no appointm ent until after expiration of five (5) days from
date of d eath. Preference m ust be exercised within forty days or
rights relinquished. If several entitled to adm inister, m en are pre­
ferred to women an d whole blood to half blood. N onresident execu­
tors and adm inistrators m ay sue in this S tate by recording in probate
judge’s office copy of letters and giving bond to faithfully adm inister
property. A nonresident m ay be appointed adm inistrator or executor
of a deceased resident’s estate. Adm inistrations m ay be removed
to court of equity.
A ffidavits m ay be taken within the State before every judge or
clerk of any court, justices of the peace, and notaries public or any
other person invested by law w ith judicial functions. Outside the
State and w ithin th e U nited S tates m ay be taken before any judge or
clerk of federal court, judge of any court of record in any state,
notaries public and commissioners appointed by the governor. For­
eign officer taking affidavit m ust attach 6eal which, fact m ust be
recited in th e ju rat.
A llens. “ Foreigners who are, or m ay hereafter become, bona fide
residents of th is State, shall enjoy th e same rights in respect to the
possession, enjoym ent, and inheritance of property as native-born
citizens.”— Sec. 34, Const.
A lte ra tio n s. When a negotiable instrum ent Is m aterially altered
without the assent of all the parties liable thereon, it is voided
except as against a p arty who has himself m ade, authorized, or
assented to the alteration and subsequent endorsers. B ut when an
instrum ent has been m aterially altered and is in the hands of a holder
In due course, not a p arty to th e alteration, he m ay enforce paym ent
thereof according to its original tenor. M aterial alterations consist
or any changes in date; sum payable in terest on principal; tim e or
place of paym ent; num ber and relation of parties; medium or currency
in which paym ent is to be made.
A ssig n m e n ts a n d In so lv en cy . E very general assignm ent made
by a debtor, or conveyance by a debtor of substantially all of his
property in paym ent of a prior debt, by which a preference or priority
or paym ent is given to one or more creditors, shall enure to the benefit
of all th e creditors equally, b ut this section shall not apply to m ort­
gages, pledges, or pawns given to secure a d eb t contracted contem ­


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1973

1974

BANKING AND COMMERCIAL LAWS—ALABAMA

of more th an 80,000 when contract is for a less am ount than $200.00.
I f th e property is rem oved to another county, contract m ust be
recorded in latter county w ithin three m onths after removal.
C o n v ey an ces. All persons of the age of tw enty-one years, not
laboring under some legal disability, m ay convey th eir real estate or
any in terest therein by instrum ent in writing signed by the grantor,
or h is agent duly authorized in writing, and attested by one witness, or
If th e grantor cannot write, by two witnesses who are able to write,
an d who sign their nam es as witnesses. If the grantor is not able to
sign his nam e it m ust be w ritten for him, and the words “ his m a rk ”
w ritten over or against it. The person writing his name m ust sign
as a witness. A parol lease for less th an one year is valid. A married
woman over eighteen years of age m ay convey dower in her husband’s
lands, and has generally the same rights as m arried women over twentyone years of age. The husband m ust join in any conveyance of the
wife’s separate estate. Conveyances, to operate as notice, m ust be
acknowledged and recorded. General acknowledgment m ust be
signed to m ake instrum ent self-proving. M arried women m ust
acknowledge twice in the event the hom estead is conveyed. Form
of general acknowledgment is as follows:
The S tate of A labam a......................... County
I ......................................................................................a (style of officer!,
hereby certify t h a t .....................................................whose name is signea
to the foregoing conveyance and who Is known to me, acknowledged
before me on this day, th at, being informed of the contents of the
conveyance, he executed the same voluntarily on the day the same
bears date. Given under: my hand and seal, t h i s . ............... .d ay of
....................A. D
(Seab
...................
N otary Public
No tim e Is required within which conveyances shall be recorded.
T hey operate as notices from date of delivery to probate judge for
record. (See Acknowledgments.) T hey m ay be used as evidence
w ithout fu rth er proof of execution. Leases lim ited to 99 years, b u t
lease for m ore th a n 20 years void as to excess unless ackhowledged and
approved as real estate conveyances and recorded in one year after
execution. A m arried woman m ust m ake the following acknowledg­
m ent to a conveyance of a hom estead:
S tate o f . . . . . . . . . , , C ounty o f. . ...............
I, . . . . . . . . . . . . .judge o f . . . . . . . . (or other officer) do hereby certify
that,; on t h e . . . . . . . . . .d ay o f . . . . . . . . . . . . , 1 9 ....., came before me
the w ithin nam ed.............known to me (or m ade
known to me) to be th e wife of the within n a m e d .................. ..
who, being examined ,separate and ap art from her husband touching
her signature to th e Within................... . acknowledged th a t she signed
the same of her own free will and accord, and w ithout fear, constraint,
of th reats on th e p a rt of her husband.
»
In witness whereof. I hereto set m y hand and official seal this
. . . . . . . . . . . .day o f................... ; . 1 9 . . . .
(Official C haracter.)
Corporation to m ake following acknowledgm ent:
.......................................... .... .t h a t ..................................... '......... ................
whose nam e a s ......................................of the said corporation, is signed
to the foregoing conveyance, and who is known to me, acknowledged
before me on this day th a t, being informed of the contents of the
conveyance, he, as such officer, and with full authority, executed the
same voluntarily for and as the act of said corporation.
C o rp o ra tio n s . All corporations are formed under th e general
sta te law; creation under a special act is not perm itted. Three or
more persons m ay incorporate and articles of incorporation are filed
in th e office of th e Judge of P robate in th e county in which th e cor­
poration has its principal place of business. Certificate of incorporation
m ust contain a verified statem ent showing th e am ount of capital stock
paid in, which shall not be less th an 20% of th e to tal subscription.
Stockholders are, liable to creditors for unpaid subscriptions to the
capital stock. Corporations m ay be sued in any county in which
it does business by agent,
D ays o f G ra c e are abolished. (See N egotiable Instrum ents.)
D e p o sitio n s. In cases a t law, depositions m ay be taken of w it­
nesses who cannot be present a t the trial in the following cases:
When the witness is a female; when the witness is too sick to attend
court; whefa the witness resides more than 100 miles from the place of
trial,,o r 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 of the facts : when the witness is one of the officers desig­
n ated in Code section 7744, Code of 1923 (last code). Affidavit m ust
be rhade of one of th e above facts, and of th e m ateriality of th e witness.
M ay be taken on interrogatories by a commissioner appointed by the
co u rt for th a t purpose. T he commissioner m ay be an y suitable person,
need n o t be an officer. In ecpiity suits, where witnesses live within
100 miles of th e place of trial, depositions m ay be taken by oral
exam ination before th e register,"or a special examiner, or commissioner
appointed fo r th e purpose.
D e s c e n t a n d D is tr ib u tio n . The real estate of persons dying
intestate, in this'.State, descends, subject to the paym ent of debts and
the widow’s dower as follows: F irst to the children of the intestate
or their descendants per stirpes in equal parts. Next, to the parents,
if they survive, in equal parts. If only one parent survives, then
one-half to such parent and one-half to the brothers and sisters of 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. If there are no children or their descendants, and no father
or m other, then to the brothers and sisters of the intestate, or their
descendants, ini equal parts. If there are none of the above to take,
then th e whole to th e husband or wife of the intestate, and if there be
no husband, or wife or none of the foregoing living, then to the next
of kin in equal degree in equal parts. If there are no next of kin
it escheats to the State. The personal estate is distributed the same
as the real estate, except th a t if there are no children the widow is
entitled to all of the personal estate. If b ut one child she takes onehalf. I f n o t more th an four children to a child’s p a rt and if more
th an four to one-fifth. Posthum ous children take as others. Illegiti­
m ate children inherit from th eir m other. The husband upon the
death of the wife is entitled to half of her personal estate absolutely,
and to th e use of all of h e r real estate for life, unless he has been divested
of all control over her estate by a degree of the chancery court.
Damages recovered by personal representative for death of deceased
are distributed according to sta tu te of distribution and are exem pt
from paym ent of debts.
D isco v ery . E ith er p arty to a suit a t law or in equity m ay examine
his adversary by filing w ritten interrogatories and m aking affidavit
th a t answers will be. m aterial evidence for him.
, D ow er. Unless the wife has relinquished her right of dower in the
m anner provided by sta tu te she is, upon the d eath of the husband,
entitled to dower In all lands of which the husband was seized in fee
during th e m arriage, or of which another was seized to his use or to
which he h ad a perfect equity having paid all the purchase money
therefor. T he dower-interest is bne-half when the husbana leaves no
lineal descendants, and one-third when th e e sta te is insolvent or the
husband leaves children or their descendants. If the wife has a t the
death of th e husbana a separate estate equal in value to her dower
Interest, she shall not have dower, and if of less value is only entitled
to such am ounts as w ith her estate will m ake the full value of the dower.
E x e c u tio n s. P roperty subject to: 1st: On real property to
which th e defendant has a legal title or a perfect eq u ity , having paid
th e purchase money, or in which he has vested interest, in possession,
reversion, or rem ainder, w hether he has the entire estate, or is entitled
to it in common with others. 2d: On personal property of the defen­
dan t (except things in action), w hether he has the absolute title there­
to, or the right only to the possession thereof for his own life, the life
of another, o r a less period. 3d: On an equity of redem ption In either
land or personal property, when any interest less th an the absolute
title is sold. The purchaser is subrogated to all the rights of the
defendant, and subject to ail his disabilities. W rit of fieri facias is a
lien only within the county in which it is received by the officer, on


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lands and personalty of defendant subject to levy an d sale, from the
tim e only th a t the w rit is received by such officer and continues as
long as w rit is regularly delivered to th e sheriff w ithout th e lapse of an
entire term . A statem ent of a judgm ent certified by th e clerk of the
court m ay be filed in th e office of the judge of probate, which makes
the judgm ent a lien w ithin the county in which it is filed for ten years
thereafter. Execution m ay be issued on such judgm ent a t any time.
Executions issued by justices are liens on the property of th e defen­
dant, on which they are levied, from the tim e of th e levy. An order
m ust be obtained from the circuit court for the sale of lands levied on
under execution from a justice’s court. No stay of execution in circuit
court except by appeal, and supersedeas bond which delays collection
until affirmance by suprem e court, and entails 10 per cent damages,
w ith legal interest and costs. In justice’s court stay is granted on
good security, below $20, th irty days over $20, sixty days.
E x e m p tio n s . Hom estead not exceeding 160 acres and $2,000 In
value.
Personal property to th e am ount of $1,000. Exem ptions of personal
property m ay be waived by instrum ent in writing except as to certain
household furniture and provisions and wages to am ount of $25.00
per m onth.
F o re ig n C o rp o ra tio n s . Before engaging in business in th e State,
corporations are required to file in th e office of th e Secretary of State
a certified copy of its charter and designate a known place of business
in th e S tate and an authorized agent residing in th e S tate upon whom
service of process m ay be had. Foreign corporations failing to comply
with foreign corporation laws become liable for pen alty of $1,000.00
for each act which constitutes doing business in th e State. Agents
of such corporations who have n ot complied w ith foreign corporation
laws are also liable for p enalty of $500.00 for each act, and all contracts
of foreign corporations who have not complied with Alabam a laws are
void. Foreign corporations are required to pay license fees ranging
from $25.00 upw ards according to the am ount of capital invested in
th e S tate and to procure a perm it on th e first of each year from the
Secretary of State. C harge for this perm it is $10.00 per year;
F ra u d s , S t a t u t e o f. In th e following cases, every agreem ent; or
note or memo thereof, expressing the consideration, is in writing and
signed by th e p arty to be charged: 1st. E very agreem ent which by
its term s is n ot to be perform ed w ithin one year from th e making
thereof. 2d. E very special promise by an executor or adm inistrator
to answer dam ages o u t of his own estate. 3d. E very special promise
to answer for th e d ebt, default, or m iscarriage of another. 4th. Every
agreem ent, promise, or undertaking, m ade upon consideration of
m arriage, except m utual promises to m arry. 5th. E very contract
for the sale of lands, tenem ents, or hereditam ents, or of an y interest
therein, except leases for a term of n ot longer than one year, unless
the purchase money, or a portion thereof, be paid and the purchaser
be p ut in possession by the seller.
G a r n is h m e n t m ay issue in any case after suit commenced upon
affidavit of necessity and bond as in attachm ent cases, or after judg­
m ent. w ithout bond.
H o lid a y s. T he following are th e legal holidays: Sundays; Janu­
ary 1 (New Y ear’s D ay); Ja n u ary 19 (R obert E . Lee’s birthday);
F ebruary 22 (W ashington’s b irthday); M ardi G ras D ay, which is
T uesday before Ash W ednesday; April 13 (Jefferson’s birthday):
April 26 (Confederate M em orial D ay); June 3 (Jefferson Datds
birthday); Ju ly 4 (Independence D ay); first M onday in September
(Labor D ay); October 12 (Columbus F ratern al Day). Where
October 12th falls on Sunday there is no provision th a t th e following
M onday is a holiday. E x tra Session 1933, page 183-4. November 11
(Armistice D ay); Thanksgiving D ay; December 25 (Christm as Day).
I f a holiday falls on Sunday, th e following M onday is a holiday.
H u s b a n d a n d W ife. T he wife has full legal capacity to contract
as if she trere sole, except th a t she can not alienate or encum ber her
real estate w ithout the husband joining in the conveyance, unless the
husband be insane or has abandoned her, or is a non-resident, or Is
Imprisoned under a conviction for crim e for a period of two years or
more, in which cases the wife m ay convey it as if she were sole.
H usband and wife m ay contract w ith each other, b u t the wife can­
not be surety for the husband. All of the property and the earnings
of the wife are her separate estate, and are not liable for the debts of
the husband. The wife m ust sue and be sued alone for ail m atters
relating to her separate estate or contracts, and for all to rts to her
person or property. Divorce bars dower and hu sb an d ’s courtesy.
I n te r e s t. Legal ra te 6% ; 8% perm itted by contract.
J u d g m e n ts of courts of record are proved by a certified transcript.
Judgm ent not a lien, b u t when a ceritfled statem en t thereof, made by
the clerk of th e court is filed in the office of th e probate judge, it
becomes a lien on all property of th e defendant therein in the county,
which is subject to execution for ten years, to enforce which execution
m ay issue a t any tim e within th a t period. Execution received by
sheriff during life of defendant m ay be levied after his decease or alias
execution issued and levied if there has not been lapse of entire term
so as to destroy lien originally created. Above applies to executions
from circuit and chancery courts. An execution issued by a justice
of the peace Is a lien only from tim e of its levy. All agreem ents to
confess judgm ent, or to authorize another to confess judgm ent, made
before th e com m encem ent of the suit in which such judgm ents are
so confirmed are void.
L ieu fo r K e n t. The landlords of any store house, dwelling house,
or other building, shall have a lien on the goods, furniture and effects
belonging to the ten an t, and sub-tenant for his ren t, which shall be
superior to all o th er liens, except those for taxes, also on crops grown
on rented premises for rent and advances.
L im ita tio n s . N otes and stated accounts, six y ears; open accounts,
three years; sealed instrum ents, real actions, and motions against
officers, ten years; judgm ents, tw enty years; actions on the case, one
year. Bar created by sta tu te can only be rem oved by a partial pay­
m ent, m ade on the contract before the b ar is complete, or by an uncon­
ditional promise in writing. If anyone entitled to bring an action,
or m ake an entry on land, or defense founded on title to real estate,
be a t the tim e such rig h t accrues, within the age of twenty-one years,
or insane or imprisoned on a crim inal 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 allowed by law be less than three years, after
the term ination of such disability to bring such suit, etc., but no action
can be commenced after tw enty years. S tatutes of lim itation apply
to m arried women’s separate estates. Actions founded on a promise
in writing not under seal, or for trespass to person or property, must
be brought within six years. S tatutes of lim itation are made appli­
cable to equitable as well as legal dem ands, but do not run against direct
trusts. Any agreem ent or stipulation to shorten th e period prescribed
by law for the bringing of any action is void. Actions seeking relief
on the ground of fraud where the sta tu te created a bar- the cause of
action begins to run upon discovery of the fraud by aggrieved party,
No promise or acknowledgment is sufficient to remove the bar to a
suit, except a partial paym ent m ade upon the contract by the party
sought to be charged before the bar is com plete, or an unconditional
promise in writing, signed by the p arty to be charged thereby.
M a rrie d W o m en ,. - (See Husband and Wife.)
M e c h a n ic s’ L ien.
C ontractors. including subcontractors
mechanics, m aterial men, and laborers have a lien on houses built
and the ground on which they stand upon complying with the law.
M o rtg ag es are executed and acknowledged in the same m anner as
deeds. M ay be foreclosed by bill in equity, or if there be a provision
to th a t effect, by 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 <»
delivery to probate judge for record. There is no fixed tim e within
which they shall be recorded. Hom estead realty cannot be m ort­
gaged or otherwise aliened w ithout the voluntary signature and assent
of wife, evidenced by acknowledgment, upon private examination
separate and ap a rt from the husband, and certified. All mortgages
m ust be in writing, signed by the m ortgagor. P aym ent of mortgage
debt m ade before or after m atu rity of debt, revests in th e mortgagor,
or his assigns, the title to the real Or personal property mortgaged, u

BANKING AND COMMERCIAL LAWS—ALASKA
made in th e lifetim e of th e m ortgagor; if m ade after his death, such
paym ent revests title to personal property in the personal representa­
tive, and title to realty in the heirs, devises, or legatees of the m ortga­
gor. C h attel m ortgages m ust be in writing. When th e mortgagor
is sued by th e mortgagee for possession of the m ortgaged property,
he m ay defend by showing paym ent of the debt, or p a rt paym ent and
a tender of the balance, or m ay pay it after judgm ent.
N eg o tia b le I n s t r u m e n t s . Uniform N egotiable Instrum ents Act.
effective Ja n u ary 1, 1908. See full tex t of the law following “ Digest
of Banking & Commercial Laws."
P a r titio n . Partition of real or personal property m ay be m ade,
upon application of any ten an t in common in either C ourts of Probate
or C ourts of E q uity, and m ay be sold for division if it can not be
equitably divided.
P o w ers of A tto rn e y . Powers of attorney or other instrum ents
conferring au th o rity to convey property m ust be proved or acknowl­
edged in. the same m anner and m ust be received as evidence to the
same extent as conveyances (see Conveyances), and m ust be executed
as conveyances. A power of attorney to relinquish dower m ust be
executed by husband and wife jointly. H er signature m ust be
acknowledged as required for conveyances of land.
P r e s e n tm e n t. Is not necessary to charge one prim arily liable
except in case of bank notes; if payable a t special place ability and
willingness to pay it there a t m aturity is equivalent to a tender: if
not on dem and it m ust be presented on day it falls due, if on dem and
then within a reasonable tim e after its issue, except a bill of exchange
must be presented within reasonable tim e after its last negotiation.
P ro b a te L aw . A court of probate, consisting of one judge, is
established for each county in the S tate. This court has jurisdiction
of the probate of wills, of granting letters testam entary and of adm in­
istration, and th e repeal or revocation of th e same; of th e settlem ents
of accounts of executors an d adm inistrators, of the sale and disposition
of the real and personal property belonging to, and the distribution of,
intestates' estates. Also of the appointm ent, removal, and settlem ents
of guardians for minors and persons of unsound mind, the binding out
of apprentices, th e allotm ent of dower, and the partition of land belong­
ing to joint owners. A court of probate m ust be held a t th e court
house of each county on the second M onday of each m onth, and the
judge m ay hold special or adjourned term s whenever necessary, but
such court m ust a t all tim es be considered open, except on Sundays.
I t also keeps a record of deeds, mortgages, and instrum ents entitled
to record.
P ro m is so ry N o te. (See Negotiable Instrum ents.)
P r o te s t. (See N egotiable Instrum ents.)
P r o te s t o f F o re ig n B ills. (See Negotiable Instrum ents.)
R ep lev in . W rit of replevin lies to recover property in custody of
an officer of the law, and is lim ited to this. The action of detinue
liés to recover personal property in all other instances.
S ales. Uniform sales act in force.
S ales in B u lk . Sales of all or substantially all of stock of m er­
chandise except in regular course of trade is prim a facie fraudulent
and void against creditors unless th ey are notified in writing prior to
the sale in m anner prescribed by statute.
T axes become due October 1st, and delinquent on the 31st of
December of th e year for which they are levied and lands m ay be
sold by proceedings had in the P robate C ourt commenced in the
m onth of M arch following the due date of taxes provided the personal
property is insufficient to pay taxes. The rate of taxation is S im ilis
or sixty-five cents on each $100.00 on am ounts assessed. This is for
State purposes only. M unicipalities may levy taxes a t the rate of
fifty cents on each $100.00 except th a t certain nam ed municipalities
of the larger class m ay levy a larger am ount by special constitutional
provision. C ounties m ay levy similar am ount to the municipalities
except th a t certain special taxes varying in different counties are
levied in addition. Assessments based on 60% of the valuation of
the property. Counties m ay vote additional levies for specific
purposes and m ay secure the same by bonds. The purchaser of lands
sold for taxes receives from the tax collector a certificate of purchase
showing a description of the property, the date and am ount of assess­
m ent, th e taxes, costs, and fees, etc., and after th e expiration of three
years from the date of sale, the purchaser may get a deed from the
Judge of Probate. T he delinquent tax payer has three years from
date of sale in which to redeem. After 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 of taxes for which the land sold,
costs of sale, w ith in terest a t 8% per annum and all taxes paid sub­
sequent to th e sale by the purchaser with interest thereon a t 8% per
annum . W henever land is sold for state or county taxes, and from
any cause such sale is invalid to pass title to purchaser, sale operates
as transfer to purchaser of lien of sta te or county, on the property for
paym ent of taxes for which sold. All cotton factories or cotton mills
and certain other industries which shall be constructed in th is S tate
shall be exem pt from taxation for a period of 5 years.
W ills. All wills of real or personal property m ust be in writing
signed by th e testa to r and declared his last will and testam ent in the
presence of two witnesses who m ust sign as witnesses in the presence
of testator. U nwritten will of personal property valid only when
the property does n o t exceed $500 in value, and m ust be m ade dur­
ing last sickness by testa to r a t his home. Persons present m ust
be called on to witness tn a t it is testa to r's will and m ust be re­
duced to writing by one of the witnesses within six days. M inor
over eighteen m ay m ake a will of personal property. No will effective
until probated. M ay be contested in probate or chancery court.
Widow m ay within six m onths dissent and tak e dower.

SYNOPSIS OF

THE LAW S OF ALASKA
RELA TIN G TO

BANKING AND COMMERCIAL USAGES
Revised by M . E . M o n a g l e , 2 0 6 Seward Bldg., Juneau, Alaska
(See card in Attorneys List)
A ck n o w le d g m e n ts. (See Deeds.)
A ctio n s. The distinction between actions a t law and suits in
equity and all forms of pleading heretofore existing in actions a t law
and suits In equ ity are abolished, and there is but one form of action,
denom inated a civil action, for the enforcem ent or protection of pri­
vate rights and the redress or prévention of private wrongs. Every
action m ust be prosecuted in the nam e of the real p arty in interest,
except th a t an adm inistrator or executor, a trustee of an express trust,
or a person expressly authorized by sta tu te m ay sue without joining
with him th e person for whose benefit the action is prosecuted; but
the assignm ent of a thing in action not arising out of contract is not
authorized.
A ffidavits. An affidavit or deposition taken out of Alaska, other­
wise th an upon commission, m ust be authenticated as follows: 1.
I t m ust be certified by a commissioner appointed by the governor of
Alaska to tak e affidavits and depositions in the state, territory, district
or country where taken; or, 2, it m ust be certified by a judge of a
court of record having a clerk and a seal to have been taken and sub­
scribed before him a t a tim e and place therein specified, and the
existence of th e court, th e fact th a t such judge is a m em ber thereof
and the genuineness of his signature m ust be certified by the clerk
of the court, under the seal thereof. In all affidavits or depositions
witness should speak in the first person.
A liens. Any alien who is a bona fide resident of th e U nited States,
or who has declared his intention to become a citizen, or whose rights
are secured by treaty , m ay acquire and hold lands upon the same term s
as a citizen. Any alien m ay acquire lands by inheritance or in the
ordinary course of justice in the collection of debts, and m ay acquire
and enforce liens upon lands, b ut such lands m ust be sold within ten
years. Any alien m ay also acquire and hold lots or parcels of land


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Federal Reserve Bank of St. Louis

1975

in an y incorporated or platted city, town, or village, or in an y mine
or m ining claim, b u t is not authorized to acquire title from th e United
S tates to any of the public lands.
Associations. A non-profit Co-operative Association m ay be formed
by flifty or more persons, a m ajority of whom are residents of th e T erri­
tory, engaged in the production of agricultural or aquatiG products.
T he corporation m ay be organized w ith or w ithout capital stock.
Articles m ust be subscribed by incorporators and acknowledged
b y a t least one of them and filed in th e m anner of any corporation
in th e T erritory.
M eetings, other th an those, provided for in th e by-laws, m ay be
called by a petition of 40% of th e members.
M arketing contracts are provided for, b u t are not binding for a
period exceeding ten years.
A tta c h m e n t. The plaintiff, a t the tim e of Issuing th e summons
or afterw ards, m ay have the property of defendant attached in an
action upon a contract, express or im plied, for thè direct paym ent of
money, and, Ì, which is not secured by m ortgage, Hen, or pledge upon
real or personal property, or if so secured, when the security has been
rendered nugatory by the act of the defendant; or, 2, against a non­
resident defendant. The writ issues whenever the plaintiff, or any­
one in his behalf, files an affidavit showing th a t defendant is indebted
to plaintiff (specifying the am ount of indebtedness over and above all
legal set-offs or counter-claims) upon a contract, express or implied,
for the direct paym ent of m oney; th a t the paym ent has not been
secured by m ortgage, lien, or pledge, upon real or personal property;
and th a t the sum for which attach m en t is asked is an actual, bona fide
existing debt due and owing from plaintiff to defendant; and th a t the
attachm ent is not sought nor the action prosecuted to hinder, delay,
or defraud any creditor of th e defendant. Plaintiff m ust also file an
undertaking, w ith one or more sureties, in a sum not less th an $100,
and equal to the am ount for which he dem ands judgm ent, conditioned
th a t plaintiff will pay all costs adjudged and all dam ages sustained
by reason of the attachm ent if the sam e be wrongful or w ithout suffi­
cient cause, not exceeding the am ount specified.
B a n k s a n d B a n k in g . T he banking business is regulated b y th e
T erritorial Banking Board. Board m ay declare Banking Holiday a t
any tim e it sees fit. E very bank w hether incorporated or private is
required to m ake quarterly reports and also special reports to th e
Banking Board.
Paid in capital stock of àn incorporated bank m ust be not less th an
$25,000, except in tow ns th a t have a population of n ot to exceed 1,000
eople w ithin a five-mile radius thereof, th e paid in capital stock m ay
e not less th a n $15,000, providing the consent of the B anking Board
is first obtained. Individuals and partnerships have th e sam e require­
m ents as to capital actually invested. However, w ith the permission
of Banking B oard a bank m ay reduce its capital stock to $15,000
where its deposits have not exceeded $100,000 a t any tim e during past
fifteen m onths. On th e other hand Banking Board m ay require bank
to increase capital stock to $25,000 where deposits have exceeded
$150,000 for a period of nine m onths. (Laws 1917, c. 7, amending
1913, c. 48.)
T hree or more persons m ay incorporate to carry on th e banking
business, b u t one of said persons m ust be resident T erritory. No
bank incorporated w ithin T erritory is authorized to carry on their
business until it m eets th e requirem ents covering paid up stock nor
until said stock is paid in full. T he list of subscribers to th e C apital
stock of an incorporated bank m ust be filed with B anking B oard and
give nam e, residence and am ount subscribed by each stockholder.
T here are special corporate laws regulating the procedure of incor­
porating banks.
No bank is allowed to m ake loans greater th an th e sum of $1,000
to any person w ithout such loan having been approved by th e Board
of Directors; or a loan exceeding 35% of its com bined capital and
surplus in any case. Banks m ay not give preference except, to T erri­
to ry to secure T erritorial funds and to th e U nited S tates; b u t bank
is allowed to borrow not to exceed its paid up capital, and m ay pledge
not to exceed 50% of am ount borrowed as collateral security. A
reserve of 20% of its dem and liabilities m ust be kep t on hand a t all
tim es by every bank in th e territory. Gh. 31 Laws 1915. Any
authorized bank can postpone paym ent of deposits.
B a n k C o lle c tio n C o d e. N one in effect in Alaska.
B ills a n d N o tes. T he uniform Negotiable In stru m en t act has
been adopted.
C h a tte l M o rtg a g e s. Any Interest in personal property, capable
of being transferred, m ay be mortgaged ; b ut the m ortgage Is void as
against creditors and subsequent purchasers and incum brancers in
good faith and for value, unless possession of the property be delivered
to and retained by the m ortgager or the m ortgage provide th a t the
property m ay rem ain in the possession of the m ortgagor and be ac­
companied by the affidavit of all the parties thereto th a t the sam e is
m ade in good faith to secure the am ount nam ed therein, and Without
design to hinder, delay, or defraud creditors, and be acknowledged
and filed. The mortgage m ust be acknowledged by the mortgagor
as a conveyance of real property is and be filed in the office of the
recorder of the precinct where the m ortgagor resides and of th e pre­
cinct where the property is. W ithin th irty days next preceding the
expiration of one year from th e date upon which such indebtedness
became due a verified statem ent of th e interest of th e m ortgagee in th e
property a t th e tim e th e sam e is renewed, m ust be filed in th e office
where th e original was filed, and th e lien is thereby extended another
year. C hattel m ortgages are foreclosed in the sam e m anner as m ort­
gages and liens upon real property, b u t a clause m ay be inserted in a
m ortgage authorizing th e m arshal to execute th e power of sale therein
granted to the mortgagee.
C o rp o ra tio n s. Domestic Corporations. Three or more ad u lt
persons m ay form a stock corporation for any lawful purpose, whose
chief business shall be in the T erritory, except for the purposes of
brokerage, or loan, tru st and guaranty associations. A t least ^one
director m ust be a resident of Alaska.
Shares of stock are not assessable unless original or am ended
Articles of Incorporation expressly confer au th o rity to levy assess­
m ent, or unless stock certificates provide for assessments, except
Insurance and Banking shares, which are assessable to certain lim its
by operation of law.
All corporations once qualified to do business m ust thereafter file
a copy of any change in its articles' or capital stru ctu re w ithin sixty
days of such change.
F o re ig n C o rp o ra tio n s . E very corporation or joint stock company
organized under the laws of the U nited S tates or any state or territory
shall, before doing business within th e district, file in the office of the
auditor of the district and in th e office of th e clerk of th e district
court for the division wherein it intends to carry on business a duly
authenticated copy of its charter or articles of incorporation, and of
any am endm ents thereto, and also a financial statem ent, giving
certain sta tu to ry inform ation, verified by the oath of its president
and secretary and attested by a m ajority of its board of directors.
T hereafter such statem ent m ust also be so filed within sixty days after
January first of each year. The corporation m ust also file in the same
offices th e ’ appointm ent of a resident of Alaska upon whom service
of sta tu to ry service or process m ay be m ade. The consent of the
sta tu to ry agent is no longer required by sta tu te, b u t since there is no
cost for filing the consent it is better procedure to file same.
D eeds. A conveyance of lands,'or of any estate or in merest therein,
m ay be m ade by deed, signed and sealed by the person from whom
the estate or interest is intended to pass, and acknowledged or proved,
and recorded, w ithout any other act or ceremony, provided, however,
th a t in all deeds or conveyances of th e family home or hom estead
made by a m arried m an, or a woman, th e husband and wife shall
join in such deeds or conveyances. A quit-Claim deed passes all the
estate which the grantor could convey by deed of bargain and sale.
No covenants are im plied in any conveyance. T he term “ heirs,”
or other words of inheritance are not necessary to create or convey
an estate in fee simple. Wife m ay convey her lands w ithout joinder
of husband. W ithin the district deeds m ust be executed in th e
presence of tw o witnesses, who shall subscribe their nam es as such;

1976

BANKING AND COMMERCIAL LAWS—ALASKA

and th e person executing a deed m ay acknowledge th e execution
before a judge, clerk of th e district court, notary public, or com­
missioner or a U nited States P ostm aster (48 U. S. C. A. 35a) w ithin
th e district, and th e officer taking th e acknowledgment m ust indorse
thereon a certificate of acknowledgment and th e tru e date of m aking
th e sam e under his hand.
D e p o sitio n s. The testim ony of a witness, in the district, m ay be
taken by deposition, in an action, a t any tim e after the service of
th e summons or the appearance of the defendant, and In a special
proceeding after a question of fact has arisen, when, 1, the witness Is
a p arty to the action or proceeding, by the opposite p arty ; 2, the
witness’s residence is more than one hundred miles from the place of
trial; 3, the witness is about to go more than one hundred miles beyond
th e place of trial; 4, the witness is too infirm to atten d the tria l; or, 5,
th e testim ony is required upon a motion, or in any other case where
th e oral exam ination of the witness is not required.
The testim ony of a witness, o ut of the district, m ay be taken by
deposition, by commission issued, upon eight days’ notice to the other
p arty , by the clerk of th e court, or justice of the peace in a cause in his
own court, to a person agreed upon by the parties, or, if they do not
agree, to a judge, justice of the peace, notary public, or clerk of a
court selected by the officer issuing the commission.
T he am ount of the commissioner’s fees should be indorsed upon the
deposition.
D escen t a n d D is tr ib u tio n . The real property of an Intestate
descends in equal share to children and to th e issue of any deceased
toy right of representation; and if there be no child of intestate living
a t th e tim e of his or her death, to all his or her other lineal descendants;
a n d if all such descendants are in the sam e degree of kindred to th e
intestate, they take equally; otherwise, by representation. 2. If
Intestate leave no lineal descendants, to his wife; or if intestate be
a m arried woman, to her husband; and If intestate leave no wife nor
husband, to th e parents equally or th e 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 th e issue of any deceased brother or sister by right of repre­
sentation. 4. I f intestate leave no lineal descendants, nor father,
brother, nor sister, living a t tim e of his or her death then real property
descends to m other, to exclusion of Issue of any deceased brothers
or sisters. 5. If intestate leave no lineal descendants, neither hus­
b an d nor wife, nor father, m other, brother, nor sister, such real
p roperty descends to his next of kin In equal degree, excepting th a t
when there are two or more collateral kindred in equal degree but
'Claimingi through different ancestors, those who claim through the
nearest ancestor are preferred. 6. If intestate leave one or more
children, and the issue of one or more deceased children, and any
■of such surviving children due under age w ithout having been m ar­
ried, all such real property th a t cam e to such deceased child by
Inheritance from such in testate descends in equal shares to the other
children of such intestate and to th e issue of any other children who
have died, by right of representation. B u t if all th e other children
of in testate be dead, and any of them have left issue, such real prop­
erty so inherited by such deceased child descends to all th e issue of
«uch other children of the intestate In equal shares, if they are in th e
cam e degree of kindred to such deceased child; otherwise, they
ta k e by right of 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 of debts (3) sam e as real prop­
e rty except (a) if husband and issue, half to husband; if no issue,
all to husband; (b) if widow and issue, half to widow; if no issue,
•all to widow; (5) if no husband, widow or kindred, all escheats to
territory.
P ro p erty escheated to the T erritory m ay be recovered by bringing
petition for said recovery w ithin seven years a fter judgm ent entered
to escheat proceedings.
D ow er a n d C u rte s y . The widow of every deceased person is
entitled to dower, or the use during her natural life of one-third p art
In value of all the lands whereof her husband died seized of an estate
•of inheritance. E states by C urtesy are abolished.
E v id en ce. No person m ay be excluded as a witness on account of
being a p arty or interested in the event of an action or proceedings,
having been convicted of a crime, or his opinions on m atters of religious
belief. Persons of unsound mind and children under ten years of age
who appear incapable of receiving ju st impressions of the fact respect­
in g which th ey are examined or of relating them truly m ay not be
witnesses. An attorney m ay not. w ithout his client’s consent, be
examined as to com m unications made by his Client to him or his advice
thereon. A priest m ay hot, w ithout the consent of the person making
'the confession, be examined as to any confession m ade to him in his
professional capacity, in the course of discipline enjoined by the church
to which he belongs. A physician or surgeon m ay not, against the
objection of his patient, be examined, in a civil action, or proceeding,
■as to Information acquired in attending the patien t which was neces­
sary to enable him to prescribe or act.
E x e c u tio n s. (See Judgm ent and Execution.)
E x e c u to rs a n d A d m in is tr a to rs . N on-residents and infants can­
not be appointed or act as executor or adm inistrator, b u t a m arried
•woman if a resident, m ay act as either executor or adm inistrator.
W hen a will is proven letters testam entary are issued to the persons
therein named as executors, or to such of them as give notice of their
¿acceptance ol the tru st and are qualified. Adm inistration is granted
as follows: 1. To th e widow or next of kin, or both, in the discretion
•of th e court; 2. To one or more of the principal creditors; or, 3, to any
person com petent and qualified whom the court m ay select. If
deceased were a m arried woman adm inistration shall in any case be
granted to th e husband; if qualified, and he apply therefor within
th irty days. Claims are paid in the following order: 1. Funeral
-charges. 2. Taxes due the U nited States. 3. Expenses of last
-sickness. 4. All other taxes. 5. D ebts preferred by the laws of the
United States. 6. D ebts which a t the death of the deceased were a
lien upon his property, in the order of the priority of the liens. 7.
D ebts due for wages earned w ithin ninety days im m ediately preceding
■death of decedent. 8. All other claims.
E x e m p tio n s . 1. Earnings to am ount of $100 of judgm ent debtor,
for personal services rendered within th irty days next preceding the
levy of execution or attachm ent, when necessary for the use of his
fam ily supported in whole or in p a rt by his labor. 2. Books, pictures,
and musical instrum ents owned by any person, to the value of $75.
3. Necessary wearing apparel owned by any person for the use of
himself or family, b ut watches or jewelry exceeding $100 in value
.are n ot exempt. 4. The tools, implements, apparatus, team , v.ehicle,
harness, or library necessary to enable any person to carry on the
trade, occupation, or profession by which such person habitually
earns his living, to the value of $500; also sufficient q u antity of food
to support such team , if any, for six m onths; the word “ team " being
•construed to include not more than one yoke of oxen, or a span of
horses or mules, or two reindeer, or six dogs. 5. The following prop­
erty, if owned by the head of a family and in actual use or kept for
use by and for his family, or when being removed from one habitation
to another on a change of residence: Ten sheep, with one year’s fleece
or th e yarn or cloth m anufactured therefrom ; two cows and five
•swine; household goods, furniture, and utensils to the value of $300;
also food sufficient to support such animals, if any, for six m onths,
and provisions actually provided for family use and necessary for the
support of such person and fam ily for six m onths. 6. The seat or
pew occupied by the head of a family or his family in a place of public
worship. 7. All property of any public or municipal corporation.
No 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 an d reserves or present value thereof are exem pt, j
G a r n is h m e n t. (See A ttachm ent.!
H o lid a y s. T he legal holidays are Sundays; Jan u ary 1 (New Y ear’s
D ay ); F ebruary 12 (Lincoln’s birthday); F ebruary 22 (W ashington’s
toirthday); M arch 30 (Sewards D ay in com m em oration of the signing
•of th e T reaty ceding Alaska to th e U nited S tates); M ay 30 (Memorial


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D a y ); Ju ly 4 (Independence D a y ); the first M onday in September
(Labor D ay); October 18 (Alaska D ay); Novem ber 11 (Armistice
D ay); December 25 (C hristm as D ay), and any d ay designated by
public proclam ation by the P resident of th e U nited States or the
Governor of th e T erritory of Alaska, as a legal holiday, or as a day
of Thanksgiving; th e day known and observed as M em orial or Decora­
tion D ay and the day on which a general election is held throughout
th e T erritory of Alaska.
H o m e s te a d . The hom estead of any fam ily, or the proceed*
thereof, is exem pt. Such hom estead m ust be th e actual abode of,
and owned by, such family or some m em ber thereof, and not exceed
$2,500 in value nor exceed 160 acres in extent, if n o t located in a town
or city laid off into blocks or lots; o r if-located in any such town or
city, one-fourth of an acre. This exem ption does not apply to decree*
for the foreclosure of any mortgage property executed; b u t if the
owners of such hom estead be m arried, the m ortgage m ust be executed
by husband and wife.
I n te r e s t. The legal rate of interest is 6 per cent, b u t on contract
interest a t the rate of 8% per cent m ay be charged by express agree­
m ent of the parties. Judgm ents bear interest a t 6% . If usurious
interest has been received or collected the p arty paying th e same, or
his legal representatives, m ay, by action brought within tw o years,
recover double th e am ount of such interest. I f it is ascertained in
any action upon contract th a t an unauthorized rate of in terest has
been contracted for, judgm ent m ust be rendered against th e defendant
for th e am ount due, w ithout interest, and against th e plaintiff for
costs. I f the ra te contracted for is 8 per cent dir less, th e debtor m ay
also agree to pay th e taxes upon th e debt, credit, or mortgage.
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. At any tim e thereafter while execution m ay
issue a certified transcript of the docket m ay be filed in the office
of the recorder of any recording district, and from th e d ate of docket­
ing a judgm ent or transcript thereof the judgm ent is a lien upon
all the real property of the defendant within the recording district
or districts where docketed, or which he m ay afterw ards acquire
therein during the tim e an execution m ay issue. I f no execution
issues within ten years the lien expires, b u t is renewed If afterw ards
leave is given to issue execution and a transcript of the docket of
the order docketed with the recorder.
Execution m ay issue a t any tim e within five years from th e entry
of the judgm ent, and thereafter on order of the court m ade on motion
of the p arty In whose favor the judgm ent was given. Such motion
m ust £>e subscribed and verified as a com plaint, and summons must
be served upon the judgm ent debtor or his representatives, to which
he or they m ay dem ur or answer. The order m ade m ust be dock­
eted as a judgm ent. Execution m ay be against the property of the
judgm ent debtor, his person, or for the delivery of the possession
of real or personal property, or such delivery with damages. Execu­
tion from the district court is returnable within sixty days; from the
commissioner’s court within th irty days. Until a levy property is
not affected by the execution.
L icen ses. (See Taxes.)
L ie n s. Every mechanic, artisan, m achinist, builder, contractor,
lumber m erchant, laborer, team ster, draym an, and other person
performing labor upon or furnishing m aterial of any kind to be used
fn the construction, developm ent, alteration, or repair, either in whole
or In part, of an y 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 m aterial fur­
nished a t the instance of the owner of the building or other improve­
m ent or his agent; and every contractor, sub-contractor, architect,
builder, or other person having charge of the work, in whole or in
part, is, for this purpose, deemed the agent of th e owner.
S tatu to ry liens given to ; (a) person who makes, alters, repairs, or
bestows labor on any article of personalty a t request of owner or lawful
possessor; (b) person who is a common carrier or who shall, a t request
of owner or lawful possessor, carry, convey, or tran sp o rt personalty
from one place to another; (c) any person who shall safely keep or
store any grain, wares, merchandise, and personalty a t request oi
owner or lawful possessor; (d) any person who shall p asture or feed
any horses, cattle, hogs, sheep or other live stock, or bestow any labor,
care or attention upon them , a t request of owner or lawful possession;
(e) laborers and loggers for labor on or in assisting to obtain any sawlogs, spars, piles, cordwood, fuelwood, shingle bolts, or other tim er;
(f) laborers, m aterial men and contractors for work, labor and materials
for th e construction altering, digging, drilling, boring, operating,
com pleting or repairing of gas wells, oil wells, or other wells, gas pipe
lines or oil pipe lines; (g) laborers and m aterial m en for labor or
m aterials furnished th a t contribute to th e preparation of fish or
aquatic anim als for food, fish meal, fertilizer, oil or other article of
commerce; (h) laborers, miners and watchm en for labor and work In,
on or about mines ahd mining property.
L im ita tio n s . Civil actions m ust be commenced within the
following periods after the cause of action accrued; W ithin ten
years—action for the recovery of real property, or the possession
thereof; upon a judgm ent or decree of any court of the U nited States,
or of any state or territory within the U nited States; upon a sealed
instrum ent. W ithin six years—action upon a contract or liability,
express or implied, except judgm ent or sealed instrum ent; upon a
liability created by sta tu te, other th an a penalty or forfeiture: for
waste or trespass upon real p ro p 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 m arshal, coroner, or constable, upon a liability
Incurred by th e doing of an act in his official capacity or in virtue
of his office, or by th e omission of an official d u ty , including the
non-paym ent of money collected upon execution, b u t not an action
for an escape; action upon a sta tu te for penalty or forfeiture, where
th e action is given to the p arty aggrieved, or to such p arty and the
U nited States, except th e s ta tu te prescribe a different lim itation
W ithin two years—action for libel, slander, assault, b attery , seduc­
tion, false im prisonm ent, or for any injury to th e person or rights
of another not arising on contract; upon a s ta tu te for a forfeiture
of penalty to th e U nited States. W ithin one year—action against
th e m arshal or other officer for th e escape of a person arrested or
Imprisoned on civil process; upon a s ta tu te for th e penalty given
in whole or in p a rt to th e person who will prosecute, b u t if not com­
menced within one year by private p arty m ay be w ithin two years
by th e U nited States.
No acknowledgm ent or promise is sufficient to tak e th e case out of
the operation of th e s ta tu te unless some m em orandum is m ade in
writing and signed by th e p arty to be charged or some paym ent made
on principal or interest. If case is w ith reference to realty th e instru­
m ent signed by th e p arty to be charged m ust be acknowledged and
recorded in the office where original instrum ent or contract filed or
recorded. S tatu te does not run while p arty out of th e Territory
or concealed therein.
M a rrie d W o m en . The property and pecuniary rights of every
m arried woman a t the tim e of m arriage, or afterw ards acquired
by gift, devise, or inheritance, or, by her own labor, are n ot subject
to the debts or contracts of her husband, and she m ay manage, sell,
convey, or devise the same by will to the same extent and in, the
same m anner th a t her husband can property belonging to him. For
civil injuries dam ages m ay be recovered from a m arried woman
alone, and her husband is not responsible therefor. Contracts may
be m ade by a wife, and liabilities incurred, and the same enforced
by or against her to the same extent and in the same m anner as if
she were unm arried. All laws which impose or recognize civil disa­
bilities upon a wife which do not exist as to the husband are repealed.
Wife m ay record list of her personal property and such list is prima
facie evidence of her separate ownership, and property n ot so registered
Is deem ed prim a facie the property of the husband. N either husband
nor wife is liable for the debts or liabilities of the other incurred
before m arriage. H usband and wife m ay m ake conveyances and
transfers and create liens between themselves, and either m ay con­
stitu te the other his or her attorney in fact. A woman becomes of

BANKING AND COMMERCIAL LAWS—ARIZONA
age a t twenty-one or upon being m arried according to Jaw.
M o rtg ag es. M ortgages are executed, acknowledged, and recorded
In the same m anner as deeds. No covenant is implied for the pay­
m ent of the sum intended to be secured. Record of assignm ent Is
not notice to the m ortgagor, his heirs, or personal representatives.
Mortgage m ay be discharged by entry in margin of record signed by
mortgagee or his personal representative or assignee and witnessed
by th e commissioner or deputy, or by certificate executed and ac­
knowledged, as other conveyances. Foreclosure is by action of an
equitable n ature in which a deficiency judgm ent m ay be had.
B u t judgm ent of foreclosure does not bar equity of redem ption and
property m ay be redeem ed in the sam e m anner and effect as r eal
property sold on an execution issued upon a judgm ent for paym ent
of an unsecured debt. No m ortgage m oratorium on foreclosure has
been enacted.
„ _
*
_ ., _ .
| .
N eg o tia b le I n s t r u m e n t s . Uniform N egotiable Instrum ents Act
(adopted April 28, 1913). (See com plete text following “ Digest of
Banking and Commercial Laws.” )
R eco rd s. An unrecorded conveyance of real property is void
as against any subsequent innocent purchaser in good faith and for
a valuable consideration whose conveyance is first duly recorded.
A commissioner is ex-officio recorder of a recording district, the
boundaries of which are fixed by the court. Conveyances of lands
not in any recording district are recorded with the clerk of th a t divi­
sion of the district court within the lim its of which such lands are
situ ated .
R ep lev in . The plaintiff, a t any tim e after the commencement
of an action to recover the possession of personal property and before
judgm ent, m ay claim the im m ediate delivery of such property upon
filing an affidavit showing th a t he is the owner of the same or entitled
to the possession thereof; th a t the property is unlawfully detained
toy defendant; the alleged cause of detention; th a t the same has not
been taken for a tax assessment or fine, pursuant to a sta tu te, or
seized under an execution or attachm ent against the pro p erty »of
the plaintiff; or. If so seized, th a t it is exem pt: and the actual value
of th e property and by delivering an undertaking in twice the value
o f th e property to be replevined to the M arshal or officer retaking
th e property.
S ervice. (See Actions.)
~
- ,
S u p p le m e n ta ry P ro c e e d in g s. (See Judgm ent a n d Execution.)
T ax es. No genera) property tax except in M unicipal corporations,
but both the U nited S tates and the territory levy and collect license
taxes upon occupations and businesses, the am ount of which differs
on th e several different occupations and businesses. Profit taxes on
sale, where lien continues in favor of T erritory for six m onths after
rep ort of taxes due said T erritory.
....
U n ifo rm la w s: Negotiable instrum ents act; bills of lading act;
air licensing act; general partnership act; lim ited partnership act;
foreign acknowledgements act; sales act; stock transfer act; warehouse
receipt a c t; conditional sales a c t; desertion and non-support; federal
tax lien registration act; foreign depositions act; foreign executed
wills; extradition of persons of unsound m ind; tax on transfer of
personal property of non-resident; proof of statutes.
W ills. Every person of twenty-one years of age, of sound mind,
m ay dispose of all his or her property by will saving a widow’s dower.
Will m ust be in writing, signed by the testator, or under his direction,
in his presence, and atteste d by two or more com petent witnesses sub­
scribing their nam es in th e presence of th e testato r provided th a t
olographic wills, with or w ithout attestation, shall be adm itted to pro­
bate th e sam e as other wills and proved the same as other private
writings. “ W ill” includes “ Codicils." A will by an unm arried per­
son is revoked by his subsequent m arriage. Children or descendants of
children not nam ed or provided for in the will take as if testato r had
died intestate. ' A m ariner a t sea or soldier in m ilitary service m ay dis­
pose of his personal property as a t common law. Proof of nuncupative
will m ust be m ade within six m onths, and the words or their substance
reduced to writing within th irty days after they are spoken., A person
owning property in, b u t not an inhabitant of, the district m ay devise
or bequeath th e sam e according to th e laws of his domicile. If such
will be probated w ithout the district, copies of the will and the probate
thereof, certified by the clerk of the court In which It was probated,
with th e seal of th e court affixed thereto, if there be a seal together
with a certificate of th e chief judge or presiding m agistrate, th a t the
certificate is in due form, and m ade by the clerk or other person having
the legal custody of th e record, m ay be recorded, adm itted in evidence,
•or contested and annulled as if executed and proved within th e district.

SYNOPSIS OF

THE LAW S OF ARIZONA
RELATING TO

BANKING AND COMMERCIAL USAGES
Revised b y W il s o n , C o m p t o n a n d W il s o n , A ttorneys a t Law, Flag­
staff, Arizona.
(See Card in A ttorneys List)
A c co u n ts. When stated draw interest; when action is upon open
account and affidavit of party, his agent or attorney, is attached,
stating th a t such “ account is within affiant’s knowledge, ju st and true,
th at it is due, and th a t all ju st and lawful offsets, paym ents and credits
have been allowed,” is prim a facie evidence, unless a t least one day
before trial, defendant files w ritten denial of any item under oath.
A c k n o w le d g m e n ts. The form of an ordinary certificate of ac­
knowledgment shall be substantially as follows:
“ S tate of Arizona,
1 □□
County o f.................................................. ...........................1
This instrum ent was acknowledged before me th is...............day
o f................... A. D . . .................. . by (if by a natural person or persons
here. insert nam e or names; if by a person acting In a representative
or official capacity, or as attorney in fact, then insert nam e of person
as executor, atto rn ey in fact, or other capacity; if by an officer or
officers of a corporation, then insert nam e or names of such officer
or officers as th e president or other officer of such corporation, naming
It).
A ........................................B .........................................
N otary Public.
(Or other officer) W
(My commission expires. . . . ............................ ) ” '
Every instrum ent affecting real property in this state executed,
acknowledged and certified in any other state or territory in accord­
ance with the laws of such state or territory, shall be valid and en­
titled to record as if executed in accordance with the laws of this
state.
A ctio n s. D istinction in forms between law and equity are abol­
ished. Pleadings are: Com plaint and answer, and in some cases a
reply.
A d m in is tr a tio n of E s ta te s . Lie in Superior C ourt. No public
adm inistrator. Where person dies intestate letters shall issue.
A ffidavits. M ay be taken before any officer authorized to take
acknowledgments.
A liens. Unless rights are secured by treaty cannot hold land in
the state, m ay acquire by inheritance, or in ordinary course of jus­
tice in the collection of debts; m ay acquire liens on real estate, may
lend money and secure same on real estate, b ut title so acquired must
be sold within five years; m ay acquire patented mines and hold
stock in dom estic corporation owning unpatented mines.
The laws provide th a t th e laws of the sta te pertaining to aliens
shall not be construed as to conflict in any m anner with any rights
existing under and by virtue of any tre a ty oi tne United S tates with
any o th er country.
A ppeals. Appeals are allowed from Justice of peace to superior
court in certain cases and from superior court to suprem e court,
except in actions of forcible entry and detainer where rental value
of p roperty is less th an $300 per year.


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1977

A rre s t. Abolished in civil cases, debtor fraudulently removing
•Property out of territory or concealing it m ay be prosecuted criminally.
A tta 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 contract, express or im plied;
for the direct paym ent of money and th a t such contract was made
or is payable in this State, and th a t the paym ent of same has not
been hilly secured by m ortgage or lien upon real or personal property,
or pledge of personal property, or if originally so secured, th a t such
security has, w ithout any act of plaintiff or the person to whom the
security was given, become valueless, and shall specify the character
of the indebtedness, th a t the sam e is due to the plaintiff over and
above all legal set-offs or counter-claim s, and th a t dem and has been
made for the paym ent of am ount d u e ; or 2 T h at defendant is indebted
to plaintiff, stating am ount and character of debt; th a t same is due
and payable over and above all legal set-offs and counter-claims, and
th a t defendant is a non-resident of this S tate or is a foreign corporation
doing business in this S tate; or 3. T h a t the action is brought upon a
Judgment of another S tate or territory of the United States, or of the
D istrict of Columbia; or 4. T h a t an action is pending between the
parties, and th a t defendant is about to remove his property beyond the
jurisdiction of the court to avoid paym ent of judgm ent; and 5. T h at
the attachm ent is not sought for a wrongful or malicious purpose, and
th a t the action is not prosecuted to hinder or delay any creditor of
defendant. No such attachm ent shall issue until suit has been duly
Instituted, b ut it m ay be issued in a proper case either a t the com­
m encement of the suit or a t any tim e during its progress. The writ
m ay issue, although plaintiff’s debt or dem and be not due and under
specified facts of intent to defraud; no final judgm ent shall be rendered
until such debt or dem and shall become due. W rit m ay issue a t or
after action begun upon plaintiff or some one in his behalf filing the
affidavit, and upon filing a bond with two sureties in an am ount equal
to am ount sued for. Sureties can be compelled to justify upon
notice. When more th an one attach m en t is levied on same property
writs take priority according to tim e of levy. (See Liens, G arnish­
ment.)
*
.■
B a n k s a n d B a n k in g . All sta te banks are under th e supervision
of th e S tate Banking D epartm ent under th e m anagem ent of th e
Superintendent of Banks. In addition to complying w ith the general
corporation laws, banks m ust procure perm it from Superintendent of
Banks before transacting business. T erm “ b a n k ” includes com­
m ercial banks, savings banks and tru s t companies. P riv ate or
partnership banks are prohibited. Incorporators are governed by
general corporation laws b u t shall be investigated as to character
and integrity. W here bank is located in city or 20,000 or less inhabi­
tan ts, th e directors m ust own a t least $200.00 par value of th e stock
and a t least $500.00 where located in city of m ore th an 20,000 inhabi­
tants. N otice of personnel of directors m ust be posted. Officers
m ust give bonds. E very bank other th an m utual sayings banks
m ust have capital stock of not less th a n $25,000, and in Cities of from
5.000 to 15,000 inhabitants n ot less th a n $100,000, in cities of over
50.000 n ot less th an $200,000. Certificate of incorporation will issue
only after it appears, by affidavit of n o t less th a n tjiree of th e incor­
porators, th a t the required am ount of capital stock has been paid
in, and certificate of am endm ent to articles of incorporation only
a fter it appears by affidavit th a t all of th e increased capital has been
paid in cash. No banking corporation is required to have m ore th an
$2,000,000 capital. Of funds available for dividends n ot less th an
25% of net profits shall first be carried to a surplus or reserve fund u n til
such fund shall equal th e capital stock. Commercial banks m u st m ain­
tain as a reserve an am ount equal to 15% of th e aggregate am o u n t of
th eir deposits and dem and liabilities, and in cities of over 50,000 a
20% reserve shall be m aintained. Savings banks m ust m aintain a
legal reserve equal to 10% of their deposit liabilities. Provision is
m ade requiring every bank to m ake n ot less th an three verified
reports each year showing th e financial condition, which reports m ust
be published in a newspaper. The commercial banks m u st be exam­
ined a t least twice a year and all other institutions receiving deposits
a t least once a year. The to ta l liability to any bank of any person
for money borrowed shall a t no tim e exceed 15% of th e am ount of
th e capital stock paid in and of th e surplus earned and set aside;
provided th a t loans m ay be m ade up to 25% when secured by readily
m arketable non-perishable, staple com m odities in warehouse or in
tran sit. Loans to officer or director shall n ot exceed 10% an d to tal
loans to officers shall n o t exceed 25% . Stockholders of banks are
liable for all contracts, debts or engagem ents to extent of par value
of their stock, in addition to am ount invested in stock. L iability
m ust be enforced within three years after closing of bank and m ay be
enforced im m ediately if in judgm ent of superintendent of banks or
receiver assets are insufficient to m eet liabilities. Banks m ay open
branch offices by permission from Superintendent of Banks if they
have a paid in capital and surplus of n ot less th a n $50,000 plus $15,000
of additional capital and surplus for each branch so authorized.
Industrial banks are subject to th e sam e laws of organization and
supervision as other banks, and are authorized to accept deposits and
issue investm ent certificates for th e same. Industrial bank loans or
discounts to any one person, firm or corporation shall n ot exceed
$1,000.00, and interest is allowed up to 10%. M inim um capital in
cities of less th a n 15,000 inhabitants is $15,000.00, in cities of 15,000 to
50.000 inhabitants is $50,000.00, and in cities of more th an 50,000
inhabitants is $100,000.00. Industrial banks shall n ot carry com­
mercial or dem and banking accounts nor accept tru st or act as trustee,
nor deposit its funds w ith any banking corporation except such as
m ay be designated by vote of m ajority of directors a t a m eeting duly
called a t which a quorum is in attendance. T hey shall purchase and
hold So much of th e stock and assum e and discharge such obligations
as shall be required for m aintaining deposit insurance in th e Federal
D eposit Insurance Corporation. Stockholders liability sam e as other
banks. Regulation, exam ination and taxation sam e as commercial
banks. Same legal reserve as savings banks.
■
Any banking institution, upon a u th o rity of a m ajority of its board
of directors, m ay do anything necessary to tak e advantage of pro­
visions of section 12B of federal reserve a ct as am ended, acquire
securities of the federal corporation, and com ply w ith regulations and
requirem ents thereof. (See Interest.)
Any bank which receives tru s t funds m u st pledge its assets to secure
such funds in com pliance w ith requirem ents of federal reserve bank
if a member, or, if n ot a m em ber, in accordance w ith rules an d regu­
lations prescribed by superintendent of banks.
Banks or tr u s t com panies qualified to a ct as fiduciaries m ay establish
common tr u s t funds to furnish investm ents to itself as fiduciary or
itself and others as cofiduciaries, and m ay invest funds therein if n ot
prohibited by th e creation of th e fiduciary relationship. No court
accounting necessary unless specifically required by court.
B ills a n d N o tes. The negotiable instrum ent code adopted by the
American Bar Association is in force. Jo in t obligor m ay be released
without releasing others. (See Holdings.)
B o n d s. Any standard surety com pany, organized under laws of
United States or of any state, m ay execute bonds in judicial proceed­
ings within the state when th ey have complied with license laws
(See G uaranty Companies.)
C h a tte l M o rtg a g e . To be valid against others than the parties1
thereto, chattel m ortgage m ust set out the residence of the m ortgagor
and the m ortgagee, the sum to be secured, the rate of interest to be
paid and tim e and place of paym ent of the debt: secured, and be
accompanied by the affidavit of both m ortgagor and mortgagee th a t
the m ortgage is bona fide and m ade w ithout design to defraud or
^ delay creditors. Void as against creditors of m ortgagor and subse­
quent purchasers, m ortgagees or lien holders in good faith unless
im m ediate delivery of the m ortgaged property is m ade to the m ort­
gagee and the change of possession Is actual and continued, unless the
m ortgage or a true copy thereof shall be forthw ith deposited and filed
In the office of the recorder of the county where the property shall
then be situated and in th e county of residence of m ortgagor, if a
resident of Arizona, except in the case of a m ortgage on automobiles,
in which case it m ust be filed w ith th e sta te m otor Vehicle Division
and a new certificate of title issued showing the lien. Removal, sale, or
other disposition of m ortgaged property w ithout consent of m ortgagee

1978

BANKING AND COMMERCIAL LAWS—ARIZONA

entitles m o rtgagee'to im m ediate possession of it, and such rem oval,
transfer, or sale, or subsequent encum brance is felony. I f m ortgagee
perm its m ortgaged p roperty to be rem oved to another county, he shall
w ithin one m onth record his m ortgage in such other county. C hattel
m ortgage m ay be foreclosed by notice and sale or by proceedings in
superior court. M ortgagee m ay obtain possession of property on
d efault and sell after notice which m ust be served on owner. After
notice m ortgagor m ay contest as to am ount due and rig h t to foreclose
and have proceedings transferred to superior court. U pon stock of
goods, wares and m erchandise w ith continued possession in m ort­
gagor, void. I f copy is filed with recorder, original m ust be acknowl­
edged, an d copy certified to by county recorder.
C la im a n d D elivery. (See Replevin.;
C o lla te ra ls. No sta tu to ry provisions—common law prevails.
C o m m u n ity P ro p e rty . (See Conveyances.)
C o n d itio n a l S ales. Where title remains in vendor until purchase
price is paid, void as to persons not parties thereto, and persons
w ithout notice, unless subscribed, and filed with county recorder.
C o n tr a c ts . (See Bills and Notes.) One or more obligors on a
Joint or jo in t and several instrum ent m ay be released without releasing
th e others, and m ay be sued separately under certain conditions w ith­
o u t releasing th e others. M arried women m ay contract as if sole,
as to their separate property.
C o n v ey an ces. Conveyances of estate in lands for term more than
one year shall be by instrum ent in writing subscribed by p arty making
It, or his agent, duly authorized thereto by writing. A conveyance is
not effectual against creditors or bona fide purchasers unless recorded
in recorder’s office in county where land is situate. A conveyance
purporting to convey a greater estate th an the grantor has passes only
the estate th a t he actually has, A general g rant or devise passes the
fee unless expressly lim ited to a less estate. All deeds to com m unity
realty m ust be signed by both husband and wife except as to un­
patented mining claims. Deeds m ust be signed and m ust be ac­
knowledged before some officer authorized to take acknowledgm ent,,
and properly certified by him to entitle same to registration. T he use
of th e word “ g ra n t” or “ convey” implies the following covenants and
none other
1. T h a t previous to the tim e of the execution of the
conveyance the grantor has n ot conveyed th e same estate, or any
right, title or interest therein, to any person other th an the grantee.
2. T h at such estate is a t the tim e of the execution of such conveyance
free from incumbrances. M arried women 21 years of age and upward
m ay convey their own lands w ithout being joined by their husbands.
(See Acknowledgment, Dower, H usband and Wife, Homestead.)
C o rp o ra tio n C o m m is sio n , organized under C hapter 90, First
Session, Laws 1912. Has general supervision of corporations.
C o rp o ra tio n s In G e n e ra l. Any num ber of persons m ay become
Incorporated for the transaction of any law ful business. Before com­
mencing any business, they m ust adopt articles of incorporation
which shall be signed and acknowledged by them as deeds and he
filed in the office of the Corporation commission a t the S tate C apital
and a certified copy thereof filed in the office of the C ounty Recorder
in each county in the state in which they tran sact business. The
articles of incorporation m ust contain: 1. The name, residence and
P ost Office address of incorporators, the nam e of the corporation,
which nam e shall indicate the character of business to be conducted,
and its principal place of transacting business. 2. The general
natu re of th e business proposed to be transacted. 3. The am ount of
capital stock authorized and the tim es when and conditions upon
which it is to be paid in. Stock w ithout p ar value m ay be issued. 4.
T he tim e of th e comm encem ent and term ination of the corporation.
5. By w hat officers or persons th e affairs of th e corporation are to be
conducted, and th e tim es a t which th ey are to be elected. 6. The
highest am ount of indebtedness or liability to which th e corporation
is a t any tim e to subject itself, which m ust not exceed tw o-thirds wof
Its capital stock. In case no par value stock indebtedness shall be
com puted by rules and regulations of Corporation Commission.
Provided such lim itation shall not apply to indebtedness authorized
by th ree qu arters of th e votes cast w ith respect thereto, in conform ity
w ith provisions of Articles of Incorporation and by-laws of any such
corporation, a t a lawful m eeting of th e stockholders thereof, and
approved by th e Corporation Commission; th e rediscounting of
securities representing lawfully m ade loans, or the pledging or guaran­
teeing of said securities, w ith th e Federal Interm ediate C redit Bank,
th e Regional Agricultural C redit C orporation, or any other Federal
Agency or an y B ank or Banking institution, if authorized by Articles of
Incorporation, and approved by th e C orporation Commission, shall
n ot be construed as a creation of indebtedness within th e m eaning of
th is section.' 7. W hether private property is to be exem pt from
corporate debts. Unless so exem pted stockholders are liable for the
debts of th e corporation In th e proportion which their stock bears to
th e whole capital stock. M ust be published for six tim es in some
newspaper in th e county where th e principal business is located.
P roof of publication m ust be filed w ith th e Corporation Corpmission.
Corporations to endure for tw enty-five years. Corporation m ust file
in office of Corporation Commission an appointm ent of agent who is
a bona-fide resident of this sta te 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 powered by articles to
a c t m ay be sta tu to ry agent. N o public officer of sta te m ay a c t ex­
cep t m em bers of legislature or county officials, other th a n judicial.
S tatu to ry agent m ay resign upon th irty days w ritten notice filed w ith
corporation commission. Charges for incorporation. R ecorder’s
fees, 20 cents folio. Recorders fees, certified copy, 20 cents folio.
Recorder’s fees certificate to copy, 75 cents. Corporation Commis­
sion’s fees, filing cost copy, $10. Certificate of filing Articles of In ­
corporation $5.00. C ertificate of incorporation $10.00. C orporation
Commission’s fees, filing appointm ent of agent, $5.00. Filing resigna­
tio n of agent, $1.00. A nnual registration fee, $15.00. W here charter
provides assessments m ay be levied on shares to p ar value.
C o r p o r a tio n s , F o re ig n . Before it can tran sact business it m ust
file certified and duly authenticated copy of Articles w ith C orporation
Commission and also an appointm ent of agent upon whom a service
personal to th e corporation m ay be m ade in each county in which it
tran sacts business. Publish its Articles of Incorporation and file
affidavit thereof as required of dom estic corporations. P ay license
fee of $15.00.
' A fter com pliance w ith laws to tran sact business has sam e rights
an d privileges as dom estic corporation except th a t it cannot a ct as
executor, ad m inistrator, trustee, guardian of estate of m inor or
incom petent, or in any other fiduciary capacity except as testam en­
ta r y trustee. Alien corporation cannot own or hold land in state.
C o rp o ra tio n s , I n s u r a n c e . M ay be organized under provisior
peculiarly applicable to insurance companies:
C o rp o ra tio n s, R a ilro a d . Are organized under a sta tu te espe­
cially providing for them .
C o rp o ra tio n s . S av in g s a n d L o an . (See Banks and Banking.)
C o rp o ra tio n S to ck , T ra n s fe r of. T ransfer of stock shall not be
valid, except as between the parties thereto, until the sam e is regularly
entered upon the books of the com pany, so as to show the nam es of the
person by whom and to whom the transfer is m ade; th e num ber of their
designation of the shares, and the date of the transfer.
C o sts. 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, m ust
authorize judgm ent to be entered against sureties.
C o u rts . Are the Supreme C ourt of the S tate, the U. S. district court
for th e D istrict of Arizona; one superior court for each County, except
in counties having over certain population in which event two or more
superior courts, justices of th e peace, police courts, recorders of cities.
T he superior court of th e several counties is a court of general juris­
diction, both civil and crim inal. I t has b o th original and appellate
jurisdiction. Its original jurisdiction extends to all civil cases where
th e am ount involved exceeds $200 exclusive of interest, and in all cases
involving th e title to or possession of real estate. Justice courts have
general jurisdiction when am ount in controversy does n ot exceed
$200.00, except when title to real estate is involved. Police courts in


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incorporated towns or cities have jurisdiction of cases arising under
city ordinances and concurrent jurisdiction w ith justice courts over
violations of law com m itted within city lim its. (See Jurisdiction.)
D ay s o f G ra c e . None.
D e p o sitio n s. M ay now be taken either upon oral examination,
and cross-examination or upon w ritten interrogatories and cross
interrogatories, as is generally provided.
D e s c e n t a n d D is tr ib u tio n . T he law of com m unity property
prevails. Upon th e death of husband or wife in testate, one-half of
th e com m unity property goes to th e survivor an d th e other half
goes to his or her descendants. In th e absence of such descendants
the entire com m unity estate goes to th e survivor.
T he interest of
either spouse in th e com m unity is subject to testim en tary disposition.
T he entire com m unity estate is charged w ith debts against it.
T he separate estate of in testate shall descend as follows: P e rso n a l
P r o p e r ty : one-third to th e surviving spouse and th e rem aining twothirds to descendants. In absence of such descendants th e 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. If no descendants one-half to surviving
spouse and the other one-half shall pass according to rule of descent and
distribution; provided th a t if the in testate leaves neither father nor
m other, then th e surviving spouse shall be entitled to th e whole of
such real estate. I f no husband or wife survive in testate, all separate
p roperty shall pass as follows: 1. to children of in testate and his or her
descendants. 2. If no such children or descendants then to fath er and
m other in equal proportions. If only one.parent survives, th en onehalf will pass to such parent and the other half to brothers and sisters of
intestate and their descendants. I f no brothers or sisters, th en th e
whole estate shall pass to th e surviving parent.
I f no brothers or
sisters or parents th en th e inheritance shall divide into m oites, one
of which shall go to th e paternal grand parents and th eir descendants
and th e other to th e m aternal grand parents and th eir descendants
(See Dower, H usband and Wife, Hom estead).
D ow er. Dower is abolished.
E vidence. The common law rules have not been codified. Parties
m ay be exam ined and the other side not concluded thereby. S tatutes
of other states and territories purporting to be printed under authority
m ay be read. No one is incom petent to testify because of religious
belief. Certified copies of all records in sta te m ay be read. C erti­
fied copies of records of all notaries m ay be read. C ourt m ay order
inspection or copy of docum ents.
E x e c u tio n s. Upon a judgm ent of superior court, executions may
be issued to any county. Lien of dates from levy, and if on real prop­
erty. the description is endorsed on execution and filed with county
recorder. A range levy m ay be m ade upon all of stock under a certain
brand in same m anner as upon real estate. (See Judgm ent, Liens.)
Proceedings supplem ental to execution— when returned unsatisfied
creditor is entitled to an order requiring debtor to answer concerning
his property, b u t n ot elsewhere th an in the county of 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 th e denial of
owning or of having property.
E x e m p tio n s . E very person who Is the head of a family, and
whose family resides within this state, m ay hold as a homestead,
exem pt from attachm ent, execution and forced sale, real property
to be selected by him or her. which hom estead shall be in one com­
pact body, n ot to exceed in value four thousand dollars, upon filing
affidavit designating such hom estead In th e Office of the County
Recorder in county where property is situated. Such homestead
exem pt from date of filing said affidavit. The following property
shall be exem pt from execution, attachm ent, and sale on any process
issued from any court: 1. The fam ily bible. 2. A seat or pew in
an y house or place of public worship. 3. A lot In any burial ground.
4. Necessary household, table and kitchen furniture, including viz:
5. The tools or im plem ents of a mechanic or artisan necessary to
carry on his trade, etc. 6. T he sewing machine and implements
of a seam stress actually used in pursuing her vocation. 7. One
watch, one sewing machine, one typew riting m achine, and one bi­
cycle. 7a. Five milch cows. 8. T he camping outfit of every
prospector in this state, including his mining tools, saddles and burros.
9. The farm ing utensils and im plem ents of husbandry of th e debtor,
etc. 10. Poultry not exceeding in value twenty-five dollars. 11.
Two horses and two m ules and their harness; one cart or wagon;
one dray or truck; one coupe; one hack or carriage for one or two
horses or one autom obile by the use of which a carm an, draym an,
truckm an, huckster, hackm an, team ster, chauffeur, or other laborer
habitually earns his living, and one horse with vehicle or harness or
other equipm ent used by a surgeon, physician, constable or clergyman
in the legitim ate practice of his profession, with food for such horses
or mules for one m onth. 12. Fuel necessary for th e use of the
debtor and his fam ily for the period of six m onths. 13. The presses,
stones, type, cases and other tools and im plem ents used by any
person or copartnership in printing or publishing a newspaper or in
conducting any printing establishm ent or by any person hired to use
them ; not exceeding two thousand dollars in value; together with
stock in trad e not exceeding four hundred dollars in value. 14. The
library and philosophical and chemical or other apparatus belonging
to and used for the instruction of youth in any university, college,
sem inary of learning or school. 15. All moneys received by or
payable to a surviving wife or child upon th e life of 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 by any police departm ent association, fire
departm ent association, beneficiary association, or fraternal benefit
association, and any person entitled to assistance therefrom , or to
any certificate holder thereof or beneficiary under such certificate.
18. Any claim for damages recoverable by any person by reason
of any levy upon or sale under execution of his exem pt personal
property or by reason of the wrongful taking or detention of such
property by any person, and any judgm ent recovered for such
damages. 19. The earnings of the m inor child of any debtor or
the proceeds thereof by reason of any liability of such debtor not
contracted for the special benefit, of such m inor child. 20. One
half of the earnings of the wages or salary of any person for his per­
sonal services rendered a t any tim e within th irty days next pre­
ceding the levy of attachm ent, garnishm ent or execution when it
appears by the affidavit of the debtor or otherwise th a t such earnings
are necessary for the use of the fam ily residing in th is state, supported
in whole or in p a rt by him. 21. All arm s, uniform s and accoutre­
m ents required by law to be k ep t by any person, an a also one gun
to be selected by the debtor. 22. All fire engines...........of any fire
departm ent. 23. All courthouses, jails, etc. The property de­
clared to be exem pt by this chapter shall not be exem pt from at­
tachm ent or sale in any action brought or judgm ent recovered for
the purchase price of such property so long as such.p roperty remains
in the possession of 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 on v ey an ces. Agreem ents m ust be in
writing and signed by the parties to be charged: 1. By an executor
or adm inistrator to answer for the debt of his testa to r or intestate out
of his own estate. 2. By a person to answer for the d ebt, default or
miscarriage of another. 3. To charge any person upon an agreement
m ade upon consideration of m arriage 4. F or sale of real estate or
lease thereof for a term longer th,an one year. 5. Those which are
not to be performed w ithin the space of one year after th e making
thereof. 6. A contract to sell or a sale of any goods or choses in
action, of value of $500.00, or upwards, unless buyer accept and
actually receive the same or give something in earnest to bind the
contract, 7. An agreem ent authorizing or employing an agent or
broker to purchase or sell real estate, or mines, for compensation or
commission. 8. An agreem ent which is not to be perform ed during
lifetime of the promisor, or an agreem ent to devise or bequeath any
property, or to m ake any provision for any person by will. Every
gift, conveyance, or assignm ent, or transfer, or charge upon any
estate, real or personal; any suit commenced on decree, judgm ent, or

BANKING AND COMMERCIAL LAWS—ARIZONA
executions suffered or obtained, or any bond or o ther'w riting given
with in ten t to delay, hinder, or defraud creditors, purchasers or
other persons, shall to such persons be void. All bargains, sales,
and other conveyances of lands, tenem ents, and hereditam ents,
deeds of settlem ent of m arriage, deeds of tru st, and mortgages, are
void as to creditors and subsequent purchasers, w ithout notice,
unless properly recorded. The creditor m ust be a judgm ent creditor,
and notice m ust be prior to date of judgm ent lien. A judgm ent
creditor m ay be an innocent purchaser. Every gift, conveyance,
assignment, transfer or charge m ade by a debtor, which is not upon
consideration deemed valuable in law shall be void as to prior credit
tors, if debtor had not then other property in the S tate sufficient
to pay all his indebtedness. N o t on th a t account, however, void
as to subsequent creditors. N o gift of any goods and chattels shall
be valid unless duly acknowledged, or proven and recorded, or by
will, or unless actual possession shall have come to and remained
with th e donee or some one claiming under him. fra u d u le n t in ten t
Is a question of fact and n ot of law. Conveyance shall not be adjudged
fraudulent m erely because not for valuable consideration. If any
person shall do or tran sact business as a m erchant or trader, with the
addition of th e words agent, factor, com pany, or & Co., or words of
like significance or Im port, and shall fail to disclose the nam e of his
principal, or p artn er, or other person who m ay be interested in such
business by a sign in letters easy to read, placed conspicuously a t the
place where such business is transacted, or if any person shall transact
business in his own nam e, without any such addition, all the property,
stock, money and choses in action used or acquired in such business
except such property as m ay be exem pt from execution, shall, as to
the creditors of an y such person, be liable for his debts, and be, in all
respects, treated in favor of his creditors as his property. Crim inal
prosecution for fraud is provided. (See Conditional Sale.)
g a r n i s h m e n t . W rit m ay issue: 1. Where writ of attachm ent
has issued. 2. Upon affidavit th a t the d eb t is ju st due, and unpaid,
and th a t defendant has not, w ithin affiant’s knowledge, property in
his possession subject to execution sufficient to satisfy such debt, and
th at the w rit is n ot sued o ut to injure either the defendant or garnishee.
3. Upon judgm ent, when affiant m akes affidavit th a t th e defendant
has not, within his knowledge, property in bis possession within this
State sufficient to satisfy said judgm ent. Proceedings under sub­
division 2 requires a bond in the am ount of th e debt, conditioned
th a t plaintiff will prosecute th e su it to effect, and pay all damages
and costs th a t m ay be adjudged against him for wrongfully suing
out th e garnishm ent. T he proceedings are docketed and judgm ent
rendered as if in an- independent proceeding. Salaries of all public
officers of th e S tate of Arizona or any of its political subdivisions are
subject to garnishm ent. (See A ttachm ent.)
H o lid ay s. T he following days are legal holidays: Sundays;
January 1 (New Y ear’s D ay); F ebruary 14 (Admission D ay—sta te­
hood); F ebruary 22 (W ashington’s birthday); second Sunday in M ay,
known as M other's D ay; M ay 30 (Memorial D ay); Ju ly 4 (Inde­
pendence D a y ); first M onday in Septem ber (Labor D a y ); October 12
(Columbus D ay); general election day; Novem ber 11 (Armistice
Day); Thanksgiving D ay; December 25 (Christm as D ay); and
Arbor D ay, which is F riday following April 1 in Apache, N avajo,
Coconino, M ohave and Y avapai counties, and F riday following
February 1, in all other counties. Any promissory note, bank check,
bill of exchange, acceptance, or other negotiable instrum ent, m ade
payable a t any fu tu re period, which falls due on any of these days
mentioned, shall be considered due and collectible on th e day following,
and when any holiday, except M other’s Day, shall fall upon Sunday,
then th e M onday following shall be considered as a legal holiday.
W rits of injunctions, attachm ents, replevin, and prohibition m ay be
issued and served on.
H o m e s te a d . . D eed to. m ust be signed by husband and wife. (See
Exemptions.)
H u s b a n d a n d W ife. All property, both real and personal, of
the husband or wife, owned or claimed by him or her before m ar­
riage. and th a t acquired afterw ard by gift, devise, or descent, as also
the increase, rents, issues, and profits of the same, shall be his or her
separate property. The earnings and accumulations of the wife and her
minor children in her custody while she has lived or m ay live separate
and ap a rt from her husband, shall also be the separate property of the
wife. AI1 property acquired by either husband or wife during the
marriage, except th a t which is acquired by gift, devise, or descent, or
earned by th e wife and her m inor children while she has lived or m ay
live separate and a p art from her husband, shall be deemed the common
property of the husband and wife, and during th e coverture ¿personal
property m ay be disposed of by the husband only- M arried women
of the age of twenty-one years and upwards shaU have the same legal
rights as m en of the age of twenty-one years and upwards, except the
right to m ake contracts binding the common property of the husband
and wife; and shall be subject to the same legal liabUities. (See
Dower, Conveyance.)
I n j u n c tio n . Is issued, where p arty is entitled to relief and
restraint, is required of some prejudicial act; where, pending litiga­
tion, an act is done which tends to render judgm ent ineffectual, and
when applicant is entitled under principles of equity. Under certain
conditions m ay be granted ex parte a t cham bers or by consent.
Bond m ay be fixed by judge and approved by clerk, except to restrain
collection of 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 rso n a l. W orkm en’s Compensation Act in force.
In s u r a n c e . (See special chapter pertaining to Insurance.)
I n te r e s t. M ay contract, in writing, for any rate of, not exceeding
8 per cent per annum . Any rate exceeding this is usurious^ When
no express contract, on bond, bill, note, or instrum ent of writing,
or judgm ent, for m oney lent, or due on settlem ent of accounts from
date of ascertained balance, and money received for use of another,
interest is com puted a t 6 per cent per annum .
Person, partnership, corporation, bank or tru s t com pany, national
bank doing business in sta te m ay m ake installm ent loans n ot to
exceed $1,000 w ith to tal interest or discount of 8% added to principal
calculated from d ate of indebtedness.Any additional sum s charged
except recording fees an d fees for acknowledgment constitute usury.
J u d g m e n ts . Judgm ents of superior courts become a lien upon all
real estate of judgm ent debtor in the county as soon as entered and
docketed. Upon filing w ith the clerk of the superior court a transcript
of judgm ent from justice court or of superior court of another county,
the same becomes a lien on all real estate of judgm ent debtor in the
county. N o execution can be issued on any judgm ent after the
expiration of five years from the date of its rendition and entry, unless
such judgm ent be revived by scire facias or action for d eb t be brought
thereon within such five years.
Ju d ic ia l B o n d s. (See Bonds.)
Levy. (See Executions.)
L icenses. For gambling prohibited.
L ien s. All persons who m ay labor or furnish m aterials In the con­
struction or repairing of any building, superstructure, canals, dams,
mines, or other im provem ent, or cuts cord wood, shall have a lien on
the same, and in case of buildings and superstructures, on the lot of
land whereon th e sam e is situ ate and connected therew ith. To fix
and secure th e lien, th e person performing labor or furnishing m aterial
m u st, within sixty days after th e completion of such labor or the fur­
nishing of m aterials, file his contract in the office of the county recorder
where th e property is situate. If the contract be verbal, a duplicate
copy of th e bill or particulars should be m ade, under oath, and one
delivered to th e recorder and filed for record and the other furnished
the party owing th e debt, or his agent. Laborers’ and like liens are
preferred to all subsequent liens, mortgages, and incumbrances, and
such as lien claim ant had no notice. Suit to foreclose such liens m ust
be commenced within six m onths after filing the same in the recorder’s
office. In case of th e levy of w rit of attachm ent or execution, clerks,
laborers, and employes of debtors have a preference claim for wages
for service perform ed sixty days before levy of writ, not exceeding
$200. upon filing notice of claim unpaid w ith creditor, .d eb to r, and
officer executing w rit. P roprietors of hotels, boarding bouses, and


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1979

lodging houses have special lien on all property or baggage deposited
w ith them by guests for price of guests’ entertainm ent. Agister and
liverym an, garagemen, have lien by sta tu te. (See Judgm ent, M o rt­
gage.)
L im ita tio n s . To recover realty against person in peaceable and
adverse possession under color of 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
claims by right of possession only, two years as against one seeking to
recover possession and showing no b etter right. Personal Actions—
One year: Malicious prosecution, false im prisonm ent, libel, slander,
seduction, breach of promise. Action on liability created by statu te,
other than a penalty or forfeiture m ust be brought within one year
from discovery of fraud. Two years: Personal injuries, trespass to
property, detention or conversion of personal property to own use,
takm g and carrying away goods and chattels: and injuries to person
wnere death ensues,to accrue from date of death. Three years:
Actions for debt not in writing; on sta te d or o pen' accounts other
than m utual between m erchants or their factors and agents; all
accounts, except as between m erchants and factors and agents, limi­
tations run from date of each item of delivery. Actions for relief
on ground of fraud or m istake. Four years: For penalties or dam ­
ages on any bond to convey real estate; between partners for settle­
m ent of partnership accounts; on m utual or current accounts between
m erchants, their factors or agents, to accrue from cessation of deal­
ings; upon judgm ent or instrum ent w ithout th e S tate; bonds of
executors, adm inistrators, or guardian, after death, removal, etc.;
specific performance; to contest will after discovery of fraud; and
w here.no provision is otherwise m ade. Five years: On domestic
judgm ent where execution has been issued within one year after
rendition. Six years: debt evidenced by writing -within th e state.
Action to foreclose lien of m echanic or m aterialm an m ust be brought
w ithin six m onths after filing for record.
'
M ines unpatented are real estate for the purpose of inheritance and
conveyance. Those being com m unity property m ay be conveyed by
spouse having title or right of possession w ithout other spouse join­
ing. Location requires seven m onum ents, th ree a t each end, and
one a t discovery, in which notice is to be placed on discovery; title
work consisting of a shaft 4 x 6 x 8 feet deep, or its equivalent in
an open cu t so th a t m ineral in place is discovered 8 feet from th e
surface m ust be done and notice recorded within three m onths, and
annual assessment work am ounting (to $100, m aintained each year
thereafter, until paten t is ordered.
M o rtg ag es. All m ortgages of real property and all deeds of tru st
in the nature of mortgages shall, notw ithstanding any provision in the
mortgage or deed of tru st, be foreclosed by action in a court of com­
p eten t jurisdiction. F ailure of m ortgagee to lawfully release a
satisfied m ortgage for ten days after dem and for the release, subjects
him to liabUity for $100 and actual damages. M ortgages on real
estate are executed, acknowledged and recorded as conveyances of
real estate. (See Conveyances, C hattel M ortgage, Acknowledgments.
Redem ption.)
N e g o tia b le I n s t r u m e n t s . Uniform Negotiable Instrum ents Act
adopted. See complete tex t following “ Digest of Banking & Com­
m ercial Laws.”
N e ta ry P u b lic . In aH certificates and acknowledgments the date
of expiration of commission m ust be stated, as “ commission expires".
N otary m ust reside in county for which appointed and has no juris­
diction outside of said county.
N o tes a n d B ills of E x c h an g e. (See Bills and Notes).
P a r tn e rs h ip s using fictitious nam es m ust file w ith C ounty Recorder
certificate showing names of partners and their residences, which
m ust be signed and acknowledged by all partners.
P ow ers of A tto rn e y . No special sta tu to ry provisions relative to.
To confess judgm ent m ust be executed subsequent to m atu rity of deb t
confessed, and m ust be acknowledged. To convey lands or release
m ortgages should be acknowledged as deeds, and recorded.
■P ro b a te L aw . (See Savings Banks and A dm inistration of E states.)
P ro te s t. Liability of draw er or indorser of bUl or note m ay be
fixed by regular protest and notice, etc., according to the negotiable
Instrum ents code. (See Bills and Notes.)
R e co rd s. The superior courts of each county are courts of ^record.
The recorder’s office in each county relates to titles of real estate
and personal property, and probate record instrum ent therein is
notice. The m inutes of the Sanitary Live Stock Board are notice of
aU brands and m arks of live stock.
R e d e m p tio n s . From Sheriff or judicial sales, six m onths, by
judgm ent debtor, or successors in interest. Senior creditor subsequent
to judgm ent having a lien on th e premises sold, m ay redeem within
five days after expiration of said six m onths, and each subsequent
lien holder, according to priority of lien, within five days after time
allowed the prior lienholder, by filing w ith County Recorder statu to ry
notices of intention to redeem. T he same rule applies to foreclosure
of m ortgages and tru s t deeds. Redem ption from ta x sales 5 years,
b u t su it m ay be brought by holder of certificate of purchase to fore­
close rig h t of redem ption after 3 years.
R e p le v in . For possession of specific personal property which has
not been seized under any process, execution or attachm ent against
the property of the plaintiff.
S ales. The “ uniform sales law ” is in force.
i
S eals. Addition or omission of seals or scrolls to instrum ents of
writing in no way affect the force and validity of the instrum ent.
Instrum ents executed by corporations m ust have a corporate seal
attached.
S ervice. A11 summons upon persons shall be persona!, or by leaving
a copy w ith copy of com plaint a t the usual place of residence of
defendant, w ith some person of suitable age and discretion th en
residing therein, or to an agent authorized b y appointm ent or by
law; upon a dom estic or foreign corporation or partnership or other
unincorporated association subject to su it under a common name,
by deUvering to an officer, a m anaging or general agent, or any other
agent authorized by appointm ent or by law, and, if agent is one
authorized by sta tu te and th e sta tu te so requires, by also mailing to
defendant, upon th e sta te or a m unicipal corporation or other govern­
m ental organization thereof subject to suit, by delivering to chief
executive officer or th e secretary, clerk or recording officer thereof.
S u its . (See Actions.)
T axes. Aside from those levied by legislative enactm ent for
specific purposes, as for the construction and m aintenance of public
institutions, etc. S tate taxes are levied by the S tate Board of E qual­
ization; county taxes by the boards of supervisors of the several
counties, and city taxes by the common councils of the various cities.
Railroads are valued for the purpose of taxation by the S tate B oard of
Equalization. O ther property is valued by county assessors. The
assessing of value begins in January of each year. The lien attaches
on the first M onday of Jan u ary of each year. One-half of taxes be­
come due and payable on first M onday in September and become
delinquent on the first M onday in N ovem ber next thereafter. Re­
maining one-half become due and payable on first M onday in M arch
and become delinquent on first M onday in M ay next thereafter.
The penalty for delinquency is 4 per cent added thereto and interest
from date of delinquency until paid, a t rate of 10 per cent per annum .
C ounty T reasurer shaU advertise property for sale for delinquent
taxes and sell sam e n ot earlier th an th e first of October nor later th an
the first day of November.
T ra n s fe r of C o r p o r a tio n S to c k s. (See Corporations.)
W a re h o u s e s. Personal property in, m ay be sold for unpaid
charges.
W ills. Wills m ust be In w riting, signed by the testato r, or by some­
one for him , in his presence and by his direction, and m ust be attested
by two or more credible witnesses above the- age of fourteen years, in
the presence of each other and the testator.
W hen the will is wholly
w ritten b y th e testa to r, 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 by three credible witnesses th a t th e testa to r

BANKING AND COMMERCIAL LAWS—ARKANSAS

1980

called on some person to take notice and bear testim ony th a t such is
his will, and th a t the testim ony, or the substance thereof, was com­
m itted to w riting within six days after the making of such will; in
such case th e am ount willed is not lim ited. Wills are revocable by
subsequent will, codicil, or declaration in writing, executed with like
form alities as in execution of will, or by testa to r destroying, canceling,
or obliterating the same, or causing it to be done in his presence, or
by subsequent m arriage, and no provision is m ade for wife. Foreign
wills, th e probate whereof is duly authenticated, m ay be probated
here. Contests of wills can n ot be initiated after one year from date
of probating.

SYNOPSIS OF

THE LAW S OF ARKANSAS
RELA TIN G TO

BANKING AND COMMERCIAL USAGES.
Revised b y S ydney S. T aylor , A ttorney a t Law, Arkansas N ational
Bank Bldg., H o t Springs N ational Park, Ark.
(See card in A ttorneys List)
A c c o u n ts . In suits upon accounts th e Affidavit of the plaintiff
th a t th e account is ju st a n d correct shall be sufficient to establish
th e
unless th e defendant shall under oath deny th e correctness
of th e account, either in whole or in p a rt; in which event the plaintiff
shall b e held to prove such p a rt of his account as is th u s domed by
0 t ikcknow ietU sm ents m ay be taken within the S tate before the
suprem e or circuit court, or a judge thereof, county and probate
court, or by county or probate judge, or clerk of any court of record,
or if acknowledgment is taken before a Justice of Peace it should be
a Justice of Peace of its county where real estate is located, or notary
public; elsewhere in th e U nited S tates before any court having a seal,
or clerk of such court, n otary public, unless taken out of state, com­
missioner of Arkansas; w ithout th e U nited States before any court
having a seal, m ayor of a city having a seal, U nited States consul,
or an y officer authorized by th e laws of such country to p robate
conveyances of real estate, provided he has a seal.
A d m in is tr a tio n of E s ta te s . Executors and adm inistrators m ust
be residents of th e S tate and m ust give bond in double th e value of
th e personal property. Claim s are classified as follows: First,
funeral expenses and of last illn'ess, wages of servants and medical,
Tn«f)ieine, an d hospital bills; Second, judgm ents rendered against the
deceased in his lifetim e which are liens on the lands of th e deceased ;
T hird, all dem ands w ithout regard to quality which are exhibited
to th e adm inistrator within six m onths after th e granting or the
letters; F ourth, all dem ands as m ay be exhibited after six mtmths
and w ithin one year after th e granting of the letters of adm inistra­
tion. All dem ands not presented within one year are barred by
lim itation. Dem ands m ust be authenticated by an affidavit to the
effect th a t nothing has been paid or delivered tow ard then* satisfac­
tion except w hat is credited thereon, and th a t th e sum dem anded,
nam ing it, is justly due. Dem ands m ust first be presented to the
executors or adm inistrators for action and if disallowed by him m ay
be presented to th e probate court for allowance. N otes and debts
secured by m ortgages m ust be probated as any other claim if it is
desired to hold the estate responsible.
A ffidavits in this S tate are m ade before a judge, justice of the
peace, notary public, or clerk of the court; w ithout the S tate before
a judge, m ayor, notary public, justice of the peace or commissioner
for th is S tate.
„
, •
A s s ig n m e n ts f o r t h e B e n e fit of C re d ito rs , are a very popular
m ethod of winding up insolvent concerns where th ere is a prospect
of a reasonably good dividend. As soon as th e assignm ent is m ade
it is th e d u ty of th e assignee to tak e im m ediate possession of the
property, m ake a detailed inventory of sam e and file th e deed with
th e chancery court together w ith th e bond in double th e am ount of
th e value of th e property. T he sale and distribution of th e assets
and th e entire adm inistration of th e estate is handled under th e direc­
tion of th e chancery court. Releases m ay be exacted as th e condition
for participating in th e assignm ent.
__ , ___
A tta c h m e n ts m ay be sued o ut where th e defendant Is a foreign
corporation or non-resident, or being insolvent has been absent from
th e S tate four m onths, or has left th e S tate w ith intent to defraud his
creditors, or has left th e county of his residence to avoid th e service of
summons, or conceals himself so th a t sum m ons can not be served on
him , is or about to rem ove or has rem oved a m aterial p a rt of his prop­
erty out of th e S tate, not leaving enough to satisfy his creditors, or has
sold, conveyed br otherwise disposed of his property, or suffered it to be
sold with the fraudulent in ten t to cheat, hinder, or delay his creditore,
or is about so to do. I t is obtained by fllfng an affidavit stating the
nature of th é plaintiff’s claim, th a t it is just, its am ount and the exist­
ence of the ground, and by giving bond conditioned to pay all damages
the defendant m ay sustain if the attach m en t is wrongfully sued out.
The defendant is allowed to traverse the attachm ent, and the affidavit
and traverse then stand as pleadings upon which the issue is tried.
If th e attach m en t is dissolved, the defendant m ay have an assessment
of damages upon the bond in the same suit. Persons claiming the
attached property m ay interplead in the same action. Attachm ents
m ay be sued out before the deb t is due where the defendant has sold,
conveyed, or otherwise disposed of his property, or perm itted it to be
sold with the fradulent in ten t to cheat, hinder or delay his creditors,
or is so to do, or is about to remove his property, or a m aterial part
thereof, out of the S tate with the in ten t of cheating, hindering or delay­
ing his creditors.
.
' „ . .
.
B a n k s . T he banking business is controlled by a S tate Bank
D ep artm en t under th e direction of a bank commissioner and a sta te
bank board. T he S tate B ank Board is composed of five mem bers,
all of whom m ust be residents of th is S tate of th e age or thn-ty-five
years or over, two of whom shall be active bankers, a t least one or
whom shall in no event be an officer or director of any bank or tru st
com pany of th e S tate of A rkansas and all of whom shall be appointed
by th e Governor.
. ,
,
All applications for charters for th e new banks and for approval
of am endm ents of th e charters of existing banks shall, im m ediately
upon their filing w ith th e S tate B ank Commissioner, be subm itted to
th e board for investigation and for approval or disapproval by it.
I f th e application be approved, th e B ank Commissioner m ay, m the
e v e n t-th a t he also shall approve th e application, g rant th e charter
therein requested or approve th e proposed charter am endm ent. No
b ank or tru s t com pany shall change or rem ove th e location of its
banking house, office or place of business from one tow n or city to
another save by charter am endm ent first approved by th e Bank Com­
missioner and th e S tate Banking Board. *■t
In th e event of great financial stress or other emergency any city,
county or regional clearing house association of banks or tr u s t com­
panies in th is sta te m ay, w ith th e approval of th e bank commissioner
and th e Governor, restrict th e right of any bank or tru s t companies
whose banking houses or places of business shall be located w ithin th e
territo rial boundaries of such clearing house to pay checks or other
orders draw n upon or against deposits for such tim e, to such extent
and in such m anner as shall to it appear necessary or desirable for
th e protection of depositors and other creditors.
E very b ank shall, a t all tim es, h av e on hand as a reserve an am ount
equal to a t least fifteen per cent of th e aggregate sum of its deposits.
A p a rt of said fifteen per cent shall be in cash in th e vaults and the
rem ainder thereof m ay be held on deposit subject to check w ith any
other bank which m ay have been approved by th e Commissioner as
reserve agents.
,
^
Any five or more qualified n atu ral persons, a m ajority o whom
pba.il be bona fide residents of Arkansas, who m ay desire to associate
them selves by articles of agreem ent for th e purpose or establishing
any b ank or tru s t com pany, m ay apply to th e Commissioner to be
incorporated and shall subm it their proposed articles of agreem ent in
duplicate.


https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

T he stock o f every bank shall be deem ed personal property and in
case of sale shall be transferred only on th e books of th e bank. When­
ever any stockholder m ay wish to tran sfer'h is stock, certificates in
duplicate of such transfer, signed by th e President and Cashier or
Secretary, and setting forth th e nam e and residence of th e transferror
and transferee, shall first be sent to th e B ank Commissioner. T he
Commissioner shall thereupon endorse upon said duplicate certificate
his approval or disapproval of th e transfer showing th e d ate thereof.
A fter m aking such endorsem ent, th e Commissioner shall, within 30
days from the receipt of such certificate, forward th e original copy
of th e certificate to th e Bank. T he Bank m ay then file th e certificate
w ith the Clerk of th e C ounty in which th e bank is located. N o trans­
fer of bank stock shall be valid as against creditors of th e transferror
unless a certificate of such transfer is filed w ith C ounty Clerk.
T he affairs and business of any incorporated bank shall be m an­
aged and controlled by a board of directors of n ot less th an three who
shall be selected from th e stockholders a t such tim es m such m anner
as m ay be provided by its by-laws. No person shall be eligible to
serve as a director of any bank unless he shall be a bona fide owner of
stock fully paid up and not hypothecated of th e p ar value of $500.
N o bank shall engage directly or indirectly in trad e or commerce
by buying or selling goods, chattels and m erchandise nor m ay it
purchase or hold its own capital stock unless such purchase wiall
be necessary to prevent loss upon a debt previously contracted m
good faith; and stock so purchased or acquired shall, within twelve
m onths of its purchase, be sold or disposed of a t p rivate sale. A
hanir m ay hold and sell all kinds of property th a t m ay come into its
possession as collateral security for loans or any ordinary collection
or debts b u t m ust dispose of it as soon as possible and within twelve
m onths. Banks can n ot lend money on their own stock.
No stockholder of any bank whose deposits are insured by the
F. D. I. C. shall be subject to any assessment or liability imposed
by any law of this S tate upon stockholdera of banks. Upon th e date
of procuring such insurance th e stockholder of said Bank shall be.
released and relieved from all liability imposed by any law or this
S tate upon ahy bank stockholders. T he purpose and in ten t or this
s ta tu te are to m ake th e stockholders of banks whose deposits are
insured by th e F. D. I. C. liable to th e sam e extent as stockholders
of ordinary business corporations b u t no further.
W henever a sta te or national bank whose deposits are insured by
th e F. D. I. O. shall be appointed as an executor or adm inistrator or
guardian and th e m oneys to come into its hands do not exceed Five
T housand Dollars. I t is n ot necessary th a t the said bank execute
a bond. If the am ount exceeds Five T housand Dollars th e bank or
tru s t com pany is required only to give bond and security for tn e
If a check is- presented for paym ent more th a n six m onths after
its’ d ate th e bank m ay a t its option refuse paym ent unless expressly
instructed by the drawer a t or prior to such presentation to pay same.
Acts required on a holiday m ay be done upon th e next succeeding
k ^ e a f 8estate acquired through th e collection of debts previously
contracted in th e due course of business shall not be held by th e
bank as an asset for a longer period th a n five years. Interest on
deposits in excess of four per cent is prohibited.
’
.
A bank m ay n ot loan over tw enty per cent of its capital stock to
any one person.
.
t
A.
B ills a n d N o te s. W ith a few minor variations th e Arkansas Act
is a literal copy of th e Uniform N egotiable Instrum ents Law. Bills
and notes given for any p atented machines, instrum ents or implements
of any kind to a citizen of this S tate are not commercial paper, unless
it shall be executed on a printed form and show th a t it is executed
in consideration of a patented m achine, etc. and. no person should
be considered an innocent holder of sam e though he m ay have given
value for sam e before m atu rity and the m aker m ay m ake any defense
to the collection of sam e in th e hands of any holder. All such notes
not showing on the face for w hat they shall be given are void. This
does n ot apply to m erchants or dealers who sell paten ted things in tne
usual course of business. No note given for prem ium s on insurance
in this S tate shall be negotiable u n til the policy for which th e said
note was given as paym ent for prem ium thereon shall have been
issued and delivered to th e m aker of th e note and all notes so given
shall set forth w hat purpose they were given. The following damages
are allowed where a bill is protested for non-acceptance or non-pay­
m ent. If the bill is draw n on any place in this State, 2 per cent; ir
the bill is drawn on any person in payable in Alabam a, Louisiana,
Mississippi, Tennessee,- Kentucky, Ohio, Indiana, Ilhnois, or Mis­
souri, or any point on th e Ohio River, 4 per cent; if drawn on any
other place in th e U nited States, 5 per cent; if beyond th e limits of
the United States, 10 per cent. For a non-paym ent after acceptance
within this State, 2 per cent; w ithout th e S tate, 6 per cent; foreign
countries, 10 per cent.
__
. ?
.
„T
,
B ills of L a d in g . (See W arehouse Receipts and Bills of Lading.)
B lu e S ky L aw . The S tate Banking D epartm ent has full authority
to perm it or prohibit th e sale of contracts, stocks, bonds and other
securities in Arkansas. An application m ust be m ade and permission
obtained before said securities can be offered for sale. Suits m ay be
commenced against every foreign or dom estic com pany holding per«
m its issued by th e A rkansas Bank Commissioner for any cause of
action arising o ut of th e sale or offer for sale of any of its securities
and process m ay be served on th e B ank Commissioner.
C o lla te ra ls are governed by th e law m erchant.
C o n tr a c ts touching commercial m atters are governed by the law
m erchant.
,
C o n v e y an ces. A m arried woman m ay convey her separate„real
estate by deed of conveyance executed by herself, th e sam e as if she
were a feme sole. A m arried woman m ust join m th e Deed of ner
husband to relinquish her dower and hom estead rights and m ust
acknowledge sam e in the proper m anner. All acknowledgments shouia
be in th e proper sta tu to ry form. T he legislature from tim e to tim e
enacts curative acts.
C o rp o ra tio n s . Three or more persons of full age m ay form a
corporation for any lawful purpose by filing in th e office of th e Secre­
ta ry of S tate articles in duplicate originals showing th e nam e or tn e
proposed corporation, which m ust end with th e abbreviation Bjc.
or m ust include th e word corporation. T he Articles m ust state
the purpose of th e corporation; th e duration m ay be perpetual or
lim ited; it m ust sta te th e nam e of th e county and th e city in whicn
its principal place of business is located and th e nam e of its resident
agent and th e to tal num bers of shares of stock which th e Corporation
shall have au th o rity to issue m entioning th e par value of each snare
or stating th a t th ey are to be w ithout par value. The am ount oi
paid-in capital w ith which th e corporation will begin business snail
not be less th an $300.00. The nam e and address of th e incorporators
and th e num ber of shares subscribed for by each and any several
provision fo r regulation of th e corporation. The following are
excluded from this form of incorporation; banks, tru s t companies,
railroad companies, corporative m arketing association, iraternai
benefit societies, fairs or expositions. The later are all covered £>y
special acts. Upon filing w ith th e Secretary o f State, th e duplicate
copy bearing th e file m ark of th e Secretary should be filed with tn e
C ounty Clerk in th e C ounty in which th e corporation has its mace
of business. E very holder of shares of stock not fully paid shall De
personally liable for any debt of th e corporation to an am ount equal
to th e unpaid balance. Transfer of stock is guided by th e Uniform
Stock Transfer Act. Any foreign corporation seeking permission
to do business in th is S tate m ust file w ith th e Secretary of State a
copy of its articles of incorporation together w ith a statem ent or it
assets and liabilities and the am ount of capital employed in tm
S tate and shall also designate its general office or place oi.business
in this S tate and shall nam e an agent upon whom process m ay d
C o sts. A plaintiff who is a nonresident of this S tate, or a corpora­
tion other th an a bank created by th e laws of this S tate
on notice to file a bond for th e paym ent of all costs which m ight accrue
in th e action which it has brought.

C o u rts . T he suprem e court is held a t L ittle Rock and has Jurisdiction of appeals from th e circuit and chancery courts. This S tate
has separate chancery courts which handle all equity m atters includine
divorces and foreclosures of liens. T he C ircuit C ourt shall have Juris­
diction in all civil an d crim inal cases, th e exclusive Jurisdiction of
which m ay n ot be vested in some other court. In other words the
circuit court is th e general tria l court of all cases. The probate
court has Jurisdiction of all probate m atters b u t is presided over bv
the chancellor. However, this court is entirely separate from th e
chancery court. Justice courts and m unicipal courts have exclusive
jurisdiction in all m atters of contract where th e am ount in contro­
versy does n o t exceed th e sum of $100.00 and concurrent Jurisdiction
in m atters of contract, where th e am ount in controversy does not
exceed th e sum of $300.00 exclusive of interest, and has concurrent
jurisdiction for th e recovery of personal property where the value
does n ot exceed th e sum of $300.00. M ost of the cities have abolished
justice courts and have m unicipal courts exclusively.
. C o u rto sy . Upon th e death of a m arried woman intestate, her
husband shall be en titled to one-third of her real property >for life and
one-third of her personal property in fee, where she leaves descendants;
but th e rights of th e husband shall be lim ited to such proportionate
share after th e paym ent of all her debts.
D eeds. (See Acknowledgments and Conveyances.)
D ep o sitio n s m ay be taken In the S tate before any judge or clerk of
*
justice of the peace, mayor, or notary public; out
of the S tate before a commissioner for this State, judge justice of the
peace, mayor, notary public, or person commissioned by the court or
by consent of parties.
D escen ts a n d D is tr ib u tio n s . P roperty descends to children and
their descendants in equal parts; if no children, then to father th e n to
mother, then to brothers and sisters and their descendants in eaual
parts, and In default of such to th e nearest lineal ancestor or his
descendants in equal parts per stirpes. Illegitim ate children inherit
and transm it an inheritance from the m other in the same m anner as
if legitim ate. If th e parents of illegitimate children subsequently
Interm arry and th e father recognizes them as his, they shall be deemed
legitimate. In default of heirs the whole property goes to husband
or tfife, and in th eir default to the State. If the estate is ancestral it
goes to th e blood of th e ancestor from whom it was derived Rela*
tions of th e half-blood inherit equally. Heirs take as tenants In
common.
D ivorce. I t is necessary th a t a person be a resident of the S tate
for a t least 2 m onths prior to th e filing of th e Com plaint in the divorce
action and a final decree cannot be,had unless he has been a resident
at least 3 m onths in th e S tate a t th e tim e th e decree is entered
Divorces are granted by th e C hancery C ourt and in H ot Springs thè
court is m session all of th e tim e and all proof is subm itted on deposi­
tions, it n o t being necessary for th e plaintiff to appear in the court­
room in person. T he grounds for divorce are; Where either party,
a t the tim e of th e contract, was or is im potent; desertion for the period
or one year ; where he or she had a form er wife or husband living a t the
time of th e m arriage sought to be set aside; where either p arty shall be
convicted of a felony; where either p arty shall be addicted to habitua
drunkenness for th e period of one year, or shall be guilty of such
cruel and barbarous treatm en t as to endanger th e life of the other,
or shall offer such indignities to the person of the other as to render
intolefab le; where either p arty shall have com m itted
adultery subsequent to such m arriage; separation for three years
without cohabitation.
^
Dower. Where there are children the wife takes one-third of the
husband s personal estate absolutely and one-third of the real estate
of which he was seized a t any tim e during the m arriage, for life. Where
there are no children she takes in a new acquisition one-half of the real
and personal estate absolutely as against heirs, or one-third absolutely
as against creditors. If it is an ancestral estate, she takes one-half for
lire against heirs and one-third for life against creditors. Husband
takes same interest in wife’s property by courtesy after death of wife.
If wife kills husband or husband kills wife and is convicted of m urder
*
or second degree for such homicide their dower and curtesy
rights are forfeited.
E x ecu tio n s from the circuit court are returnable in sixty days
tnose from justices’ courts within thirty. They m ay be stayed for
giving bond. T hey are a lien on th e personal prop­
erty of th e defendant in th e county from the tim e they come to the
officers hands. T he officer before levying on personal property, the
title to which is doubtful, m ay require th e plaintiff to give him an
indemnifying bond, and then suit m ust be brought by th e claim ant
upon th e bond. T he defendant and other judgm ent creditors have
one year in which to redeem from th e sale of real estate. In case the
writ is returned nulla bona th e plaintiff m ay proceed by bill of dis­
covery against th e defendant and examine him on oath, and enforce
a surrender of concealed property by imprisonment.
E x em p tio n s. U nm arried persons are entitled to $200 and m arried
persons and heads of families to $500 in selected articles of personal
property as exem pt against debts by contract. No personal property
exempt as to to rt judgm ents b u t hom estead is so exempt. Persons who
?fie “ al? ied or heads of families are entitled to a hom estead as against
, except th e purchase-money, specific liens, laborers, and
mechanics liens, taxes and claims for tru s t funds converted. The
nomestead in th e country is n ot to exceed 160 acres, and in tow n not
to exceed one acre, nor to be w orth m ore th an $2,500, b u t th e country
nomestead is not to be reduced to less th an 80 acres nor th e town
nomestead to less th an one-fourth of an acre, regardless of value,
in e nom estead goes to th e widow and minor children after th e husÌS .1 uS death. T he hom estead can only be conveyed by deed in
IT.riu j e W1,fe Joins and which is acknowledged by her, and if the
nusband neglects to claim th e hom estead th e wife m ay do so.
„ £ r a H“ - . S tatu te of F rauds has been re-enacted in this S tate and
a ¡standard Bulk Sales Law.
in
m ay be sued o ut pending suit upon giving bond
m double th e am ount garnished, or after judgm ent w ithout bond,
uramishment m ay be discharged and funds or property in hands of
garnishee released by filing bond for double the am ount of sum
garnished. Upon judgm ent being rendered against defendant summary judgm ent m ay be rendered against sureties on bond. Act 177
or Acts 1925.
T he legal holidays are: Sundays; Jan u ary 1 (New
,XS-a^ . Day); Ja n u ary 19* (Robt. E. Lee’s birthday); F ebruary 22
? b irth d ay ); M ay 30 (Decoration D ay); June 3* (Jefferbirth d ay ); Ju ly 4 (Independence D ay); first M onday in
(Tabor Day) ; October 12* (Columbus Day) ; general
election day ; Novem ber 11 (Armistice D ay); Thanksgiving D ay;
^ b o r :Daf * (first S aturday in December, a special day); and December 25 (Christm as D ay). W hen bills become due on any of
rnese days, th ey are payable th e next business day. October 12th
i?„V®lum bus Day* (a public holiday, b u t n ot affecting commercial
,or «he execution of w ritten instrum ents, nor interfering with
judicial proceedings).
*These days are n o t generally observed. Banks are open.
H u s b a n d a n d W ife. (See M arried Women.;
m»y be issued by circuit judges, chancellors, or the
i r df? i .any p °u rt in which suit is brought. The person applying
injunction.m ust give bond as th e court or judge m ay direct in
hijimctlon
cm m lt and chancery judges, county judge m ay issue
«,*?®olyeP ? y - The Supreme C ourt has held th a t the Federal B ank­
ruptcy Act has suspended the S tate insolvency laws.
The legal rate of interest is 6 per cent, but parties m ay
u y ritm g for n ot exceeding 10 per cent. Interest exacted in
!•» I*"« °? 10 per cent forfeits the debt. In computing the interest
w u ? lsslons paid to th e agent of the lender are counted as interest.
„ usury is charged the borrower m ay go into equity and have the
rtno a5d securities cancelled w ithout tendering the am ount lawfully
nn TJ fig m e n ts bear the same rate of interest as the obligation sued
' t ^ udSments against counties bear no interest.
J u d g m e n ts . A judgm ent of a court of record shall be a lien on, the


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real estate owned by th e defendant in th e county in which th e judg­
m ent was rendered from th e date of its rendition for a period of three
u V * 18 n.°* a b°n °u th e land of a defendant in other counties
unless^a transcript of th e judgm ent is filed in th e office of th e clerk
county in which th e real estate is situated. Judgm ents of th e
u n ited States C ourts can be m ade liens on th e real estate by filing a
tran scrip t in th e office of th e circuit clerk. A judgm ent o f lower
courts m a y . be abstracted and filed in th e office of Hie circuit clerk
whereupon it becomes lien on real estate for a period of three years,
c irc u it c o u r t liens m ay be continued in force by reviver. A judgm ent of th e circuit or chancery court is good for ten years and can
be revived any tu n e during th a t period, m aking it good for another
ten years. Judgm ents of M unicipal and J. P. C ourts are only good
for five years.
J u r is d ic tio n . (See Courts.)
L ie n s. Mechanics, builders, artisan s laborers, and others doing
any work upon or furnishing any m aterial for any building or erection
ander any contract with th e owner or his agent, contractor or subcontractor- shall have for such work or m aterial furnished a lien on
the bufiding or im provem ent together w ith the land on which It stands
to th e extent of one acre if in the country; if in a city the lot or land
upon which the erection is situated. Hotel keepers have lien on
baggage and personal effects of guests. Liverym en have lien on all
stock and property left in th eir care.
L im ita tio n s . Suits for th e possession of real estate m ust be
Drought within seven years, saving to minors and lunatics three
years after their disabilities are removed. Actions for recovery of
lands sold a t judicial sales m ust be brought witbin five years, savins
to minors and lunatics three years after rem oval of disabilities.
Actions for the recovery of lands held under tax title m ust be brought
In two years. Actions for forcible en try and detainer, on contracts
not In writing, for trespass and for libel, within three years. Actions
Tor criminal conversation, assault and b attery , false im prisonm ent,
and slander, within one year. Actions on w ritten instrum ents, within
“ye years; on Judgments, within ten years; on bonds of executors
:w ^ lstrato rs, w ithin eight years. In all cases, except actions
1
o f lands, minors and lunatics have, after removal
or their disability, the sta tu to ry period In which to sue. Verbal
promises or acknowledgments do n ot take a claim o ut of the sta tu te,
o n e year Is allowed after dismissal of a su it in which to begin a new
^ o n
No person can avail him self of a disability which did not
exist a t the tim e the right of action accrued. No endorsem ent of Daym eat m ade by the payee or on his behalf Is sufficient proof to take
the case out of the sta tu te.
_ J 'J a r r le d W o m en . The property, real and personal, of m arried
women rem ains their separate estate as long as they choose, and m ay
2® ?'eTHed u?r «»“/e y e d w ithout the husband’s assent, and is not
subject to his debts. If she dies w ithout m aking any disposition of
estate, he is entitled to curtesy if th ey have or have had issue
W S alive. She m ay carry on any business or perform any services
on her own account, and her earnings are hers, and she m ay sue alone
in respect of her separate property. She can bind herself by contract
only in reference to her separate estate or business. She can not
e“ te r In to,P artnership with her husband. I f she does not file a
schedule of her persona! property, th e burden of proof is on her to
show th a t it is hers.
«1 ®?®,r tg a g e s. Deeds of tru s t should be properly acknowledged and
m m m m m Otherwise are not such liens as would effect th e title
m tb e th ird person. . M ortgages of real estate should be recorded
TV,COUntJ / here„ iu 6
li?s‘ M ortgages are barred five years
after th e m atu rity of th e obligation which it secures unless a notation
“ “ ade
m argin of th e record showing paym ent of interest
Pa rt o f th e principal. M ortgages are foreclosed in th e chancery
sold J?y commissioner appointed by th e court. C h attel
m ortgages m ay be filed as other m ortgages or m ay be filed b u t n ot
is lo cated T bey sllould be filed in th e county in which th e property
£,battel M ortgages m ay be acknowledged and filed as o ther m ort­
gages, or they m ay be endorsed T his instrum ent is to be filed b u t not
signed by the m ortgagee, and m ay then he filed in the
recorder s office with the sam e effect as though recorded. M ortgages
tlonearenfraudffienty reserv,ng ln th e m ortgagor the power of disposl^ M o rtg a g e s a n d D eeds of T r u s t m ay be enforced by foreclosure
a t any tim e within the period prescribed by law for foreclosing m ort­
gage or deed of tru st so far as the property m entioned and described
In such m ortgage or deed of tru st is concerned, b u t no claim or debt
fgffiKFL/*e estate of a deceased person shall be probated against
secured by m ortgage or deed of tru st or not
saf<? e s tate^ the tim e Prescrlbed by law for probating claims against
I n s t r u m e n t s . T he Uniform Negotiable Instrum ents
CommS?!ia?La^Se” C° m Plete te x t iollowmS “ D igest of B anking and
P r o b a te L aw . (See A dm inistration of E states.)
P ro te s ts . (See Bills of Exchange and Prom issory Notes.)
¡£® «cdrds. (See Acknowledgments, Conveyances, M ortgages
C hattel M ortgages, and Powers of A ttorney.)
88
R e d e m p tio n . Owners of real estate sold for taxes m ay redeem
from such sales w ithin tw o years after sale.
R e p le v in . The plaintiff in replevin m ay file a n affidavit describing
the property, stating its value and the am ount of dam ages he expects
th a t the property is wrongfully detained by the
defendant, th a t it has not been taken for a tax or under process against
plaintiff, and th a t his cause of action has accrued within three years
and upon giving bond In double its value, the property shall be taken
fy o y ^ b e defendant and given to the plaintiff pending the suit, unless
the defendant within two days a fter It Is taken gives a cross-bond.
R evision. The last revision of the sta tu tes was in 1937
b a le s . C onditional sales contracts do n ot have to be recorded
S o p e rty T rCL e t o i t s v l f u e M th e vendOT m ay either repossess |h e
Tax«58. All property should be assessed for taxes between th e
first ¡-Monday in Jan u ary and th e 10th .day of April, in th e countv in
which th e property is located. T he S tate T ax Commission has
general supervision and control of th e tax m atter. Taxes m av be
PhiPeiP.
th e H l l q u arter being payable between
jijei
and th e 10th of April, th e second being
Rayab(® before th e 10th of Ju ly and th e balance being payable before
October first. I f taxes are n ot paid by th a t date all delinquent
property m sold by th e collector under proper notice for th e taxes.
T he taxes are a first lien upon all real and personal property.
T e s tim o n y . (See Evidence.)
^ '
T ra n s fe r of C o rp o ra tio n S to c k . (See Corporations.)
T ru s t C o m p a n ie s m ust have a paid-up capital of $50,000 and
In counties with a population exceeding 50,000, they m ust have a sub­
scribed capital of not less th an $100,000. T hey m ay exercise all the
powers commonly conferred on such com panies
exercise an tne
W areh o u se R e c e ip ts a n d B ills o f 'L a d in g shall not be given
except where the commodities m entioned are received on the premises
and are under the control of the warehouseman a t the tim e of Its’
issuance. No warehouseman shall sell, encum ber, ship or remove
a receipt has been given without the
written assent of the holder of the receipt. The sam e provisions cover
hm=eincap<i a®’en*s
boats and vessels. All warehouse receipts and
hin3, , laPiiPg are m udif Ufgotiable by w ritten endorsem ent and
■HMIHBHIIh I f,am e as bills of exchange and promissory notes, and no
bF^uted or w ritten conditions, clauses, or provisions inserted In oi
a^ a®bed to them shall in any way lim it their negotiability or impair
th e parties thereto, or persons interested
therein, or such conditions shall be void. W arehouse receipts given
ky
warehouseman or other person for goods and other com*
™°iMle™f.tS°Siteid ’ and a11 bills of lading given by a n y c a rrie r boat,
vessel, railroad, transportation, or transfer com pany m ay be trans' e / r ^ b y e n d o fe i—
and delivery; and the transferee shall be
deemed to be the owner of such com m odities so far as to give validity

BANKING AND COMMERCIAL LAWS—CALIFORNIA

1982

to an y 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 of such receipts and bills of lading, unless
such receipts and bills of lading have the words “ n ot negotiable”
plainly w ritten or stam ped on th eir face. A carrier m ay however
deliver to shipper or consignee goods w ithout presentation of bill of
lading upon receiving from such shipper or consignee bond in double
the value of th e goods conditioned for delivery to the carrier there­
after th e original bill of lading (acts 1907). Penalties are denounced
against any warehousem an or other person who shall violate any of
the provisions of this sta tu te. So much of the a ct as forbids the
delivery of property except the surrender and cancellation of the
original receipt or bill of lading shall, n ot apply to property replevined
or removed by operation of law.
W ills. A will m ust be subscribed by the testa to r or by some person
for him a t his request in the presence of two a ttestin g witnesses, and he
m ust acknowledge it to be his will to each of them . He inust declare
a t th e tim e of his subscription or acknowledgm ent to the witnesses
th a t th e instrum ent is his will and testam ent. The witnesses m ust
sign th eir nam es a t the end of the will as witnesses a t the request of
the testato r. If, however, the entire will is in the hand-w riting of the
testato r, it need not be attested, b ut m ay be proved by three witnesses
fam iliar with the hand-w riting. Such will, however, can not be
pleaded in bar of an attested will. Wills are revoked by m arriage and
birth of issue, unless provision for such issue is m ade by settlem ent,
or is provided for in the will. T he will of an unm arried woman is
revoked by her m arriage. A fterborn children, not mentioned in the
will, take their regular distributive share. If the testa to r fails to
m ention in his will any child, or its legal representatives, living a t the
tim e of executing the will, he shall, as to such child, or its represent­
atives, be deemed to have died intestate, and such child, or its rep­
resentatives, is entitled to Its regular share.

SYNOPSIS OF

THE LAW S OF CALIFORNIA
RELATING TO

BANKING AND COMMERCIAL USAGES.
Revised by T a n n e r , O d e l l & T a f t .
A ttorneys a t L aw , Suite 1011 Van N uys Building.
Los Angeles.
(See C ard in A ttorneys’ List.)
A c c o u 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 m utual current
and open account or upon an open book account is barred after four
years. T he cause of action on an open account is deemed to have
accrued from th e d ate of th e last item . In th e case of a book account
consisting of a single item it becomes outlawed four years after its
d ate. (See Actions and Lim itations.)
A c k n o w le d g m e n ts. Before an Instrum ent can be recorded, its
execution m ust be acknowledged by th e person executing it, or If
executed by a corporation, by its president or secretary, or other
person executing tn e sam e on behalf of th e corporation, or if a p art­
nership by a m em ber thereof (to be so identified in th e acknowledge­
m ent) or proved by a subscribing witness, or by judgm ent in an
action brought for th e purpose. T he proof or acknowledgment of
an instrum ent m ay be m ade a t any place w ithin th e S tate before
a justice or clerk of th e suprem e court, and within th e city, county
or tow nship for which th e officer was appointed or elected, before
either: (1) A clerk of a court of record; (2) a county recorder; (3) a
county clerk; (4) a court commissioner; (5) a notary public; (6) a
justice of th e peace. Officers taking and certifying acknowledgments
or proof of instrum ents for record m ust authenticate their certificates
b y affixing thereto their signatures, also their seals of office, if by th e
laws of th e S tate or country where th e acknowledgm ent or proof is
tak en , or by authority of which th ey are acting, th ey are required to
have official seals. Acknowledgments tak en o u t of this S tate b u t
w ithin th e U nited States, to be used w ithin this S tate, m ay be taken
before a no tary public, a commissioner appointed by th e governor of
t.hfe S tate, a judge, or clerk of a court of record, or in foreign countries
a m inister, counsul, vice-consul, or consular agent of th e U nited
States, or a judge of a court of record or a notary public.
A c tio n s . All civil actions are commenced by filing a com plaint
upon which plaintiff m ay, a t any tim e w ithin one year thereafter,
have a sum m ons issued. T here is b u t one form of action and th e only
pleadings allowed are: 1. T he com plaint. 2. T he dem urrer.
3. T he answer which m ay contain a counterclaim . 4. T he dem urrer
to th e answer. 5. T he cross-com plaint. 6. T he dem urrer to the
cross-com plaint. 7. T he answer to th e cross-complaint. 8. T he
dem urrer to th e answer. M otions to strike and to m ake m ore certain
m ay be m ade. Bill of p articulars m ay be dem anded.
A d m in is tr a tio n of E s ta te s . E states are adm inistered in a
dep artm en t of th e Superior C ourt under a P robate Code. For
in testates letters of adm inistration are issued upon petition. For
wills th e nom inated executor takes out letters testam entary, or some­
one eligible petitions for letters of adm inistration with th e will annexed.
R ights to letters begin with surviving spouse an d proceed through
ten classifications, preference being given those of th e whole blood
over those of th e half. A dm inistrators m ust give a bond as fixed by
th e court, b u t executors m ay be relieved of bond by the term s of the
Six m onths Is given after th e first publication of notice to creditors
for presentation of claims. Rejected claims m ust be sued upon
w ithin th ree m onths after notice of such rejection. Claims are m ar­
shalled under nine preference provisions. E states of $2500 or less
are subject to sum m ary disposition.
A ffidavits. An affidavit to be used before any court, judge, or
officer of th is S tate m ay be tak en before any officer authorized to
adm inister oaths. In this S tate every court, every judge or clerk of
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 power to adm inister oaths and affirmations
An affidavit taken in another S tate of the U nited S tates to be used
in this S tate, m ay be taken before a commissioner appointed by the
governor of this State to take affidavits and depositions in such other
State, or before any notary public in another S tate, or before any
judge or clerk of a court of record having a seal. An affidavit taken
in a foreign country to be used in th is S tate, m ay be taken before an
ambassador, m inister, consul, vice-consul, or consular agent of the
United States, or before any judge of a court of record having a seal,
in such foreign country.
.
. ,.
A lien s. 1. All aliens eligible to citizenship m ay take, hold and
dispose o f property, real andvpersonal, w ithin this S tate, when th e
country in which alien resides grants reciprocal rights of some nature.
2.
All aliens not eligible to citizenship m ay acquire and possess land
in accordance w ith th e term s of any existing tre a ty w ith any foreign
country of which such alien is a citizen, and not otherwise. N or can
such be guardian of any estate consisting in p a rt or whole of real estate.
No non-resident alien can tak e by succession unless he appear
and claim w ithin 5 years after death of decedent. No alien m ay be
employed upon any public work except in cases of extraordinary
emergency. N o alien shall be em ployed in an y departm ent of th e
sta te , county or city. No alien m ay own or possess or have under his
control any firearms capable of concealment.'
A rre s t. In an action for the recovery of money, upon a contract,
express or Implied, th e defendant m ay be arrested if about to depart
from th e S tate w ith in ten t to defraud his creditors, upon order of
court based upon affidavit therefor, also in an action for money or
other property embezzled or fraudulently misapplied by a public
officer, officer of a corporation, or an attorney, factor, broker, agent.


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or clerk in the course of his em ploym ent, or by an y person in a fidu­
ciary capacity; also in actions to recover the possession of personal
property wheré it has been concealed or removed or disposed of to
prevent its being found ; also in cases where the defendant^ has been
guilty of a fraud in contracting the debt or obligation for which action
is brought: or in concealing or disposing of property: also when the
defendant has removed or disposed of his property or Is about to do
so w ith in ten t to defraud creditors. Bail given upon arrest is liable
upon judgm ent secured.
„
A s s ig n m e n ts fo r t h e B e n e fit of C re d ito rs . T here are statu to ry
provisions for assignm ents b u t they are so seldom resorted to th a t
their place in th e s ta te ’s commercial code is negligible.
A tta c h m e n ts m ay be issued a t the tim e of or an y tim e after
Issuing th e sum m ons, and prior to judgm ent, where am ount sued for
is not less th an $15.00 (no attachm ent issues from sm all claims court)
as is hereinafter provided. All property not exempt from execution
m ay be attached. If attachm ent is to recpver for necessaries theaffidavit m ust so sta te including the character or n atu re constituting
th e alleged necessaries. An attachm ent lien iroon real property
continues for three years and m ay be extended for tw o years more
and thereafter from tim e to tim e. On personal property an attach ­
m ent continues three years. A ttachm ent issues upon affidavit alleging
(1) indebtedness m ade and payable in this sta te and not secured; or
(2) defendant is non-resident or cannot be found ; or (3) th a t cause of
action is damages, fraud or wrongful act of defendant; (4) th a t attach ­
m ent is not sought to delay or defraud creditors.
Bond m ust be filed w ith the clerk Before w rit issues, to pro tect de­
fendant if plaintiff fails to recover.
. ,
B a n k s. C annot pay interest on dem and deposits. T he business
of banking m ay be carried on only by corporations organized for such
purpose under th e California Bank Act ana N ational Banks. B u t
three classifications are perm itted: Commercial banks, savings banks,
tr u s t companies. Banking corporations m ay be organized by not
less th an three persons. W here banks have complied w ith th e pro­
visions of recent legislation th e stockholders are no longer liable
for th e debts of th e bank. D irectors m ust each own stock of the
p ar value of n o t less th an $500. Provisions are m ade for branch
banks; also for issuing and retiring preferred stock. A bank or­
ganized under th e laws of another sta te m ust com ply w ith all the
requirem ents of th e California Bank Act. A banker has a gen­
eral lien dependent upon possession of all property in his hands
belonging to a custom er for balance due from custom er in th e course
of business. E very bank m ust designate th e character of its business.
By virtue of th e existing California B ank Act a ll banks, foreign and
dom estic except N ational Banks, are under th e supervision of the
S tate S uperintendent of Banks and m u st obtain a certificate of
authority to do a banking business. T he Act sets forth .the minimum
requirem ents regarding capital and surplus, such requirem ents being
identical for both commercial and savings banks, as follows: $50,000
in cities of less th an 25,000 inhabitants; $100,000 in cities of from
25.000 to 100,000 inhabitants; $200,000 in cities of from 100,000
200.000 inhabitants; $300,000 in cities of over 200,000 inhabitants.
Commercial and savings banks m ust hâve a surplus of 25 per cent of
capital stock. C apital and surplus m ust be a t least 10 per cent of
deposit liabilities up to $1,000,000— 5 per cent of any am ount in
excess of $1,000,000. For savings banks a decreasing per cent on
larger am ounts. Special reserves against unsecured deposits are
required of commercial banks, unless th ey are m em bers of th e Reserve
bank. A m ount of reserve is regulated by sta tu te. Bank officers
cannot be borrowers from their bank. All sta te banks are eligible to
become m em bers of th e Federal Reserve Bank. Any b ank to become
m em ber of th e Federal Hom e Loan Bank m u st have th e previous
w ritten consent of th e superintendent of banks. T ru st companies
likewise operate under th e supervision of S tate Superintendent of
Banks, and m ust deposit cash or securities with S tate T reasurer to
insure faithful perform ance of tru sts. T he m inim um deposit required
is $100,000, and th e am ount varies according to population and
am ount of th e res. Any savings bank m ay discount or purchase
bankers’ acceptances eligible for discount by th e Federal reserve bank,
and m ay purchase, hold or sell real or personal property, as follows: (1)
The real estate, furniture, fixtures, etc., in which its business m ay be
conducted, such real estate, etc., not to be carried on th e books of such
bank as an asset to an am ount exceeding one-half its paid-up capital
and surplus except with the w ritten consent of th e Superintendent of
Banks. Commercial banks are restricted to one-half such am ount.
2) Such as m ay have been m ortgaged, pledged or conveyed to it in
(tru st for its benefit in good faith, or money loan in regular course of
business. (3) Such as m ay have been purchased a t sales under
pledge, m ortgage or deed of tru s t m ade for its benefit or money loaned
and such as m ay be conveyed to it by borrowers in satisfaction and
discharge of loans. (4) Gold and silver bullion, and U nited States
M int Certificates. (5) Bonds and other securities of certain classes
as are set forth in Section 61 of California Bank Act. Savings banks
m ay not m ake loans for longer periods th a n ten. years. T here are
m any other m inor restrictions on loans. W ith some exceptions
no commercial bank can lend more th a n 10 per cent of its capital
stock on unsecured loan, or 15 per cent, in addition to th e amount
th a t m ay be loaned w ithout security, upon security w orth a t least
15 per cent more th an th e am ount loaned so secured, provided the
to tal am ount cannot exceed 25 per cent in all and separate note
m ust be taken for the unsecured and the secured loan, or 25 per cent
upon security w orth a t least 15 per cent more th an th e am ount of the
loan so secured, or 40 per cent upon commercial or business paper
actually owned by th e person negotiating same to th e bank and are
endorsed by such persons w ithout lim itation. B u t commercial banks
m ay accept drafts or bills of exchange having not more th an six months
sight to run growing out of transactions involving im portation or
exportation of goods or involving dom estic shipm ent of goods providing
shipping docum ents are attached as security or are seem ed by ware­
house receipts or other m unim ent of title. N o bank shall hold as
security for loans more th an 25 per cent of th e capital stock of
another bank, nor loan In excess o f 10 per cent of its assets upon tne
security of capital stock of any corporation. A b ank organized or
doing business In this sta te m ay refuse paym ent of check or draft,
except cashier’s check or bank d raft, if presented for paym ent more
th an six m onths from its d ate unless expressly instructed to pay by
drawer or m aker, and no liability shall attach to draw er or maker
by such non-paym ent. To stop paym ent on a check th e notice
therefor in w riting m u st be delivered to th e p articu lar branch upon
which i t is drawn.
,
, * «Any bank m ay purchase Class A stock in th e Federal Bank Deposit
Insurance C orporation and w ith th e approval of th e superintendent
of banks m ay become a m em ber of th e T em porary Federal Deposit
Insurance Fund.
. , , ^
,,
In addition to all other holidays banks are p erm itted to close an
day on S aturday. General practice, however, continues to be to
close on S aturday afternoon only.
B ills a n d N o tes. The Uniform Negotiable Instrum ents Law is
In force. S tatutes of 1917. C hapter 751.
B re a c h o f P ro m is e . Breach of prom ise to m arry, or for aliena­
tion of affections, are no longer bases for action for dam ages; neither
is seduction of a female over th e age of consent a basis for action.
B u lk S ales. (See F raudulent Sales and Conveyances.)
C h a tte l M o rtg a g e s m ay be m ade upon all personal property,
including growing crops, except such as is not capable of
delivery, articles of wearing apparel and stock in trad e of merchandise.
Recording m u st be m ade of growing crops in th e C ounty where tne
land is situated; if of anim ate personal p roperty other th a n growing
crops in th e C ounty where th e m ortgagor resides a t tim e of th e m ort­
gage, or if he is a nop-resident then in th e C ounty where th e property
6 a t date of m ortgage; of all other personal property in th e County
where th e m ortgagor resides a t th e d ate of th e m ortgage and also m
th e C ounty where th e property is located a t th a t d ate, an d to whicn it
m ay be thereafter rem oved. As notice to th ird parties it continues
for four years only unless re-recorded. This provision does not appiy,
to ch attel m ortgage executed to secure paym ent of order or decree oi

BANKING AND COMMERCIAL LAWS—CALIFORNIA
a court of record, or of indebtedness perm itted to be incurred by th e
Commissioner of Corporations or th a t is m ade by a public utility under
the Public U tility act. On a m otor vehicle th e instrum ent m ust be
deposited" with th e sta te m otor vehicle departm ent in lieu of recording.
No deficiency judgm ent allowed after sale under power of sale in
mortgage.
M oratorium on foreclosure under conditions has been extended
to Ju ly 1, 1943.
C odes. 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 volume of
general laws. Also there are m any general laws n ot codified.
C o lla te ra ls. Are governed by the law relating to pledges of per­
sonal property. Delivery of th e thing pledged is essential to the
validity or th e bailm ent. Before the property can be sold the pledgee
m ust dem and perform ance from the debtor, if he can be found, and
m ust give actual notice to the pledgor of the tim e and place a t which
the property pledged will be sold, a t such a reasonable tim e before
the sale as will enable th e pledgor to attend, b u t notice of th e sale
may be waived by th e pledgor a t any tim e. The sale m ust be by
public auction. T he pledgee, or a pledgeholder, -may purchase the
property pledged when cue same is sold a t public auction. A pledgee
can not sell any evidence of debt (collateral) pledged to him, except
the obligations of governments, states, or corporations; b u t he m ay
collect th e sam e when due. Also m oratorium laws are applicable in
certain cases.
C o n tr a c ts . C ertain contracts are invalid unless the same or
some note or m em orandum thereof is in writing. (See S tatute of
Frauds.) A contract for personal services cannot be enforced specifi­
cally b u t its breach m ay be com pensated by damages. For special
provisions relating to contracts refer to various subjects involved.
C o n v ey an ces. 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 by operation of law, or by an instrum ent in writing, subscribed by
the p arty disposing of th e same, or by his agent thereunto authorized in
writing. Leases of agricultural land for a longer period th in fifteen
years and of city property for a longer period than ninety-nine years are
void with some exceptions. A fee simple title is presum ed to be in­
tended to pass by a grant of real property, unless it appears from the
face of th e grant th a t a lesser estate was intended. A grant of real
property m ay be m ade in th e following form : “ I, A. B „ grant to
C. D. all th a t real property situated in (insert nam e of county) comity,
State of California, bounded (or described) as follows: (Here insert
description). W itness my hand th is (insert) day ot (insert m onth),
19—A. D .” “ G ran t ” implies present ownership in grantor, free from
incum brances m ade or suffered by grantor. Subsequently acquired
title passes to grantee. Instrum ents entitled thereto m ust be recorded
in th e county where th e property is situated. An instrum ent of
later date, acquired for a valuable consideration in full faith, takes
precedence of one of earlier date b u t subsequently recorded. Joint
tenancies m ay be created by th e owner or owners by w ritten and
recorded conveyance by and to them selves in addition to th e ordinary
grants by vendors to jo int tenants.
C o rp o ra tio n s . P riv ate corporations m ay now be formed by three
or more persons. T he form er provisions holding each stockholder
liable for a pro ra ta of debts have been repealed. All original papers
for organization are now filed w ith th e secretary of state. Certified
copy of articles m ust be filed w ith C ounty Clerk in C ounty where its
principal place of business is. C apital stock of a corporation organ­
ized for pecuniary profit can only be issued under au th o rity of the
State Commissioner of Corporations. Foreign-corporations to establish
places of business m u st file copies of articles w ith Secretary of S tate
and pay certain franchise taxes.
C o u rts . Each county has a Superior C ourt, with from one u p to
fifty judges. Several of th e 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 justice’s courts in two classes according to
lim it of jurisdiction. T rial courts are, in contem plation of law, in
continuous session, holidays excepted.
Between th e Supreme C ourt or seven judges and th e tria l courts
there are D istrict C ourts of Appeal, of which there are six divisions
of three judges each. T he bulk of appeals goes first to these inter­
mediaries, from whose decisions th e Supreme C ourt m ay, in its dis­
cretion, g ran t a fu rth er hearing before itself. Crim inal cases involving
capital punishm ent and cases in equity and cases involving title of
real estate or taxes are appealed directly to th e Suprem e C ourt.
All appellate courts have original jurisdiction for writs of m andam us,
habeas corpus, etc.
D e p o sitio n s. The deposition of a witness out of this S tate m ay
be taken upon a commission issued from the court under the seal of
the court, upon an order of the court, or a judge or justice thereof, on
the application of either party, upon five days’ previous notice to the
other, plus one d ay 's additional notice for each one hundred miles
of trav el betw een residence of witness and place of deposition or by
stipulation of th e parties w ithout an order of C ourt. I f the court be a
justice's court, th e commission shall have attached to it a certificate
under seal by th e clerk of th e superior court of th e county to the effect
th a t th e person issuing th e sam e was an acting justice of th e peace a t
the date of th e commission. If issued to any place w ithin th e United
States, it m ay be directed to a person agreed upon by the parties, or if
they do n ot agree, to an y notary public, judge or justice of th e peace or
commissioner selected by th e court, or judge, or justice issuing it. If
issued to any country o ut of th e U nited States, it m ay be directed to a
minister, am bassador, consul, vice-consul, or consular agent of the
U nited S tates in such country, or to any person agreed upon by the
parties or judge of a court of record in such country. Depositions m ust
be taken in th e form of question and answer. T he words of the witness
m ust be w ritten down, in th e -presence of th e Witness, by th e officer
taking th e deposition or by some indifferent person appointed by him.
I t m ay be taken down in short hand in which case it m ust be tra n ­
scribed to long hand by th e person who took it down. W hen com­
pleted, it m u st be carefully read to or by th e witness and corrected by
him in any particular, if desired, by writing, or causing his corrections
to be w ritten a t th e bottom of th e deposition, and m ust then be sub­
scribed by th e witness. Corrections m ust be initialed by officer before
whom deposition is taken. I f th e parties agree in writing to any other
mode, th e mode so agreed m ust be followed.
Depositions in th is S tate. The testim ony of the witness in this
State m ay be taken by depositions in an action a t any tim e after the
service of summons or the appearance of defendant, and in a special
proceeding after a question of fact has arisen therein. Id certain
enum erated cases. Deposition of a p a rty to th e action m ay be taken
under a cross-examining sta tu te.
Depositions for use o ut of th e S tate. Any p a rty to an action or
special proceeding in a court or before a judge of a sister state, m ay
obtain the testim ony of a witness residing in this S tate, to be used in
such action or proceeding, in the cases mentioned following: If a
commission to tak e such testim ony has been issued from the court,
or a judge hereof, before which such action or proceeding is pend­
ing. on producing th e commission to the Clerk of th e Superior C ourt
of th e county in which sucn witness is to be examined, with an affi­
davit satisfactory to him of th e m ateriality of the testim ony, he
m ay issue a subpoena to th e witness, requiring him to appear and
testify before th e commissioner nam ed in the commission, a t a specified
tim e and place.
D e s c e n t a n d D is tr ib u tio n of P ro p e rty . T here is no dower
right, b u t all p roperty acquired during continuance of th e m arriage
relation (except by gift, devise or inheritance) is com m unity property,
one-half of which goes to th e surviving spouse, and in absence of
testam entary disposition th e survivor takes all. A widow, however,
m ay have th e whole estate, if less th an $2,500, set off to her. All
property not com m unity is separate, and if not disposed of by will is
d istributable; first to th e surviving spouse and children. I f no sur­
viving spouse th en all to child or children. I f surviving spouse and


55
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Federal Reserve Bank of St. Louis

1983

one child, half to each; if m ore th an one child one-third to surviving
spouse, rem ainder to issue; in absence of children one-half to th e sur­
viving spouse rem ainder to lineal descendants of decedent or their
children. Those next entitled to inherit are, in their order: father
and m other, or if neither, then brothers and sisters; if there are none
of any of, these th e surviving spouse takes all. I f there be no sur­
viving spouse then the next of kin tak e in equal degree. Illegitim ate
children inherit from th e m other, and from th e father where parentage
has been acknowledged in writing. W here widow or widower dies
intestate, and there has been no issue, com m unity property goes half
and half to the lineal descendants of each spouse. No assignm ent of
an interest, power of atto rn ey to act nor contract for com pensation
of an agent is of any force u n til approved by th e court. A reasonable
fam ily allowance to widow or m inor children m ay be ordered during
pending of probate proceedings.
E x e m p tio n s . Exem ptions from attachm ent, judgm ent an d forced
sale are very liberal, and th e list is gradually increasing to include
some of th e later inventions and im plem ents of labor and production.
An autom obile is now exem pt if of value of $100 or less. U nem ploy­
m ent and several other benefits under recent legislation are also
exem pt.
F r a u d . (For F raudulent D ebtors, see Arrest.) In certain actions
Involving money where fraud is charged, th e debtor is subject to
arrest. These include actual fraud, always a question of fact, and
promises m ade w ithout any intention of perform ing; m isdirecting a
prospective hotel guest is a misdemeanor, as is also any false repre­
sentations m ade for th e purpose of procuring public relief. F raud
and fraudulent representations are prolific sources of litigation to set
aside contracts or conveyances and are controlled by code provisions.
F r a u d u l e n t S ales a n d C o n v e y a n c e s. Sale, transfer, or assign­
m ent of a substantial p a rt of stock in trade, except in ordinary course
of business, and sale, transfer, assignm ent, or m ortgage of fixtures or
equipm ent of m erchant is void as to existing creditors unless seven
days prior thereto seller or purchaser record with C ounty Recorder a
notice of such intended sale, transfer, etc. The notice m ust conform
to certain sta tu to ry requirem ents. Exceptions relating to warehouse
receipts have been m ade.
H o lid ay s. T he legal holidays are: Saturdays after 12 noon for all
public business (banks m ay claim th e entire d ay); Sundays; Jan u ary
1 (New Y ear’s D ay); F ebruary 12 (Lincoln’s birthday): F ebruary 22
(W ashington’s b irth d a y ); M ay 30 (M emorial day); July 4 (Inde­
pendence D ay); first M onday in Septem ber (Labor D ay); Septem ber
9 (Admission D ay); October 12 (Columbus D ay); general election
day; M ay and A ugust prim ary election days; Novem ber 11 (Armistice
D a y ); Thanksgiving D ay; and December 25 (Christm as D ay). M on­
day is holiday if holiday falls on Sunday. Injunctions and w rits of
prohibitions m ay be issued and served on any day. C ontracts m ade
on a holiday are valid. In th e larger counties a designated judge of
th e superior court is available nights and every day in th e year for
issuing and approving bail, original w rits and issuance of release for
a person’s property or title thereto.
H o m e s te a d . T he hom estead consists In the interest of the claim ­
ant, divided or undivided, in the dwelling house in which the claim ant
resides, and in th e land on which the sam e is situated, selected, if the
claim ant be m arried, from com m unity property, or the separate
property of the husband, or. w ith the consent of the wife from her
separate property. T he hom estead can not be selected from th e
separate property of th e wife w ithout her consent, shown by her m aking
or joining th e declaration of hom estead. T he hom estead is exem pt
from execution or forced sale, except in satisfaction of judgm ents
obtained. 1. Before th e declaration of hom estead was filed for
record, and which constitutes liens upon th e premises. 2. On debts
secured by m ortgage or tr u s t deed, of date prior to declaration, or
proper execution subsequent. H om esteads m ay be selected and
claim ed: 1 . I f n ot exceeding $5,000 in value by any head of a fam ily.
2. I f not exceeding $1,000 in value, by another person. U pon death
of either spouse, if hom estead is selected from com m unity property
or from separate property of spouse joining therein, title thereto vests
in survivor, otherwise th e heirs or devises of th e person whose p roperty
was selected.
H u s b a n d a n d W ife. The husband is th e head of th e fam ily.
He m ay choose any reasonable place or mode of living, and th e wife
m ust conform thereto. In other respects their interests are separate
except as to com m unity property. N either husband nor wife has
any interest in th e separate pro p erty of th e other, and either m ay
en ter into an y engagem ent w ith th e other, or w ith any other person,
respecting separate property, which either m ight if unm arried. All
property of either, owned by him or her before m arriage, and th a t
acquired afterw ard by gift, bequest, devise or descent, is th e separate
property of such person. All other p roperty acquired after m ar­
riage by either husband or wife or both, is com m unity property,
except th a t a m arried wom an m ay acquire and hold shares in build­
ing and loan associations as her separate property; m ay transfer
shares of corporate stock generally as if unm arried. P roperty con­
veyed to a m arried wom an by an instrum ent in writing is presum ed to
be her separate property. P roperty conveyed to husband or to husband
and wife as such is presum ed to be com m unity property. A m arried
woman m ay become a sole trad er by au th o rity of court, th u s con­
verting a lim ited am ount of com m unity pro p erty into her sep arate
estate. T he husband has th e m anagem ent and control of th e com­
m unity property, w ith absolute power of disposal other th a n te sta ­
m entary, provided th a t he cannot m ake a gift of th e sam e or convey
the sam e w ithout valuable consideration, unless th e wife consents In
writing, either personally or by her authorized agent, and provided
th a t in th e execution of any instrum ent by which com m unity real
property, or any interest therein is leased for a longer period th a n one
year, or is sold, conveyed, or encum bered, th e wife and husband m ust
join in th e execution of any such instrum ent. T he com m unity
property except earnings of th e wife is n ot liable for th e contracts
of the wife m ade before or after m arriage, unless secured by a pledge
or m ortgage thereof executed by th e husband. E xcept for th e
necessaries of life the husband is n ot liable for dam ages or to rts com­
m itted by wife except in a case where he would be jointly liable with
her if the m arriage did not exist. N either th e separate property of th e
husband nor his earnings after m arriage is liable for the debts of th e
wife contracted before m arriage, and th e separate property of th e wife
is n ot liable for the debts of her husband, nor for debts secured by
m ortgage or other hypothecation of com m unity p roperty unless ex­
pressly assented to by her in writing, b u t is liable for her own debts
contracted before or after m arriage. C om m unity property is not
liable for contracts of th e wife m ade after m arriage unless secured by
pledge or m ortgage executed by the husband. A husband an d wife
m ay hold p roperty as joint tenants, tenants in common, or as com­
m unity property. Upon death of husband or wife intestate, th e
entire com m unity p roperty goes to th e survivor. E ither the husband
or th e wife m ay subject one-half of th e com m unity property to testa­
m entary disposition by will, th e wife’s right so to do being subject
to special sta tu to ry conditions.
I n t e r e s t .1 T he legal ra te of interest is 7 per cent and is due upon
judgm ents after rendition and upon other obligations unless there is an
express contract in w riting fixing a different rate, which, however, is
lim ited to 10 per cent w ith severe penalties for any agreem ent or
subterfuge by which th e lender profits above th a t rate. On loans
of $300 or less, secured by pledge or chattel m ortgage or assignm ent
of wages, 10% annual interest m ay be agreed upon. All other charges
against th e borrower shall n o t exceed: on am ounts of $100 or under,
per m o n th ; on am ounts in excess of $100, 2% per m onth.
J u d g m e n ts . Judgm ents, including those of inferior courts if an
abstract be recorded w ith th e county recorder, are a lien on real
property for five years, and m ay be renewed by an action, or still
enforced by order of court. T he lien expires, however, unless th e
judgm ent is renewed. (Recording is required for all judgm ents
to constitute a lien).
L ie n s. M echanics, m aterial-m en, contractors, sub-contractors,
artisans, architects, m achinists, builders, miners, team sters, dray­
men and all persons and laborers of every class performing labor

Î984

BANKING AND COMMERCIAL LAWS—CALIFORNIA

upon or furnishing m aterial to be used in or furnishing aDpiiances.
team» an a power contributing to the construction, alteration, or
repair of any building, wharf, bridge, ditch, flume, aqueduct, well,
tunnel, fence, m achinery, railroad, wagon road, or other structure,
have liens upon the property upon which they have worked or fur­
nished m aterial, and any person performing labor in a mining claim
has a lien upon the same, and the works owned and used by the owners
for reducing the ores from such mining claim, for the work or labor
done. T he common carrier has a lien upon the luggage of a passenger
for th e paym ent of his fare. One who sells real property has a ven­
d o r’s lien thereon. Im provers of 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 of possession.
Owners of anim als used for propagating purposes have a lien for the
agreed price upon th e offspring. Loggers rendering services' upon
logs, bolts and other tim ber have a lien thereon for th e am ount due
for their personal services. A personal judgm ent m ay be had against
th e debtors w ith or w ithout attachm ent for security, w ithout infringing
th e rig h t to a m echanic’s lien when legally established. L andlords and
innkeepers have liens on th e personal property of guests.
E very person perform ing work or labor in, with, about, or upon any
threshing machine or engine, horse-power, wagon, or o ther appliance
thereof, while engaged in threshing, has a lien thereon to the extent
of the value of his services, for ten days after ceasing work or labor,
provided, within th a t tim e, an action is brought to recover the am ount
of th e claim, persons repairing or altering any personal property have
a lien for th e reasonable value of such service. P est destruction in
orchards by authority of sta tu te creates a lien against, th e realty
involved in favor of the county causing such destruction. The lien
of a garage m an for work on a vehicle (dependent upon possession) is
valid up to $100 if. the work is done on th e order of other th an the
owner; b u t n ot for more unless th e owner had previous notice of the
work to be done.
L im ita tio n s . If 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. The periods pre­
scribed for the commencement of actions other than for the recovery
of real property, are as follows: W ithin six years, upon certain corpora­
tion bonds and notes. W ithin five years: (1) An action upon
a judgm ent or decree of any court of th e U nited States, or of any
S tate w ithin th e U nited States. (2) An action for mesne profits
of real property. (3) Action by heir unknow n a t tim e an escheat
estate is distributed, counting from date of decree. W ithin four
years: (1) An action upon any contract, obligation or liability
founded upon an instrum ent in writing. (2) An action to recover
a balance due upon a m u tu al open and cu rren t count or upon an
open book account. W ithin three years: (1) An action upon a
liability created by sta tu te, other th an 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 of personal property. (4) An action for relief on the
ground of fraud or m istake, the cause of action in such case not to be
deemed to have accrued until th e discovery by the aggrieved p arty of
th e facts constituting fraud or m istak e: W ithin tw o years: (1) An
action upon a contract, obligation or liability not founded upon an
instrum ent of writing, (2) An action on a debt, liability or obligation
evidenced by an abstract, guarantee or certificate of title; and such
action shall n ot be deemed to have accrued until the discovery of the
loss or dam age. (3) An action for foreclosure of a lien securing an
assessm ent against real p roperty for street im provem ent: b u t tim e
does n ot commence to run until the last installm ent becomes due. (4)
An action against a sheriff, coroner, or constable, upon a liability in­
curred by th e doing of an act in his official capacity, and in virtue of his
office, or by the omission of an official duty, including the non-pay­
m ent of money collected upon an execution; b u t this subdivision doe»
not apply to an action for an escape. W ithin one year: (1) An action
upon a sta tu te for a penalty or forfeiture, when the action Is given to
an individual or to an individual and the S tate, except when the
sta tu te imposing it prescribes a different lim itation. (2) An action
upon a sta tu te, or upon an undertaking in a crim inal action, for a
forfeiture or penalty to the people of this S tate. (3) An action for
libel, slander, assault, battery, false im prisonm ent, or seduction, or
for injury to or for the death of one caused by the wrongful act or
neglect of another, or by a depositor against a bank for the paym ent
of a forged or raised check, or a check th a t bears a forged or u nauthor­
ized endorsem ent. (4) An action against a sheriff, or other officer for
th e escape of a prisoner arrested or imprisoned on civil process.
(5) An action against a m unicipal corporation for dam ages or injuries
to property caused by a m ob or riot. W ithin six m onths. (1) An
action to recover property seized by tax collector. (2) To recover
corporation stock sold fo r delinquent assessm ent. N inety days for
recovery of or conversion of personal property, bags, trunks, etc.,
left in hotel, lodging house, etc. T o actions brought to recover
m oney or other property deposited w ith an y bank, banker, tru s t
com pany, or savings and loan society, there is no lim itation. If
when th e cause of action accrues against a ’person, he is out of the
S tate, th e action m ay be commenced w ithin th e term herein lim ited,
after his retu rn to th e S tate, and if, after th e cause of action accrues,
he departs from th e State, th e tim e of his absence is not p a rt of the
tim e lim ited for th e com m encem ent of th e action. And if th e person
en titled to bring th e action be, a t th e tim e th e action accrued, either
a m inor, insane, imprisoned for a term less th a n life, or a married
woman, and her husband is a necessary p a rty with her in commencing
such action, th e tim e of such disability is not a p a rt of th e tim e limited
for th e commencement of th e action. N o acknowledgm ent or prom ­
ise is sufficient to ta k e a case o ut of th e operation of th e s ta tu te of
lim itations, unless th e sam e is in writing, signed by th e p arty to be
charged. P art, paym ent will n o t tak e th e case out of th e s ta tu te of
lim itations. W here a cause of action has arisen in another S tate,
an d would be barred by th e s ta tu te of lim itations of th a t S tate, an
action cannot be m aintained here, except in favor of one who has
been a citizen of this S tate and has held th e cause of action from th e
tim e it accrued. There is no lim itation upon actions to recover money
or property w ith banks or tru s t companies. (See Accounts.) The
above lim itations apply to contracts executed outside of th e State,
unless barred b y th e laws of th e S tate where made.
T here are now in force various m oratorium acts concerning mortgage
foreclosures, tax redem ptions, building and loan operations and similar
m atters, which for th e present modify former sta tu tes of lim itation,
which are of a tem porary character, and changed w ith each session of
th e legislature. A ct of 1941 fu rth er extends tim e to Ju ly 1, J.943.
M a rrie d W om en. A m arried woman may. be sued without ner
husband being joined as a p a rty and m ay sue w ithout her husband
being joined as a p arty in all actions, including those for injury to
her person, libel, slander, false im prisonm ent, or m alicious prosecution,
or for the recovery of her earnings or concerning her right or claim to
th e hom estead property. A m arried woman m ay become a sole
trad er by the judgm ent of the superior court of th e county in which
she has resided for six m onths next preceding the application. The
husband of the sole trad er is not liable for any debts contracted by
er in th e course of her sole tra d e r’s business unless contracted upon
his w ritten consent. A m arried woman m ay convey her separate
property w ithout consent of her husband, and is not liable for th e debts
of her husband, b u t is liable for her own debts contracted before or
after her m arriage. She m ay contract as a femme sole so as to bind
her separate property. The wife m ay m ake a will of her separate
property and under sta tu to ry conditions of one-half th e com m unity
property. The earnings of the wife are not liable for the debts of 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 rtg a g e s. Any interest in real property which is capable ol
being transferred m ay be m ortgaged. A m ortgage can be created.


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renewed, or extended only by writing executed with the formalities
required in the case of a g rant of real property. I t requires the
signature of th e wife except as to property which is th e separate
estate of th e husband, and in practice th e wife’s signature should
always be required. Every transfer of an interest in real property,
other th an in tru st, m ade only as th e security for th e perform ance
of any act. is to be deemed a m ortgage, and th e fact th a t th e transfer
was m ade subject to defeasance on a condition m ay, for th e purpose
of 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 th e fact does not appear by th e term s of th e instru­
m ent. A, m ortgage is a lien upon everything th a t passes by a grant
of th e property. A m ortgage does not entitle the m ortgagee to the
possession of th e property. The assignm ent of a debt secured by a
m ortgage carries with it the security. W hen a m ortgage is satisfied
or th e m ortgage indebtedness paid, th e m ortgagee m ust satisfy the
m ortgage of record under penalty for failure on dem and. A mortgagee
m ay foreclose the right of redem ption of th e m ortgagor. (See also
T ru st Deeds.)'
T em porary m oratorium m easures have been continued by th e 1941
legislature to Ju ly 1, 1943.
N e g o tia b le I n s t r u m e n t s . T he Uniform Negotiable Instrum ents
Act adopted. (See com plete text following “ Digest of B anking and
Comm ercial Laws.)
•
N o tes a n d B ills of E x ch an g e. (See Bills and Notes.)
P led g e. (See Collaterals.)
P ow ers of A tto rn e y . An attorney in fact m ay be appointed for
any purpose for which an agency can lawfully be created. Powers of
attorney can only be conferred by an instrum ent in writing subscribed
by the principal which m ust particularly specify the powers con­
ferred. If the instrum ent contains a power to convey or execute
Instrum ents affecting real property, it m ust be duly acknowledged
and m ust be recorded in the county within which the real property
to be conveyed or affected is situated. No such instrum ent which has
been so recorded is revoked by any act of the p arty by whom it was
executed, unless the instrum ent containing such revocation is also
acknowledged or proved, certified, and recorded in th e sam e office
in which the instrum ent containing the power was recorded. When
an attorney in fact executes an instrum ent transferring an estate
in real property, he m ust subscribe the nam e of his principal to it.
by his own nam e as attorney in fact.
P ro b a te L aw . T he superior court has jurisdiction of proceedings in
probate, which m ust be instituted (1) In th e county 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 of th e State; (3) in the
county in which any p a rt of the estate m ay be, if th e decedent died out
of th e S tate and was not a resident. (4) In any county in which any
p a rt of the estate m ay be, or the decedent n ot being a resident of the
S tate nor leaving an estate in th e county of death. (5) In other cases
where application is first m ade. Any person interested m ay petition
for probate of a will or m ay contest such probate before letters issue
or thereafter w ithin six m onths. If no hom estead has been previously
selected, th e court oh p etition m ust select, designate an d set ap a rt and
cause to be recorded a hom estead for th e use of th e surviving husband
or wife, or or th e m inor children, or if there be no surviving hus­
band or wife, then for the use of th e m inor children o u t of th e common
property, or out of th e real estate owned in common by th e decedent
and th e person or persons to whom th e hom estead is set ap art, or
if there be no common property and no such jointly owned property,
then o ut of th e real estate belonging to th e decedent as his own separate
property. P roperty so set a p a rt is not subject to fu rth er adm in­
istration. I f upon th e retu rn of th e inventory it appears th a t the
value of th e whole estate does n ot exceed $2,500, th e court m ay set
ap a rt th e whole of th e estate for th e use and support of th e widow
of the deceased, and if there be no widow, then to th e m inor children
of deceased. W here an entire estate is of personal p ro p erty of less
th an $1,000 value no court proceedings are necessary. Sales encum­
brances and im p o rtan t leases m ust be sanctioned b y court order.
(See A dm inistration of E states, 'Claims against E states, Descent and
D istribution.)
P r o te s t. (See Bills and Notes.)
R e p le v in . T here is no action of replevin in this S tate, b u t the
action of claim and delivery is a su b stitu te and very sim ilar in its
provisions.
S ale of S to c k S h a re s. P erm it m ust be obtained from S tate Cor­
poration Commissioner on all original issues of stock of corporations
organized for pecuniary profit. W e have an elaborate “ Blue S k y ”
Law.
S t a t u t e of F ra u d s . A will m ust be in writing, except a nun­
cupative will. (See Wills.) An agreem ent not to be performed
within a year from m aking it m ust be in w riting; also a special prom­
ise to answer for th e debt, default, or miscarriage of another with
certain sta tu to ry exception which in th e S tate are sim ilar to those in
most other jurisdictions; also agreem ents m ade in consideration of
m arriage other th an a m utual promise to m arry; also an agreement
for th e sale of goods and chattels or things in action a t a price not
less th an $500, unless th e buyer accept and receive p a rt of th e same
or pay any p art of th e consideration. Goods m anufactured especially
for th e buyer, n ot suitable for general sale, are excepted from this
rule. No estate in land will pass other th an leases not to exceed one
year, unless in writing. An agreem ent authorizing or employing an
agent or broker to purchase or sell real estate for compensation or
for a commission; an agreem ent by its term s not to be performed in
the lifetim e of th e prom isor or to m ake, devise or bequeath or make
any provisions for any person by will, m ust be in writing. No evi­
dence is admissable to charge a person upon representations as to the
credit of another, unless the representations be in writing. However,
where prom isor has received property to apply pursuant to promise
or a discharge of an obligation in consideration of th e promise, or
where a creditor parts w ith value or where th e new promise is sub­
stitu ted for th e old debt, or where levy or execution is released or
there is benefit moving to promise from any p arty or where a factor
undertakes for a commission to guarantee a sale, contracts to answer
for the default of another need not be in writing. Transfer of personal
property in bulk capable of m anual delivery, except wine in cellars and
tanks, when h ot accom panied by delivery and change of possession are
deemed fraudulent as to th ird parties unless notice of intention of
sale is recorded seven days before transfer is m ade in accordance with
law.
S u p p le m e n ta r y P ro c e e d in g s. When an execution is returned
unsatisfied, th e judgm ent creditor can obtain an order requiring the
judgm ent debtor to appear and answer concerning his property before
the judge or referee.
T axes. On the fifth day of December of each year taxes become
delinquent, except th e last half of the real property taxes, and there­
after 8 per cent is added for delinquency; provided, th a t if they
be not paid before th e 20th day of April next succeeding, 5 per cent
is added for delinquency. On th e 20th day of April, of each year, all
the unpaid portion of th e rem aining one-half of th e taxes on all real
property is delinquent, and thereafter 3 per cent is added for delin­
quency; and provided fu rth er, th a t th e entire tax on any real property
m ay be paid a t th e tim e th e first installm ent as above provided is due
and payable: and provided further, th a t th e taxes on all personal
property, unsecured by real property, shall be due and payable
im m ediately after th e assessment of said personal property is made.
Legislation of 1935 imposes income taxes of practically 51 % of those
provided by Federal laws. T here is also a sales, tax of 3 % except
on foods. By 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 of
deceased persons w ith exemptions of lim ited am ounts. If taxes re­
m ain unpaid or unredeem ed, real property is deeded to State, which
m ay th en sell sam e a t auction.
T r u s t D eeds. T ru st deeds as security are in general use, and are
usually preferred to m ortgages by banks and other lenders, as a right
of redem ption does n ot exist after foreclosure of tru st deed by trustee s

BANKING AND COMMERCIAL LAWS—COLORADO
sale. Also, th e m ethod of foreclosure is more simple. To foreclose
th e beneficiary m ust record w ith th e C ounty Recorder a three-m onths
notice of his election to cause th e property to be sold and thereafter
the tru stee m ust give notice of tim e and place of sale by posting in
sta tu to ry m anner and by publishing copy once a week for tw enty
days in newspaper of general circulation. Should such sale result in a
deficiency, judgm ent for same m ay be recovered in appropriate action,
but action therefor m ust be begun within three m onths after the
tim e of sale. (See M ortgages.) T ru st Deeds m ay also be foreclosed
by an action in court.
A tem porary m oratorium act also modifies foreclosure proceedings
under tru s t deeds up to July 1, 1943.
W ills. ' Every person over che age of eighteen years, of sound
mind, m ay, by last will, dispose of all his estate, real and personal.
1A m arried woman m ay dispose of all her separate estate by will w ith­
out th e consent of her husband, and m ay a lter or revoke the will in like
m anner as if she were single; she m ay also under certain conditions,
dispose of by will one-half of th e com m unity property. Her will m ust
be executed and proved in like m anner as other wills. Every will
other th an a nuncupative will m ust be in writing, and every will other
th an an holographic will and a nuncupative will, m ust be executed and
attested as follows: 1. I t m ust be subscribed by th e testator himself,
or some person in his presence, and by his direction m ust subscribe
his nam e thereto. *2. T he subscription m ust be m ade in the presence
of th e attestin g witnesses, or acknowledged by th e testator to them
to have been m ade by him o r by his authority. 3. The testato r
m ust, a t th e tim e of subscribing or acknowledging th e same, declare
to th e attestin g witnesses th a t th e instrum ent is his will, and 4. There
m ust be two attestin g witnesses, each of whom m ust sign his nam e
as a witness a t th e end of the will, a t th e testa to r’s request, and in
his presence. An holographic will is one th a t is entirely written, dated,
and signed by th e hand of th e testa to r himself. I t is subject to no
other form, and m ay be m ade in or out of this .State, and need not be
witnessed. A nuncupative will m ay dispose of personal property
only and of value n ot exceeding $1,000. A witness to a will should
always write his nam e and residence. All devises or gifts to a sub­
scribing witness are void unless there are two cither com petent sub­
scribing witnesses unless such witness is entitled to a sh a re , if there
had been no will. No will m ade out of this S tate is valid as a will
in th is S tate, unless executed according to the provisions of th e code,
except th a t a will m ade in a S tate or country in which the testator
is domiciled a t th e tim e of his death, and valid as a will under the
laws of such S tate or country is valid in this State as to personal prop­
erty. Wills proven out of sta te m ay be recorded in county where
testato r has left real estate. Ancillary adm inistration is usually
necessary.
Bequests for ch arity are void unless m ade more th an th irty days
before death and m ust in no case exceed more th an one-third of the
estate unless there are no legal heirs, except th a t bequests to the
S tate or a political subdivision or to educational institutions exem pt
from taxation, and other sim ilar institutions, under certain conditions,
are not so lim ited. Also, bequests to charity by will m ade six m onths
. or more before death are n ot so restricted unless there are living
spouse, child, grandchild or parent, and these m ay in w riting executed
a t least six m onths before the te s ta to r’s death waive the restriction.
Wills are revoked by m arriage unless provision for the same or an
intention n o t to provide clearly appears.

SYNOPSIS OF

THE LAW S OF COLORADO
RELATING TO

BANKING AND COMMERCIAL USAGES
Revised by J. Frederick Schneider, Attorney a t Law,
M ajestic Bldg., Denver.
(See card in A ttorneys List)
A c k n o w le d g m e n ts . The sta tu to ry form and m anner of rea
estate acknowledgm ent are as follows:
STATE O F ...
COU NTY OF
The foregoing instrum ent was acknowledged before me t h i s .. . .
day o f ....................... 1 9 . . . . , b y ......................................... ................ (if by
natu ral person or persons here insert nam e or nam es; if by person
acting in representative or official capacity or as attorney-in-fact,
then insert nam e of person as executor, attorney-in-fact or other
capacity or description; if by officer of corporation, then insert nam e
of such officer or officers as th e president or other officers of such
corporation, nam ing it. If acknowledgment is taken by notary
public, th e d ate of expiration of commission shall also appear on
th e certificate.)
W ITN E SS m y hand and official seal. (If acknowledged before
notary, th e d ate on which his commission expires m ust be here stated.)
T itle of Officer.
For ch attel m ortgage form, see “ C hattel M ortgages.” The
acknowledgment m ay be before the clerk of any court of record,
commissioner of deeds, or notary public, or certain other specified
officers.
A d m in is tr a tio n of E s ta te s . All demands not exhibited in six
m onths are barred, unless such creditor can find other estate of the
deceased not inventoried. Claims are classified for paym ent, ordinary
debts being in th e fifth class. Creditors having liens can foreclose
a t any tim e by court action, b u t cannot foreclose w ithout court
' action within one year w ithout permission of court. A dm inistration
is granted to surviving husband or widow, or next of kin of an intestate,
if they will accept or are not disqualified; if no such relative appears
within tw enty days after death of intestate, adm inistration m ay be
granted to a creditor; if no creditor appears in ten days after tw enty
days from death of intestate, or if next of kin files w ritten relinquish­
m ent county judge m ay select adm inistrator. In counties having a
population of more th an 50,000 on default of relatives adm inistration
is m ade by public adm inistrator. An abbreviated form ot adminis­
tratio n is provided for estates of $2,000 o r less, and where less th an
$300, adm inistration m ay be waived. (See Wills; H usband and Wife;
Descents and D istributors.)
A s sig n m e n ts. Assignments for th e benefit of creditors are pro­
vided for. Assignments of wages not due a t the tim e of th e assign­
m ent, or of other sums to become due to the assignor,'are invalid unless
recorded with' th e recorder of the county where the wages are to be
earned, or th e sums are to become due, within five days from th e date
thereof. If th e assignor is a m arried m an or woman, residing w ith the
wife or husband, he or she m ust join in the assignment. T here are also
provisions regulating assignm ents to wage-brokers and others.
A tta c h m e n ts . In actions on .contracts, express or implied, or in
to rt against a non-resident, th e plaintiff m ay have th e defendant’s
property attached, upon filing a bond in double/the am ount sued for,
with affidavit “ showing th e existence of sta tu to ry grounds, consisting,
in general, of th e defendant’s non-residence or fraud.” Garnishee pro­
cess will issue in aid of attachm ent when money or property of the
debtor is found in possession of th ird persons.
Banks. K in d s Permitted. Banks of Deposit and Discount, which
m ay have a savings departm ent and a tru st departm ent; T rust,
Deposit and Security Com panies; T ru st companies, which m ay
engage in general banking; Industrial B anks; C redit Unions. The
discussion which follows is necessarily lim ited to Banks of Deposit
and- Discount.


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1985

Supervising Authority. T he S tate Bank Commissioner.
Incorporators. Any num ber of persons not less th a n three.
Officers and Directors. T he officers, usually a president, vicepresident and cashier, are elected annually by th e board of directors.
T he directors m ay be from three to twenty-one in num ber, m ust give
bond, m ust own a fixed am ount of stock free from indebtedness, and
m ust never have been convicted of a felony or a violation of banking
laws. They m ust atten d m eetings m onthly.
papital Stock, and Surplus Requirements. The m inim um paid-up
cash capital required to commence business is $25,000 in cities or
towns of 4,000 or less; $50,000 in cities of from 4,000 to 50,000; $100,000
in cities of more th a n 50,000; to which m ust be added, in each case,
a cash surplus of 10% of th e capital stock. T he capital and surplus
thereafter m aintained m ust also equal 10% of th e average daily
deposits for th e preceding calendar year.
Reserves. Reserves are required to be m aintained n an am ount
equal to 15% of all deposits
Examinations and Reports. Exam inations by th e S tate Bank
Commissioner are m ade a t least twice a year; directors m ust prepare
and file a detailed report a t least twice a year, 5 m onths ap art. The
dates of exam ination and reports are determ ined by th e S tate B ank
Cdmmissioner.
Loan Limitations. N o loans are perm itted on a b ank’s own stock
or to its officers. Loans on real estate cannot exceed 25% of its
interest bearing securities except th a t up to 50% of its savings deposits
m ay be so invested. N o commercial loan can exceed 15% of th e
bank’s capital and surplus except th a t loans fully secured by collat­
erals of definite value in excess of th e loan are not so limitedStockholders’ Liability. Shareholders are individually liable for
the corporations’ indebtedness to th e extent of double th e am ount
of their stock therein, a t par, in addition to th e am ount invested in
such shares. This liability is n o t subject to offsets on account of
deposits.
Branch Banking is prohibited.
Federal Deposit Insurance C orporation authorized to act as liqui­
dator of closed banks.
Federal Deposit Insurance. Banks authorized to m ake loans in
co-operation w ith N ational Housing Act. M ortgages insured b y th e
Federal Housing A dm inistrator eligible for investm ent.
Dividends. Before dividends are declared, twenty-five per cent
of n et profit for the period p u t into surplus fund u n til surplus fund
equals one hundred per cent of capital qf bank.
B a n k s, M is c e lla n e o u s . Savings Banks, T ru st Companies, either
Independent or as a p a rt of a bank, Industrial Banks and Credit
Unions are all authorized and are regulated by th e S tate Bank Com­
missioner. '
B lu e S ky L aw . All corporations organized in Colorado who desire
to place on sale to th e public, securities in certain classes m ust comply
with th e “ Securities A c t” or “ Blue Sky Law ” of 1923 as amended
In 1931,. which provides th a t two copies of prospectus issued shall be
filed with th e Secretary of S tate setting forth certain inform ation
with reference to th e com pany and the Secretary of S tate shall charge
and collect a fee of $10 for th e filing of such prospectus. Securities
salesmen m ust fu rth er register under th e Act of 1931 w ith th e Secre­
ta ry of State. In 1933 an am endm ent was passed extending: th e
scope of th e form er acts, and empowering th e Secretary of S tate to
prohibit th e sale of securities by insolvent, unlawful, fraudulent
or unsound issuers.
B u ild in g & L o a n A sso ciatio n s are authorized and are regulated
by a Building and Loan D epartm ent under a com plete code adopted
and in effect June 8, 1933, and am ended by Act of Legislature, effective
M ay 17, 1939.
C h a tte l M o rtg a g e s as between the parties are good u n til th e
Indebtedness is paid or barred by lim itation. To be valid as to th ird
persons they m ust sta te th e am ount and m atu rity of the debt, describe
the property, and be acknowledged and filed or recorded. The form
of acknowledgm ent is “ T his m ortgage was acknowledged before me
t h i s . .............day o f............
1 9 . . . . , b y . .......................... eg.......
m ortgagor” ; if bv a corporation or partnership, th e form is varied to
read ‘b y . ....................... ............ .f o r . ....................... ..............m ortgagor.”
T he notary m ust sta te when his commission expires. T he lien
remains good u ntil th e m atu rity of th e indebtedness b u t not to exceed
two 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, b u t as to m ortgages for
over $2,500 a sworn statem ent m ust be filed every tw o years beginning
with th e second anniversary showing good faith and th e am ount
unpaid. Possession m ay be taken a t any tim e within six m onths after
th e m atu rity nam ed, or to which it m ay have been extended, an d th e
m ortgage m ay be extended or furth er extended by filing or recording
a sworn statem ent showing to tal paym ents, am ount unpaid, th a t the
debt is due, and th a t it is extended to a definite sta te d tim e, n o t exceed­
ing tw o years. During said six-m onth period th e debt m ay be paid
and th e lien discharged as a t m aturity. M ortgages of stocks of
goods which reserve possession and power of sale to m ortgagor, are
void as against creditors and bona fide purchasers. Disposing of
m ortgaged property is larceny. C hattel m ortgages upon household
goods used by th e fam ily, when m ade by husband or wife residing
w ith th e other, m ust be m ade by husband and wife jointly.
C o lla te ra ls . Shares of stock m ay be validly pledged only by
delivery of th e certificate properly indorsed. Persons holding stock*
In corporations as collateral security are not personally liable as stock­
holders for corporate debts. A pledgee of stock m ay represent sam e
a t corporate meetings.
C o m m e rc ia l P a p e r is governed by th e uniform Negotiable In stru ­
m ents Act adopted in 1897. See com plete tex t of uniform law else­
where in this publication.
C o n d itio n a l S ales. C onditional sales contracts give th e seller
no rights as against purchases for value w ithout notice from a buyer
in possession, and should never be used in this sta te , a chattel m ort­
gage being th e only satisfactory form of security.
C o n v ey an ces. No joint tenancy in real property unless expressly
declared in the deed, except in certain particular cases. ' Unless
so declared grantees shall be deem ed tenants in common, Lands
not in possession m ay be conveyed. N ot necessary for wife to join
In deed except in a conveyance of a m ortgage or a hom estead,
entered as such of record. W itnesses are unnecessary. Seals are
not necessary excepting in th e case of corporations, b u t a p rinted or
Ink seal is advisable. Unacknowledged deeds are deemed notice from
the d ate of filing b ut they can not be read in evidence unless subse­
quently acknowledged or proved, unless th ey are on record for over
tw enty years. (See Acknowledgments; H usband and Wife.)
C o rp o ra tio n s . Colorado corporation laws are broad and flexible
Three or more residents or non-residents m ay form a Colorado corp­
oration by signing, acknowledging and filing with the Secretary of
S tate a certificate stating th e nam e (containing "A ssociation,” “ Com­
pany,” “ C orporation,” “ C lub,” “ Incorporated,” “ L im ited.” “ So­
ciety,” “ U nion,” “ Syndicate,” “ Co.,” “ In c.,” or “ L td .” ), objects,
term of existence, which m ay be perpetual, th e am ount of stock which
m ay have any_ or no par value and m ay be divided into classes w ith
respect to voting power, preferences, participation, etc., the num ber
of directors, who m ay be classified according to term of office, location
of principal office, and w hether cum ulative voting is allowed, and,.
If desired, special provisions lim iting or regulating powers of thecom pany, directors, stockholders or any class thereof, providing for
compromises between th e corporation a n d 'i t s creditors or stock­
holders, giving th e board of directors power to sell or m ortgage, giving
to stockholders a preem ptive right to subscribe to additional stock
Issues, requiring more th a n th e legal proportion of voting for cor­
poration action, or perm itting th e directors to m eet out of th e sta te
or to m ake by-laws. Filing fees are $20 plus 20c per thousand capital
in excess of $50,000 capital or shares of 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 th e am ount remaining
unpaid on stock. W hen fully paid a certificate thereof should be filed.

1986

BANKING AND COMMERCIAL LAWS—COLORADO

Stock is transferred omy oy delivery oi th e certificate, unless th e by­
laws otherwise provide for. Unless th e certificate of incorporation
otherwise provides, m ining and m anufacturing companies can encum­
ber their property only by au th o rity of a m ajority of stockholders.
T he certificate m ay be am ended in any respect excepting to change its
original purpose. T he term of existence m ay be extended from tim e
to tim e and th e corporation m ay be dissolved by a vote of tw o-thirds
of th e stockholders. Foreign corporations are prohibited under
penalty from transacting business until they file a copy of their charter
of incorporation and a certificate identifying th e act under which it
is organized and a certificate appointing an individual or corporate
agent for th e service of process and pay a fee of $30 plus 30c on each
thousand dollars in excess of $50,000 represented by capital in Colo­
rado, plus $5.00 for a certificate of authority and $5.00 for designating
agent. Foreign corporations cannot m ortgage property as against
citizelns w ithout published notice. E very corporation foreign or
dom estic m ust 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 by th e Secretary of S tate, paying a fee of $5.00, unless the
capital is $10,000 or less when th e fee is $1.00, and for wilful con­
cealm ent of any m aterial fact or failure to file such report th e directors
and officers become liable for th e debts contracted in th e preceding
calendar year up to $1,000 each. An annual license tax of $10.00
plus •10c per thousand dollars capital or shares of no par stock above
$100,000 m ust be paid by all foreign or dom estic corporations on or
before M ay 1st, failure to pay resulting in forfeiture or right to do
business subiect to reinstatem ent w ithin two years.
Special sta tu to ry provisions in addition to those governing general
business corporations apply to title and guaranty, banking, insurance,
mining, telegraph, ditch and reservoir, flume and pipe line, water
users, toll road, bridge and ferry, gas, cem etery, cooperative, religious
and for non-profit and other corporations.
O ther provisions of the Revenue bill, approved August 4, 1917,
and this act regarding annual reports, assessm ent of tangible and
Intangible property, etc., too voluminous to be quoted, m ake it
advisable th a t care should be exercised by both dom estic and for­
eign corporations operating in th e S tate to acquaint themselves fully
with its requirem ents.
D e p o sitio n s. T he deposition of a witness o u t of th e S tate shall
be taken upon commission issued by the clerk of the court where
th e suit is pending on th e application of either party on five days'
previous notice to th e other, which notice shall be accompanied
by a copy of the interrogatories to be attached to the commission.
I t m ay be issued to a person'agreed upon by th e parties or to any
judge or justice of the peace, or to a commissioner appointed by the
governor of th e S tate to take affidavits and depositions in other S tates
and T erritories, or to a notary public. The adverse p arty m ay file
and have attached to the commission such cross-interrogatories as
he m ay desire. P arties m ay agree by w ritten stipulation to take
th e deposition orally, or, upon proper cause shown, m ay obtain an
order of court directing it to be so taken. Depositions can be taken
a t any tim e after startin g suit. E ith er p a rty m ay have a deposition
tak en in th is sta te a t any tim e after commencing su it and m ay therein
exam ine th e adverse p a rty as under cross-examination.
D e sc e n ts a n d D is tr ib u tio n s . T he estate of an Intestate descends
one-half to th e surviving husband or wife, and the residue to the
surviving children and descendants of children, if any; if none,
then th e whole descends to such surviving husband or wife. Except
as enum erated the estate of every intestate descends: 1. To his
children surviving, and the descendants of his children who are dead,
the descendants collectively taking the share which their parents
would have taken ir living. 2. If no children nor their descendants,
th en to his father and m other, share and share alike, and if one dead,
then to th e o ther: if no fath er or m other, th en to his brothers and
sisters, and to descendants of brothers and sisters who are dead,
the descendants collectively, taking the share of their im m ediate
ancestors in equal parts. 3. If none of th e foregoing living, then to
th e grandfather, grandm other, uncles, aunts and their descendants,
th e descendants taking collectively the share of their im m ediate
ancestors in equal parts. 4. I f none of the relatives above enu­
m erated be living, then to th e nearest lineal ancestor and their descend­
ants, th e descendants collectively taking the share of their im m ediate
ancestors in equal parts. All posthum ous children or descendants
of th e in testate, inherit as if born in the lifetim e of the intestate,
and all children of the half blood an d all legally adopted children
shall inherit as children of the whole blood. Illegitim ate children
inherit if parents subsequently interm arry. Convicted M urderers
shall n o t inherit property of victim .
D o w er. Common Law Dower and curtesy are abolished, as such,
b u t neither husband nor wife can by will devise more th a n one-half
of her estate away from th e other w ithout his consent.
E x e m p tio n s . T hese consist, in brief, of a $2,000 hom estead, 60%
of th e wages of th e head of a fam ily, and specified personal property
of certain classes of persons'of from $100,00 to $300,00 in value.
F ra u d s , S t a t u t e of. The following m ust be i n w riting: Con­
tracts for leasing of land for period longer th an one year or for the
sale of lands, or any interest in lands; every agreem ent which by
Its term s is not to be perform ed w ithin one year: every special
promise to answer for th e 'd e b t, default or m iscarriage of another;
every agreem ent, promise, or undertaking m ade upon consideration
of m arriage, except m utual promises to m arry, and every contract
for th e sale of any goods, chattels, or things in action, for th e price
of $50 or more, unless the buyer accepts and receives p a rt of such
goods or th e evidence of some of them , or the buyer a t th e tim e
pays p a rt of the purchase money.
G a r n is h m e n t. (See A ttachm ents.)
H o lid a y s. T he legal holidays are: Sundays; Ja n u ary 1 (New
Y ear’s D ay); F ebruary 12 (Lincoln’s birthday); F ebruary-22 (W ash­
ington's b irth day); M ay 30 (M emorial D ay); Ju ly 4 (Independence
D a y ); A ugust 1 (Colorado D a y ); first M onday in Septem ber (Labor
D a y ); October 12 (Columbus D a y ); general election day; Novem ber 11
(Armistice D ay); Thanksgiving D ay; December 25 (Christm as Day).
I f an y such holiday falls on Sunday, th e M onday following or the
preceding Saturday in th e case of N ovem ber 11th are legal holidays
for all purposes including presentm ent of commercial paper. T hird
F riday in April, second F riday in M ay, and October 12th are holidays
n o t affecting business transactions. S aturday afternoon in cities of
25,000 an d over in June, Ju ly and A ugust, on which days commercial
paper m ay be presented in th e forenoon or th e following M onday.
H u s b a n d a n d W ife retain their separate property, real, personal
and mixed owned a t m arriage, and any such property which shall
come to either of them by descent, devise, or bequest, or the gift
of any person, for their own separate use. Such property o f 'th e
wife is n ot liable for th e husband’s debts except as hereinafter stated .
Wife m ay carry on trad e or business, sue and be sued, contract debts,
an d execute promissory notes, bonds, bills of exchange, and other
instrum ents precisely as if sole and m ay Convey real estate w ithout th e
husband joining in th e deed. Any chattel m ortgage upon, or sale of,
th e household goods used by th e fam ily, and any conveyance of, or
m ortgage upon, a hom estead, and any assignm ent of fu tu re wages,
or sum s to be come due in th e future, when m ade by husband or wife
residing w ith th e other, m ust be joined in by th a t other. A m arried
wom an m ay m ake a will, but neither husband nor wife shall devise or
bequeath m ore th an half of his or her property away from th e other
w ithout th e consent in w riting of th e other, executed after death of
th e te sta to r or of testatrix. M arriage revokes a will previously m ade.
T he husband is liable for th e debts and liabilities of th e wife contracted
before m arriage to the extent of the real and personal property he
m ay receive with or through her, or derive from the sale or ren t of
her lands, and no further. The expenses of th e fam ily and the edu­
cation of th e children are chargeable upon th e property of both
husband and wife, and in relation thereto th ey m ay be sued jointly
or severally. E ith er husband or wife living together can separately
declare property of record in th e nam e of the other “ A Hom estead,”
by an en try of record over his or h er signature. N either can mortgage
nor convey hom estead w ithout the signature of th e other.


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I n t e r e s t . The legal rate was 8% from th e organization of th e sta te
up to M arch 7, 1935, when it became 6% , b u t any other rate m ay be
fixed by agreem ent w ith th e exception of loans of $300 or less m ade
by m oney lenders upon which th e m axim um ra te is 10 per cent.
J u d g m e n ts . A transcript of judgm ent m ay be filed In the office
of the county clerk and recorder of any county in th e S tate, and
thereupon such judgm ent becomes a lien upon all real property
owned by the judgm ent debtor in th a t county. T he lien 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
of courts of record in tw enty years. Unless revived by appropriate
proceedings. (See Executions.)
L im ita tio n s —P e rs o n a l A ctio n s. All actions upon any con­
tra c t or liability express or im plied m ust be begun w ithin six years
next after th e cause of action accrues. In actions on account th e '
last item proved fixes th e date. Bill of relief in th e case of eauitable
tru sts shall be filed w ithin five years; personal actions on any contract
other th an th e above and bills for relief on th e ground of fraud shall
be filed within three years after discovery, by aggrieved p arty , of
facts; and all actions based on implied or constructive fraud m ust be
commenced within 3 years after act complained of. The doctrine of
laches applies in equitable proceedings. Additional sta tu tes govern
lim itations in certain unusual proceedings. T he lim itation does not
apply to minors, m arried women or persons insane, in prison or absent
from the U nited States; and legal representative of a person under
disability has n o t less th a n 2 years after appointm ent to tak e action,
unless person under disability dies, in which case executor or adm in­
istrato r has 1 year after death. P aym ent, new prom ise in writing
or absence from th e s ta te extend the period.
— R e al A c tio n s. Actions to recover real property
m ust be brought within not more th an 18 years after th e right accrued
as defined by extensive sta tu to ry provisions. I f th e claim be against
an actual resident holding under fee or tax title, or against a person in
possession of land under claim or color title or having color of title to
vacant land, and having paid taxes for seven years, th e action m ust be
brought within seven years after the right accrued.
M a rrie d W o m en . (See H usband and Wife.)
M echanics* L ie n s. M echanics, m aterial-m en, contractors, sub­
contractors, builders, m iners, and all persons of every class performing
labor upon, or furnishing m aterials used in th e construction or repair
of any building, or any o th er structure or im provem 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 m aterials or m achinery for the working of a mining claim
or mineral deposit shall have a similar lien. Liens ran k in th e follow­
ing order: 1. Laborers or mechanics working by th e day or piece,
without furnishing m aterial. 2. Sub-contractors and m aterial-m en,
whose claims are either entirely or principally for m aterials, machinery
or other fixtures. 3. All principal contractors. Laborers are allowed
one m onth, m aterial m en two m onths, and th e original contractor
three m onths after the com pletion of the structure, within which to
file claim of lien. Action to enforce such lien m ust be commenced
within six m onths after com pletion of the building upon which it is
claimed.
M o rtg ag es. Ordinary m ortgages on realty are in common use;
also deeds of tru st to a public trustee and to private trustees. A
tru s t deed to private tru stee is foreclosed as a m ortgage. In case
the public trustee is nam ed, the property is sold by him as provided
In the deed, after advertisem ent in a newspaper designated in the
tru st deed, and such advertisem ent shall not be less than four weeks.
Upon a sale by the public trustee, a certificate of sale is issued. Re­
dem ption m ay be m ade by th e grantor w ithin six m onths. W ithin
10 days thereafter, If notice of intention to redeem has been filed within
six m onths, subsequent encum brancers or lienors m ay redeem in order
of priority.
N e g o tia b le I n s t r u m e n t s . Uniform N egotiable In strum ents Act
adopted 1897. (See com plete tex t following “ Digest of Banking and
Comm ercial Laws.)
P a r tn e r s h ip s . General partnerships are governed by th e rules
of th e common law ordinarily applicable, w ithout sta tu to ry change,
excepting th a t individuals or partners doing business under any
nam e other th an their personal names m ust file an affidavit showing
the real persons represented, or m ay not bring suits upon debts due,
and m ay be convicted or fined. Lim ited partnerships are organized
under th e uniform lim ited partnership act adopted in 1931. A
lim ited partnership is formed by signing a certificate in s ta tu to ry form.
A lim ited partner is not liable to creditors beyond th e am ounts stated
in such certificate unless he takes control of th e business. T he rights
of th e partners, rights of th ird persons, m ethod of conducting the
partnership, its dissolution, etc., are m inutely provided for.
P ow ers of A tto rn e y . Powers of attorney for th e conveyance
of lands m ust be acknowledged in the same m anner as deeds, and
m ust be recorded in the sam e county wherein the real property to
be conveyed is situate.
S ales of P e rs o n a l P ro p e rty . E very sale or assignm ent of goods
and chattels in the possession or under the control of the vendor
is void, as against creditors or subsequent purchasers in good faith,
unless accompanied by im m ediate delivery and followed by actual
and continued change of possession. Sales of any portion of a stock
of m erchandise otherwise th an in the ordinary course of trad e are
prim a facie fradulent and void against creditors, unless seller and
purchaser together, before sale, m ake inventory, showing q u antity
and cost price of the various articles; and unless purchaser makes
full inquiry of the seller as to nam es and addresses of all creditors
of seller, and the am ount due to each, and obtains an answer; and
notifies each creditor of the proposed sale, the cost price, and the
proposed selling price; and unless th e purchaser retains th e inventory
and w ritten answer a t least six m onths after the sale. This act
does not apply to sales by legal representatives of public officers
conducting sales in their official capacity and there are some other
exceptions to this law. C8ee Husband and Wife.)
S e c u ritie s A ct. See Blue Sky Law.
T ax es. A schedule of taxable property In each county with th e •
owner’s valuations m ust be filed between April 1 and M ay 20. Taxes
are assessed after a review of valuations in August. Taxes levied
are a lien on real estate and personal property u ntil paid, as also upon
stocks of goods including new goods added thereto. Taxes m ay be
paid in tw o sem i-annual installm ents; th e first on or before th e last
d ay of February, and th e residue on or before th e last day of Ju ly of
th e year following th e one in which th ey are assessed. , T ax sales are
held in N ovem ber when ta x certificates are given to purchasers on
which treasurer’s deed m ay issue after three years. Prior to sale de­
linquent taxes bear interest a t 6 per cent per annum from M arch 1 to,
Ju ly 31 and a t 8 per cent per annum from Ju ly 31 to d ate of sale; plus
a 10 per cent p enalty if th e first h alf be n o t paid b y April 30; after sale
a t 18 per cent per annum for th e first six m onths, 12 per cent there­
after. Household goods to th e value of $200 belonging to a head of a
fam ily are exem pt from taxation. A graduated sales ta x law was
passed in 1936 to raise revenue for relief. In 1937 an income tax law
was enacted.
A 2% tax on services passed in 1937 and was re-enacted in 1939
w ith minor changes requiring all persons including corporations, trusts,
estates, syndicates, etc., to pay a tax on services rendered, except
medical, undertakers and religious. A ct term inates Ju n e 30, 1943.,
U n c la im e d D o r m a n t B a n k D e p o sits. A list of all deposits with
names and last known addresses of depositors which have remained
unchanged except for credits for interests for ten years or more or
which have for ten years rem ained unclaim ed shall be published in
one issue of a newspaper of general circulation in th e city where the
deposit is located, sworn to by th e cashier a t any convenient day
during M arch in each year.
'
W ills. M ales of th e age of twenty-one years, and females of
the age of tw enty-one years, m ay dispose of their real and personal
property by will b u t personal property m ay be disposed of by will
by any person of the age of seventeen years. For restrictions as to

BANKING AND COMMERCIAL LAWS—CONNECTICUT
m arried persons, see “ H usband and W ife.” All wills, w hether of
realty or personalty shall be in writing signed by the testator or
some one for him in his presence and a t his direction, and attested
In his presence and in th e presence of each other by two or more
credible witnesses. Unless otherwise expressed in th e will an afterborn child will share in th e property. Devises and bequests to w it­
nesses are null and void, unless the will be attested by a sufficient
num ber of witnesses exclusive of such persons. No will can be revoked
otherwise th an by the subsequent m arriage of the testator, or by
burning, tearing, or obliterating the same by the testator, or in his
presence an d by his direction and consent, or by another will or codicil,
declaring th e same, duly signed and witnessed. The property devised
by will m ust be adm inistered by th e county court, and all property
of non-residents m ust generally be adm inistered to clear title to real
property situated in this State. (See Husband and Wife. Descents
and D istributions. Adm inistration of E states.)

SYNOPSIS OF

THE LAWS OF CONNECTICUT
RELATING TO

BANKING AND COMMERCIAL USAGES
Revised b y O arl A. L u n d g r e n , A ttorney a t Law,
Ansonia, Conn.
A c c o u n ts. In all actions for a book debt, the entries of the
parties in th eir respective books shall be admissible in evidence.
(For lim itation of actions on accounts, see Lim itations to Suits.)
A c k n o w le d g m e n ts . (See Conveyances.)
A d m in is tr a tio n of E s ta te s . The Drobate court has jurisdic­
tion of deceased estates. Bonds which' m ust be furnished bÿ the
adm inistrators or executors, are usually m ade double the estim ated
value of personal property. Banks and tru s t companies generally
excepted from th e requirem ent of furnishing bond. Bonds of surety
companies authorized to do business in the S tate m ay be accepted.
N o t less th an six m onths are lim ited for the presentation of claims
against deceased estates. Such claims are presented to th e adminis­
tra to r or executor if th e estate is solvent, or to commissioners appointed
b y th e pro b ate court if th e estate is insolvent. Creditors not inhabi­
ta n ts of th is S tate m ay exhibit their claims against any estate which
has n o t been represented insolvent, a t any tim e within one year after
order of notice, and if presented more th an six m onths after order of
notice, shall be entitled to paym ent only o ut of the clear estate rem ain­
ing after paym ent of claims exhibited within tim e lim ited. Twelve
m onths is th e usual tim e allowed for th e settlem ent of deceased estates.
Foreign C orporations m ay a ct as executors or trustees under a will, b u t
not as adm inistrators, providing sta te of foreign corporations’ domicil
grants reciprocal rights to C onnecticut corporations. T ru st funds
m ay be invested in securities selected by trustee with th e care of a
prudent investor. A nnual accounts required of trustees. There are
no sta tu to ry fees for fiduciaries, b u t fees are fixed by the probate court.
A ffidavits. Civil actions do not ordinarily have to be supported
by affidavits. Affidavits have no weight sus evidence, and are never
adm itted as such.
A llens. Any alien resident of any of the United States, and
any citizen of France, so long as France shall accord the same right
to citizens of the United States, m ay purchase, hold, inherit, or
transfer real estate in this S tate in as full a m anner as native-born
citizens.
A rb itra tio n . P arties to any controversy desiring to subm it the
same to arbitration under a rule of court, and having signed and
sworn to an agreem ent to th a t effect, may, upon filing this agree­
m ent In th e court having jurisdiction of the subject m atter, nave
this agreem ent entered of record and obtain a rule of court th a t
the said parties shall subm it to and be finally concluded by such
arbitration
A s sig n m e n ts. Assignments of wages or debts due for personal
services are invalid.
A tta c h m e n ts . A ttachm ent m ay be m ade upon the original
process, and is served by attaching the goods or lands of th e defend­
ant, or, if sufficient goods be not found, the person in actions where
there is.fraud in contracting the debt or concealing property or refus­
ing to pay an adm itted debt. A ttachm ents m ay be granted upon all
complaints containing a money dem and. Supplem ental attachm ent
m ay be ordered by the court upon application a t any tim e during
the pendency of the action. If the plaintiff be a non-resident, he Is
required to furnish a bond for 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 th e attached real estate. (See Exemptions.)
B a n k s S ta te a n d T r u s t C o m p a n ie s. '
Capital Stock. $100,000.00 in cities of less th an 50,000 population;
$200,000.00 in cities of over 50,000 population, par value not less than
$50.00. T he capital stock, together w ith a surplus of a t least 100%
of th e am ount of such capital stock, m ust be paid in cash.
Charter Fee. $1.00 for each $1,000.00 of the capital stock.
Reserves. 12% of dem and and 5% of tim e deposits.
Incorporators. N ine or more persons.
Officers and Directors. Usual officers—by-laws are subject to
approval by th e Bank Commissioner. Director m ust be a stockholder
and own a t least $500.00 of th e capital stock.
Supervising Authority. Bank Commissioner, S tate Capitol,
H artford. Conn.
Examinations and Reports. All banks are examined annually or
oftener by th e B ank Commissioner. Banks are required to m ake
not less th an th ree reports annually Within ten days after request
from th e Bank Commissioner.
Loan Limitaiionsi No one person, corporation or firm m ay borrow
more th an 10 % of th e am ount of the capital stock. Paper of executive
officers and clerks m ay not be discounted. No director m ay be
obligated in an am ount exceeding 5% of the combined capital and
surplus. Penalty. $1,000.00 or not more th an one year or both;
Stockholders, Liability is lim ited to paym ent in cash for stock pur­
chased. No double liability.
Savings Banks. M ay pay an order for not exceeding $500.00 not
withstanding death of draw er if m ade within th irty days from death,
and at any tim e if Bank has not actual notice of drawer.
Limitation on Loans by Savings. Loans on capital stock as collateral
security m ust be on stock which paid dividends not less th a n 4%
dining th e two fiscal years of th e corporation preceding th e date of
th e loan; such loans lim ited to $10,000.00 or
of one per cent of the
bank deposits and th e aggregate to tw enty per cent o f its deposits and
surplus account combined.
Branch banking is permissible w ith th e approval of th e sta te bank
commissioner..
Interest and Dividend Limitation. S tate advisory council on bank­
ing, w ith th e governor’s approval, can and generally does authorize
th e b an k commissioner to establish maximum rates of interest or
dividends on savings accounts.
Savings B ank L ife Insurance. Savings banks are perm itted to es­
tablish life insurance departm ents and to sell m axim um politicies of

$ 1 ,0 0 0 .

Joint Savings Accounts can be paid to either nam ed depositor.
Savings B anks Investments. Savings banks m ay invest n ot more
th an 10% of deposits and surplus in corporate bonds approved by
th e bank commissioner and th e advisory council on banking.
B ills o f E x ch an g e. (See N otes and Bills.)
B ills of L a d in g . Uniform Bills of Lading Act passed in 1911.


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1987

C h a tte l M ortgages'. (See M ortgages, Conditional Sales, and
Interest.)
C o lla te ra l I n h e r ita n c e o r S u ccessio n T ax. (See Taxes.)
C o n d itio n a l S ales. All contracts for the sale of personal property,
conditioned th a t the title thereto shall rem ain in th e vendor after
delivery, shall be in writing, describing the property and all conditions
of such sale, and shall be acknowledged before some com petent
authority and filed within a reasonable tim e in th e tow n clerk’s office
in the town where th e vendee resides; but the provisions of th is act
shall not apply to household furniture, musical instrum ents, phono­
graphs, phonograph supplise, radios, bicycles or property exem pt from
attachm ent and execution. If not m ade 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 convey persona)
property held on such conditional sale.
C o n d itio n a l S ales C o n c e rn in g B u ild in g E q u ip m e n t. Any
contract for the sale of a portable garage or other portable building,
or electric light fixtures, or plum bing fixtures, or elevators, or building
m aterials, or any equipm ent used in any building and so placed as to
apparently form a p a rt of such building, conditioned th a t th e title
thereto shall rem ain in th e vendor after delivery, shall be in writing,
describing the property and all th e conditions of the sale, and shall
be acknowledged before some com petent authority, and filed within
a reasonable tim e in the office of th e town clerk in th e town where
the real estate upon which such articles are placed is situated.
C o n tr a c ts . O rdinary provisions of S tatu te of F rauds apply.
C ontracts for th e conveyance of lands or of an y interest therein,
m ay be recorded, in the records of th e town in which such
lands are; and such record shall be notice to all the world o f thé
equitable Interest thus created. Gam ing or wagering contracts
are void. C ontract of incapable person pending appointm ent of
conservator or applicant void when selectm en have filed in town
Clerk’s office certified copy of application in case of incapable person,
and contract of spendthrift void when selectm en have filed in tow n
clerk's office certified notice of proposed appointm ent in case of
spendthrift. No person who receives a valuable consideration for
a contract, express or implied, m ade on Sunday, shall defend any
action upon such* contract on th e ground th a t it was so m ade until
he restores such consideration. The Uniform Sales Act passed in
^1907 covers contracts to sell. (See Sales by R etail Dealers.)
C on v ey an ces. All conveyances of land m ust be in writing,
signed, sealed, and acknowledged by the grantor, and attested by
two subscribing witnesses. T he word “ se al” or th e letters (L. S.)
m ay be used for a seal. T he acknowledgm ent is m ade by th e grantor
before a judge of a court of record of this S tate or of th e United
States, a clerk of th e superior court, court of common pleas, or dis­
trict court, justice of the pease, commissionèr of th e school fund,
commissioner of the superior court, notary public, town clerk, or
assistant tow n clerk, if in this S tate, and if in an y other sta te or
territory of th e U nited States, th en before a commissioner appointed
by the governor of this State and residing therein, or any officer
authorized to take the acknowledgement of deeds in such S tate or
T erritory, and if in a foreign country, before any consul of th e U nited
States, or notary public, or justice of the peace in such foreign country
Conveyances of real estate situ ated in this state, executed - and
acknowledged in any other s ta te or territory, in conform ity w ith th e
laws of such sta te or territory, are valid. I f th e land conveyed
belongs to the wife, the husband should join in th e conveyance, if
married before April 20, 1877. I f the land conveyed belongs to the
husband, the wife need not join in the conveyance. No separate
examination of a m arried woman is required in taking her acknowl­
edgment. Conveyances, including leases for more th an one year, to
be effectual against any other person th an the grantor and his heirs
m ust he recorded on the town records of the town in which the land
lies. T he common law right of survivorship in th e case of joint
tenancies is n ot ordinarily recognized.
C o rp o ra tio n s. Corporations m ay be formed under the general
laws by three or more persons for the transaction of any lawful busi­
ness except th a t of bank, savings bank, tru st com pany, building
and loan association, insurance company, surety or indem nity
company, steam railroad or street railway com pany, telegraph com­
pany, and gas and electric lighting, w ater com pany, or any company
which shall need to have the right of em inent domain.
A certificate of incorporation m ust be filed, signed, and sworn to
by a t least three of the incorporators, giving the nam e and location
of the corporation, the nature of the business, the am ount of authorized
capital stock, which m ust not be less th an $2,000, num ber of shares
and par value of each, am ount of capital stock with which it will
commence business, which shall not be less than $1,000. A certified
copy m ust be filed in the town clerk’s office.
T he organization fee m ust be paid to th e state, of one dollar, on
every thousand of its authorized capital stock up to five million, no
paym ent to be less th an $50.
Stock m ay be paid ror either In cash or property, b ut if in prop­
erty, a m ajority of the directors m ust m ake and sign upon a record
book a statem ent of the am ount for which th e property is received
and its actual value. In case of fraud in such valuation, directors
personally liable.
Certificate of organization m ust be signed and sworn to by a m ajority
of the directors and filed in the office of th e secretary of state, setting
forth th e am ount of stock subscribed for am ount paid in cash and
in property, am ount paid on each share of stock which is not paid
for in full, names and address of subscribers w ith num ber of shares
subscribed for, statem ent th a t the directors are officers have been
duly elected and by-laws adopted, names and addresses of directors,
th e location of th e principal office in th e sta te w ith th e nam e of th e
agent in charge.
There m ust be a t least three directors; vacancies in directors m ay
be filled by rem aining directors.
No stock can be issued until it has been paid for in full. Receipts
for partial paym ents of stock m ay be issued by the treasurer. Cer­
tificates fo r; fractional shares cannot be issued. The corporation
has a lien on capital stock owned by any person for' debts due to
capital stock w ith the approval of stockholders owning three-fourths
of its entire outstanding capital stock, given a t a meeting called for
th a t purpose.
Stockholders’ m eetings m ust be held in this state.
Similar corporations m ay consolidate.
A corporation m ay be wound up by voluntary agreem ent of all
stockholders, signed and acknowledged, directors acting as trustees
to wind up the business.
Receiver m ay be appointed on application of stockholders own­
ing one-tenth of the stock, in case of fraud, m ism anagem ent, or if
assets are in danger of waste by attachm ent, or when corporation
has abandoned its business.
Annual statem ents m ust be filed in the office of the secretary of
state and a certified copy thereof in the tow n clerk’s office, either
on or before the 15th day of F ebruary or August, giving th e names
and addresses of the officers and directors, am ount of outstanding
stock not paid for in full with th e am ount due thereon, the location
of th e principal office in th is sta te w ith th e nam e of th e agent in charge
on whom process m ay be served. F or failure to file annual statem ent
th e corporation m ay forfeit $25 to th e state.
Stock of no p ar value m ay be issued.
T he Uniform Stock T ransfer A ct was adopted in 1917.
D ays of G race. (See N otes and Bills of Exchange.)
D eeds. (See Conveyances.)
D e p o sitio n s. M ay be taken in a civil action by a judge or clerk
of any court, justice of the peace, notary public, or commissioner
of the superior^ court, when witness lives o ut of th e S tate, or more
than tw enty miles from place of trial, is over sixty years of age and
unable to atten d th e trial, is going to sea, or o ut of the S tate, or by

1988

BANKING AND COMMERCIAL LAWS—CONNECTICUT

age and infirm ity is unable to travel to court, or is confined in jail.
Reasonable notice m ust be given to adverse party. Deponents must
be cautioned to speak the whole tru th , ana carefully examined.
T hey m ust subscribe their depositions and m ake oath before the
au thority taking the same who shall a tte st the same and certify
th a t the adverse p arty or his agent was present (if so), or th a t he
was notified, and shall also certify the reason of 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 a t whose request it was taken.
Depositions m ay be taken in any other S tate or country by a notary
public, commissioner appointed by the governor of this State, or by
any m agistrate having power to adm inister oaths, and they may
also be taken before a foreign m inister, secretary of legation, consul
or vice-consul appointed by the United States, if taken out of the
United States. A judge of the superior, common pleas, or district
court can issue a “ com m ission” to take the deposition of a person
residing o ut of 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 p erpetuate testim ony concerning th a t which m ay there­
after be the subject of a Suit. The person taking depositions mav
compel attendance of witnesses by subpoena and capias. Depositions
m ay be tak en in C onnecticut for suits pending in any court in the
U n ited’S tates or any foreign country.
D escen t a n d D is tr ib u tio n of P ro p e rty i n I n t e s t a t e E sta te s .
(As to the share of a surviving husband or wife, see the title Husband
and Wife.) A fter the share of the surviving husband or wife, the
residue of th e real or personal estate is distributed in equal propor­
tions among th e children and the legal representatives of any of
them who m ay be dead (children who have received estate by advance­
m ent of the in testate in his lifetime being charged with the same in
the distribution). If 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 of the intestate of the whole
blood, and those who legally represent them ; and if there be no
such kindred, then equally to the brothers and sisters of the half
blood and those who legally represent th e m ; and if none, then equally
to th e next of kin in equal degree, kindred of the whole blood to
take in preference to kindred of the half blood, in, equal degree, and
no representatives to be adm itted among collaterals after the repre­
sentatives of brothers and sisters.
D ow er. (See H usband and Wife.)
E v id en ce. (See C ourts, Insurance Com pany. Corporations.)
E x ecu tio n s. Issue on final judgm ent, and are returnable within
sixty days. No execution issued in an action founded on contract
m erely can be levied on the body of the debtor except for breach
of promise of m arriage, misconduct or neglect in office or profes­
sional em ploym ent, or breach of tru st and cases where the original
attach m en t is against the body. Any judgm ent debtor, an execution
against whom shall have been returned unsatiflsed in whole or in
part, m ay be examined on oath touching his property and m eans of
paying such judgm ent, and m ay be com m itted for contem pt. Execu­
tions m ay issue against wages and debts due for personal services sub­
ject to a weekly exem ption of fifteen dollars.
F o re ig n A tta c h m e n ts , Goods concealed in th e hands of agents
or d eb ts'd u e th e defendant are subject to foreign attachm ent which
takes th e place of garnishm ent. Wages and debts due for personal
service are n o t subject to foreign attachm ent.
F o re ig n C o rp o ra tio n s. Every foreign corporation, except insur­
ance and surety companies and building and loan associations and
Investm ent companies (a corporation which has power to or does
sell or n egotiate its own choses in action or sell, guarantee, or negotiate
the choses in action of other persons or corporations as investm ents)
shall, before transacting business in this sta te , file in th e office of
the secretary of the S tate a certified copy of its charter or certificate
of incorporation, together with a statem ent, signed and sworn to
by its president, treasurer, and a m ajority of its directors, show­
ing th e am ount of its authorized capital stock and the am ount thereof
which has been paid in, and, if any p a rt of such paym ent has been
made otherwise than in cash, such statem ent shall set forth the
p articulars thereof. E very foreign corporation w ith an office or
place of business in this sta te , except insurance companies, surety
companies, and building and loan associations, shall, before doing
business in th is state, appoint in w riting th e secretary of th e sta te
an d his successors in office to be its attorney, upon whom all process
in any action or proceeding against it m ay be served; and in such
w riting such corporation shall agree th a t any process against it which
is served on such secretary shall be of th e sam e legal force and validity
as if served on th e corporation, and th a t such appointm ent shall
continue in force as long as any liability rem ains outstanding against
th e corporation in this state. Such w ritten appointm ent shall be
acknowledged before some officer authorized to take acknowledgments
of deeds and shall be filed in th e office of said secretary, and copies certi­
fied b y him shall be sufficient evidence of such appointm ent and agree­
m ent. *Service upon said attorney shall be sufficient service upon the
principal, and m ay be m ade by leaving a d uly attested copy of th e pro­
cess w ith th e secretary of th e sta te or a t his office. E very foreign cor­
poration doing business in this sta te shall, w ithin th irty days after an
increase or reduction of its capital stock file in th e office of th e secretary
of the S tate a certificate substantially like th a t required of domestic
corporations organized under the like conditions. The president and
treasurer of every foreign corporation doing business m this state
which is not required by law to m ake other annual returns in this
state, shall, annually, on Or before th e fifteenth day of F ebruary or
August, m ake, sign, and swear to and file in th e office of the secretary
of th e sta te a certificate sim ilar to th e certificate required of domes­
tic corporations (See Corporations), except th a t such certificate
need not give the nam e of the agent or person in charge of its principal
office upon whom process against the corporation m ay be served.
The secretary shall thereupon record such certificate in a book kept
by him for th a t purpose and shall furnish a certified copy to be re­
corded in the office of th e town cieru of the town in this S tate in
which such corporation has its principal office or place of business
and said town clerk shall record the sam e in a book kept by him
for th a t purpose. On the thirtieth day of M arch and September
the town clerks of the several towns shall report to the secretary
of th e sta te th e nam es of all corporations whose annual reports have
been filed for record during the preceding six m onths, in accordance
with the provisions of this section, and the secretary shall report
to th e attorney-general every six m onths the names of all corporations
which have failed to comply with th e provisions of this section, and
the attorney-general shall collect all forfeitures due under this sec­
tion. Every corporation whose officers shall fail to comply with
the requirem ents of this section shall forfeit to th e State *100 for
each failure. The attorney-general m ay rem it this fine. The cor­
porations’ license to do business shall be suspended for failure to file
reports for tw o successive years.
F o re ig n J u d g m e n ts . N ot conclusive on question of jurisdiction.
A foreign judgm ent when used by way of defence, is as conclusive
to every intent, as those of our own courts. In an action on a judg­
m ent rendered in another S tate, evidence on the part o f the defend­
an t th at he had no legal notice of the suit and did not appear, is
admissible, although the record of the judgm ent stated th a t the
defendant appeared by his attorney. Where the foreign court
has a peculiar and exclusive jurisdiction, its decree is binding upon
the judgm ent of any other court, into which the same subject comes
Immediately into controversy. A judgm ent rendered by a court
in one sta te has no efficacy when it is sought to be enforced! n Con­
necticut, unless such court had jurisdiction of the person against
whom it is rendered, acquired either by service upon him of the
process in th e suit, or actual notice to him of the suit, or a t least by
his having appeared in it, and thus subm itting to the jurisdiction
of the court. Jurisdiction presumed to have been properly exercised.
If court once had jurisdiction. Notice presumed of resum ption of
Jurisdiction if required by practice of foreign court. A judgm ent
recovered in a sister S tate is a bar to the further prosecution of an

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action pending a t tn e tim e in this S tate between the sam e parties
on the sam e cause of action. I t m akes no difference th a t the judg­
m ent of th e sister sta te has bèen appealed from , and th a t th e appeal
is still pending, where by th e laws of th a t 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 debt or
duty belonging to others, shall, notw ithstanding any pretended con­
sideration therefor, be void against- those persons only, their heirs,
executors, adm inistrators, or assigns, to whom such debt or duty
belongs.
• G a r n is h m e n t. (See Foreign A ttachm ents.)
G u a r a n ty C o m p a n ie s, (See Surety Companies.)
H o lid ay s. T he legal holidays are: Sundays; January 1 (New
Y ear’s D ay); F ebruary 12 (Lincoln’s b irth d a y ); F ebruary 22 (Wash­
ington’s birthday); M ay 30 (Memorial D ay); Ju ly 4 (Independence
Day) ; first M onday in Septem ber (Labor Day) ; October 12 (Columbus
D ay); Novem ber 11 (Armistice D ay); Thanksgiving D ay; Decem­
ber 25 (Christm as Day). T he Governor m ay déclare a “ Bank
H oliday." W henever any of such days shall occur upon Sunday, the
M onday next following such day, and any day appointed or recom­
mended by th e governor of this sta te or the president of th e United
S tates as a day of 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 m arriages contracted after April 19,
1877, neither husband nor wife acquires by force of the marriage
any right to or interest in any property held by the other before
the marriage or acquired after the tnarriage, except as to the share
of the survivor in the property of -the other as hereinafter stated.
Wife m arried subsequent to April 19, 1877, m ay 'h o ld and convey
real estate separate from her husband. Separate earnings of the
wife are her sole property. On the death of the husband or wife
the survivor shall be entitled to the use for life of one-third in value
of all the property, real or personal, owned by the other a t the time
of his or her decease, after the paym ent of all debts and charges
allowed against the estate. The 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 of the estate
of the decedent absolutely to the extent of 82,000, and one-half
absolutely of the rem ainder of said estate, and if there are no children
of the decedent or representatives of children, and no parent, the
survivor shall take all of the estate absolutely.
I n ju n c tio n s . Any judge of any court of equitable jurisdiction
may, on motion, grant and ehforce writs of injunction, which shall
be of force until the sitting of such court and its further order therein,
unless sooner dissolved. Superior court judge m ay dissolve tem ­
porary injunction granted by other court. I t shall be th e d u ty of the
court to continue said injunction until a final decision be rendered in
the suprem e court of errors.
In so lv en cy . Suspended, owing to U nited States B ankruptcy Act.
I n te r e s t. Legal rate, in absence of express agreem ent, 6 per cent;
no. more th an 6 per cent can be recovered in either case after debt
becomes payable. Express agreem ents in which 12 per cent is
charged are valid and any person m aking a greater charge is liable to
fine and im prisonm ent. T here is no lim it to the interest charge
which can be m ade by any N ational Bank or any Bank or T rust
ComDàny. incorporated under the laws of this S tate nor is there any
lim it to the interest charge on a bona fide mortgage o f real property
exceeding the sum of five hundred dollars. Special law for pawn­
brokers. Loan companies licensed by Bank Commissioner may
loan not more th a n $300.00 and m ay charge not to exceed 36 per
cent per annum on th a t p a rt of the unpaid principal balance of any
loan not in excess of $100.00, and not to exceed 24 per cent, per annum
on any rem ainder of such unpaid principal balance.
J u r is d ic tio n . (See Courts.)
L ie n s. (M echanics’ Liens.) Any person having a claim for
m aterials furnished or services rendered, exceeding the sum of $10.00,
in the construction, erection, and repair of any building, or in the
removal of a building, m ay have a lien on such building, and th e
land on which the same m ay stand, and said premises m ay be fore­
closed, in the same m anner as if held by m ortgage. No one other
than the original contractor, or a sub-contractor under a written
contract, assented to in writing by owner, shall be entitled to claim
a lien unless, after starting and not later th an ,60 days after ceasing
to furnish labor or m aterials, he gives w ritten notice to the owner
of his intention to claim and such lien. A certificate, subscribed and
sworn to, describing the premises, the am ount claimed as a lien
thereon, and the date of the com m encement of the claim, m ust be
lodged w ith the town clerk of the town in which such .premises are
situated, within 60 days after the person performing such services or
furnishing such m aterials has ceased so to do. Mechanics’ liens may
be dissolved on substitution of bond. Such lien continues only 2 years
after it is perfected unless foreclosure is commenced. Vessels can be
subjected to a lien for moneys due for work or m aterials furnished in
their construction, by recording claim in town clerk’s office within
10 days after job is done. Persons keeping anim als under contract
with owner have lien for their contract charge. M echanics’ liens, on
claims for m aterials furnished or services rendered, under any contract
with or approved by a railroad corporation owning or managing the
railroad, are enforceable. The lien, however m ust be lodged with the
secretary of state. B y Public Acts 1925, there is no prio rity among
mechanics lienors, unless some other incum brance intervenes, in
which case prior iiens take precedence of incum brance on pro rata
basis as between themselves. Liens after the incum brance yield to
the incum brance and as between themselves none has priority * The
m echanics’ lien attach subject to apportionm ent only to th e am ount
which owner agreed to pay under the contract.
L im ita tio n s to S u its . Open accounts and contracts nor under
seal, six years; contracts under seal and promissory notes not negoti­
able, seventeen years. Usual exceptions in favor of m arried women
minors, lunatics, and those imprisoned. The tim e during which
the party against whom there m ay be such cause of action shall be
w ithout th e sta te shall be excluded from th e com putation. Title
to real estate by adverse possession may be gained in fifteen years
There is no lim itation against judgm ents but the common law pre­
sumption of paym ent after tw enty years exists.
L im ite d P a r tn e rs h ip s . Such partnerships (except banking and
insurance) shall consist of one or more partners, jointly and severally
responsible, as in ordinary cases, to be called general partners: and
one or more partners, furnishing capital to the partnership stock,
whose liability shall not extend beyond the capital so furnished by
them, to oe called special partners. Such partnerships shall be
conducted under a com pany nam e, in which the name of one or more
of the general partners shall appear; and if any special p artn ers
name shall be; used in said company name, he shall be held liable
as a general partner. No such partnership shall be deemed to be
formed until the persons forming it shall m ake, and severally sign
and acknowledge before any officer authorized to tak e the acknowl­
edgment of deeds, a certificate stating the com pany name and names
and residences of all the partners designating which are general
and which are special partners, and which of the general partners
are authorized to transact the partnership business and sign the
firm name, and also the am ount of capital furnished by each special
partner and the tim e a t which the partnership is to commence and
term inate; nor until such certificate, and also a certificate of the
am ount actually paid in by each special partner, signed and sworn
to by such of the general partners as are authorized to transact the.
partnership business, shall be filed and recorded in the office of the
town clerk of the town where the.'principal business of the part­
nership is to be carried on; and a copy of such certificate shall be
prim a facie evidence of the m atters therein contained; and the p art­
nership shall be responsible only for th e acts of th e general partners

B A N K IN G A N D

COMMERCIAL

designated as specially authorized as aforesaid; and copies of said
certificates «hall, in like m anner, be filed in every town where such
partnership m ay have a place of business. Term s of such partnership
m ust be published for six weeks in newspaper published in county
where business is to be carried on. Any such partnership m ay be
renewed by filing a t any tim e before its expiration, with the town
clerk, a sworn certificate of the general partners, setting forth the
tim e for which said renewal is made, whether the special capital
has been reduced or impaired since the last certificate filed by said
partnership, and if so, to w hat am ount, and by publishing not less
th an once a week for two weeks in a newspaper published in county,
the tim e a t which the said renewed partnership is to Commence and
term inate, signed by the partners thereto, and specifying which are
general and which are special partners. _ If the requirements con­
cerning original certificate are not complied with, or false certificate
be made, ail special partners shall be liable as genera! partners. All
advancem ents to the capital stock by the special partners shall
be in cash and no part of the capital furnished by them shall be with­
drawn, either.in th e shape of dividends, profits or otherwise, a t any
time while such partnership continues; except th a t any special p art­
ner m ay lawfully be paid from the assets of such partnership, each
year during the continuance thereof, a sum not exceeding 10 per
centum upon the cash contributed by him to the capital stock; pro­
vided th a t such paym ent shall only be m ade out of the net profits
actually earned by such partnerships during the year for which such
paym ent is made. No special partner shall under any circum ­
stances be considered a creditor, or allowed to claim as a creditor.
No special partner shall be joined as a p arty in any action by or
against, such partnership unless liable as a general partner
M a rrie d W o m en . (See H usband and Wife.)
M o rtg ag es of real estate are executed, acknowledged, and recorded
in th e sam e m anner as deeds, and are generally foreclosed by strict
foreclosure w ith tim e allowed for redem ption, although it is also possi­
ble to foreclose by decree of sale. C hattel mortgages to be good against
th ird parties, where th e m ortgagor retains possession, m ust be executed,
acknowledged, an d recorded as m ortgages of land, and can only be
made of the following described personal property— with or . w ithout
the real estate in which the sam e is situated or used—-namely: m a­
chinery, engines, or im plem ents situated and used In any m anu­
facturing or mechanical establishm ent; m achinery, engines, imple­
ments,, cases, types, cuts, or plates situated and used in any print'
tng, publishing, or engraving establishm ent; household furniture in a
dwelling house used by the owner therein in housekeeping; hay and
tobacco in the leaf in any building. Piano, organ, melodeon, and
any musical instrum ent used by an orchestra or band. Brick burned
or unburned, in any kiln or brickyard. Hotel keepers m ay m ort­
gage the furniture, fixtures, and other personal chattels contained
and used in th e hotels occupied by them or employed in connection
therew ith. Any one engaged in farm ing, oyster growing, etc., m ay
m o rtg a g e to production credit associations or governm ental agencies
live-stock, farm m achinery or equipm ent and crops, or oysters and
oyster p lanting or digging equipm ent and vessels used in oyster
business. C h attel m ortgages are foreclosed by sale under order
of court. In all ch attel m ortgages there m ust be a particular descrip­
tion of each article o f personal property. Judgm ent for deficiency
after sale, perm itted.
N e g o tia b le I n s t r u m e n t s A ct. Adopted. (See complete text
following “ Digest of Banking and Commercial Laws.)
N o ta rie s P u b lic hold office for five years from first day of Feb­
ruary of year in which commissioned, unless commission is sooner
revoked by governor. M ay exercise their function a t any place in
state. M ay tak e acknowledgments, adm inister oath, take deposition,
subpoena witnesses to give deposition. The authority and official
acts of any notary m ay be certified to by the clerk of the superior
court of the county in which he resides, except in New London County,
where the certification is made by the clerk of the court of common
pleas.
P ow ers of A tto rn e y . Where a deed is executed by a power of
attorney it is recorded with the deed. Powers of attorney to convey
real estate m ust be executed and acknowledged in the m anner required
for th e execution and acknowledgm ent of the conveyance itself.
P riv a te B a n k s. The establishm ent of new private banks has been
prohibited since M ay 29, 1925.
P ro b a te L aw . (See Adm inistration of E states, Assignments and
Insolvency, Collateral Ihheritance Tax, Descent and D istribution of
P roperty, H usband and Wife, and Wills.)
P ro te s t. (See N otes and Bills of Exchange.)
R eco rd s. W arranty, mortgage, quitclaim deeds m ust be recorded
in office of town clerk in town where land lies, also assignments of
m ortgage, conditional bills of sale, chattel mortgages, assignments
of future earnings. Certificate of trade-m ark to be filed for record
in office of secretary of state. Certificate of unsatisfied judgm ent
to be filed for record in town clerk’s office. (See Conveyances, Lim ited
Partnerships, etc.)
:
R e d e m p tio n . (See M ortgages.)
R eplevy. Replevin lies for goods wrongfully detained, in which
the plaintiff has a general or special property with right to immediate
possession.
S ale of R e ta il B u sin ess. Any person (including a person having
an interest in a barber shop, dental parlor, restaurant, shoe shining,
shoe repair or h at cleaning, business), who m akes it his business to buy
commodities and sell the same in sm all quantities for the purpose of
making a profit and desiring to sell the whole or a large p a rt of his stock
in trade, m ust file a notice of such intention in the town clerk s office
not less th an fourteen, nor more th an th irty days prior to such sale.
S ales. Uniform Sales Act passed in 1907.
S av in g s B a n k s. (See Banks S tate and T rust Companies.)
Service. Service of a writ of summons in ease of a resident is
made by reading it and the com plaint accompanying it in the defend­
a n t’s hearing, or by leaving an attested copy in the defendant's hands
or a t his usual place of abode; in case of a non-resident, the several
courts, other th an courts of probate, and the judges, clerks, and
assistant clerks thereof, or any county commissioner, in term time
or In vacation, m ay, except where it is otherwise specially provided
by law, make such orders as m ay be deemed reasonable, in regard
to the notice which shall be given of the institution or pendency
of all com plaints, writs of 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, th a t they ought to be made
parties thereto, reside out of th e state, or when th e names or resi­
dences of any such persons in interest are unknown to the party
instituting the proceeding; and such notice having been given and
proved shall be deemed sufficient service and notice.
S u re ty C o m p a n ie s . Any corporation with a paid-up capital of
not less th an $250,000, Incorporated and organized for the purpose of
transacting business as surety on obligations for persons or corpora­
tions, on complying with certain requirem ents of law m ay be accepted
as surety upon the bond of any person or corporation required by
the laws of this S tate to execute a bond. Every foreign corporation
before transacting any business in this State am ust deposit with the
insurance commissioner a copy of its charter or articles of association,
ana sworn statem en t of the condition of its business. The insurance
commissioner may thereafter issue to such company a license to do
business in this state. Such com pany m ust appoint th e insurance
commissioner its agent on whom process m ay be served. Such com­
pany m ust file annually on or before M arch 1st, with the insurance
commissioner a statem ent of the capital of such company and its
Investments and risks. An annual license is granted if annual sta te­
ment be satisfactory. Local agents m ust procure certificates of
authority to act as agent from the insurance commissioner. The
insurance commissioner m ay also a t any tim e examine the affairs
of any su rety com pany doing business in th e state. A reserve fund
-m ust be m aintained equal to 50 per cent of the gross am ount of


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1989

LA W S— D E L A W A R E

prem iums received on business in force. No such com pany can
incur on behalf of any one person or corporation a liability for an
am ount larger than one-tenth of its paid-up capital stock and sur­
plus w ithout giving collateral security
T axes. L and 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, by paying the purchase
money, with 12 per cent interest. Bonds, notes, or other choses
in action, except bonds and notes secured by mortgage on real estate
situated in this State, m ay be exempted from all local taxation by
paying to th e s ta te a ta x of 2 per cent on th e face am ount thereof
for five years, or a t the option of the holder thereof for a greater or
less num ber of years a t a proportionate rate. Inheritance taxes are
levied on all property within Connecticut possessed by any resident
of C onnecticut a t the tim e of his decease, and all tangible property
within Connecticut possessed by a non-resident a t the tim e of his
death which passed by gift, to take effect a t death or by will to any
person, corporation, voluntary association or society, with exemp­
tions in favor of charities and on certain particular kinds of property.
R ates of the taxes are 2 per cent of the value of all property in excess
of $10,000 passing to any parent, grandparent, husband, wife, lineal
descendant, adopted child, adoptive parent and lineal descendant of
any adopted child, up to $25,000 with graded increases; 3 per cent
on property passing to the husband or wife of any child of such deced an t to any stepchild, brother or sister of the full or half blood and
to any descendant of such brother or sister in excess of $3,000 up
to and including $25,000, with graded increases; 6 per cent of the
value of all property in excess of $500 passing to any persons other
than those above m entioned up to and including $25,000 with graded
Increases. Only one exemption is allowed for each class.
T ra n s fe r of C o rp o ra tio n S to ck s. (See Corporations.)
T r u s t C o m p a n ie s . (See S tate Banks and T rust Companies.)
W areh o u se R e ceip ts. Uniform Warehouse Receipts Act passed
1907. Uniform T ru st Receipts Act passed in 1937.
W ills. All persons of the age of eighteen years, and of sound
mind, m ay dispose of thpir estate (real or personal) by will. No
devise, except for public and charitable uses, or for th e case of ceme­
teries or graves, shall be m ade to any persons b ut such as are a t th e
tim e of th e death of th e testa to r in being, or to their im m ediate issue
or descendants. Wills m ust be in writing, subscribed by the testato r,
and attested by three witnesses, each of them subscribing in his pres­
ence, b ut they will be effectual here if executed according to th e laws
of th e s ta te or country where executed. I f after th e m aking of a will,
the testa to r shall m arry or a child shall be born to th e testa to r or a
m inor child shall be legally adopted by him, and no provision is m ade
In sUch will for such contingency, such m arriage, birth or adoption
of a minor shild shall opérate as a revocation of such will. No will
or codicil shall be revoked in any other m anner except by burning,
canceling, tearing or obliterating it by the testa to r or by some person
in his presence by his direction or by a later will or codicil. A devise
of bequest to a subscribing witness or to, the husband or wife of a sub­
scribing witness, is void unless th e will is otherwise legally attested ,
or unless the devisee or legatee be an heir to the testator. Wills are
proved and estates settled in the probate court in the district where
the deceased resided. Wills of nonresidents owning property in this
sta te m ay be proved by filing exemplified copies thereof in d istrict
where property is located. Such course should always be tak en in
order to pass good title to real estate.
W o rk m e n ’s C o m p e n s a tio n A ct. Passed in 1913.

SYNOPSIS OF

THE LAWS OF DELAWARE
R E L A T I N G TO

BANKING AND COMMERCIAL USAGES
Revised by C a l e b M . W b i g h t , A ttorney a t Law, Georgetown,

Delaware.

(See card in A ttorneys List)
A c k n o w le d g m e n ts , In Delaware, m ay be m ade In the Superior
C ourt, before th e Chancellor, or any judge or notary public or before
two justices of th e peace for the sam e county, or before th e judge
of th e m unicipal court or the M ayor of W ilm ington. Elsewhere
In the U nited States, before any Federal Judge or judge in any
court of record of any sta te or m ayor or chief officer of any city or
borough, with official seal attached; or before th e clerk or other officer
of said courts, or before any Commissioner of Deeds, or any notary
public. In foreign countries, before any consul or representative of
the U nited States, a t his official residence, or any Commissioner of
Deeds
In 1941, all deed records prior to Ja n u ary 1, 1941, were validated
by s ta tu te where signed and sealed by th e grantor, although th e
acknowledgm ent m ight be defective.
A c tio n s. Actions a t law and suits in equity are, in general, accord­
ing to th e common law. T hé distinctions between case and trespass,
and covenant and debt are abolished. A simplified procedure is
followed in suits on instrum ents in writing for th e paym ent of
money, book accounts, judgm ents and m ortgages, wherein the plaintiff
files an affidavit of dem and; judgm ent is entered by default unless an
affidavit of defense is filed. All personal actions except actions for
defam ation, malicious prosecution, or any injury to th e person or
upon penal sta tu tes, shall survive to and against th e executors or
adm inistrators.
A ffidavits, in Delaware, m ay be m ade before the Chancellor, any
judge, justices of th e peace, or notary public. In legal proceedings
in Delaware, where an affidavit of a non-resident is required, it m ay
be m ade before any person authorized to take acknowlëdgments.
A lien s. All real and personal property situ ate in th is sta te m ay be
taken, acquired, held and disposed of by an alien in the sam e m anner
as by a citizen of th e S tate of Delaware.
All conveyances to or from an alien a t any tim e m ade, are validated,
ratified and confirmed.
A tta c h m e n ts . All corporations doing business in th e S tate are
liable to attachm ent, except banks, saving institutions, and loan
associations. Insurance companies are only so liable for m oneys due
on th e happening of risks provided in th e policy.
A u c tio n s . Auctioneers m dst be licensed, except honorably dis­
charged soldiers and sailors of th e Civil, Spanish and. W orld W ar and
disabled soldiers and sailors who have served in th e M ilitary and N aval
forces of th e U nited S tates an d who have been honorably discharged
from said services and are residents of th e S tate of Delaware.
Fee is $10.00 for residents and for non-residents an additional
$100.00 for each C ounty wherein th ey act as auctioneer.
B a n k s. All banks are under th e supervision of th e S tate Bank
Commissioner, and subject to exam ination by him annually or oftener.
Federal Reserve members m ay be exem pted by him from exam ination.
He also has control of sm all loan companies. Banks m ay only be
created by special act of th e Legislature, and no corporation created
under th e general corporation law m ay be deemed to have banking
powers. Banking powers m ay be exercised only by a duly chartered
and authorized corporation. New banks m ust have a certificate from
th e S taté B ank Commissioner th a t they are duly authorized to do
business. A certificate m ust also be had to open a branch office in
th e state. M erger of banks, is prohibited unless approved by th e
Commissioner.
In case of im pairm ent of capital, th e Commissioner
m ust give a sixty 7day warning, and if th e deficiency is not corrected
in th a t tim e, he assumes control of the business or has a Receiver
appointed. Four reports a year of financial condition m ust be sent to
th e Commissioner. S trict lim itations are p u t on cash reserves, loans.
Investm ents, equipm ent and pledging of assets. D irectors m ust be
shareholders. N o double liability in this state.

1990

BANKING AND COMMERCIAL LAWS—DELAWARE

Use of th e word “ T ru s t” as a p a rt of a corporate nam e Is pro­
hibited. T here is only one sta te bank, chartered in 1807. M inors
are recognized as a d u lts in banking. Passing worthless checks is a
crime, if th e m aker knew a t th e tim e th e check was passed th a t he
did n o t have sufficient funds on deposit to m eet th e check. Ten
days notice to th e m aker m u st be given before crim inal proceedings
are in stitu ted . T he B ank Commissioner has jurisdiction over the
business of receiving deposits or paym ents on income contracts,
an n u ity contracts or certificates, or ann u ity bonds. Registration
and a certificate of au th o rity are required, b u t th is does not apply to
sellers of m erchandise on installm ents, insurance companies, building
and loan associations, banks or tru s t companies or surety companies
authorized to do business in th e sta te . Com panies engaged in m ak­
ing sm all loans are under rigid control by sta tu te and th e B ank Com­
missioner.
T he Federal D eposit Insurance Corporation Is by sta tu te sub­
rogated to th e rights of th e depositors in closed banks and tru s t com­
panies, in like m anner as if assigned. T axation is assessed on th e true
value of shares of stock. In savings banks or societies, where there
is no capital stock, taxes are assessed on the average of deposits held
during th e preceding year. Such taxes are a lien on th e property of
such savings banks or societies.
B ro k e rs m ust be licensed. An unlicensed broker cannot collect
Commissions and is guilty of a misdemeanor.
B u ild in g a n d L o a n A sso c ia tio n s are under the jurisdiction of the
S tate B ank Commissioner. The am ount of fines is lim ited to 5 per
cent per m onth for six m onths and
per cent per m onth thereafter.
A fter six m onths arrearage, a shareholder m ay be forced to withdraw.
All fees, etc., in any one association m ust be>uniform'. Funds m ay not
be invested in corporate stocks. An association m ay issue bonds or
certificates of indebtedness up to 30 per cent of dues paid in, a t not over
6 per cent per annum . No more th a n 50 per cent paid in dues m ay be
loaned on real estate security on other th a n first liens. The business
m ust be licensed annually, and after July 1, 1931, it is a m isdemeanor
to solicit sales of shares on commission. An annual statem ent- of
business is required, and a list of accounts and standing thereof m ay be
dem anded. Failure to m aintain standards.w ill expose associations to
su it by th e A ttorney General and assum ption of its business by the
Bank Commissioner.
Such associations are exem pt from th e attach m en t laws. No
lim itation is placed on the lien of judgm ents on th e bonds for loans.
Loans m ay be m ade w ith their own capital stock for security. P artial
paym ents of their m ortgages do n ot have to be recorded. I f funds
are in excess of requirem ents, they m ay be loaned to outsiders for not
over 6 per cent. Foreign associations m ust deposit sufficient securities
with th e S tate T reasurer which, with th e assets in the state, will be
equal to th e indebtedness to shareholders in th e state.
C h a tte l M o rtg a g e s . A bona fide m ortgage of personal property
duly signed and sealed and acknowledged is a valid lien on th e property
for five years, if recorded w ithin 10 days of the date of acknowledg­
m ent. I t m ay be foreclosed in equity or by sci. fa. if defaulted for
60 days. Affidavit of bona fldes m ust accom pany the m ortgage. I t
is unlawful for th e m ortgagor to remove th e goods from th e county
w ith o u t consent of th e mortgagee.
C o n tr a c ts are joint and several, unless otherwise expressed.
Bonds, specialties an d 'n o tes in writing, payable to order or assigns,
are freely assignable; suits thereon are brought by the real p arty in
Interest. Assignments of bonds and specialties m ust be under seal
and before one credible witness. A sealed agreem ent has its common
law significance. A sale of goods m ust be accompanied by paym ent
or security for paym ent, or delivery; if such goods subsequently come
into th e vendor’s possession, they are liable to th e dem ands of his
creditors. No action shall be brought whereby to charge any person
upon an y agreem ent m ade upon consideration of m arriage, or sale of
lands, or any agreem ent not to be performed within one year, or any
prom ise to answer for th e debt, default or miscarriage or another, of
any sum over $25, unless reduced to writing or m em orandum signed
by th e p a rty to be charged or his agent. N or shall any action be
brought whereby to charge th e personal representatives or heirs of any
deceased person upon agreem ent to m ake a will of real or personal
property, or to give a legacy or m ake a devise, unless such agreem ent,
if m ade after M ay 1, 1933, shall be reduced to writing, or some memo­
randum or note thereof be signed by the decedent, or his agent author­
ized in writing. Goods sold and delivered and other m atters properly
chargeable in an account are excepted. In such cases th e oath of the
plaintiff together with a book regularly kept, is recognized as evidence.
Bulk sales are presum ed fraudulent against creditors unless inventoried
five days before sale and full inform ation is given by the purchaser to
all creditors of the seller; failure to comply is also a m isdemeanor.
Sales b y personal representatives or public officers are excepted. A
F air T rad e A ct was passed April 22, 1941.
C o rp o ra tio n s . N ot less th an three persons m ay form a corpora­
tion for an y business except banking, m unicipal governm ent or
charitable, penal, reform atory or educational institutions. T he cer­
tificate of incorporation m ust set forth th e nam e; principal place of
business in th e sta te ; nature and purposes of th e business; types and
am ount of stock authorized, m inim um of capitalization being $1,000;
nam e and residence of incorporators; term of existence, which m ay be
perpetual; extent of liability of stockholders. Corporations have the
power to have succession in its corporate name, to sue and be sued, to
have a corporate seal, to hold real and personal property, to appoint
officers and agents, to m ake by-laws, to dissolve according to law, to
conduct business anywhere, and to exercise all the powers and privi­
leges insofar as m ay be necessary for th e transaction of business. I t
m ay not issue currency, receive deposits of money, or buy and sell for­
eign money as a business. Corporations m ay hold and transfer their
own shares, b u t cannot vote them . T he certificate m ay be am ended.
Dividends are payable from annual net profits or net assets beyond
capital. At least three directors are required; th e president m ust be
one. Other officers are elected by the board. Stock m ay be paid for
by 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 th e state, if so provided by the by-laws.
Shares of stock are intangible personalty. Fees are based on the
num ber of shares of stock authorized or gross assets whichever is the
lesser; m inim um, $10. Taxes are likewise so based; m inim um , $5,
m axim um . $25.000. An annual report is required. C harters are
voided by proclam ation if taxes are n ot paid for two years in succes­
sion; although action m ay be brought by th e A ttorney G eneral for
such taxes, and he m ay also have a receiver appointed for th e cor­
poration.
Foreign corporations, except insurance companies, m ust register
w ith th e Secretary of S tate in order to do business in Delaware, show­
ing its charter, an authorized agent in th e sta te for service of process,
and a statem ent of its assets and liabilities, w ith a fee of $10. Excep­
tions: M ail order or sim ilar business, one th a t merely employs sales­
men to solicit orders, one installing m achinery sold outside th e sta te
requiring technical skill, and those engaged in wholly in terstate
business.
C o u rts . Supreme C ourt: regular term a t Dover th ird Tuesday
In Ju n e and January; adjourned term is held first Tuesday after the
fourth M onday in October; special sessions are had a t the call of the
Chancellor a t Dover when deemed expedient by a m ajority of th e
members.
C ourt of Chancery, Orphans C ourt: New C astle C ounty a t W il­
m ington, fourth M onday in M arch and second M onday in Septem ber.
K ent C ounty a t Dover, th ird M ondays in M arch and Septem ber and
second M ondays in Ju n e and December. Sussex C ounty in George­
town, second M onday in M arch and first M ondays in June, Septem­
ber and December.
Superior C ourt and C ourt of General Sessions: New Castle C ounty
a t W ilmington, first M onday in January, M arch, M ay, and Novem ber
and th ird M onday in Septem ber (for crim inal cases only). K ent
C ounty a t Dover, first M onday in July and th ird M ondays in Febru­
ary, April and October. Sussex C ounty a t Georgetown, first M ondays


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in February, April and October and last M onday In June.
C ourt of Oyer and Term iner m eets on call of Judges.
T he Superior C ourt has general jurisdiction in all civil cases, b u t If
suit is brought for less th an $50, costs can not be recovered. The
C ourt of Common Pleas, for New Castle C ounty, has contract juris­
diction up to $1,000. C ourt of Common Pleas for N ewcastle County
now has a lim ited crim inal jurisdiction. Thè C ourt of Common Pleas
of K ent C ounty, created in 1931, has both contract and to rt juris­
diction up to $1,000, and a lim ited criminal jurisdiction; appeals are
to the Superior C ourt of K ent C ounty. The jurisdiction of the
Justices of the Peace is lim ited to $500, exclusive of interest and costs.
C u rte s y . T he conveyance or devise of a m arried woman will not
divest th e husband’s right to curtesy in her real estate. If a wife dies
intestate leaving a husband and issue, he is entitled to a life estate in
half of her realty. If she dies w ithout issue, he is entitled to a life
estate in all of her realty.
D e a th , P re s u m p tio n of, arises after seven years, as a t common
law.
D e c e d e n ts E s ta te s . L etters of adm inistration are granted to
(1) a person entitled to residue of personal property, or (2) a creditor,
or (3) to any suitable person. Executors or adm inistrators m ust give
bond in double the estim ated value of the personal property. The
order of paym ent of claims is (1) funeral expenses, (2) medical serv­
ices during last illness, (3) household and farm servants wages, not
over one year, (4) rent, not over one year, (5) judgm ents, (6) m ort­
gages, recognizances, and other obligations of record, (7) sealed obliga­
tions, (8) contracts under hand for paym ent of money or delivery of
goods, and (9) other dem ands. If real estate is sold upon order of the
Orphans C ourt to pay debts, all liens thereon become of equal grade
and m ust be paid from the purchase money before other debts. Banks
are authorized to pay over personal deposits of decedents not exceeding
$75, not less th an 15 days after death to the wife, husband, children,
father, m other, sister or brother (preference in order named) without
requiring letters of adm inistration ; such paym ent is a full release for
th e am ount so paid. A widow of a decedent shall be entitled to re­
ceive from th e executor or adm inistrator as soon as possible th e sum
of $500.00 from th e estate of the decedent, shall have priority on all
unsecured debts w ith th e exception of taxes, costs of adm inistrator,
reasonable personal expenses and reasonable expenses of medicine and
medical attendance and for nursing and necessaries during last illness
of deceased, b u t such paym ent shall n ot affect any rights under hus­
b and’s will, or intestacy laws. Widow m ust notify Registrar of wills
in w riting w ithin six m onths from th e date of d eath of th e decedent
of her dem and for th e sum of $500.00. A debtor, in order to reCover
from an estate, m ust m ake affidavit of non-paym ent of th e debt by the
decedent. One year is allowed for the settlem ent of estates, b u t an
inventory is required w ithin three m onths from granting of letters.
E scheat is recognized. Non-residents, banks and tr u s t companies of
Delaware or elsewhere (if perm itted by their charters) m ay act as
executor or adm inistrator, b u t a foreign bank m ay only act>vto th e ex­
te n t th a t a Delaware bank m ay act in th e place of incorporation of
such foreign bank. General claims should be presented within six
m onths. L etters granted in another sta te are sufficient authority for a
personal representative to act in Delaware.
D eeds. W arranty deeds are custom ary. T he words “ grant ” and
‘bargain and se ll” im ply a special w arranty against th e grantor and
his heirs, and all claiming under him, in th e absence of an express pro­
vision otherwise. D eeds m ust be under seal and either acknowledged
or proved by a subscribing w itness in open court to be acknowledged
A deed of a corporation m ust be executed by the president or a vicepresident, duly authorized by resolution of th e board of directors, or
by th e legally constituted attorney of the corporation; th e seal of the
corporation, attested by th e secretary, m ust be affixed.
I f a deed is n ot recorded w ithin 15 days from th e sealing and deliv­
ery, it doeè n ot avail against a subsequent creditor, mortgagee, or'
purchaser for a valuable consideration. A deed to two or more
persons creates a tenancy in common, unless to husband and wife,
when it creates a tenancy by the entireties.
D e p o sitio n s m ay be by w ritten interrogatories or orally; th ey are
taken before a Commissioner nam ed by the applicant, by agreement,
or by the C ourt. W ith the interrogatories m ust be filed a list of wit­
nesses, who alone m ay be examined. If oral, all questions and answers
m ust be w ritten down by the Commissioner or his duly qualified
stenographer.
Depositions m ay be taken to perpetuate tesitm ony of aged, infirm
or going witnesses, b u t m ay be used in evidence only in case those
examined are unable to atten d the trial. In cases of boundary dis­
putes, such testim ony m ay be preserved by order of th e chancellor.
Registers and justices of th e peace m ay take depositions of those
beyond th e reach of process or of those who are sick.
D e s c e n t a n d D is tr ib u tio n . R e al e s ta te descends in fee unless
otherwise provided, to (1) children in equal shares and lawful issue
of deceased children by representation, (2) father and m other, as
tenants by th e entireties, unless divorced, in which case as tenants
in common; if one only survives, then in fee. (3) (a) brothers and
sisters of whole blood and lawful issue by representation, (b) brothers
and sisters of half blood and lawful issue by representation. In either
case brothers and sisters of blood of ancestor from whom intestate
acquired land by devise or descent shall be preferred. (4) Next
of kin, or lawful issue, with preference to those claiming through the
nearest common ancestor. (5) C urtesy and dower are saved (see
those titles). (6) I f no kin or heir of in testate, th en to his or her
spouse in fee.
P e rs o n a l E s ta 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 of whole blood and lawful issue surviving,
(4) brothers^ and sisters of th e 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 m arried person w ithout issue, spouse takes
entire estate, and (2) if with children, spouse takes one-third and
children take tw o-thirds.
D uly adopted children are recognized as of th e whole blood. Ad­
vancem ents to children of real or personal property are deemed to
be in lieu of their share pro tan to , b u t do not affect dower. Descent
from an illegitim ate child is first to its m other, and after th a t to her
heirs. An illegitim ate child shares with legitim ate children or their
issue in property descending from the m other. A child legitimated
by either m arriage before birth or m arriage after acknowledgment
of patern ity takes as though legitim ate. A child acknowledged with­
out m arriage cannot inherit from its father.
D ow er. A widow is entitled to a life estate in an undivided third
of all real estate held by her husband, free from lien or other alienation
unless relinquished by her. If th e husband dies intestate, th e widow
becomes ten an t in dower of one half, and if he dies w ithout issue,
then all of his real estate. Dower m ay be alienated by antenuptuai
contract. A widow has th e election of taking dower or devise. Dower
is barred by th e widow's having lived in adultery w ithout her husband’s
connivance or reconciliation. Dower m ay be barred by th e wife's
deed, or upon sale of th e lands by th e executor or adm inistrator to
pay debts of th e decedent.
E x e c u tio n s. An execution becomes a lien on personalty when deliv­
ered to the sheriff, and binds all goods actually levied upon within
60 days. P riority of writs is based on the tim e of delivery. 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 by justices of the peace m ust be levied
on in 60 days and th e lien continues for two years. Goods are liable
to one year’s rent in preference to execution. T here is no redemption
of property sold on execution. A stay of six m onths is granted to
defendant from judgm ent for w ant of an affidavit of defense, when
security is posted. Before justices of the peace, six m onths stay may
be obtained by pleading freehold and nine m onths by posting security.
E x e m p tio n s . Fam ily Bible, school books, fam ily library, family
pictures, seat or pew in church, lot in burial ground, all Wearing apparel

1991

BANKING AND COMMERCIAL LAWS—DISTRICT OF COLUMBIA
of debtor or his fam ily, and, in addition tools or fixtures necessary
to carry on a trade, value not exceeding $7,5 in New Castle and Sussex
counties and $50 in K ent county. Sewing m achines owned and used
by seamstresses and private families are exem pt, and pianos and
organs which are rented are not liable to distress if th e owner has
notified th e landlord of his title. The above exemptions apply to
distress for ren t 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 K ent county; b ut
this does not include goods bought to be sold in th e regular transaction
of business by th e debtor. There is no such exemption in Sussex
county. This la tte r exemption will not avail against a Judgment for
work and labor held by an employee— 60 per cent of all wages exempt
in K ent and Sussex counties. In New C astle county, 90 per cent
of all wages are exem pt from attachm ent, and balance, not over
$50, m ay be taken for board and lodging. No exemptions, are
recognized on a sale for taxes. Any husband and wife m ay m ake a
joint waiver of exemption.
F ra u d s , S t a t u t e of, see C ontracts.
F r a u d u le n t S ale of S e c u ritie s . Jurisdiction has been conferred
on th e Chancellor to enjoin th e fraudulent sale or exchange of securities
in th e State, upon th e verified petition of the Attorney General.
H o lid ay s. The legal holidays are: Sundays; January 1 (New Y ear’s
D ay); February 12 (Lincoln’s b irth d a y ); February 22 (W ashington’s
b irth d a y ); Good F riday; M ay 30 (Memorial D ay); July 4 (Inde­
pendence D a y ); first M onday in Septem ber (Labor D a y ); October 12
(Columbus D ay); Novem ber 11 (Armistice D ay); General Election
D ay as it biennially occurs; Thanksgiving D ay; December 25 (Christ­
m as D ay). S aturday in New C astle C ounty and K ent C ounty shall
be known as S aturday B ank H oliday, b u t any business done in a bank
on S aturday is n ot illegal because it is Saturday B ank Holiday. W hen
a holiday falls on Sunday, th e M onday following is a legal holiday.
'H o m e s te a d . T here is no hom estead law in Delaware.
I n s o lv e n t L aw s exist and m ay be applied in the absence of equiva­
lent provisions in th e Federal B ankruptcy Act. They are seldom
resorted to. There is no provision for a general discharge.
I n s u r a n c e . T he insurance law was codified in 1931. The Insur­
ance Commissioner has complete supervision of ail insurance companies,
agents and brokers, including th e collection of taxes. A certificate of
au thority to do business is required of all companies; it m ay be
revoked for insolvency, fraudulent operation, insufficient assets,
failure to comply with laws, or financial instability. A foreign or
alien com pany m ust file copies of its charter, by-laws, policy forms,
authorization to do business in its home state, and an appointm ent of
th e Commissioner as agent upon whom process m ay be served. An
annual statem ent of financial condition is required. The resident
agent m ust countersign ail policies. A domestic company cannot do
business elsewhere w ithout a certificate of authority. Political con­
tributions, defam ation of rival companies, misrepresentations as .to
policies and rebates are prohibited. Real estate holdings and invest­
m ents are strictly lim ited by sta tu te . No person m ay insure th e life
or health of another w ithout his consent, except a wife for her hus­
band, an employer for his employees collectively, or heads of educa­
tional institu tio n s for health of students. Any minor fifteen years of
age or more m ay validly contract for insurance on his or her person as
though he or she were of full age. Insurance agents and brokers m ust
be licensed to do business.
The Insurance Commissioner likewise has jurisdiction over domestic
and foreign surety an d guaranty companies and title insurance
companies.
I n te r e s t. T he legal ra te is 6 per cent.« No debtor shall be required
to pay more th an th e legal rate, b u t m ay deduct any excess from the
am ount of th e debt. I f already paid, the debtor m ay recover the
excess paid over th e legal rate in an action if brought within one year
from d ate of paym ent. Properly registered “small loan” companies,
firms or individuals or sta te banks or tru st companies, which need
not be registered, m ay charge 6 per cent on am ounts up to $500 with
an additional investigation fee of not more th an 2 per cent.
J u d g m e n ts are a lien from th e d ate of signing or entry, or, if on a
jury trial, from th e d ate of th e verdict. If the am ount is not deter­
mined, it is a lien from date of entry only if am ount is ascertained and
entered before th e first day of the next term ; otherwise, the lien com­
mences on d ate of entry of am ount. No judgm ents are entered by
confession in New Castle C ounty, in spite of a sta tu te perm itting if.
Satisfaction m ust be entered in 60. days. If a testatum fi. fa. is issued,
the P rothonotary m ust notify other counties within th irty days.
Failure to m ark record creates liability to dam age suit, and rule to
show cause thereon m ay be served by publication.
A foreign judgm ent will found an action in debt in Delaware. If
the plaintiff files an affidavit of dem and, with a Certified copy of the
judgm ent, judgm ent m ay be had a t the first term for w ant of an
affidavit of defense, although appearance m ay have been entered.
The only defenses recognized go to the jurisdiction of the court render­
ing th e foreign judgm ent.
L im ita tio n s . Action for mesne profits m ust be begun 6 m onths
after ejectm ent or m andate of affirmance if appeal is taken. Recovery
is allowed for 3 years next preceding the ejectm ent.
One year: Actions for personal injuries, forfeiture on a penal
sta tu te, forcible entry, and any suit where prior suit failed for w ant of
service or reversal on appeal.
Two y ears: Forcible detainer.
_
Three years: G uardian's bond, recognizance in Orphans C ourt,
official bond, waste, and all personal actions. M utual running
accounts do not accrue while open and current.
Six years: Sheriff’s official recognizance, testam entary bond, bills,
notes and acknowledgments of debt signed by the debtor.
Seven years: After expiration of term of office of Escheator on his
bond.
Twenty years: Real estate titles. Only ten years is allowed after
removal of disability.
Infancy, coverture or m ental incompetency will bar th e running
of th e sta tu te . If th e defendant is absent from the sta te when the
action accrues, th e lim itation runs from the entry into the state.
Absence after accrual bars running of the sta tu te until return.
Appeals from an interlocutory decree in equity m ust be presented
a t the first day of th e next term of the Supreme C o u rt; from a final
decree, six m onths from signing the decree; taking exceptions to
account of executor or adm inistrator 3 m onths after notice th a t
account is filed with the register, guardian account 3 years, partition
3 m onths. In other cases, rules of court apply
M a rrie d W o m en m ay freely alienate all property and contract
as though unm arried. A m arried woman m ay not affect her husband s
right of curtesy, unless he has abandoned her w ithout ju st cause. She
may sue and be sued. A husband is liable on his wife’s mortgage
bond only if he joins in executing it.
M e c h a n ic s L ie n s. The contractor has a lien on buildings and
land for money due for construction or repairs; his claim m ust be
filed within th irty days after ninety days have elapsed from the_ com­
pletion of th e work. All other claims m ust be filed within the ninetyday period. Proceedings are by sci. fa., and judgm ent m ay be had
for failure to file an affidavit of defense, Execution is by levari facias.
M o rtg ag es are executed like deeds, usually accompanied by bond.
Foreclosure m ust be by intervention by the proper court. Priority
of m ortgages is based on the date of recording. Lien of purchase
money m ortgage is superior to all other liens on the property, if
recorded within five days from date of sale. Satisfaction m ust be
entered on th e record within sixty days from paym ent; failure to do
so will render th e m ortgagee liable to court action and for damages.
One witness is required on an assignm ent. Release of p a rt of lands
does not affect th e balance, b u t it m ust be under seal and recorded
within sixty days.
N e g o tiab le I n s t r u m e n t s . Uniform Negotiable Instrum ents Act
adopted Jan u ary 1, 1912. (See com plete text following “ Digest of
Banking and Commercial Laws.” )


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P a r tn e rs h ip s , associations and persons using trad e nam es m ust
register them with prothonotary, together w ith th e full nam es of each
and every person comprising such firm: Jurisdiction of dissolution
of partnerships is in th e C ourt of Chancery. Lim ited partnerships
m ay be formed for any business b u t banking and insurance. A record
of members and their liability m ust be filed with th e Recorder of every
county in which th e firm does business.
P r o te s t is required on foreign bills, otherwise optional. (N. I. L..
5 1 1 8.)

S ales. See C ontracts.
T ax L ie n s. Taxes are a prim ary lien on all real estate for two
years from July first of year, imposed. I f land is sold by order of th e
Orphans C ourt the lien transfers to funds in th e hands of th e officer
so selling, and continues as a lien on th e land for balance due. Taxes
in New Castle county are a prim ary lien now for ten years.
(T ra d e M a rk s m ay be registered w ith the Secretary of State, as
m ay be labels or forms of advertisem ent, by filing two copies thereof
with him . The rem edy for infringem ent is_ by bill for injunction.
T here is also a crim inal penalty for unauthorized use.
T ru s te e s . T rust companies incorporated under th e laws of Dela­
ware and having their principal place of business there m ay be
appointed to any office of tru s t w ithout giving surety on their bond
for faithful perform ance. A liability growing out of a tru st estate
is a first lien on the com pany’s real estate. N ational banks>located
In th e sta te are accorded th e sam e powers, and security on their bonds
m ay n ot be required, in th e discretion of the appointing authority.
Trustees m ust file a ju st and tru e account a t least every two years
with the Register in Chancery.
T r u s t I n v e s tm e n ts m ay be any of th e following: (a) Those
specified by tru st deed, (b) Bonds of th e U nited States, or any
S tate; of any county, school district or incorporated city or town of
Delaware; of any city in U nited States of over 75,000 population,
if net debt is not over 10 per cent of assessed valuation of taxable
p ro p erty ; first m ortgage bonds on real estate located in Delaware w ith­
out prior encum brance, and not exceeding 60 per cent of th e value of
the land when invested; bonds of railroads whose earnings for five years
average one and one-half tim es th e fixed charges; bonds of tran sp o rta­
tion or public service companies whose earnings for five years average
two tim es the fixed charges; bonds of industrial companies whose earn­
ings for five years average three tim es the fixed charges; equipm ent
tru st obligations, covering n ot over 80 per cent of th e cost, which
m ature in 15 years payable in installm ents beginning not later th an
three years from date of issue; bonds of railroad or transp o rtatio n
companies guaranteed by a corporation whose bonds satisfy require­
m ents above; and securities of any kind approved by th e court
having jurisdiction.
Unsecured obligations of Industrial corporations of any S tate in­
cluding finding companies, m aturing not more th a n fifteen years from
date of purchase; obligation cannot be convertable into stock or carry
th e creation of m ortgage debt m aturing after one year and provided
fu rth e r:
1. Assets of corporations shall be $100,000,000.
„
,
2. T otal secured debt of corporation n o t greater th a n 10% or
to ta l unsecured d eb t of corporation.
A' B ank or T ru st Com pany m ay establish a common fund, for th e
investm ent of tru s t funds.
_, , , :
Responsibility for. due care in selection still rests upon fiduciaries.
Other property m ay be taken and held while pru d en t? b u t majr not
be purchased. Investm ents legal under prior laws m ay be retained,
b ut when sold, th e proceeds m ust be applied in accordance w ith th e
U n ifo rm A cts adopted are: Aeronautics, Bills of Lading, Condi­
tional Sales, Federal Tax Liens, F raudulent Conveyances, Negotiable
Instrum ents, N on-Support; Warehouse Receipts, Sales Act, Fresh P u rSUW ills. Any person of the age of tw enty-one or upw ard, of sound
mind, m ay m ake a will. I t m ust be in w riting and signed by th e
testato r or some person subscribing th e te sta to r’s nam e in his presence
and by his express direction. I t m ust be attested and subscribed by
two or more credible witnesses. N uncupative wills are accorded a
lim ited recognition.
. _
'
, Kftj
P robate proceedings are held before th e Register of Wills of the
county in which th e decedent was a resident. Appeals are usually to
th e Superior C ourt, although exceptions to accounts of executors are
heard by th e Orphans C ourt. P robate of foreign wills is authorized
when there is filed w ith th e Register of th e county where th e property
is located, a certified copy of th e probate proceedings from th e place
of th e testa to r’s domicile; such wills are recognized as to personal
property although they m ay not conform to local requirem ents.
Devise w ithout lim itation passes a fee. After-acquired land passes
by will. A will is revocable by cancellation, a w riting executed by
the testa to r in testam entary form, by im plication. After-born children
take their in testate share of the estate, in th e absence of provision to
the contrary. M arriage after the execution of a will by a husband
entitles his widow to her in testate share, which m ust be contributed
ratably by all th e beneficiaries. Posthum ous children born alive are
considered as after-born children. A devise or legacy tp a child, lineal
descendant, brother, sister, nephew or niece dpes not lapse on his or her
decease prior to th a t of th e testa to r, b u t passes to their surviving issue.
A legacy is not satisfaction of a debt, unless a contrary in ten t clearly
appears.

SYNOPSIS OF

i

THE LAWS OF
THE DISTRICT OF COLUMBIA
RELATING TO

BANKING AND COMMERCIAL USAGES
Revised by H e w e s P e e t t t m a n A w a l t & S m id d y , A ttorneys a t Law,
822 C onnecticut Ave., W ashington, D. G.
(See card in A ttorneys List)
A c k n o w led g m en ts. The deed of a corporation shall be executed
by having the seal of the corporation attached and being signed with
the nam e of the corporation, by its president or other officer, and shall
be acknowledged as the deed of the corporation by an atto rn ey
appointed for th a t purpose, by a power of attorney embodied in the
deed or by one separate therefrom , under the corporate seal, to be
annexed to and recorded w ith the deed.
A ck n o w le d g m e n t of D eeds. W hen any deed or contract under
seal relating to land is to be acknowledged out of the D istrict of
Columbia, b ut within the U nited S tates, the acknowledgm ent m ay
be m ade before any judge of a court of record and of law, or any
chancellor of a State, an y judge or justice of th e suprem e, district, or
territorial courts of the United States, or any justice of the peace or
notary public; Provided th a t the certificate of acknowledgment
aforesaid, m ade by any officer of a State or T erritory, not having a
seal, shall be accompanied by a certificate of the register, clerk, or
other public officer th a t the officer taking said acknowledgment was
in fact the officer he professed to be. Deeds m ade in a foreign coun­
try m ay be acknowledged before any judge or notary public, or before
an y secretary of legation or consular officer or acting consular officer
of the U nited States as such consular officer is described in section 1674
of the revised sta tu tes of th e U nited States, and when the acknowl­
edgm ent is m ade before any other officer other th an a secretary of
legation or consular officer or acting consular officer of the United
States, the official character of the person taking the acknowledgment
shall be certified in the m anner prescribed as to deeds out of the D is­
trict of Colum bia b u t w ithin th e U nited States. No deeds of con­
veyance of either real or personal estate by individuals shall be exe­
cuted or acknowledged by attorney.

1992

BANKING AND COMMERCIAL LAWS—DISTRICT OF COLUMBIA

A ctio n s. _ U nder th e F ederal Rules of Civil Procedure there is one
form of action know n as “civil action,” which is commenced by the
filing of a com plaint. I n su its a t law in M unicipal C ourt, involving
$1000 or less, th e old form s of action obtain, except as modified by
sta tu te .
A d m in is tr a tio n . The probate court, a special term of the
D istrict C ourt of th e U nited S tates for th e D istrict of Columbia,
has exclusive jurisdiction of th e settlem ent of estates. A w ritten
petition stating th e facts in th e case m ust be filed w ith th e register of
wills. T his petition is acted upon by a justice of th e D istrict C ourt of
th e U nited S tates for th e D istrict of Columbia, who sits daily. All
executors and adm inistrators and guardians are required to give
bond with security ■to be approved by th e court. T he testa to r
m ay waive the giving of bond, b ut the court always requires a bond
sufficient to cover th e debts and legacies of the deceased not to exceed
double th e value of th e personal estate. By act of Congress, certain
tru st companies incorporated thereunder m ay act as executor or ad ­
m inistrator w ithout bond,' and corporations having power under their •
charters m ay act as sureties in all cases where individuals can. Credi­
tors m ay be barred in thirteen m onths provided the required notice
is properly ^published. P robate court m ay order sale of real estate to
pay debts, in case personal assets are insufficient. Assets of non-resi­
dents in D istrict of Columbia are subject, to claims of local creditors
for one year after death.
A ffidavits. Affidavits for use in the D istrict of Columbia should
be tak en before a justice of the peace, n otary public, judge of any
court of record, or a U nited States commissioner. If taken before a
justice of th e peace, a certificate of his official authority from a clerk
of a court of record should be attached.
A lien s. Alien individuals and corporations m ay acquire and hold
personal p ro p erty and lots or parcels of land in the D istrict of Columbia.
A p p eals. Appeals lie from final orders and certain interlocutory
orders of th e D istrict C ourt of th e U nited States for th e D istrict of
C olum bia d irect to th e U nited States C ourt of Appeals for th e D istrict
of Colum bia. ' Appeals lie, as a m a tte r of rights, from th e M unicipal
C ourt to th e M unicipal C ourt of Appeals. Appeals to th e Supreme
C o u rt of th e U nited States are governed b y sta tu tes and rules per­
taining to appeals from th e federal courts generally.
A rre st. T here Is n o . Im prisonment for debt In the D istrict of
Columbia. T he court has the power to imprison for non-paym ent of
alim ony in divorce cases, and for contem pt of court.
A tta c h m e n ts . In any action a t law in th e D istrict C ourt of the
U nited S tates for th e D istrict o f Colum bia or th e M unicipal C ourt for
the recovery of specific personal property, or a debt, or damages for
the breach of a contract, express or implied, if the plaintiff, his agent
or attorney, either a t th e commencement of the action or pending the
same, shall file an affidavit showing the grounds of his claim and setting
forth th a t th e plaintiff has a ju st right to recover w hat is claimed
in his declaration, and where the action is to recover specific personal
property stating the nature and, according to affiant’s belief, the value
of said property and the probable am ount of damages to vrpich the
plaintiff is entitled for the detention thereof, and where the action is
to recover a debt stating the am ount thereof, and where the action is
to recover damages for the breach of a contract setting out, specif­
ically and in detail, the breach complained of and the actual damage
resulting therefrom , and also stating either, first, th a t the defendant
is a foreign corporation or is not a resident of the D istrict, or has
been absent therefrom for a t least six m onths; or, second, th a t the
defendant evades the service of ordinary process by concealing him ­
self or tem porarily w ithdrawing himself from the D istrict; or, third,
th a t he has removed or is about to remove some or all of his property
from th e D istrict, so as to defeat ju st dem ands against him; or,
fourth, th a t he has assigned, conveyed, disposed of, or secreted, or
Is abo u t to assign, convey, dispose of, or secrete his property with
in ten t to hinder, delay, or defraud his creditors; or, fifth, th a t th e
defendant fraudulently contracted the debt or incurred the obligation
respecting which the action is brought, the clerk shall issue a writ
of attach m en t and garnishm ent, to be levied upon so much of th e
lands, tenem ents, goods, chattels, and credits of the defendant as
m ay be necessary to satisfy the claim of the plaintiff: Provided, T h a t
th e plaintiff shall first file in the clerk’s office a bond, executed by
himself or his agent, with security to be approved by the clerk, in
twice the am ount of his claim, conditioned to m ake good to the
defendant all costs and damages which he m ay sustain by reason of
the wrongful suing out of the attachm ent.
A ttachm ent m ay be had upon accounts in th e nam es of two or
more persons held by any bank, tru s t com pany or any other corpora­
tion or person.
(See Execution).
B a n k s. All banking institutions are under supervision of the
Com ptroller of th e C urrency. N o banking business m ay be done
m _th e D istrict except by corporations previously organized and
doing such business or organized in accord w ith th e incorporation
laws of th e D istrict of Colum bia or U nited States. Non-m em ber
banks of th e Federal Reserve System are required to m aintain re­
serves on th e sam e basis as national banks doing business in th e
D istrict. L iquidation of any banking business is provided for by a
tw o-thirds vote of shareholders. M any other sections of th e national
banking laws are extended to apply to all banks. Crim inal laws ap­
plicable, to m em ber banks of th e Federal Reserve System are also in
force. Bank or tr u s t com pany is n ot liable for refusal to pay check
or othe^ dem and in stru m en t presented m ore th an one year after
d ate of check or instrum ent, unless expressly instructed by drawer
or m aker to pay th e same. L iability of bank or tr u s t com pany for
non-paym ent, through m istake or error and w ithout malice, of a check
or o ther negotiable instrum ent which should have been paid, is lim ited
to actu al dam age shown by reason of such non-paym ent.
B ills a n d N o tes. Uniform Negotiable Instrum ents Act, w ith some
modification, in force, adopted Ja n u ary 12, 1899.
C h a tte l M o rtg a g e s. No bill of sale or m ortgage or deed of tru st
to secure a debt of any personal chattels whereof the vendor, m ort­
gagor. or donor shall rem ain in possession, is valid and effectual to
pass th e title therein, except as between th e parties to such in stru ­
m ent and as to other persons having actual notice of it, unless the
same be executed and acknowledged and within ten days from the
date of such acknowledgment recorded in the sam e m anner as deeds
of real estate; and as to th ird persons n ot having notice of it, such
Instrum ent shall be operative only from the tim e within said ten
days when it Is delivered to th e recorder of deeds to be recorded.
C o lla te ra ls. The holder of the note as collateral security for debt
stands upon th e same footing as the purchaser and m ay m aintain suit
thereon for his own benefit. The collateral pledged m ay be sold in
accordance w ith the term s of the collateral note which usually pro­
vides th a t th e collateral m ay be sold upon non-paym ent of the prin­
cipal of th e note, either a t public or private sale, and in such cases the
purchaser a t any such sale obtains a valid title to the collateral sold.
C o n d itio n a l S ales. Unlawful to sell, convey, conceal or remove
from th e D istrict, w ith in ten t to defraud, property possessed under
w ritten conditional sales contract, before conditions are fulfilled,
w ithout consent of vendor. No conditional sale of chattels, where
purchase price exceeds $100, is valid as against th ird parties w ithout
notice, unless reduced to writing, signed, acknowledged and recorded.
C o n tr a c ts . E very contract and obligation entered into by two
or more persons, w hether partners or m erely joint contractors, whether
under seal or not, w ritten or verbal, and w hether expressed to be
joint and several or not, is for the purposes of suit deem ed joint and
several. On the death of one or more of such persons, his or their
executors, adm inistrators, or heirs are bound by said contract in the
same m anner and to the sam e extent as if the same were expressed
to be jo int and several. In actions ex’contractu against alleged joint
debtors it is not necessary for the plaintiff to prove their joint lia­
bility in order to m aintain his action, b u t he is entitled to recover,
as in actions ex delicto, against such of the defendants as shall be
shown by th e evidence to be jointly indebted to him, or against one


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only, if he alone Is shown to be indebted to him , and judgm ent will
be rendered as if the others had n ot been joined in th e suit. Any of
several joint debtors, when their debt is overdue, m ay m ake a separate
composition or compromise with their creditors.
Common Law S ta tu te of frauds in force.
C o rp o ra tio n s. Any three or more persons m ay form a company
for the purpose of carrying on any enterprise or business which m ay be
lawfully conducted by an individual, excepting banks of circulation
or discount, railroads and such other enterprise or business as is other­
wise provided for. Such corporations m ay have a perpetual existence.
No such cm npany is authorized to transact business until 10 per cent
of the capital stock shall have been actually paid in, either in money
or property a t its actual value; and th e recorder of deeds, before
filing any certificate of incorporation, m ust be satisfied th a t th e entire
capital stock has been subscribed for in good faith. All of th e stock­
holders or such com pany are severally and individually liable to the
creditors of th e com pany in which th ey are stockholders for the unpaid
am ount due upon the shares of said stock held by them respectively
for all debts and contracts m ade by such com pany, until th e whole
am ount o f capital stock fixed and lim ited by such com pany shall have
been paid in, and a certificate thereof shall have been m ade and
recorded. : E very such com pany m ust annually, except insurance
companies, within tw enty days from th e first of January, m ake a
report, which shall be duly published and which rep o rt shall sta te the
am ount of capital and th e proportion actually paid and the am ount of
existing debts. Foreign corporations doing business in th e D istrict
of Colum bia are subject to service of process on th eir agents or on
the persons conducting their business, or by leaving copy thereof a t
the principal place of business of such com pany, or a t th e residence
of its agent. The affairs of th e corporation shall be m anaged by not
less than three nor more th an fifteen trustees, a m ajority of whom
m ust be residents of the D istrict, to be annually elected, except for
the first year, by the stockholders, a t such tim e and place as m ay be
provided by th e by-laws. The fee of th e recorder for filing certifi­
cates of incorporation where capital stock is authorized is a m in im u m
of $50.00 on th e first $100,000. of capital stock, fifty cents on each
additional $1,000., plus $1.00 for first tw o hundred words in certificate
and tw enty cents for each additional one hundred words or fraction
thereof.
C o u rts . The D istrict C ourt of th e U nited S tates for th e D istrict
of Colum bia has jurisdiction generally in m atters sounding in law
and equity. M unicipal C ourt has jurisdiction in contract and to rt
cases involving $3,000. or less. T rial C ourts aré in session continu­
ously throughout th e year, except th e D istrict C ourt which, usually,
during July. A ugust and Septem ber hears only uncontested m atters
and crim inal cases.
D ays of G ra c e abolished.
D eeds. The following form of deed Is now all th a t is required In
the D istrict of Columbia to convey a fee simple title to real estate;
This deed, m ade t h i s .. . . day o f............ in the year. . . by m e........
o f ............ w itnessetb: T h at in consideration of (here insert con­
sideration), l. the s a i d . . . . . . . do grant unto (here insert grantee’s
name), o f............ all th a t (here describe the property)
Witness m y hand and seal.
................................(Seal.)
A deed to be effective as to th ird persons w ithou t notice, m u st be
acknowledged and recorded w ith th e recorder of deeds a n d takes
effect from th e tim e of recording. No deed m ay be recorded w ithout
acknowledgm ent. A scroll'is considered a sufficient seal.
D e p o s itio n s . Depositions of any p a rty or person m ay be taken,
w ithout leave of court, upon oral exam ination or w ritten interroga­
tories a t any tim e after jurisdiction of the defendant or property in­
volved is obtained and after answer is served, either for purpose of
discovery or for use as evidence in th e action or for both purposes.
Leave of C ourt m ust be obtained to take a deposition before answer
is served. The deposition m ay be taken before an y judge of any
court of the U nited States, U nited States Commissioner, an y clerk of
a district court, or any chancellor, justice, or judge of a Suprem e or
Superior C ourt, m ayor or chief m agistrate of a city, judge of a county
court or court of common pleas of any S tate, or an y n o tary public,
n ot being of counsel or attorney to any of th e parties, nor interested
in th e event of th e cause. T he Federal Rules of Civil Procedure
govern.
D e s c e n t a n d D is tr ib u tio n , (a) Real E state. Lands of inte­
sta te descend first to child or children equally. Children of a deceased
child tak e (equally) the share of their im m ediate ancestor. I f there
be no child or descendant of a child, the estate descends equally to the
father and m other of th e intestate, or th e whole to th e sole surviving
parent. I f th ere be no father or m other, th e brothers and sisters of
th e in testate tak e equally, and the descendants of a deceased brother
or sister share equally in th e share of such brother or sister. I f there
be no brother, or sister or a descendant of a brother or sister, the
whole goes to th e widow or widower of th e intestate. I f th ere be no
widow or widower, one half goes to th e paternal, and th e other half
to the m aternal kindred or th e intestate in th e following order:
To th e grandfather and grandm other equally, or th e entire half to the
surviving grandparent. If none, th en to th e uncles and au n ts of th e
in testate equally or to th e descendants of any deceased uncle or aunt.
I f none, then to th e great-grandfathers and great-grandm others, in
th e sam e m anner prescribed for grandfather and grandm other. If
none, then to the brothers and sisters of th e grandfathers and grand­
m others or th eir descendants equally. And so on, in other cases,
w ithout end, passing to th e nearest lineal ancestors and th e descend­
an ts of such ancestors. I f their be no paternal kindred, th e whole
goes to th e m aternal kindred; and if their be no m aternal kindred, the
whole goes to th e paternal kindred. I f their be neither p atern al nor
m aternal kindred, th e whole goes to th e kindred of th e husband or
wife of th e in testate in like m anner as to th e kindred of th e intestate,
and if th e intestate has had more th an one spbusé, all deceased before
th e intestate, th e estate shall be equally divided am ong th e kindred
of the several spouses in equal degree equality. There is no distinc­
tion between kindred of th e whole blood and kindred of th e half
blood.
P e rso n a l E s ta te . Surplus of personal estate of an intestate, after
paying debts and expenses of adm inistration, is to be distributed as
follows; If the intestate leave a widow or surviving husband and no
child, parent, grandchild, brother, or sister, or the child of a brother
or sister of the said intestate, the said widow or surviving husband shall
be entitled to the whole. If there be a widow 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 of the
intestate, b u t the said intestate shall leave a father or m other, or
brother or sister, or child of a brother or sister, the widow or surviving
husband shall have one half. T he surplus, exclusive of th e widow’s
or surviving husband’s share, or th e whole surplus (if there be no
widow or surviving husband), shall go as follows: I f th ere be children
and no other descendants, th e surplus shall be divided equally among
them . I f there be a child or children and a child or children of a
deceased child, th e child or children of such deceased child shall take
such shares as his, her, or their deceased parent would, if living, be
entitled to, and every other descendant or descendants in existence
a t th e death of th e intestate shall sta n d in th e place of his, her, or
their deceased ancestor. If there be no child, or descendant, th e whole
shall go to th e fath er and m other in equal shares, or to th e survivor
of them . I f there be a brother or sister, or child or descendant or
a brother or sister, and no child, descendant, or fath er or m other
of the intestate, the said brother, sister, or child or descendant of a
brother or sister shall have the whole. Every brother and sister of
the intestate shall be entitled to an equal share, and the child or
children, or descendants of a brother or sister of th e intestate, shall
stand in the place of their deceased parents respectively. After
children, descendants, father, m other, brothers, and sisters of the
deceased and their descendants, all collateral relations in equal degree
shall take, and no representation among such collaterals shall be
allowed. I f there be no collaterals, th e grandfathers an d grand-

BANKING AND COMMERCIAL LAWS—DISTRICT OF COLUMBIA
m others, or such o f them as survive, shall tak e alike. I f any person
en titled to d istribution shall die before th e sam e shall be m ade, his
or _her share shall go to his or her representatives. Posthum ous
children of in testate shall tak e in th e sam e m anher as if they: had
been born before th e decease of th e intestate, b u t no other posthum ous
relation shall be considered as entitled to distribution in his or her
own right. In th e distribution of personal estate there shall be no
distinction between th e whole and half blood.
D ow er. A wife is entitled to dower in all real estate owned by
th e husband during coverture, w hether or n o t owned by him a t the
tim e of his death, including equitable as well as legal estates. The
wife m ay relinquish dower by joining in deed w ith husband or by
separate deed.
E v id e n ce. In all trials th e testim ony of witnesses is taken orally
unless otherwise provided by th e Federal Rules of Civil Procedure.
All evidence is ad m itted which is admissable under the sta tu tes of
the U nited States, or under th e rules of evidence applied in courts
of th e U nited States on th e hearing of suits in equity. An official'
record m ay be evidenced by an official publication thereof or by
a copy atteste d b y th e officer having th e legal custody of the record,
or by his d eputy, an d accompanied w ith a certificate, th a t such officer
has th e custody; or b y a certificate of the one having custody under
the seal of th e office or court where th e record m ay be m ade. '
E x e c u tio n s. Executions m ay be levied upon all goods, chattels and
credits of th e debtor n ot exem pt, and upon gold and silver coin, bank
notes or other money, bills, checks, promissory notes or bonds, or
certificates of stock in corporations owned by said debtor, and upon
money owned by him in the hands of the m arshal or of the constable
charged with th e execution of such writ, and also upon ah legal lease­
hold and freehold estates of the debtor in land. Executions on judg­
m ents before justices of the peace m ay be superseded, according to
the am ount of the judgm ent, upon good and sufficient security being
entered by a person who m ay a t th e tim e be the owner of sufficient
real property located in the D istrict, above all liabilities and exemp­
tions, to secure the debt, costs and interests from one to six m ouths,
but there can be no stay of execution for wages of servants or common
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., th ere are exem pt from execution or attachm ent household
furniture to th e value of $300, im plem ents of debtor’s trad e or business
to th e value of $200, stock for carrying on business to am ount of $200,
one horse, harness and Cart, wagon or dray, and earnings of m arried
m en or heads of families, n ot to exceed $100 per m onth for two m onths.
Exem ptions are only allowed where th e p arty claiming such is the
head of a fam ily or householder residing in th e D istrict. Also exem pt
are a n o tary ’s seal and his official documents, money or benefits to be
paid b y a fratern al beneficial association and money recovered by
fam ily of deceased as damages on wrongful death.
F o re ig n J u d g e m e n ts . Actions m ay be instituted in the D istrict
C ourt of th e U n ited States for th e D istrict of Columbia on any judg­
m ent of a court of record in any other jurisdiction. The com plaint
in an y such case m ust be accompanied by a transcript of the record
of such judgm ent w ith th e attestatio n of the Clerk of the court and
a certificate of th e judge, chief justice and presiding m agistrate th a t
th e attesta tio n is in due form. Action m ay not be brought if barred
in foreign jurisdiction.
G a r n is h m e n t. A fter judgm ent, the w rit of garnishm ent m ay
issue against specific property or credits in th e hands of the garnishee
and on th e retu rn of th e writ, if there be property or credits, the judg­
m ent or condem nation follows. W rit m ay issue against property or
credits in jo int account. T he w rit of garnishm ent can not be issued
against th e U nited S tates or th e D istrict of Columbia.
H o lid ay s. The legal holidays are: Sundays; January 1 (New
Y ear’s D ay); F ebruary 22 (W ashington’s birthday); M ay 30 (Memo­
rial D a y ); Ju ly 4 (Independence D a y ); first M onday in September
(Labor D ay); N ovem ber 11 (Armistice D ay); Thanksgiving D ay;
December 25 (Christm as D ay); and day of th e inauguration of the
President, in every fourth year. E very Saturday is a legal half
holiday after twelve o’clock noon and notes falling due on th a t day
are n o t payable u n til M onday, except dem and notes which m ay, a t
the option of th e holder, be presented for paym ent in th e forenoon.
H u s b a n d a n d W ife. T he wife’s property is exem pt from execu­
tion for th e h usband’s debts. The husband m ay convey direct to his
wife. T he wife m ay use all of her property of every description as
fully as if she were unm arried, and m ay dispose of the same by deed,
etc., as fully as if she were Unmarried. She also has power to trade
and to sue and be sued, b u t no m arried woman under th e age of
twenty-one years can m ake a valid deed or conveyance. On the
death of a m arried woman th e husband is entitled to an estate by
curtesy in her fee sim ple property of which she dies intestate, if a child
be born capable of inheriting. The husband is n ot liable for the
debts of his wife contracted before marriage. A husband, who wil­
fully neglects to provide for wife, or minor, child under sixteen years,
in d estitu te circumstances, m ay be adjudged guilty of a misdemeanor,
and m ay be fined, or imprisoned, by the court having jurisdiction.
I n te re s t. The legal rate of interest in the D istrict of Columbia Is
6 per cent, and in any su it where the contract is tainted with usury the
plaintiff forfeits the whole of 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 of a higher rate of interest than
is lawful in the D istrict, m ade or to be performed in any sta te or
territory of the U nited S tates where such contract rate of interest
is lawful, the judgm ent for the plaintiff shall include such contract
interest to the date of the judgm ent and interest thereafter a t the
rate of 6 per centum per annum u n til paid. By w ritten contract this
rate m ay be increased to 8 per cent.
J u d g m e n ts . Every judgm ent is good and enforceable by an execu­
tion issued thereon for a period of twelve years from the date when an
execution m ight first have been issued thereon or from the date of the
last revival thereof by m otion to revive. Judgm ents of the' M unicipal
C ourt are good for six years, b u t are n ot liens on real estate u ntil
recorded in th e D istrict C ourt of th e U nited States for th e D istrict of
Columbia.
J u r is d ic tio n . (See Actions, Adm inistrations, Appeals, C ourts and
M unicipal Court.)
L a n d lo rd a n d T e n a n t. R ent law fixes rental for housing ac­
commodations of rates in existence Jan u ary 1, 1941, Adm inistration
of law under A dm inistrator of R ent Control.
L im ita tio n s . Fifteen years for recovery of lands, tenem ents or
hereditam ents; executor’s or adm inistrator’s bond, five years; instru­
m ents under seal, twelve years; simple contracts and recovery of per­
sonal p roperty and dam ages for injury to or for its unlawful detention,
three years; sta tu to ry penalty or forfeiture, libel, slander, assault,
battery, m ayhem , wounding, malicious prosecution, false arrest or
im prisonm ent, one year; all other actions three years. Usual excep­
tions in favor of persons under disability. Acknowledgment to revive
action on deb t m u st be in writing. P a rt paym ent will tak e debt o ut
of sta tu te. Actions m ay n ot be m aintained against D istrict for un­
liquidated dam ages unless w ritten notice of tim e, cause, place is given
within six m onths of damage.
M a rried W o m en . (See H usband and Wife.)
M o rtg ag es. M ortgages are alm ost entirely supplanted by deeds
of tru st, requiring no court proceedings to foreclose. Acknowledged,
recorded and effective in sam e m anner as absolute deeds. T rustee
holds qualified fee sim ple title. Joining th e wife is necessary to bar
dower.
i M u n c ip a l C o u r t. The M unicipal C ourt for th e D istrict of Colum­
bia is a co u rt of record. I t has exclusive jurisdiction in all civil cases
in which th e claimed, value of personal property, debt or damages ex­
clusive of interest and costs, does n ot exceed $3,000. E quitable


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Federal Reserve Bank of St. Louis

1993

defenses m ay be interposed. W hen th e value in controversy shall
exceed $20, and in all actions for th e recovery of th e possession of
real property, either p a rty m ay dem and a ju ry trial. Judgm ent
rendered by th e M unicipal C ourt rem ain in force for six (6) years and
no longer, unless docketed w ith th e clerk of the D istrict C ourt of th e
U nited States for th e D istrict of Columbia, when it rem ains in force
for twelve (12) years. No judgm ent shall b e n lien upon real property
until so docketed.
P a r tn e rs h ip s . Lim ited partnerships for the transaction of any
mercantile, mechanical, or m anufacturing business within th e D istrict
m ay be formed by any two or more persons, b ut the num ber of special
partners is limited to six. T he special partners are not liable for
the debts of the partnership beyond the fund contributed by them
to the Capital. A certificate setting forth the firm nam e; general
nature of the business to be conducted; names of all the general
and special partners interested therein, distinguishing which are
general and which are special, and their respective places of resi­
dence; the am ount of capital contributed by each special p artn er
to the common stock; and the period a t which the partnership is
to commence and term inate, m u st be filed with th é clerk of th e D istrict
C ourt of th e U nited States for th e D istrict of Columbia after having
been acknowledged in th e m anner prescribed for deeds. Partnership
term s m ust be published in tw o newspapers.
P ro te s t. M ay be m ade by a notary public under his hand and
seal; or by any respectable resident of the place where the bill is
dishonored,_in the presence of two or more credible witnesses. Where
a foreign bill, appearing on its face to be such, is dishonored by nonacceptance, it m ust be duly protested for same; and where such a
bill which has not previously been dishonored by non-acceptance.
Is dishonored by non-paym ent, it m ust be duly protested for same.
If it is not protested the draw er and, indorsers are discharged. Where
a bill does not so appear to be a foreign bill, protest thereof in case
of dishonor is unnecessary. T hé protest m ust be annexed to th e bill
or contain a copy thereof and m ust sta te the (1) tim e and place
for presentm ent; (2) the fact th a t presentm ent was made and the
m anner thereof; (3) the cause or reason for protesting; (4) the demand
made' and th e answer given, if any, or th e fact th a t th e drawee or
acceptor cannot be found.
R e co rd s. T he exemplification of the record under the hand of the
keeper of the same, and the seal of the office or court where such
record m ay be m ade, is good and sufficient evidence to prove any
record m ade or entered in any of the States or T erritories of the United
States: and the certificate of the party purporting to be th e keeper
of such record, accompanied by such seal, is prim a facie evidence
of th a t fact. A copy of the record of any deed or o ther instrum ent
In writing not of a testam entary character, where th e laws of the
S tate, Territory, or country where th e sam e m ay be recorded require
such record, and which has been recorded agreeably to such laws,
and the copy of any will which said laws require to be adm itted
to probate and record, by judicial decree, and of the decree of the
court adm itting the sam e to probate and record, under th e hand
of the clerk or other keeper of such record and the seal of th e court,
or office in which the record has been m ade, is prim a facie evidence
to prove the existence and contents of such deed, will, or other instru­
m ent in writing, and th a t it was executed as it purports to have been.
See Evidence.
S ales. Uniform Sales Act in force, effective Ju ly M 1937, does not
elate to conditional sales.
T axes. T he ra te fixed annually by Congress, on real an d tangible
personal property is, a t present, 1.75 per centum of th e assèssed value
of such property. Assessments are based on th e fair cash value, and
new assessments are m ade annually by a B oard of Assessors. These
taxes are payable, one-half in Septem ber and one-half in M arch of
each year, with a penalty of one per centum per m onth for default.
Real estate taxes become liens on real p roperty on th e date placed on
the records, Ju ly 1st.
Income tax rates for individuals domiciled in th e D istrict are:
1% on the first $5,000. of taxable income, 1)4% on th e next $5,000.,
2% on th e next $5,000., 2)4% on th e next $5,000. and 3 % on all in
excess of $20,000. Corporations, w hether dom estic or foreign, are
required to pay 5% on taxable income derived from D istrict of Colum­
bia sources. Taxable income is arrived a t by exemptions, exclusions
and deductions substantially th e sam e as in th e federal income tax
law. R eturns and paym ent of one-half of th e ta x m ust be m ade
on April 15 of each year, or, if th e retu rn is m ade on th e basis of a
fiscal year, th e retu rn and paym ent of one-half of th e tax m u st be
m ade on th e 15th day of th e fourth m onth following th e close of th e
fiscal year. T he rem aining one-half of th e tax m ust be paid on
October 15, or, if th e retu rn is m ade on th e basis of a fiscal year, on
th e 15th day of th e te n th m onth after th e close of th e fiscal year.
Inheritance taxes are levied on all transfers of property, or interest
therein, having its taxable situs in th e D istrict of Columbia, m ade or
intended to take effect in possession or enjoym ent after th e death
of th e decedent, or m ade in contem plation of death. R ates are
graduated on th e basis of th e relationship of th e beneficiary to th e
decedent. In addition théreto, an E sta te T ax is imposed equal to
80% of th e federal tax imposed under th e 1926 A ct and m u st be paid
w ithin seventeen m onths after th e death of th e decedent. W here
th e gross value of the estate exceeds $1,000. th e personal representa­
tive m ust file a re tu rn w ithin fifteen m onths from th e date of death
of th e decedent, and pay th e ta x w ithin eighteen m onths from th e
date of death. I f there be no personal representative, each benefi­
ciary of property in excess of $1,000. in value, m ust file a retu rn within
six m onths from th e date of death of th e decedent and p ay th e tax
within nine m onths from th e date of death. A copy of th e federal
estate tax retu rn m ust be filed w ith th e D istrict Assessor within
sixteen m onths after th e d eath of th e decedent.
T r u s t C o m p a n ie s . T ru st companies can be organized under th e
general provisions of th e Code on th a t subject. M u st be twenty-five
or more incorporators, all citizens of th e U nited States. Visitorial
powers exercised by com ptroller of currency sim ilar to such powers
exercised w ith respect to national banks. N o tru s t com pany can be
incorporated w ith less capital stock th an $1,000,000. M ay do a
storage business w ith a capitalization of n ot less th an $1,200,000.
Foreign companies desiring to operate in th e D istrict m ust first com­
ply w ith th e provisions for th e governm ent of tr u s t companies under
th e laws of this D istrict.
W ills. All wills and testam ents m ust be In writing and signed by
the testator, or by some other person in his presence and by his express
directions, and shall be attested and subscribed in the presence of
the said testator by a t least two credible witnesses. No will, testa­
m ent, or codicil is effectual for any purpose w hatever unless the
person making the sam e be, if a male, of the full age of twenty-one
years, and if a female, of the full age of eighteen years, and be at
the tim e of executing or acknowledging it, of sound and disposing
mind and capable of executing a valid deed or contract. Any will
executed after January 17, 1887, and before January 1, 1902, devising
real estate, from which it shall appear th a t it was th e . intention of
the testa to r to devise property acquired after the execution thereof
shall be deemed, taken and held to operate as a valid devise of all
such property; and any will executed after January 1, 1902, which
shall by words of general im port devise all of th e estate or all of th e
real estate of th e te sta to r shall be deemed, taken and held to operate
as a valid devise of any real estate acquired, by said testa to r after th e
execution thereof, unless an intention shall appear to th e contrary.
W here a devisee or legatee dies before th e testa to r, leaving issue, such
issue stands in th e place of th e deceased devisee or legatee unless a
contrary intention appear from th e will.
Devises and bequests to attestin g witnesses are void.
(Sen Adm inistration.)

1994

BANKING AND COMMERCIAL LAWS—FLORIDA
SYNOPSIS OF

THE LAW S OF FLORIDA
RELA TING TO

BANKING AND COMMERCIAL USAGES
'
_
Revised b y G ra n t & L u t h e r ,
A ttorneys a t Law, G rant Bldg., 407 M ain St., D aytona Beach, Pia.
(See card in A ttorneys List)
A c c o u n ts. Open accounts are barred in three years.
™c^ n ? wÌ£d ?iP ?n t 5 ™ us.t in evei-y instance be under official seal.
A# X ade 511
S tate of Florida, m ay be m ade before any judge, justice
of th e peace, clerk or deputy clerk of a court of record, or notary public;
S T al®,out„of th ® s.tate, and within the U nited States, before a
United S tates Commissioner of Deeds appointed by th e governor of
this State, or before a judge or clerk of any court of the U nited States
territo ry or district, having a seal, or before a notary
m °-r lustlpe the peace o f such sta te , territo ry or district, having
an official seal, and the certificate of acknowledgment or proof shall
be under th e seal of the court or officer as the case m ay be. If made
tlie United
before any commissioner of deeds appointed
hy th e governor of the S tate to reside in such country, or any notary
public of such foreign country, or before any m inister charge d ’affaires
consul-general, consul, vice-consul, commercial agent, or vice-com­
mercial agent of the United S tates appointed to reside in such country
Conveyances of dower and powers of attorney for the execution of
deeds to real estate m ust be executed in like m anner as conveyances of
real estate. A wife s acknowledgment m ust be taken separate and
ap art from h er husband. Officers m ust certify th a t the grantors are
known to him. The following is the usual form adopted, viz:
S tate of Florida,
1
C ounty o f...........................(
Before th e subscriber personally appeared ......................
and
h lf .wife............ . . . k n o w n to me to be the individuals described in
e^ecuted the foregoing instrum ent who acknowledged th a t
th ey executed the sam e for the uses and purposes therein expressed
an a tne s a i d . . . . . . . . . ........................................wife of th e sa id ............
: •V
'¿A™ u ng
P e £urtber and Privily examined separate
and ap art from her said husband, acknowledged and declared th a t
she executed the same freely and voluntarily, and w ithout fear, appre­
hension, compulsion, or constraint of, or from h sr said husband and
for the purpose of renouncing and relinquishing all her right, of w hat­
soever kind, in and to said property.
l gGiven under my hand and seal official th is ...............day o f................

M y commission expires................. ...................... .......... N °(See notaries.)
SuiÌ® sba11 be begun only in the county (or if less than
»100 in justice district) where the defendant resides, or where the
cause of action accrued, or where the property in litigation is. If
brought in any county where defendant does not reside, the plaintiff
or some person in his behalf, shall file w ith th e praecipe or bill in chancery, an affidavit th a t 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 joint defendants
su it m ay b e brought m any court (or justice district) where any one of
the defendants resides, or where the cause of action accrued or where
the property in litigation is. Corporations (domestic) can only be
sued in a county where they keep an office. Foreign corporations m ay
be sued in any county where they have an agent, or where the cause
of action accrued or where the property'in litigation is.
the death o t a person intestate,
P S p f c no executor, th e county judge
*adm inistrator, observing th e following preferences*
m ade
v ^th
t he enext
T l x ^offTkm
i n , Ior Tsu
hervivin
^
f kin. c.thIe^co
ap
t lee
o n in
^
m
a a e Vby
g° spouse,
u n^tvl i ciuf d

i M ^ b f a n n o i n M ^ ^ •SOme ca? able Person, a debtor or creditor
’ b u t ? ° ml? or.can be appom ted. The adm inistrator
I S r e ti^ orb W h “ urt11ì?,usÌ &ve b° n d , w ith two or m ore sufficient
b u fixed h v Thth J ^ i ^ th-0ri Zed siir e ty com pany in an am ount to
v a l u e o f thft
aÌter tak m £ into consideration th e
banks and tru s t companies, authorized
horirt
Per5°r‘al representatives, do n ot have to give such
‘ Any individual who is n ot a citizen of th e U nited States
in "Florida1
a reslden1j of tb e S tate of Florida m ay not be appointed
of au cstatArepresenjfca tive (adm inistrator or executor)
app ly to an y oPf t t e fon’o ^ in g T er’
foregoing prohibition shall n ot
who is a Citizen of th e U nited S tates of America
a n d w h o I f ì r k ? a lì y i p a r t -t h e r e o f o t h e r t h a n tb e S tate of Florida
£?t t a * V aWP ™ a“ £ Person who died in te sta te having
an ta tw « ? ei i t h o e3 at e °f Flo/ 1^ a ’ aj“d ^ b o has th e sole interest or
^ ta te of ?uch decedent, which interest is equal to
a n o h rJ * an th e interest m such estate of any other heir a t law of
an y such person dying intestate.
B. Any person who is a citizen of th e U nited S tates of America
an d who resides in any p a rt thereof other th an th e S tate of Florida
al?d who is an heir a t law and also is a legatee or devisee under th e
fM 'S » alW p ?rson w ho has died in testate having his domicile in the
S tate of Florida and who has th e sole interest or an interest in the
estate pi such decedent which interest is equal to or greater th a n the
interest m such estate of any other legatee or devisee under th e will
of such testator.
C. Any persons who are citizens of th e U nited S tates of America
an d reside m any p a rt thereof other th a n th e S tate of Florida and
who am ong them selves or together w ith one or more residents of the
S tate of Florida own th e entire interest in th e estate of any person
dying in testate having his domicile in th e S tate of Florida, so long
as all of said persons owning said entire interest in such estate are
appom ted an d act jointly as personal representatives of such estate.
?•
Persons who are citizens of th e U nited S tates of A m aH ^
and reside m an y p a rt thereof other th a n th e S tate of Florida and who
are h en s at mw of any person who has died te sta te having his domicile
in th e S tate of Florida and who also, as legatees or devisees am ong
themselves or together w ith one or m ore residents of th e S tate of
h londa, own th e entire interest in an estate under th e will of any such
person, dying testa te having his domicile in th e S tate of Florida,
so long as all of said legatees and devisees owning said entire interest
in such estate shall be appointed and act jointly as personal representa­
tives o f such estate.
E . A ny person who is a citizen of th e U nited States of America and
resides in an y p a rt thereof other th a n th e S tate of Florida and who
is th e spouse, father, m other, child, brother, or sister of a decedent
dym g domiciled in Florida.
F. Any person appointed as personal representative prior to June
All corporations except banks and tr u s t com panies incorporated
under Laws of this S tate and having tr u s t powers and except N ational
Banking Associations located in th is S tate and having tru s t powers,
are prohibited from exercising any of th e powers or duties and from
acting in an y of th e capacities w ithin this S tate as executor or adm inis­
tra to r of th e estate of any decedent, w hether such decedent was a
resident of this S tate or n ot and w hether th e adm inistration of th e
estate of such decedent be original or ancillary, provided, th a t if
th e executor or adm inistrator of th e estate of a non-resident decedent
be a corporation duly authorized, qualified and acting as such executor
or adm inistrator in th e jurisdiction of th e domicile of th e decedent,
it m ay, as a foreign executor or adm inistrator perform such duties
an d exercise such powers and privileges as are required, authorized
o r perm itted b y th e laws of this S tate.
T he com pensation of th e personal representative for ordinary
services is fixed b y sta tu te as follows: For th e first One T h ousand


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DoUars a t th e ra te of six percent, all above th a t sum and n o t exceeding
.biye Thousand Dollars a t th e rate of four percent, an d all above Five
ihousim d Dollars
th e ra te of two percent and in addition such
fu rth er com pensation as th e court m ay deem ju st an d reasonable
for any extraordinary services. Personal representatives m u st m ake
their annual re tu rn on or before April th e 1st of each year for th e
calendar year or fractional calendar year expiring on December 31st
preceding, or forfeit his commissionsi. T he County judge is empowered
to authorize personal representatives to carry on deceased tra d e or
business for a reasonable time.
Adm inistration of estates shall not be necessary where th ere is a
?°*e Sgwf and th e estate is n ot indebted, or where th e estate is not
indebted and there are several heirs who m ake division of th e p roperty
am icaply among themselves, or where there is no property except th e
exem pt, hom estead or exem pt personal property, or where there is
money in th e bank less th a n One Thousand Dollars, or where collections are to be m ade th a t will n ot cause th e aggregate am ount of
^personal property to exceed One Thousand Dollars.
Claims against estates are barred after eight calendar m onths from
first publication of notice to creditors. Claims are required to be
n writing, to contain th e place of residence and post office address of
th e claimant, t o be sworn to by th e claim ant, his agent or atto rn ey ,
and to be filed in th e office of th e county judge.
A ffidavits m ay be m ade before any judge, clerk of th e circuit and
suprem e courts, justice of the peace, or notary public.
A liens. No distinction between any citizens, except th a t they are
not allowed to vote.
.
A p p eals. All appellate proceedings, w hether a t common law or
^ ,cbancery > are b y appeal except where certiorari or prohibition lie.
All appeals m u st be sued o ut and taken w ithin sixty (60) days from
th e date of th e judgm ent or th e entry of th e order or decree appealed
from . N otice of appeal m ust be filed w ith th e clerk of th e C ircuit
C ourt and recorded in th e m inutes. T he record m u st be filed on or
before th e re tu rn day of th e appeal under penalty of dismissal.
A s sig n m e n ts a n d In so lv e n c y . Assignments by insolvents are
provided for by law. Preferences are not allowed. All property,
except th a t which is exem pt, m ust be surrendered to the assignee.
Assignee gives bond and winds up estate.
A tta c h m e n t process m ay issue upon affidavit m ade, setting forth
th a t am ount is actually d u e; th a t plaintiff has reason to believe defend­
a n t will fraudulently p a rt with his property before judgm ent can be
recovered or is actually removing his property, or is about to remove
It out of the S tate, or resides beyond the limits thereof, or is actually
removing or about to remove out of the S tate, or absconds or conceals
himself or is secreting property or fradulently disposing of same, or
actually removing, or is about to remove, beyond the judicial circuit
In which he, she, or they reside. A ttachm ent m ay also issue for a debt
not due, upon affidavit stating th a t the debt is actually existing, and
th a t the defendant is actually removing his property beyond the
lim its of the State, or is fraudulently disposing of his property for
the purpose of avoiding the paym ent of his ju st debts or demands, or
Is fraudulently secreting his property for such purposes. T he making
of th e affidavit causes all debts to m ature for th e purpose of th e suit.
Plaintiff m ust give bond, with two sureties in a t least double th e debt
or sum dem anded. One surety is sufficient If th a t surety is a surety
com pany authorized to do business in the state of Florida. Service
of notice of the suit m ay be either personal or by publication where
attachm ent is levied and property is not retaken by defendant. No
arrest allowed in civil actions. W rits of garnishm ent m ay be issued
both before and after judgm ent. If issued before judgm ent plaintiff
his agent or attorney m ust make affidavit th a t the debt for which th e
plaintiff sues is just, due and unpaid; th a t the garnishm ent applied
for is not sued out to injure either the defendant or the garnishee;
th a t he does not believe th a t defendant will have in his possession
after execution shall be issued visible property in this sta te and in
the county in which suit is pending upon which a levy can be made
sufficient to satisfy the am ount of plaintiff's claim, stating th e am ount,
and, except in cases in which plaintiff has had an attach m en t or
obtained his final judgm ent, he, his agent or attorney, m ust enter into
bond payable to defendant in double the am ount of th e debt, condi­
tioned to pay all costs and damages which defendant m ay sustain in
consequence of plaintiff's im properly suing out the writ.
B a n k s. Corporations for carrying on the business of banking m ay
be formed by any num ber of persons not less th an five, with a board
of directors consisting of not less th an five nor more th an twenty-five.
No banking com pany shall be organized w ith a capital of less th an
$50,000, except th a t banks with a capital of not less th an $25,000
m ay, with the approval of th e com ptroller, be organized in any city
or tow n containing not more th an 3,000 inhabitants. The capital
stock shall be divided into shares of $100 each. Stockholders of
every banking, savings and tru st com pany, shall be held individually
responsible equally and rateably and not for one another for all
contracts, debts and engagem ents of such com pany to th e extent of
the am ount of their stock therein a t th e par value thereof in addition
to th e am ount invested in such shares. Persons holding stock as
executors, adm inistrators, guardians, or trustees are not personally
subject to any liability as stockholders; b u t th e estates and funds
in their hands are liable to th e sam e extent as a testa to r, intestate,
w ard or person interested in tru st funds would be if living an d com­
p eten t to hold th e stock in his own nam e. Banking corporations are
formed as other corporations and cannot begin business until au th o r­
ized by th e com ptroller. D irectors m ust be citizens of th e United
S tates and a t least three-fifths of the directors m ust have resided in
the S tate of Florida for a t least one year preceding their election as
director and every director m ust own in his own right a t least ten
shares of stock. Every banking firm, banking com pany or tru st
com pany or liquidating agency, except national banks, shall be ex­
am ined a t least twice in each year by examiners appointed by the
S tate Com ptroller, and shall furnish financial reports whenever called
upon by the S tate Com ptroller. T he com ptroller on becoming satis­
fied of th e insolvency of all banking corporations in th e S tate except
national banks, or th a t th e affairs of any such bank are in an unsound,
condition or threatened w ith insolvency because of illegal or unsafe
investm ents, or th a t it is violating any of the laws of th e S tate relative
to banking corporations, m ay in his discretion apply to th e proper
court and have a liquidator take charge of the assets and affairs of
such banking corporation. Such liquidator is under th e direct control
of th e com ptroller and m ay be rem oved by th e com ptroller. No new
private banks p erm itted after June 4, 1915. Banks and T ru st Com­
panies m ay issue preferred stock b u t it cannot affect liability of com­
mon stock.
Stockholders of banks, savings and tru st companies, members of the
Federal Deposit Insurance Corporation, or whose unim paired surplus
equals its capital stock, not subject to assessment.
Com ptroller m ay perm it Deposit Insurance C orporation to act as
L iquidator of any closed bank having m em bership therein, w ithout
bond.
Banks and tru s t companies m ay refuse paym ent of check or other
dem and instrum ent presented more th an one year after date.
Foreign tr u s t companies and banks not authorized to do business
in the sta te prohibited from exercising tru s t powers in th e state.
B ills of L a d in g . Bills of lading are evidence against the carrier o f
the direction by which freights are to be received, carried, and delivered
—collector or holder of commercial paper, attached to a bill of lading
n ot a w arrantor of the quantity or quality of the goods represented
thereby, except by express contract in writing, and the officers, agents,
ana employes of the carrier are required to comply w ith th e term s of
the bill or lading under penalty of criminal prosecution.
B lu e S ky L aw . “ On 7-1-31 th e Uniform Sale of Securities Act went
into effect and is adm inistered by the Florida Securities Commission.”
C h a tte l M o rtg a g e s a n d D eeds of T r u s t. All conveyances in­
tended to secure the paym ent of money are mortgages. C hattel
m ortgages m ust be recorded or the property delivered to m ortgagee
to m ake them effectual against bona fide creditors and purchasers for
value. Injunction will be granted against the rem oval of m ortgaged

BANKING AND COMMERCIAL LAWS—FLORIDA
personalty from th e S tate; can only be foreclosed by bill In chancery
unless under $100, and upon personal property, when a common law
action m ay be brought in justice of the peace court, and m ortgage filed
with precipe. The form and effect of tru st deeds have not been dis­
turbed by sta tu te. I t is a criminal offence to mortgage personal prop­
erty .more th an once w ithout the consent of first lienor.
C h e c k s. Any person who w ith intent to defraud shall m ake
u tte r, draw, deliver or give any check, d raft, op Written order upon
an y bank, person or corporation and who secures money, property
or other things of value therefor, an d who knowingly shall n ot have
an arrangem ent, understanding or fund w ith such bank, person or
corporation sufficient to m eet or p ay th e sam e shall be guilty of a
felony if such check, d ra ft or w ritten order shall be for th e sum of
F ifty ($50.00) Dollars or m ore and if such check, d raft or w ritten order
be for less th an F ifty ($50.00) D ollars such person shall be guilty
of a misdemeanor.
C o lla te ra l S e c u rity . I t is a m isdem eanor to sell, pledge, loan, or
in any way dispose of collateral security w ithout the consent of pledgor.
A w ritten agreem ent m ay be m ade a t the tim e of making the pledge
for th e sale of the collateral In such m anner and upon such term s as
the parties m ay desire, b u t notice m ust be given to pledgor ten days
prior to sale.
C o n d itio n a l S ales C o n tr a c t. Conditional sales contracts are
valid in Florida as such and m ay be either oral or in writing. No
requirem ent as to recordation until th e elapse of two years from
date of delivery of th e property. Invalid after two years against
purchasers or creditors unless recorded. For purpose of recordation
contract should be signed, sealed, witnessed and acknowledged before
a N o tary Public.
C o n tr a c ts . S t a t u t e of F r a u d s . In order to bind an adm in­
istrator personally, or any one for th e debt or default of another, or
one upon an agreem ent m ade in consideration of m arriage; or upon
contracts for th e sale oflands.tenem ents.or hereditam ents or any uncer­
tain interest therein or for any lease thereof for a period longer than
one year; or upon an agreem ent not to be performed within one year,
there m ust be an agreem ent, note, or m em orandum thereof in writing
signed by the p arty to be charged, or some one lawfully authorized
by him. C ontracts for the sale of personal property m ust be in writing
or the property m ust be delivered or earnest money paid. News­
papers an d periodicals m ust either be subscribed for or ordered in
writing.
C o n v ey an ces. All conveyances of real estate, or any interest
therein for a term of m ore th a n one year, m u st be by deed in writing,
signed in th e presence of tw o subscribing witnesses, and in order
to be effectual against creditors or subsequent purchasers for valuable
consideration an d w ithout notice m u st be recorded. T he wife’s
separate estate can be conveyed only b y th e joint deed of herself
an d husband an d confirmed by her acknowledgment taken separate
and a p a rt from her husband. (See acknowledgments). W ords of
lim itation are unnecessary. H usbands and wives m ay convey direct
to each other.
C o rp o ra tio n s m ay be organized for any lawful business under the
General Corporation Law of 1925, except banking, tru st, safety
deposit, building and loan, insurance, m utual fire insurance, surety,
express, railroad and canal, telegraph and telephone, cooperative,
fraternal, benefit, sta te fairs, and cem etery companies and corporations
not for benefit, which are organized under, special acts. In general
corporations, stockholders a re liable only for arpount unpaid upon
subscription. C harter fee, payable to th e Secretary of S tate, is $2.00
for every $1,000, of 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
of $2,000,000.- Corporations m ay have stock of no par value, and
upon such stock th e fee is $0.20 a share up to 1,250 shares; $0.05 a
share in excess of 1,250 to 10,000 shares; $0.0025 a share in excess of
10,000 to 20,000 shares; and $0.001 a share in excess of 20,000 shares.
M inim um fee $10.00. All corporations required to file annual report
and pay annual tax on capital stock as follows: C apital stock author­
ized n ot 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 of $1,000.00
and avoid filing report. Designation of resident agent for service of
process required of dom estic and foreign corporations doing business
In th e state.
Two or more corporations m ay m erge into one by agreem ent of
a m ajority of th e directors of all.
Corporations dissolved for non-paym ent of tax m ay reinstate by
paym ent of th ree years’ capital stock tax and filing of certificate.
C o sts. N on-resident plaintiff required to give $100 bond to secure
costs. The defendant m ay have suit dismissed if bond is not given.
C o u rts . C ircuit courts have original jurisdiction in all equity cases
and all cases a t law n ot cognizable by inferior courts. C ounty Courts,
in such counties as have C ounty Courts, have jurisdiction of am ounts
not exceeding $500.00. C ounty Judge’s Courts have jurisdiction of
probate m atters and, in counties where there are no Civil C ourts o f
Record, have civil jurisdiction up to $100.00. Justices of th e Peace
have civil jurisdiction up to $100.00. In counties having a population
of more th an 250,000 Civil C ourts of Record are organized, with
jurisdiction from $100.00 to $5,000.00.
C re d ito rs’ B ills m ay be brought before claim is reduced to Judg­
m ent, b u t su it a t law m ust be first brought and judgm ent m ust be
obtained before decree can be rendered.
D ays of G race are abolished.
D ep o sitio n s m ay be taken upon commission when witness resides
out of the county, or is bound for sea, or is about to go out of the
State to rem ain u n til after the trial of the cause, or is very aged or
Infirm; or when o ath is m ade th a t a m aterial p art of the case or defense
depends upon th e testim ony of such witness. The tim e for the suing
out of the commission, the names of the witnesses, and the nam e of
one commissioner m ust be given to opposite side a reasonable tim e
before commission is issued. P rinted instructions for the guidance of
commissioners usually accompany commission. Fees ot not less than
$5 a witness are to be taxed as costs by the clerk and paid by losing
party.
D e sc e n t a n d D is tr ib u tio n of P ro p e rty . Section 24: O R D ER
OF SUCCESSION— T he real and personal property of an in testate
shall descend a n d .b e distributed as follows: 1. To th e surviving
spouse and lineal descendants, th e surviving spouse taking th e sam e as
if he or she were one of th e children. 2. If there be no lineal descend­
ants to th e surviving spouse. 3. I f there be no surviving spouse to
the lineal descedants. 4. And, if there be none of the foregoing, to
the father and m other equally, or to the survivor of them . 5. And,
if there be none of th e foregoing, to the brothers and sisters and the
descendants of deceased brothers and sisters. 6. And. if there be
none of th e foregoing, the estate shall be divided into moieties, one of
which shall go to th e paternal and the other to the m aternal kindred in
the following course: (a) To th e grandfather and grandm other
equally or to the'survivor of them , (b) If there be no grandfather or
grandm other, to th e uncles and aunts and th e descendants of such of
them as m ay be deceased, (c) If there be no grandparent, uncle or
aunt, or their descendants, to the great grandfathers and the great
grandm others equally, or to th e survivor of them , (d) I f there be
no great grandfather or greatgrandm other, th en to th e brothers and
sisters of th e grandfather and grandm other on th e same side and to the
descendants of such of them as m ay be deceased, (e) And so in
other cases without end passing to the next lineal ancestors or. ancestor,
and for w ant of them , to th e descendants of such ancestors. ’ 7. And
where the estate is hereinbefore directed to go by moieties to th e pa­
ternal and th e m aternal kindred. If there should be no such kindred on
th e one p art, th e whole shall go to th e other p art; and if th e re be no
kindred eith er on th e one p art or th e other th e whole estate shall go to
the kindred of th e deceased spouse of th e intestate in like course as if


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1995

such deceased spouse had survived th e in testate and th en died entitled
to th e estate.
HALF-BLOOD. Half-bloods inherit only one-half.
IL L E G IT IM A T E S , inherit and tran sm it through m other’s side as
If legitim ate, and also through fath er’s side when recognized by father.
Adopted children inherit th e sam e as children of 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. T here
are no entailed estates nor right of survivorship.
D ivorce. In order to obtain a divorce th e Com plainant m u st have
resided ninety days in th e S tate of Florida before th e filing of th e
Bill of Com plaint.
D o m ic ile . Any person who shall have established a domicile in
th e S tate of Florida, b u t who shall m aintain another place or places
of abode in some other S tate or States, m ay m anifest and evidence
his domicile in Florida by filing in th e office of th e clerk of th e Circuit
C ourt for th e C ounty in which he resides a sworn statem en t th a t
his place of abode in Florida constitutes his predom inate and principal
home, th a t he intends to continue it perm anently as such an d th a t
he is a bona fide resident of th e S tate of Florida, setting forth his
place of residence w ithin th e S tate of Florida, th e C ity, th e C ounty
and th e S tate wherein he form erly resided and th e place or places if
any where he m aintains another or other place of abode.
D ow er. Deceased m ay not by will cut off his wife’s right to dower,
b ut she shall be entitled to tak e dower consisting of one-third of all his
real and personal p roperty by electing to do so w ithin prescribed period
of tim e, w ithout regard to num ber of children, provided, however,
th a t if a 'decedent, dying intestate, be survived by his widow and
lineal descendants and th a t none of such lineal descendants are also
th e lineal descendants of such widow, th en such widow shall be
lim ited to dower in th e estate of said decedent, and such dower shall
be lim ited to th e portion of th e estate of th e decedent to which th e
widow is entitled under th e law of descent and distribution, to-wit,
a child’s p a rt. T he hom estead shall n ot be included in th e property
subject to dower, b u t shall descend as provided by law. In ,addition
to dower th e widow of an intestate shall he entitled to retain necessary
clothing, household goods, utensils and provisions necessary for
fam ily use, upon petition to th e C ounty Judge.
E v id en ce. Witnesses not disqualified by reason of interest. In
civil cases, husband and wife m ay testify for or against each other.
In suits by or against lunatics or personal representatives, heirs-atlaw, next of kin, assignee, legatee, devisee, or survivor of a person
deceased, no evidence of a transaction or communication between
such lunatic or deceased person and the opposing p arty or those under
whom he Claims, can be given by the opposing party, unless such’evi­
dence is first offered in behalf of such lunatic representatives legatees,
devises, etc. N o person is excused from testifying or producing
docum ents in trials for bribery, burglary, larceny, gambling, or illegal
sale of liquors, on ground th a t it m ay tend to convict him of crime
b ut no such person shall thereafter be prosecuted or subjected to any
penalty on account of anything concerning which he m ay so testify
or produce evidence.
E x e m p tio n s to every head of a fam ily residing in the S tate hom e­
stead of 160 acres of land, and im provem ents, if in the country: onehalf acre of ground, if in an incorporated city or town, together with
$1.000 w orth of personal property. The exem ptions in a city or town
shall not extend to more im provem ents or buildings than the residence
and business house of th e owner. No property is exem pt from sale
for taxes or assessments, or for obligations contracted for its purchase,
or the erection or repair of im provem ents thereon, or for house, field,
or other labor performed thereon. Wages and salary of head of a
fam ily residing in th e S tate are exem pt from garnishm ent. W henever
any person shall die leaving insurance on his life, th e said insurance
shall inure exclusively to th e benefit of th e child or children and
husband or wife of such person in equal portions or to an y person
or persons for whose use and benefit such insurance is declared in
th e policy, and th e proceeds thereof shall in no case be liable to a tta c h ­
m ent, garnishm ent or any legal process in favor of an y creditor or
creditors of th e person whose life is so insured, unless th e insurance
policy declares th a t th e policy was effected for th e benefit of such
creditor or creditors, provided, however, th a t whenever th e insurance
is for th e benefit of th e estate of th e insured or is payable to th e estate
or to th e insured, his or her executors, adm inistrators or assigns, th e
proceeds of th e insurance m ay be bequeathed by th e insured to any
Person or persons as an y other property. T he cash surrender values
or
insurance policies issued upon th e lives of citizens or residents
of th e S tate of Florida shall n ot in any case be liable to attachm ent,
garnishm ent or legal process in favor of any creditor or creditors of th e
persons whose life is so insured unless th e insurance policy was effected
for th e benefit of such creditor. D isability income benefits under
any policy or contract of life, health, accident or other insurance shall
n ot m any case be liable to attachm ent, garnishm ent or legal process
in favor of any creditor of; th e recipient of such disability income
benefits unless such policy or contract of insurance was effected for
th e benefit of such creditor.
F o re ig n C o rp o ra tio n s . Commercial corporations can do business
in this S tate without restriction upon complying with requirem ents
as to foreign corporation, provided its name is not the sam e or so
nearly sim ilar to any dom estic corporation as to cause confusion.
(See Service of Process.)
Subject to sam e charter fees and annual taxes except th a t it is based
only on capital actually used in Florida.
F o re ig n J u d g m e n ts . Judgm ents obtained in the several courts
of the S tate, m ay be recorded in any county and have sam e force and
effect as if originally obtained therein. Judgm ents obtained in other
States or countries, m erely evidence, and have to be sued upon to be
m ade effective as judgm ents.
F ra u d . (See Lim itations of Actions.) Obtaining money or prop­
erty under false pretense or by falsely personating another, are punish­
able criminally.
G u a r d ia n s . G uardian or curator m ay be appointed for physically
or m entally incapacitated, by reason of age, epilepsy, drugs, alcohol,
or other reason m aking them incapable.
G uardians m ay invest w ard’s funds only in certain specified secur­
ities. (Ohap. 17949, A cts of 1937.)
G u a r a n ty C o m p a n ie s . G uaranty Com panies are perm itted to
become surety upon bonds for all purposes after complying with certain
sta tu to ry requirem ents.
H o lid a y s. The legal holidays are: T he first day of th e week,
commonly called Sunday; th e first d ay of January, New Y ear’s D ay;
Ja n u ary 19, birthday of R obert E . Lee; F ebruary 22, W ashington’s
B irthday; April 26, Confederate M em orial D ay; M ay 30, M em orial
D ay for Veterans of all wars; Ju n e 3, b irth d ay of Jefferson Davis;
Ju ly 4, Independence D ay; first M onday in September, Labor D ay;
General Election D ay; th e last T hursday in Novem ber, Thanksgiving
D ay; December 25, C hristm as D ay; Good F riday; October 12, Col­
um bus D ay and F arm ers’ D ay; Novem ber 11, Arm istice D ay; and
in cities and tow ns where carnival associations are organized for th e
purpose of celebrating th e same, th e day in each year known as
Shrove Tuesday, shall for all purposes whatsoever as regards th e pre­
senting for paym ent or acceptance and of th e protesting and giving
notice of dishonor of negotiable instrum ents, be treated and considered
as public holidays. W henever any legal holiday shall fall upon a
Sunday, th e M onday next following shall be deemed a public holiday
for all and any of th e purposes aforesaid.
H u s b a n d a n d W ife. T he husband has full control of wife's prop­
erty and is n ot chargeable by th e wife w ith th e rents and profits, b u t
he cannot charge for his services. M u st be joined with wife in sales
of her property. Hom estead can only be alienated by their joint
deed. E states by entireties aS a t common law. H usband not liable
for wife’s antenuptial debts. H as no interest in her separate earnings.
Has action for negligence causing her death; wife’s property not
generally liable for husband's debts. Wife m ay sue w ith respect to
separate estate w ithout husband joining. In fan t wife m ay join
husband in sale of real estate.
In so lv e n c y . S tatutes suspended by national bankruptcy law.

1996

BANKING AND COMMERCIAL LAWS—GEORGIA

I n s u r a n c e C o m p a n ie s . Foreign and domestic, are placed, by
sta tu te , under control of S tate treasurer. T hey m ust annually file
a statem en t with, and obtain from the S tate treasurer, a certificate
before being authorized to do business. Certificate m ay be revoked
if com pany refuses to pay judgm ents which have been legally obtained
against it.
. I n t e r e s t . E ight per cent is allowed on contracts where interest
is p a y a b le b u t no ra te is specified. C ontract for m ore th a n te n per
cent is usurious. If m ore th a n ten per cent is wilfully charged all
interest is forfeited. I f m ore th a n ten per cent interest is wilfully
tak en double th e am ount of in terest is forfeited. I f twenty-five per
cent or m ore interest is wilfully charged or accepted both principal and
interest are forfeited. All judgm ents and decrees shall bear interest
a t th e ra te of six per cent per annum , provided, however, th a t when
such judgm ent or decree shall be obtained or rendered on a w ritten
contract or obligation providing for interest a t a less ra te th a n six per
cent per annum th en such judgm ent or decree shall bear interest a t
th e ra te specified in such w ritten contract or obligation.
J u d g m e n ts of a court of record are a lien for tw enty years upon
real estate of debtor w ithin the county where rendered, and m ay be
extended to other counties by recording certified transcript of judg­
m ent in any county where a lien is sought. Judgm ents of justice of the
peace m ay be m ade a lien upon real estate by recording in the office
of clerk of circuit court.
L ie n s. In order to secure a lien by lis pendens, a statem ent m ust
be filed with the clerk of the circuit court, and recorded by him in a
book k ep t for th a t purpose, setting forth the nam es of the parties and
the natu re or the relief sought, and the description of the property
upon which it is desired to obtain a lien. S tatutory liens are given to
laborers and m aterial-m en. Such liens are called M echanic’s Liens
an d m ay be filed in th e office of th e clerk of th e circuit court a t any
tim e during th e progress of th e work b u t n ot later th a n three m onths
after th e final perform ance of th e labor or th e services or th e final
furnishing of th e m aterial by th e lienor. Such liens are given priority
9ver a conveyance, mortgage, building loan contract, attachm ent,
judgm ent or other incum bents n ot recorded a t th e tim e of th e visible
com m encement of operation. | Such lien continues for no longer period
th a n one year after th e claim of lien has been filed unless w ithin th a t
tim e an action to enforce such lien is commenced and a notice of
pendency of such action is filed w ith th e clerk of th e circuit court.
M echanic Liens upon personal property exist only while possession is
retained b y th e lienor.
L im ita tio n s of A ctio n s. Civil actions can only be commenced
within th e following periods after the cause of action shall have
accrued, to wit: Actions on Florida judgm ents, actions on con­
tracts or obligations in writing and under seal tw enty (20) years;
actions for th e recovery of real property, actions on judgm ents of
courts of the U nited States or any other sta te 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 by sta tu te other
th an a penalty o f forfeiture, taking, detaining or injury to chattels,
for relief on the ground of fraud, upon contract not founded upon
Instrum ent of writing, including an action open account for goods,
wares and merchandise, three (3) years. Actions for libel, slander,
assault, b attery, false im prisonm ent, or an action by another th an the
S tate upon a sta tu te for a penalty or forfeiture two (2) years. Actions
for wrongful d eath of a child, actions against railroad com panies for
killing cattle, and any action by the S tate for a sta tu to ry penalty or
forfeiture, one (1) year.
M a rrie d W o m e n retain th eir property, real or personal, owned a t
m arriage or acquired thereafter by gift, devise, descent, or purchase,
and it is not liable for husband’s debts except by her w ritten consent,
executed according to law regulating conveyances of m arried women.
H usband m u st join in all sales, transfers, and conveyances of th e wife’s
property except when he has been adjudged insane for more th a n a year.
Wife m ay Sue concerning her real estate w ithout joining her husband
with her in th e suit. Widow entitled to tak e dower consisting of oneth ird of all deceased’s real and personal property by electing to do so
w ithin prescribed period of tim e, w ithout regard to num ber of children,
providing she is n o t a step-m other. (See dower.) I f there are no
children she will inherit all th e property, real and personal. Wife by
p etition to proper court m ay be decreed a free-dealer and as such
sue an d be sued
M in o rs. Both sexes a tta in their legal m ajority a t the age of 21
years. M inors who deposit in savings banks m ay control, transfer
or w ithdraw the money so deposited. All other contracts m ade by
them are voidable, except for neoessaries. M arriage removes dis­
ability of non-age of m ale m inor. M inors over 18 m ay have dis­
abilities rem oved by petition in chancery.
M o rtg ag es of real estate m ust be executed and proved or acknowl­
edged in the sam e m anner as deeds, and they, likewise assignm ents
thereof, to be effectual against creditors or bona fide purchasers,
m ust be recorded. Are foreclosed by bill in equity in the circuit
, court. C hattel m ortgages m ust be recorded unless property is
delivered to mortgagee and rem ains in his possession; becomes subject
to debts of m ortgagee if left in his possession more than two years
without th e m ortgage being recorded.
N o ta rie s. Both m en and women over twenty-one years m ay be
appointed notaries public. T hey m ust renew commissions every four
years. M ay adm inister oaths, take acknowledgments and perform
marriage ceremony. $500 bond is required to be given. Certificate
m ust show d ate of expiration of commission.
N e g o tia b le I n s t r u m e n t s . The Uniform Negotiable Instrum ent
Act adopted. (See com plete tex t following “ Digest of Banking and
Commercial Laws.” )
P a r tn e r s h ip , L im ite d , a n d S p ecial. None. N o uniform acts
adopted. Common law rules apply.
P o w ers of A tto rn e y . Any contract or conveyance m ay be m ade
by power of attorney. A conveyance of a m arried wom an’s real estate
by power of attorney in order to be valid th e power of atto rn ey m ust
be acknowledged by her separate and a p art from her husband, and the
acknowledgment m ust sta te th a t she executes it freely and voluntarily,
without compulsion, fear, apprehension, or constraint of or from her
husband. The husband m ust join either in the deed or powers of
attorney. Powers of atto rn ey for th e conveyance of real estate m ust
be recorded.
P ro b a te L aw . (See Adm inistration of E states.) The county
judge has original jurisdiction of all m atters relating to the adm inistra­
tion of estates of decedents.
P ro te s t. (See N otes and Bills of Exchange.)
R e c o rd s . Records of deeds an d m ortgages are kep t in th e office
of th e clerks of th e several circuit courts, and th e original m ust be
recorded in th e county w ithin which th e p roperty lies. E xcept m ort­
gages on m otor vehicles which m u st be recorded in th e office of Regis­
tr a r of M otor Vehicles a t Tallahassee, Florida, to be effective against
bona fide purchasers. Wills are required to be recorded w ith th e
several county judges and m ay be probated in any county in which
th e deceased left property, if he dies o ut of th e S tate. I f death takes
place w ithin th e State, th en in th e county in which he has h ad resi­
dence, house, or other place of abode a t th e tim e of his death, and
if he h ad none such, th en in th e county wherein he died.
R e d e m p tio n . None, excepting tax sales.
S eal. A scrawl or scroll, printed or w ritten, affixed as a seal to any
written instrum ent, is effectual.
S ervice o f P ro c ess. O ut of circuit court, m ade by th e sheriff
or his deputy. O ut of county judge’s or justice of peace, courts, m ay
be m ade by sheriff or constable. Service in civil actions m ay be
m ade either upon th e person of th e defendant, or b y leaving a copy
a t his residence w ith som e person over fifteen years of age. Process
against a dom estic or foreign corporation m ay be served upon any
officer or business agent of said corporation residing in Florida.
Dom estic and Foreign corporations are required to file w ith Secretary
of S tate a certificate designating an office for' service of process,which
 office m u st contain a sign w ith nam e of corporation and agent and

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

m ust be k ep t open and agent m ust be present from ten a.m . to twelve
noon each day except Sundays and Holidays. I n lieu of such agent
corporation m ay designate Clerk of Circuit C ourt. Failure to comply
w ith act authorizes service by publication once each week for four
weeks, and carries penalty of one dollar per day up to tw o hundred
fifty dollars. Service against dissolved corporations can be had by
publication. Service of process b y publication m ay be h ad where
personal service of process can n o t be had against a defendant who
is a resident of th e S tate of Florida and has been absent from th e
S tate of F lorida for m ore th an sixty days or conceals him self so th a t
process can not be personally served upon him and th ere is no person
in th e S tate of Florida upon whom service of process would bind said
absent or conceal defendant and upon a known defendant who is
a resident of some S tate or C ountry other th a n th e S tate of Florida
and against unknow n defendants.
S u its . Actions a t law are commenced by filing a precipe w ith the
clerk. Personal service is required except in suits by attach m en t and
garnishm ent. 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. If no appearance of defendant, default is entered forthwith.
D efault m ay be entered for w ant of plea or other pleading on rule day.
next after appearance day.
T axes. Taxes are not due and payable until the first day of Novem ­
ber, and if not paid by first day of the following April property m ay be
sold. Owner has two years within which to redeem. Taxes are a
lien from the first day of the year of the assessm ent, and have the force
and effect of a judgm ent upon which execution m ay issue.
T e s tim o n y . (See Depositions.)
T ra n s fe r of S to ck . Stock is transferable in the m anner prescribed
in the bydaws. No stock can be transferred until, after all previous
assessments thereon have been fully paid. The transferee succeeds
to all the rights and liabilities of the prior holder.
W a re h o u se R e c e ip ts. Uniform Warehouse Receipts Act adopted,
and effective after July 31st, 1917.
W ills. Who M ay M ake a Will. E very perso'n, male or female
m arried or single, who is a t least eighteen years of age and who is of
sound m ind m ay m ake a will. No other person m ay m ake a will.
Property Which M ay Be Devised. Any property, real or personal,
held by any title, legal or equitable, w ith or w ithout actual seizin, m ay
be devised or bequeathed by will; provided, however, th a t whenever a
person who is head of a fam ily, residing in this S tate and having a
hom estead therein, shall die and leave either a widow or lineal descend­
ants or both surviving him, the hom estead shall not be th e subject of
devise, b u t shall descend as otherwise provided in th is Act for the
descent of homesteads.
Requisites of Nuncupative Wills. N o nuncupative will shall be
good which is not proved by th e oaths of three witnesses present a t the
m aking thereof, nor unless it be proved by th e said witnesses th a t the
testa to r a t th e tim e of pronouncing th e same did desire th e persons
present, or some of them to bear witness th a t such was his will, or to
th a t effect, nor unless Such nuncupative will was m ade in th e tim e of the
last sickness of th e deceased. Personal property only shall be subject
to disposition by nuncupative wills.
Execution of Wills. E very will, other th a n a nuncupative will,
m ust be in w riting and m ust be executed as follows: I t m ust be signed
a t th e end thereof by th e testa to r himself, or some person in his presence
and by his direction m ust subscribe th e nam e of th e testa to r thereto.
The testato r, in th e presence of a t least tw o attestin g witnesses
present a t the sam e tim e, m ust sign his will or cause his nam e to be
signed as aforesaid or acknowledged his signature thereto.
No will executed by a non-resident of Florida, is valid as a will in
this sta te unless it is executed ih accordance w ith th e laws of th is state
in force a t the tim e of its execution, except th a t a will valid under the
laws of th e sta te or country in which th e testa to r is domiciled a t the
tim e of his death is valid in this sta te , so far as th e sam e relates to
personal property.
A codicil shall be executed with th e sam e form alities as a will.
Revocation m ay be by fraud, subsequent inconsistent will, codicil,
or by te s ta to r’s act. N either subsequent m arriage nor subsequent
m arriage and b irth of issue shall revoke a will, except th a t when a
person m arries after m aking a will and th e spouse survives th e testato r
such surviving spouse shall receive a share in th e estate of a testato r
equal in value to th a t which th e surviving spouse would have received
if th e testa to r had died intestate, unless provision has been m ade for
such spouse by m arriage contract or unless she is provided for in the
will or unless the will discloses an intention n ot to m ake such provision,
and except when a testa to r om its to provide in his will for an y of
his children born after th e m aking of th e will and such child has not
had bestowed upon him b y w ay of advancem ent a portion of th e
te s ta to r’s property equivalent to a child’s p a rt, unless it appears
from th e will th a t such omission was intentional, such child shall
receive a share in th e estate of th e testa to r equal in value to th a t
which he would have received if th e testa to r had died intestate.

SYNOPSIS OF

THE LAW S OF GEORGIA
RELATING TO

BANKING AND COMMERCIAL USAGES
Revised by M a c D o u g a l d , T b o u t m a n & A r k w r ig h t , A ttorneys at
Law, 1607 William-Oliver Bldg., A tlanta. (See card in A ttorney List.)
A c k n o w le d g m e n ts . (See Deeds.)
A ctio n s. All distinction between suits a t law and in equity is
abolished. E quitable relief can be had in superior courts of law.
A d m in is tr a tio n of E s ta te s . L etters of adm inistration issue in
the line of preference, first to the husband or wife, second to the next
of kin, relations by consanguinity are preferred to those by affinity.
If there are several of the next of kin in the same degree, preference
is given to th a t one selected in writing by those most interested in
the estate. If no preference is expressed the ordinary exercises
his discretion. If no application is m ade by next of kin a creditor
m ay be appointed, and if no application is m ade the ordinary will
vest the adm inistration in a county adm inistrator, an officer authorized
by sta tu te for th a t purpose. A dm inistrators m ust give bond in double
the value of the estate. O ut of th e estate of each deceased person,
th e first charge, and before paym ent of funeral expenses, is a y ear’s
support for th e fam ily, to be laid off by commissioners according to the
condition and standing of the fam ily. Foreign adm inistrators m ay act
in this S tate on giving bond to th e ordinary where they qualify The
bondsm en m ust be residents of this State.A citizen of any other State
m ay act as executor of the will of a deceased citizen of th is S tate when
he has th e sam e interest and will give the sam e bond as in th e case of
foreign adm inistrators. A dm inistrators of other States m ay sue in
this S tate by filing in th e office of the clerk of the court, to which suit
is brought, a properly authenticated copy of th eir letters of adminis­
tration.
A ffidavits. Pleas and defenses in the courts of this S tate which
are required to be under oath, m ay be m ade before any official of
the S tate or county where the oath is m ade, who is authorized by
the laws of such S tate or county to adm inister oaths. P rim a Facie
the official attesta tio n of the officer is evidence th a t he was author­
ized to act. Any non-resident seeking equitable relief, when called
on to verify proceedings, should be sworn before a commissioner of
this State, or a judge of a court of record where th e oath is made,
with th e attesta tio n of the clerk of such court th a t th e signature of
the judge is genuine, and th a t the court over which he presides is a
court of. record.
A liens. The subjects of governm ents a t peace w ith th e United
States and this State are entitled to the rights of citizens of other
States, resident here, in so far as they accord to them th e privilege
of purchasing, holding, and conveying real estate.
A ppeals. (See Courts.)
A r b itra tio n . U nder the law of Georgia disputes and controversies

BANKING AND COMMERCIAL LAWS—GEORGIA
relating to rights, or property, m ay be subm itted to arbitration.
A s sig n m e n ts. Assignments for the benefit of creditors are per­
m itted.
A tta c h m e n ts . A sum m ary process of attachm ent will lie in
the following cases: 1. W here the debtor resides out of th e State.
2. W here he is actually removing, or about to remove, w ithout the
limits of the county. 3. W hen he absconds. 4. When he resists
a legal arrest. 5. W here he is attem pting to remove his property
beyond the lim its of this S tate. 6. Where he has disposed of, or
threatens to conceal, his property, liable for the paym ent of his debts,
or shall m ake a fradulent lien thereon to avoid paying his debts.
A ttachm ent will lie to recover the purchase money of an article sold
when th e debtor is still in the possession of the property. A ttach­
ments m ay issue upon affidavit by the plaintiff, his agent or attorney,
who m ust sw ear th a t one of the sta te of facts exists which authorize
an attachm ent, and also as to the am ount of the claim. Bond and
security, in double the am ount sworn to, m ust accompany the affidavit
and th e officers require personal security. Non-resident corporations
are liable to attachm ents, and one non-resident m ay attach the
property of another non-resident in this S tate, except for wages
earned w ithout th e State.
B a n k s a n d T r u s t C o m p a n ie s .
K inds of Banks p erm itted: Banks and T ru st Companies.
P riv ate banks or private bankers, n ot within definition of A Banks,
given rig h t to pay checks draw n on it or them when presented by
any bank, banker, tru st co. or agent thereof, and to charge an exchange
charge of n o t more th a n ys of 1% of th e aggregate am ount of the
check or checks paid.
Capital Stock Required: M inim um capital stock in cities of 7,500 or
less, $25,000; over 7,500, $50,000. Banks m ay be chartered for 2 yrs.
in towns n ot exceeding 2,500 pop., in which no chartered banks are
now located, w ith m inim um capital of not less th an $15,000. Any
bank now located in tow n of n ot over 2,500 pop. and having capital
of $25,000 or more m ay, w ithin 2 yrs. from date of passage of th is Act
(M arch 27, 1941) reduce their capital to $15,000 by amending their
charter.
■
, , , , ■
,
Reserves: Cash in hand, including am ount due by banks and bankers,
shall n ot be reduced below 15% of dem and deposits.
Incorporators: M inim um num ber is five.
Officers and Directors: Board of directors to consist of not less than
three or more th an twenty-five of stockholders of two or more shares.
Directors to examine affairs semi-annually.
Supervising Authority: Superintendent of banks.
Examinations and Reports: Semi-annual examinations by Super­
intendent of Banks. R eports four each year and oftener if required
by Superintendent of Banks, on forms prescribed by latter, verified
by president or cashier and certified by a t least two directors.
Loan Limitations: Individuals—m axim um is 20% of capital and
unimpaired surplus, and if more th a n 10%, m ust be am ply secured
and approved by directors. All loans to officers, directors and
employees m ust be am ply secured and approved by directors.
Stockholders Liability: U npaid stock subscription and am ount
equal to face value of shares.
■ ■■
>
Branch Banking. B ranch banks established prior to 1920 are
perm itted, b u t not p erm itted after th a t date.
B ills o f L a d in g . A bona fide assignee of a bill of lading of goods
will be protected in his title against th e seller’s right of stoppage in
transit.
C o lla te ra ls. T he holder of a note as collateral security for a debt
stands upon th e sam e footing as th e purchaser. P roperty left in
pledge or pawn m ay be sold a t public sale to the highest bidder, upon
th irty days’ notice.
•• ' ' .
,' •
'
.
. .
C o rp o ra tio n s. Power to create corporations in this State is vested
In th e general assem bly and the superior courts. Said courts may
grant charters to all corporations except banking, insurance, canal,
navigation, express, and telegraph companies and railroads. The
Secretary of S tate m ay grant charters for the corporations above
enum erated in m anner prescribed by law in th e particular case. A
charter for a p rivate corporation is obtained by a petition to the
superior court, setting forth th e object, particular business, corporation
name, capital, place of business, tim e for which incorporation is desired,
not exceeding thirty-five years. The petition and order granting the
same co nstitute th e charter. T hereafter m ust be advertised m news­
paper of general circulation in C ounty of principal of corporation,
once a week for four consecutive weeks. In such corporations the
liabilities of th e stockholder is m easured by the am ount of unpaid
stock subscription due hy him. The liability of Bank Stockholders
exists only to th e extent of the balance remaining unpaid on his or her
shares of stock. The paym ent of 10 per cent of the capital stock is
necessary before commencing business. General powers of corpora­
tions are conferred on all corporations organized in this state. _ All
corporations organized under the laws of the State or doing business
therein are required to register w ith th e Secretary of S tate and pay a
graded license fee, w ith a m inim um of $10, maximum $1000._ Volun­
tary dissolution of a corporation m ay be granted by the Superior C ourt
upon petition filed by th e Corporation if authorized by tw o-thirds of
capital stock. Lost stock certificates m ust be established by petition
to Superior C ourt. Corporations organized under charter granted
by act of Legislature, or by Secretary of State, may_ a t any tim e
renew or extend its charter for an additional 30 years, by filing w ith
th e Secretary of S tate a petition signed in corporation s name, stating
name of Corporation, when incorporated, date of original incorporation
and all am endm ents— ; and paying fee of $100 to Secretary or S tate
and filing affidavit from editor th a t applicant has deposited with
newspaper th e cost of publishing four insertions of said applicant
for renewal.
„ ,
C o sts. A .d ep o sit of $10 is required in courts of record from
non-resident plaintiffs before the filing of suits and a deposit of $6 in
all divorce cases except in certain counties it is $10.00.
C o u rts. T he term , jurisdiction, etc., of th e several courts of the
State are as follows: JU S T IC E COURTS hold m onthly sessions and
have civil jurisdiction up to $200. In criminal m atters they are
only com m itting courts. COURTS OP O RD IN A R Y hold their
sessions m onthly and have jurisdiction over wills, adm inistration of
estates, an d of th e conduct of adm inistrators, executors and guardians.
COUNTY COURTS have m onthly and quarterly sessions. Their
jurisdiction is lim ited to controversies n ot exceeding $300. CITY
COURTS hold four sessions per annum . The jurisdiction of city
courts is unlim ited except in m atters of divorce, tildes to land and
adm inistration of equitable relief. The Civil C ourt of P ulton C ounty
replaces th e Justices C ourts. Its jurisdictional lim it is $2500. I t
holds one term each m onth. SU PER IO R COURTS have juris­
diction of all suits and controversies and have exclusive jurisdiction
in equity powers, divorce cases, and suits involving titles to land, and
on th e crim inal side exclusive jurisdiction of all cases involving life
or im prisonm ent in the penitentiary.
D eeds. Deeds to real estate in Georgia m ust be in writing, and
should be executed in th e presence of two witnesses, one of whom shah
be an officer authorized for th a t purpose. T hey should be recorded
in the office of th e clerk of the superior court of the county 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. To authorize the record of a deed to realty, it m ust be a t­
tested by or acknowledged before, if executed out of this S tate, a
commissioner of deeds for the S tate of Georgia, notary public, clerk
of a court of record, or a consul, or vice-consul of the U nited States
(the certificates of these officers under their seals being evidence of
the fact). When th e deed is executed out of this S tate before a
notary public, th e attestatio n should be under his hand and official
seal. In case of acknowledgment it is better, as a m atter of precaution,
always to have two witnesses, besides the officer who takes the acknowl­
edgment. I f executed in this State, it m ust be attested by a judge of
a court of record of this S tate, or a justice of the peace, or notary
public, or clerk of th e superior court, in the county in which the three
last m entioned officers respectively bold their appointm ent, or if subse­
quent to its execution the deed is acknowledged in the presence of


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1997

either of the nam ed officers, th a t fact, certified on the deed by such
officer, shall entitle it to be recorded. (Act of 1893.) Deeds to secure
loans are in more common use th an mortgages because they have
been held to pass the absolute title and protect against year’s support
and dower, the equity of redem ption remaining in the m aker, can not
be levied upon until th e debt secured by the deed has been paid
off. Under the law of Georgia these deeds can not be foreclosed as
mortgages, the notes they are given to secure m ust be sued to judg­
m ent, the land m ust be re-conveyed to the grantor, and then levied
on, b u t the lien of the judgm ent relates back to th e date of th e con­
veyance. In the Federal courts, however, foreclosure can be made
in equity as in the case of ordinary mortgages. Usury will, however,
void such a conveyance, only as to the interest paid on such debt.
D ep o sitio n s. Testim ony is taken in this State by written in ter­
rogatories where the witness is a female, or where the witness does
not reside in the county where the suit is pending, or by reason of disa­
bility is unable to atten d court. In all counties within this S tate,
depositions m ay be taken upon five days' notice to the other p arty of
the tim e and place a t which the witness is to be examined. This latter
process cannot be used for taking testim ony outside of the State.
Depositions m ay be taken w ithin or w ithout the state, w ithout com­
mission, before a notary public or any officer authorized to issue
attachm ents. If within the sta te or if taken w ithout the state, before
any officer of the sta te or county where taken, authorized by laws of
Georgia to a tte s t deeds or take acknowledgments, upon 10 days'
notice to opposite party. In taking answers to interrogatories,
which m ust be authorized by a commission issued for such purpose
by the court here, two commissioners m ust act. Commissioners m ust
be disinterested and hot related to either party, or connected with
the case; attorneys of the parties are incom petent. None of the parties
to the case, nor their agents or attorneys, can be present when the
commission Is executed. The witness can only write his answer in
the presence of the commissioners. I t is usual, and th e b etter practice,
for one of the commissioners to write the_ answers of the witness as
they are given. Depositions m ay be w ritten with the typew riter,
and commissioners m ay adjourn their sittings from day to d ay . The
following instructions for taking testim ony are im portant; Instruc­
tions for taking answers to interrogatories: 1. in se rt the commis­
sioners’ nam es in the commission; any two respectable citizens will
do. 2. State the case as you find it. T hen comes the caption, th u s :
S tate of. ....... ...................
(Here insert the county and State
C ounty o f .............................ss. where the commission is executed.) s
By virtue of a commission from th e ................... court o f...............
county, we have caused the person in said commission nam ed to come
before us, who being duly sworn true answers to m ake to certain
Interrogatories thereto annexed, deposeth and answ ereth as follows:
(Here insert answers of the witnesses to each interrogatory in order
3. Let the witness sign the answ ers; then sa y : “ Answered, sworn to,
and subscribed before us, t h i s . . . .day o f........ _.. .. . 1 9 . . . . ” Then
sign your own names, adding the words “ Commissioner (L. S.) ” after
each name. 4. Seal all up together, using two wafers, each com­
missioner writing his name with “ Com m issioner” across a wafer or
seal. 5. State the case on the package, and address it to th e clerk
of the court issuing the commission. 6. I f it is to go by mail, get
the postm aster to receipt on the package. “ Received from one of
the commissioners (giving his name) the within interrogatories, to be
forwarded by due course of m ail,” nam ing his post-office. Testim ony
thus taken m ust be sent by mail, or by some person specially au th o r­
ized by the commissioner to carry it to the court.
D escen t a n d D is tr ib u tio n of P ro p e rty . T he husband is the
sole heir to his intestate wife, unless she leave Children, and In th a t
event the husband and children shall inherit per capita, b u t the
descendants of children shall take per stirpe. If a m an die w ith o u t.
children, or the descendants of children, leaving a wife, the wife is
his sole heir. If there are children, or those representing deceased
children, the wife shall take a child’s part, unless th e shares exceed
five in num ber, in which case the wife shall have one-fifth p a rt of the
estate. If the wife elects to take her dower, she has no further interest
in th e estate Children stand in the first degree to the intestate, and
Inherit equally. Posthum ous children stand upon th e sam e footing
with other children. Lineal descendants of children stand in the
place of their deceased parents, and take per stirpe, and not per
capita. B rothers and sisters stand in the second degree and inherit
if there be no widow or children, or representatives of children. • The
half-blood on the paternal side inherit equally w ith th e whole blood.
The father, if living, inherits equally w ith brothers and sisters, and
stands in the sam e degree. If there be no father, and the m other
is alive, she shall inherit in the sam e m anner as the father would.
Real estate descends direct to the heirs, and personal estate to the
adm inistrator. B ut real estate is subject to adm inistration for the
purpose of paying debts, and if necessary, for distribution.
D ow er. In this S tate th e wife is entitled to an estate for life in onethird of all lands of which the husband dies seized or possessed a t the
tim e of his death, or to which the husband obtained title in rig h t of
his wife. T here is no necessity for renunciation of dower in th is S tate,
and a m arried woman, on th a t question, need not join w ith her hus­
band in conveying land, except in cases where, before 1866, he obtained
real estate belonging to his wife, by virtue of the m arital relation.
E x ecu tio n s. M ust follow the judgm ent or decree from which they
Issue. T hey are good for seven years and m ay be renewed for a like
period by 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 th e constitution and laws
of Georgia, each head of a fam ily or guardian, or trustee of a family
of m inor children, or of an aged or infirm person, or a person having
care and support of dependent females of any age, who is not the
head of a family, shall have exem ption of realty, or personalty, or
both, to the aggregate of $1600. T he debtor shall have power to waive
or renounce, in writing, his right to the benefit of exem ption above
stated, except as to wearing apparel and not exceeding $300 worth
of household and kitchen furniture, and provisions. T he hom estead
or exem ption m ay be sold by th e debtor and his wife, if any, w ith the
sanction of the judge of the superior court of th e county where the
debtor resides, or the land is situated. The proceeds to be re-invested
upon the same uses. A general w aiver in writing, of the hom estead,
or exemption, is good.
The hom estead of each resident of th e s ta te actually occupied by
owner as a residence shall be exem pt from all taxes for state, county,
and school purposes, to value of $2,000, if said applicant file his
w ritten application an d schedule w ith C ounty T ax Receiver on or
before April 1st of year in which exem ption from ta x is sought.
F o re ig n C o rp o ra tio n s . All corporations, except those chartered
and organized under the laws of this State, are held to be foreign
corporations. Such corporations are recognized by com ity only;
they are subject to attachm ent, b u t have all the rights of replevy and
defense. T hey cannot exercise any corporate powers or privileges
which' by the constitution and laws of Georgia are denied to domestic
corporations or the exercise of which would be contrary to th e public
policy of this State. T here is otherwise no restriction upon foreign
corporations except in the case of insurance companies and building
and loan associations, which are required to m ake deposits. All cor­
porations are subject to license fees for doing business and all are liable
for taxes on property owned or held in the State* (See Corporations.)
F ra u d . C ontracts, awards, m arriages, judgm ents, sales, and wills
are void when they are brought about and procured by fraud. Prom ­
issory notes when procured by fraud are void in the hands of th e holder,
who so procures them . The s ta tu te of frauds, as of force in Georgia,
requires the following obligations to be in writing, signed by th e p arty,
or his authorized agent, to be binding: 1. A promise by an executor,
adm inistrator, guardian, or trustee, to answer in dam ages out of his
own estate. 2. A promise to answer for the debt, default, or mis­
carriage of another. 3. An agreem ent m ade upon consideration of
marriage, except m arriage articles as otherwise provided. 4. Any
contract for the sale of lands, or any interest in or concerning them .
5. Any agreem ent th a t is not to be perform ed in a year. 6. A
promise to revive a debt barred by sta tu te of lim itations or bankruptcy.

1998

BANKING AND COMMERCIAL LAWS—IDAHO

7. Any contract for the sale of goods, wares, an d m erchandise.
In existence or not in esse, to the am ount of $50 or more, except the
buyer shall accept p a rt of the goods sold and 'actually receive the sam e
or give som ething in earnest to bind the bargain or in p art paym ent.
8. An acceptance of a bill of exchange.
G a r n is h m e n ts . T his process m ay be invoked in any case, b u t wa­
ges or salaries are not subject u ntil after judgm ent has been rendered.
G arnishm ent m ay be dissolved by giving bond and a th ird p a rty m ay
claim a fund held up under garnishm ent and m ay release th e fund by
giving bond. Any person m ay claim exem ption from garnishm ent as
to wages to the extent of $1.25 per day and one-half of the rem ainder.
Holiday®. The legal holidays are: Sundays; Ja n u ary 1 (New
Y ear s D ay); Ja n u ary 19 (Robert E. Lee’s birthday); F ebruary 22
(W ashingtons birthday); April 26 (Confederate M em orial D ay);
June 3 (Jefferson D avis’ b irth d a y ); Ju ly 4 (Independence D ay); first
M onday in Septem ber (Labor D a y ); October 12 (Columbus D a y );
N ovem ber 11 (Armistice D ay); Thanksgiving D ay; and December 25
(Christm as Day).
I n t e r e s t . T he legal ra te of interest in Georgia is 7 per cent, b ut
8 per cent is legal when contracted for in writing. B u t 1 ^ % per
m onth m ay be charged under Small Loan Act up to $300. P arties
charging u sury forfeit th e excess if usury is set up. U sury has no
present penalty in Georgia, except forfeiture of all interest paid upon
the debt.
J u d g m e n ts create liens from th eir rendition upon the real or per­
sonal property of the defendant; all judgm ents a t the sam e term rank
equally, and property sold by a debtor after judgm ent is obtained
against him is only discharged from the lien of such judgm ent, if real
estate, after four years’ possession by the vendee, and in cases of per­
sonal property, after two years’. Judgm ents, w hether in the United
States court, or in any S tate court, obtained in any other county than
th a t in which the defendant resides have no lien on the property of
the defendant in any other county, unless the execution thereon is
recorded in the county of th e defendant’s residence. Unless such
execution is recorded as so required within th irty days, its lien will
only date from the tim e of record. (See Actions.)
J u r is d ic tio n . (See T itle Courts.)
L ic en se. N o license is required of commercial travelers. Itin e ran t
traders m ust pay license fees.
L ie n s. Under the laws of Georgia mechanics, m aterial-m en, m a­
chinists, employes of steam boats, millwrights, builders of gold mine
machines, stone-cutters, and m arble works laborers have special liens
on property im proved or worked on. Landlords have a general lien
which takes effect from the levy of distress and a special lien on crops
for re n t of land on which they are raised. Common law liens of inn­
keepers, factors, pawnees, carriers, attorneys and others are recog­
nized. Vendor'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 by them or successfully defended by them.
L im ita tio n s . Suits on open accounts are barred after four years,
on prom issory notes and bills after six years, on instrum ents under
seal after tw enty years, on suits for personal injury after two years.
Seven years’ adverse possession of real estate under color of title, and
tw enty years’ adverse possession w ithout color of title, will bar the
claims of all persons not laboring under disability. ' Infants have seven
years to assert their rights, after becoming tw enty-one years of age.
T his S tate does not require th a t notes or contracts under seal be
witnessed, so th a t a note or contract under seal w hether witnessed
or n o t carries th e tw enty-year sta tu te of lim itation provision.
M a rrie d W omen.- The wife m ay contract and sue and be sued in
her own nam e in respect to her separate estate as a femme sole, except
th a t she can not bind her separate estate by suretyship for any one,
and any promise to pay her husband’s debt is void. She cannot
sell to her husband or trustee for any purpose, except Dy order of the
superior court. A wife or her heirs m ay sue and recover from any
person money or property used by her husband to pay his debt where
the creditor takes with notice. All the property of the wife a t the
.time of m arriage, and all she m ay acquire by gift, inheritance, or pur­
chase, shall vest in and belong to her, and shall not be liable for t h e '
debt, default, or contract of her husband. The wife w ith h er children,
If any, is entitled to twelve m onths’ support out of the estate of her
deceased husband. The husband is bound to support and m aintain
the wife, and his consent is presum ed to her agency in th e purchase of
necessaries. T he wife’s separate property is not liable for debts con­
tracted by her as agent of h er husband in the ordinary support of her­
self, and children, b u t by special contract in her own capacity, and
not as agent for her husband, she could bind her separate estate, for
th a t purpose. A m arried woman can dispose of h er property by will.
M o rtg a g e s. M ortgages are only security for debts. T hey m ay
embrace property in the m ortgagor’s possession, or to which he has
x rig h t of possession. T hey m ay cover a stock in bulk, b u t changing
In specifics, and after acquiring property. N o particular form is
necessary, b u t it m ust be cleared th a t th e instrum ent indicates a lien,
describes th e property and specifies th e debt it secures. M ortgages
on land are not good against dower, and a wife cannot waive her
dower as against this lien. M ortgages m ust be executed and attested
in th e sam e m anner as deeds, except th a t in mortgages on personal
property, only the official witness is necessary. M ortgages w ith power
of sale are valid in Georgia. Hom estead and exem ption m ay be
waived in th e mortgage. All m ortgages on personal property m ust
be recorded in the county where the m ortgagor resides a n a the prop­
erty is located. M ortgages on land m ust be recorded in the county
where th e land is situated.
N e g o tia b le I n s t r u m e n t s . Uniform N egotiable Instrum ents Act
(see com plete text following “ D igest of Banking and Commercial
L aw s” ). A dopted A ugust 18, 1924, w ith certain changes, i.e., m ay
be m ade payable in cotton or other articles of value, om its provision
authorizing confession of judgm ent if n ot paid a t m atu rity , where
in strum ent payable a t bank it shall not be equivalent to an order
to th e b ank to pay sam e for account of principal debtor. A contract
to pay atto rn ey ’s fees cannot be enforced unless th e debtor when
served ten days before su it is filed with a w ritten notice of intention
to sue w ith am ount and term of court to which su it will be brought,
shall fail to pay such debt before retu rn day. A waiver of hom estead
in a prom issory note is a bar to such a claim as against th e collection
of such note. Prom issory notes and contracts containing reservation
of title to personal property m ust be executed before a notary public,
justice of th e peace, or clerk of a court of record, and m ust be recorded
as m ortgages to hold such property as against th ird parties or innocent
purchasers. Any draft, bill of exchange or check, drawn upon an
in stitution or person w ith which the draw er has not sufficient funds
on deposit to m eet th e same, subjects th e draw er to crim inal liability.
N o ta rie s. Commercial notaries, male or female, are appointed
for four years by the superior courts, and for th e sta te a t large by the
S tate Librarian. T hey m ust have seals and are authorized to attest
deeds and mortgages, and m ake protest of commercial paper.
P ro b a te L aw . (See A dm inistration ot E states, Deeds and M o rt­
gages.)
P r o te s ts . (See Bills of Lading and Prom issory Notes.)
R e co rd s. (See Deeds and Mortgages.)
R e d e m p tio n . T here is no redem ption in this S tate under judicial
sales except in case of sale of property under tax execution where
parties m ay redeem in twelve m onths if improved land and wild land
w ithin tw o years. Unless after 12 m onths from date of sale notice is
given th e defendant in execution of purchaser's intention to foreclose
redem ption real estate m ay be redeem ed any tim e thereafter. (N ot
applicable to redem ption of wild land.)
R eplevy. All property seized under attachm ent, distress, or other
sim ilar process, m ay be replevied. P roperty seized under process
and claimed by the third p arty m ay be delivered over upon bond and
security for its forthcom ing to answer final judgm ent of decree.
R e v isio n . (See Courts.)
S ales. Sales m ay be m ade to pay debts, b ut any sale of stocks of
goods in bulk is deem ed fraudulent unless the seller delivers to the


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buyer a list of all creditors and the am ount due each. I t shall th en be
the d u ty of the buyer to notify th e creditors of his purchase. This
notice m ust be mailed five days before completion of the purchase
T axes. Taxes are a lien upon all the property of th e debtor, real
or personal, and its lien is preferred as stated in section herein relating
to distribution of the estates. Sales of property for taxes are con­
ducted in the same m anner as other judicial sales. One year in which
to redeem is allowed. All taxes and liens for taxes accrued against
property, an equity of redem ption in which is em braced in a y ear’s
support duly set apart, shall be thereby divested, th e sam e as if the
entire title were included in such year’s support.
W ills. All persons of full age and sound and disposing memory.
Including m arried women, m ay m ake wills, and dispose of their estates.
Wills m ust be executed in the presence of three witnesses, all of whom
shall be present, m ust be called by the testa to r as witnesses, and m ust
sign, and shall certify th a t they signed, in the presence of the testator,
and in the presence of each other. Wills m ust be in writing, except
nuncupative wills. Wills of citizens of other States, where executed
according to the laws of the S tate, and probated in solemn form in
such S tate, which dispose of real or personal property in Georgia, may
be adm itted to probate in this State, when an exem dified copy of
the will Is presented. Wills are probated in the court of ordinary
m the county where the testator resides a t the date of his death. All
wills executed out of this State by citizens of this State to dispose
of property in Georgia m ust be executed according to our law. A
foreign will, executed according to the law of Georgia, will constitute
a m unim ent of title to real property w ithout being probated in this
State, when recorded on the record of deeds in the county where the
land lies, together with an exemplification of record adm itting It to
probate in another State, certified according to the Act of Congress.
Uniform Stock T ransfer Act adopted M arch 24, 1939.

SYNOPSIS OF

THE LAWS OF IDAHO
RELATING TO

BANKING AND COMMERCIAL USAGES
Revised by C h a s . H . D a r l in g , A ttorney a t Law, Boise.
(See card to A ttorneys List.)
A c k n o w le d g m e n ts . AH conveyances and other instrum ents
required to be acknowledged in this S tate m ust be acknowledged, if
within the S tate, before a judge or clerk of a court of record, or the
Secretary of S tate, as county recorder, a notary public, or a justice
of th e peace. T he authority of a justice or clerk of th e Supreme
C ourt, or N otary Public, or th e Secretary of S tate, to tak e acknowl­
edgm ents extends to any place within the state, and of th e remaining
officers authorized to take acknowledgments to th e city, county or
district for which said officer was elected or appointed. If w ithout th e
S tate, b ut w ithin the U nited States, th ey m ust be acknowledged before
any such officer, or a commissioner of deeds for this S tate, or before
any officer authorized by the laws of this S tate or T erritory to take
such acknowledgment. I f w ithout th e U nited States, th ey m ust be
acknowledged before a m inister or charge d ’affaires of the United
States, resident and accredited in the country where the acknowledgm ent is taken, before a consul or vice-consul, a judge of a court of
record, a duly appointed commissioner, or a notary public. The
certificate of acknowledgment, if m ade before a justice of the peace,
when used in any county other than th a t in which he resides, m ust
be accompanied by a certificate, under the hand and seal of th e recorder
of the county in which the justice resides, setting forth th a t such
justice, a t the tim e of taking such acknowledgment, was authorized
to take the same, and th a t the recorder is acquainted w ith his hand­
writing, and believes th a t the signature is genuine. Proof of the
execution of an instrum ent m ay be m ade though it has not been
acknowledged. Form of m arried wom an's acknowledgment the
sam e as th a t of a single person. The forms of certificates of acknowl­
edgm ent by individuals; corporations; partnerships; attorneys in fact;
trustees, adm inistrators executors, guardians, sheriffs receivers, or
other official representatives; and of th e sta te ; and of an y county or
subdivision, are prescribed by Idaho Code A nnotated, Secs. 54-710
to 54—714, Inc. (See Conveyances.)
A ctio n s. T here is b ut one form of civil action in this State. An
action is commenced within the m eaning of the sta tu te when the
com plaint is filed with the clerk. E very action m ust be prosecuted
in the nam e of the real p arty in interest.
A ffidavits are used only to verify pleadings, to prove service of
summons, notice, or other paper, to obtain provisional rem edy.
A llen s.x Anti-Alien bill prohibits aliens not eligible to citizenship
and corporations, a m ajority of whose m embers are such aliens, from
acquiring or holding real estate except to the extent and for the pur­
poses prescribed by existing treaties between their countries and the
U nited States, b u t perm its such aliens to lease lands for n ot more
than five years for agricultural purposes. Also prohibits such aliens
from acting as guardian or trustee for any real estate and provides
th a t lands hereafter conveyed to such aUens shall escheat to the State.
(I. C. A., Sec. 23-102, et. seq.)
A r b itra tio n . Persons capable of contracting m ay subm it to
arbitration any controversy which m ight be the subject of a civil
action between them , except a question of title to real property in
fee or for life.
A s s ig n m e n t fo r B e n efit o f C re d ito rs . No assignm ent for benefit
of creditors shall be valid unless m ade to a bona-fide resident of this
sta te or to a corporation duly authorized to do business in this state.
(I. C. A. Sec. 66-201.)
A tta c h m e n ts . 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 debt is unsecured. Plaintiff a t the tim e of issuing th e summons
or any tim e afterw ards m ay obtain the attachm en t upon filing affi­
dav it and undertaking and notice of attachm ent m u st be published.
B a n k C o lle c tio n C ode. Effective M ay 5, 1931. Given directly
following laws.
B a n k s a n d B a n k in g . T itle 25 of Idaho Code A nnotated, as
Amended, entitled “ Bank A ct,” governs the form ation, regulation and
adm inistration of banks.
I t is unlawful to engage in banking or tru s t business except by
m eans of a corporation duly organized for such purpose, except th a t
any individual, copartnership or unincorporated association actually
transacting banking or tru s t business as defined in th e Act, on the
effective d ate thereof, M ay 5, 1925, m ay continue in such business
a t the places where they are then located, subject to th e provisions
of th e Act.
Bank Act does not apply to national banks. Supervising authority
is the D epartm ent of Finance of State. Banks are divided into the following classes: Savings Banks, Commercial Banks, T ru st Com­
panies. C orporations m ay be organized by any num ber of natural
persons— not less th an five in any case—;under th e General Corporation
Laws of th e S tate and as provided in th e Bank Act. Officers and
D irectors are as provided by th e General C orporation Laws of the
S tate. C apital Stock required varies in proportion to th e population
of the com m unity, from $25,000 to $100,000. Articles of Incorpora­
tion m ust be prepared under the General C orporation Laws and m ust
be approved by th e D epartm ent of Finance before filing. No bank
shall transact any business, except such as is incidental to its organi­
zation, w ithout th e w ritten approval of th e Commissioner of Finance
and his Certificate stating th a t it has complied w ith th e provisions of
the Bank Act and all requirem ents of law. T he entire C apital, plus
10% for Surplus, in cash, or property approved by th e Commissioner
of Finance, m u st be paid in before commencing business. As a pre­
requisite to obtaining th e perm it from the D epartm ent of Finance,
Bank m u st file (1) Certified Copy of Articles, (2) Proof th a t entire
C apital, plus 10% Surplus, is paid in, (3) Nam es and addresses of its

BANKING AND COMMERCIAL LAWS—IDAHO
Officers and Directors, ( 4) N am es and addresses of all Subscribers to
its C apital Stock and am ount subscribed by each, (5) Financial S tate­
m ent of each and every Subscriber, showing the property he owns,
not exem pt from execution, which m ust be a t least three tim es the
am ount of subscriber’s subscription, (6) Oath of each D irector,
(7) Affidavit of Directors th a t corporation has complied w ith all
provisions precedent to doing business.
E very bank not a m em ber of the Federal Reserve System shall, a t
all tim es, have on hand as a Reserve an am ount equal to a t least 15%
of its aggregate deposits, in cash, in its vaults or held on deposit,
subject to check, w ith other banks, which shall have been approved
by th e Comfnissioner of Finance. 33 Ji % of Reserve m ay consist of
U. S. Bonds n o t hypothecated. Any bank becoming a member of
Federal Reserve System shall com ply with requirem ents of Federal
Reserve Act.
Commissioner of Finance is required to examine S tate Banks twice
each year and whenever he shall deem it necessary. Fees for examin a tio n a re required to be paid by th e bank. Every bank is required
to m ake not less th an three reports to D epartm ent each calendar year
a t th e tim es reports are called for from N ational Banks. D epartm ent
of Finance prescribes forms for reports. Commissioner of Finance m ay
om it exam ination of any bank and accept in lieu thereof findings of
the exam ination m ade by any agency of the U nited States authorized
and required by laws of th e U nited S tates to m ake such examination.
T otal liabilities of any one person to any bank shall not a t any one
tim e exceed 20% of the aggregate paid in C apital and Surplus. In ­
debtedness of an Officer whoi s actively engaged in m anaging of bank,
or an Employee, shall not exceed 5% of paid up C apital and Surplus.
No loan to Officer or Em ployee shall be m ade without being approved
by m ajority of Board Of Directors, and every such loan shall be acted
upon in absence of applicant. Combined indebtedness of Directors,
Officers and Employees shall not exceed 40% of paid up C apital and
Surplus. No Officer or Em ployee m ay borrow except on good col­
lateral or other am ple security. Loans to Officials of D epartm ent of
Finance are prohibited.
Banks m ay m ake real estate loans secured by first liens, represented
by m ortgages or deeds of tru st, upon real estate including improved
farm lands, business and residential properties, and m ay purchase
obligations so secured, when entire am ount of such obligation is sold
to bank. A m ount of any loan on real estate shall not exceed 50% of
appraised value of real estate, and no loan shall be m ade for a longer
term th an five years except th a t loans m ay be m ade in an am ount
not to exceed 60% of appraised value of real estate for term not longer
th an 10 years if loan is secured by am ortized m ortgage or deed of tru st
upon term s by which instalm ent paym ents shall am ortize 40% or
more of principal of loan w ithin not more th an 10 years, and these
lim itations do n ot prevent renewal or extension of loans which are
insured under act of Congress relating to Federal Housing Adminis­
tration. No bank shall m ake real estate loans in aggregate in excess
of th e am ount of th e capital stock of th e bank paid in and unim paired
plus unim paired surplus fund or in excess of 60% of am ount of its
tim e and saving deposit—w hichever is greater. Loans m ade to
finance construction of residential or farm buildings and having
m aturities of n o t to exceed six m onths, whether or not secured by
m ortgage on real estate, shall not be considered as real estate loans
but shall be classed as ordinary commercial loans provided no bank
shall invest in or be liable on any such loans in aggregate am ount in
excess of 50% of actually paid-in and unim paired capital. Loans
m ade to established .industrial or commercial businesses which are
in whole or in p a rt discounted or purchased or loaned against by
Federal Reserve Bank under act of Congress of June 19, 1934, or for
any p a rt of which a com m itm ent shall have been m ade by Federal
Reserve B ank or in th e m aking of which a Federal Reserve Bank
participates under th e provisions of said act of Congress, are not sub­
ject to th e above restrictions or lim itations upon loans secured by real
estate.
Banks m ay invest their funds and money in their custody eligible
for investm ent in notes or bonds secured by m ortgage or deed of tru st
insured or debentures issued by Federal Housing A dm inistrator and
in securities of N ational M ortgage Associations, and in bonds or other
obligations issued by a housing authority pursuant to th e Housing
Authorities Law of th is sta te or issued by any public housing authority
or agency in th e U nited States when such bonds or obligations are
secured by a pledge of annual contributions to be paid by th e U nited
S tates G overnm ent or any agency thereof. No bank shall accept
as collateral or m ake loan on, or purchase any of its own C apital
Stock or Shares of any other bank, except Stock of Federal Reserve
Banks, unless such security or purchase shall be necessary to prevent
loss upon debt previously contracted in good faith, and Stock so
purchased or acquired shall, within six m onths from date of acquire­
m ent, be sold or disposed of a t public or private sale.
Banks and tru s t companies m ay act as executors or adm inistrators
and are n ot required to give bond, except when appointm ent is m ade
under will requiring bond.
Excess or double liability of stockholders is prohibited by Section 17
of A rticle 11 of th e S tate C onstitution.
Branch banks m ay be operated w ith approval of Commissioner of
Finance, provided th a t any corporation operating branch banks shall
have paid in C apital Stock of n ot less th an $100,000 and Surplus of
not less th an 10% of C apital Stock. No corporation shall establish
branch banking offices unless its paid-in C apital Stock shall, in the
aggregate, am ount to a t least $25,000 for each of its banking offices
and, after M arch 19, 1935, no corporation shall establish new branch
banks unless it has, paid in, an unim paired C apital Stock in am ount
not less th a n M inim um C apital Stock required by Subsections (C)
and (D) of Section 36 of T itle 12 of U nited S tates Code as Amended
by Section 23 of Act of Congress approved June 16, 1933, for N ational
Banking Associations.
Branch banking offices shall not be established in any city or town
in which is located a sta te or national bank regularly transacting
banking business, unless corporation establishing such branch shall
tak e over existing bank or obtain consent of all banks there located.
No u n it bank shall be acquired for th e purpose of establishing a
branch bank u n til said u nit bank shall have been to operation as a
u nit for a period of five years.
B ills of L a d in g . Uniform act recom m ended by the American
Bar Association.
B lu e Sky L aw . Idaho has a blue sky law governing corporations,
unincorporated associations and partnerships, domestic or foreign,
dealing in stocks, bonds, and other securities, excepting United States
bonds. State or municipal securities in Idaho, and Idaho real estate
mortgages. This law requires the filing of various statem ents,
accounts and other papers, and m akes it unlawful to do business in
th e S tate w ithout compliance. Securities issued or guaranteed by
the U nited States, or any territory or possession thereof, or by any
state, or by an y foreign governm ent w ith which the U nited S tates
is m aintaining diplom atic relations,; securities issued by cooperative
associations organized under th e laws of Idaho, securities issued or
guaranteed by public service utilities, securities appearing in lists on
New Y ork Curb, New York, Boston, San Francisco and Chicago
Stock Exchanges, or other recognized exchanges which have been
approved by th e Commissioner of Finance, securities issued by or
representing interest in, or a direct obligation of, a bank, tru st com­
pany, or savings institution, or issued by a federal land bank or joint
land bank or national farm loan association, or by any company
created and acting as an intrum entality of th e governm ent of the
U nited States, any security other th an common stock outstanding in
the hands of th e public for a period of not less th an five years, upon
which there has been no default to th e paym ent of principal, interest
or dividends for a continuous im m ediately preceding period of five
years, securities evidencing indebtedness under any contract m ade
pursuant to th e provisions of any s ta tu te of any S tate of th e U nited
States providing- for th e sale of personal property under conditional
p ie s contracts, and conditional sales contracts and promissory notes
in th e ordinary, course of business, are exem pt from th e operation of
th e Blue Sky Law. T he provisions of th e Blue Sky Law do not


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1999

apply to persons or corporations engaged in actual mining operations,
developing mining property within th e S tate, except th a t mining
corporations m ust m ake an annual report. T he provisions of th e
Act do not apply to any judicial sale, or to a sale by a pledgeholder,
a bona fide sale by an owner who is not the issuer or underw riter of
a security who sells th e sam e for his own account, nor to transfers or
exchanges by one corporation to another corporation in th e course
of a merger, nor to th e bona fide sale of membership certificates by
established enterprises actually engaged in business in this S tate where
no compensation, fees or commissions are paid. A dm inistration of
Blue Sky Law by D ept, of Finance. Appeal is allowed from ruling of
Commissioner of Finance to D istrict C ourt, Ada C ounty. (I. C. A.,
Sec. 25-1601 et seq.)
C o lla te ra ls. No sta tu to ry regulation.
C o llectio n s. Uniform Bank Collection Code as recommended by
American Bankers Association; see complete text, back of laws'.
C o m m u n ity P ro p e rty . A11 property acquired after m arriage
other than by gift, bequest, devise, or descent, is com m unity property.
The personal earnings of th e wife and the income from her separate
property are com m unity property unless she is living ap a rt from her
husband.
C o n tr a c ts . A w ritten Instrum ent Is presum ptive evidence of a
consideration.
C on v ey an ces. Real estate is conveyed by instrum ent in writing.
Subscribed by the p arty or his authorized agent in writing. The
com m unity property can be conveyed or incumbered only by husband
and wife joining in the execution and acknowledgment of the in stru ­
m ent. During the continuance of the m arriage the wife has the
m anagem ent, control, and absolute power of disposition of her separate
property, and m ay bargain, sell, and convey her real and personal
property, and m ay enter into any contract with reference to th e same,
in the same m anner and to the sam e extent and with like effect as a
m arried m an m ay in relation to his real ana personal property.
Separate property of wife not liable for debts of her husband- wife is
not liable as surety unless the obligation is for her benefit or benefit
of her separate property. An instrum ent purporting to g ran t real
property to take effect upon condition precedent, does n ot pass the
estate upon the perform ance of the condition. Such instrum ent is
merely an executory contract. (See Acknowledgments.)
C o rp o ra tio n s . P rivate corporations m ay be formed by three or
more natural persons of full age, a t least tw o-thirds of whom are
citizens of the United States. Such corporations are formed by
executing articles of incorporation signed in triplicate by each of
the incorporators and acknowledged by a t least three of them before
an officer authorized to tak e acknowledgm ents, and in addition to
stating th e nam e of the corporation, shall sta te in th e English language:
1. Its purpose. 2. Its duration. 3. Location and post-office address
of its registered office in this state. 4. T otal authorized num ber of
par value shares and their aggregate par value, and if any of Its
shares have no par value, th e authorized num ber of such shares.
5. D escription of the classes of shares, if shares are to be classified,
and a statem ent of th e num ber of shares in each class and th e relative
rights, voting power, preferences and restrictions granted to or imposed
upon th e shares of each class. 6. T he nam e and post-office address
of each of th e incorporators and a statem ent of th e num ber of shares
subscribed by each, which shall not be less th an one, and th e class of
shares for which each subscribes. T riplicate originals of th e articles
of Incorporation shall be delivered to tn e Secretary of S tate, and if
he finds th a t they conform to law he shall p u t an endorsem ent of his
approval on each set and when all taxes, fees and charges have been
paid as required by law, he shall file one of such sets in his office and
record the sam e and shall issue and record a certificate of incorpora­
tion. One of th e sets of articles of incorporation shall then be filed
for record in th e office of th e C ounty Recorder of th e C ounty in which
th e registered office of th e corporation is situated, and th e other
shall be retained by th e corporation. Railroad, wagon road, tele­
graph and telephone corporations m u st s ta te also in their articles:
1. The kind of road, telegraph or telephone line intended to be con­
structed. 2. T he estim ated length of th e road or line. 3. T hey m ay
provide in their articles th e num ber of directors which shall constitute
a quorum for th e transaction of business, th e decision of th e m ajority
of such quorum to be a valid act. 4. W hether m eetings of th e board
shall be held w ithin or w ithout th e S tate. 5. W hether stockholders
shall be individually liable for debts of corporation. R ailroad corpo­
rations m ust have subscribed, before filing articles, $1,000 per mile;
wagon road corporations, $300 per mile; telegraph corporations, $100
per mile, and th e articles m ust be verified by affidavit of president,
secretary, or treasurer nam ed in articles, th a t such stock has been
subscribed. . All corporations, except insurance, non-production m in­
ing companies, co-operative telephone and irrigation companies, m ust
pay between July 1 and Septem ber 1 of each year, a license fee based
on th e am ount of authorized capital stock, varying froto $10 to
$150; a failure to m ake paym ent by Septem ber 1 entails a penalty
of $10, and a failure to m ake paym ent by Novem ber 30 entails a
loss of charter for dom estic corporations and a loss of th e right to do
business w ithin th e S tate for foreign corporations. Between Ju ly 1
and Septem ber 1, all corporations m ust m ake an annual report.
Corporations m ay be reinstated by paying all license taxes th a t have
accrued and a penalty of $10 for each year th ey have failed to file
their annual statem ent or failed to pay their annual license fee
(I. C. A., T itle 29, Chap. 1), styled th e “ business Corporation
A ct," follows very closely th e Uniform Business Corporation Act
drafted by th e N ational Conference of Commissioners on Uniform
Laws.
C o rp o ra tio n , F o re ig n . Foreign corporations desiring to do busi­
ness in this State, m ay have all th e rights and privileges of like domes­
tic corporations, by filing w ith the secretary of state, a certified copy
of the articles of incorporation, and in th e office of th e county recorder
of the County where th e principal place of business of such corporation
is to be conducted, a copy of their articles of incorporation duly certified
by the secretary of sta te of this S tate, and th e designation of some per­
son residing in th e county in which such principal place of business is
to be located upon whom process issued by au th o rity of or under any
law of this S tate m ay be served. T he original designation of agent
m ust be filed with th e secretary of sta te and a copy certified by the
secretary of sta te m ust be filed to th e office of th e C ounty Recorder
in which its principal place of business is located in this S tate.
F o r­
eign corporation m ay surrender its right to do business w ithin S tate
of Idaho by filing w ith Secretary of S tate certificate th a t it surrenders
its a u th o rity to tran sact in tra sta te business in the state, th a t it con­
sents th a t process against it upon any liability incurrred prior to
filing the certificate of w ithdraw al m ay be served upon Secretary of
S tate, and post office address to which Secretary of S tate m ay m ail copy
of any process against such corporation th a t m ay be served upon him.
Surrender of au th o rity to tran sact business in this sta te does n ot affect
any action pending a t tim e of such w ithdrawal, and retirem ent from
transacting business in th e sta te w ithout filing certificate of with­
draw al does n ot revoke appointm ent ,of agent upon whom process
m ay be served within th e state. Any foreign corporation th a t has
voluntarily surrendered its rig h t to do business in this state, or whose
license has been forfeited for failure to pay its annual license tax or
otherwise comply w ith th e laws of th e sta te relating to foreign cor­
porations, before it is again perm itted to resum e doing business in
th e state, shall reinstate w ith th e Secretary of S tate by paying all
th e fees and annual license taxes which have accrued during th e
tim e th e charter was forfeited, or shall requalify under th e sta tu tes
of th e sta te and pay th e fees and annual license tax fixed by sta tu te
for corporations n ot previously qualified to do business in th e state.
C o u rts . Term s and Jurisdiction, The judge of th e d istrict court
of each of the judicial districts of the S tate m ust annually fix the
tim e for holding the district court in the several counties of his dis­
trict; and he m ay hold such special term s as he deems proper and
necessary. D istrict courts have original jurisdiction in all civil cases.
P robate courts are held to each county continuously, have original
jurisdiction to pro b ate m atters an d have jurisdiction up to $500, in

2000

BANKING AND COMMERCIAL LAWS—IDAHO

civil cases and concurrent jurisdiction w ith justice’s courts in all
crim inal cases. Justices' civil jurisdiction, $300.
C u rte s y does n o t exist.
D ays o f G race abolished b y sta tu te.
D e p o s itio n s m ay be tak en w ithin or w ithout th e sta te before any
judge, justice of th e peace, n otary public, clerk of a court of record,
or commissioner, appointed by th e C ourt,upon notice served upon th e
opposite p arty , sta tin g th e court, action, tim e, an d place, and before
whom th e sam e will be taken, or th ey m ay be taken upon commission
issued b y th e judge w ith interrogatories attached. Depositions shall
n o t be tak en before any person or th e kin of any person interested
in th e action.
D e sc e n t a n d D is tr ib u tio n of I n t e s t a t e E s ta te s . If a person
dies in testate, surviving spouse takes all the com m unity property,
both real an d personal.
,
On death intestate separate property, both real and personal,
descends as follows: If decedent leaves spouse and one child, each
entitled to one-half of decedent’s separate property: if more th an
one child, surviving spouse gets one-third and rem ainder goes in
equal shares to children of decedent and to the lawful issue of any
deceased child by right of representation, b u t if no children of decedent
living a t his death, rem ainder goes to all of his lineal descendants,
and if they are in same degree equally, otherwise according to right
of representation; if decedent leaves no surviving spouse b u t leaves
issue, th e 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 decedent's father and m other in equal shares,
or If either be dead, the whole goes to th e other; if no issue nor h us­
band or wife, estate goes to father and m other: if neither issue, hus­
band. wife, father nor m other, iD equal shares to brothers and sisters
of decedent and to their children by right of representation; if spouse
survives decedent and there are neither issue, fath er 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
of kin in equal degree, com puted according to rules of civil law; if
decedent leaves no heirs, property escheats to S tate. W hen any
estate is devised or bequeathed to any child or other relative of the
testato r and th e devisee or legatee dies before th e testato r, leaving
lineal descendants, such descendants tak e th e estate so given by the
will in th e sam e m anner as th e devisee or legatee would have done
had he suryived th e testator.
D ow er does not exist. (See C urtesy and Com m unity property).
E m p lo y ers a n d E m p lo y es. All persons employing m echanics or
laborers in working mines, erecting or repairing buildings, construct­
ing canals, railroads, etc., m ust m ake, record, and publish a sta te ­
m ent, under oath, setting forth th e following: T he nam e Of the
owner of th e premises where work is being done or upon which it is
Intended to begin work; the nam e of the person or com pany engaged
In or who contem plates engaging in work upon such premises; the
conditions under which such person or corporation is prosecuting
the work as agent, owner, etq., th e principal office of the owner and
the agent in th is S tate; th e tim e and place where paym ent of laborers
and mechanics will be m ade. A copy of the statem en t m ust be
posted a t th e place where work is prosecuted.
E m p lo y e r’s L ia b ility L aw . (See W orkm en’s Compensation.)
E x e c u tio n s issue a t any tim e within five years after judgm ent.
T he only stay is by appeal, with supersedeas bond. One year allowed
for redem ption from execution and foreclosure sale.
E x e m p tio n s . Hom estead, not exceeding $5,000, by head of
fam ily and $1000.00 by any other person, if declaration of home­
stead is duly acknowledged and recorded; office furniture and library,
$i!00; necessary household and kitchen furniture n ot exceeding
in value $300, and provisions for fam ily for six m onths; certain farm
anim als, etc., w ith food for six m onths; and w ater right of 160 inches,
when actually used in irrigation; also crops growing or grown on
fifty acres of land, leased, owned or possessed by person cultivating
th e same; tools or im plem ents of m echanic necessary for his trad e
of th e Value of $500; m otor vehicles n ot exceeding $200 in value; all
instrum ents of surgeons, etc., also all professional libraries; m in e rs
dwelling of value $500, and his pipes, cars, etc., of th e value of $200;
pack anim als and equipm ents, n ot exceeding $250; team , wagon, etc.,
of draym an; 75 per cent of th e personal earnings of a debtor w ithin
th irty days preceding levy, where earnings are necessary for use of
fam ily, residing in this S tate ; th e shares held by m em bers of a Building
an d Loan Association to th e value of $1,000; provided, such person
has no hom estead; all benefits arising o ut of life insurance, represented
by a n annual prem ium of $250; all property of fire companies. All the
above p roperty m ay be sold under foreclosure of m ortgage, which
includes same of execution issued on judgm ent for purchase price.
G a r n is h m e n t. Any personal property or credits in the hands of
another, belonging to th e defendant, is subject to garnishm ent, as
are debts owing to him from another if due.
G u a r a n ty , T itle a n d T r u s t C o. M ay furnish abstracts, act as
surety, trustee, fiscal agent. P aid up capital of $25,000 required.
C apital deemed security for th e perform ance of their duties.
H o lid a y s. T he legal holidays are ¡Sundays; Ja n u ary 1 (New Y ear’s
D a y ); F ebruary 22 (W ashington’s b irth d a y ); M ay 30 (M emorial
D ay); Ju n e 15 (Pioneer D ay); Ju ly 4 (Independence D ay); first
M onday in Septem ber (Labor D ay); October 12 (Columbus D a y );
general election day; Novem ber 11 (Armistice D ay); Thanksgiving
D ay; and December 25 (Christm as D ay); every day on which an
election is held throughout th e state, every day appointed by the
President or by th e Governor of the sta te for a public fast, thanks­
giving or holiday.
, ,
,
.,
H u s b a n d a n d W ife. All property of either th e husband or the
wife owned by him or her before m arriage, and th a t acquired after­
w ard either b y gift, bequest, devise or descent, or th a t which either
he or she shall acquire w ith th e proceeds of his or her separate prop­
erty , b y way of moneys or other property, shall rem ain his or her
sole an d separate property. T he wife has th e m anagem ent, control,
and absolute power of disposition of her separate property, to th e sam e
extent and w ith like effect as a m arried m an m ay have in relation
to his real and personal property. T he separate p roperty of the
wife is not liable for the debts o f her husband, b u t is liable for her
own deb ts contracted before or after m arriage. T here is no estate
by courtesy or in dower. M arriage settlem ents are provided for,
and when properly executed and recorded m ay vary the sta tu te
governing th e relations of husband and wife concerning property
rights. M inors m ay execute valid m arriage settlem ents
I n t e r e s t . W here there is no express contract in writing fixing a
definite rate of interest, th e rate is 6 per cent per annum . P arties
m ay agree in writing for interest a t a rate n ot to exceed 8 per cent per
annum . Judgm ents bear interest at-the ra te of 6 per cent per annum .
Com pound in terest allowed if aggregate does n ot exceed 8 per cent
on principal.
J u d g m e n ts are liens on all real estate of debtor w ithin the county,
from tim e of docketing, and m ay be extended to 9th e r counties by
filing transcript in recorder’s office. Lien continues five years.
Justice’s court judgm ents become liens when certified and recorded.
M ay be revived by issuing execution w ithin lim itation. T ranscript
of judgm ent of U. 8. C ourt m ust be filed w ith Clerk of D istrict C ourt
in an y county in th e S tate in order to m ake it a lien on real property.
L ie n s, H o s p ita l. Hospitals have lien for charges for care and
treatm en t of injured persons, upon causes of action, suits, claims and
counter claim s on account of injuries giving rise to such causes of
action. To perfect lien hospital m ust w ithin 10 days after discharge
of patien t, file verified statem ent w ith county recorder, setting forth
nam e of p atient, am ount of claim an d nam e of person claim ed to be
liable for injury. N o release of cause of action effectual unless ben
holder shall join therein or execute release of lien.
L ie n s, M e c h a n ic s ’. E very person perform ing labor upon or fur­
nishing m aterials used in the construction or repair of any mining
claim, building, or other im provem ent, has a lien thereon. Farm
 laborers have lien upon th e crop and products thereof, upon which

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they bestow labor. All liens m ust be se t forth by a statem en t in
writing, showing the am ount due, the facts connected w ith th e m atter,
th a t there are no credits due on the claim, or offsets against the
same; which statem ent m ust be verified by the claim ant, and recorded
in the office of the county recorder, if on claim of original contractor,
within ninety days, if on claim of other persons, within sixty days
from th e tim e of the completion of the structure the completion of the
labor, or the furnishing of the m aterials. Lien m ust be enforced by
suit within six m onths, unless credit is given, expires a t all events
In two years.
L im ita tio n fo r S u its . Judgm ents six years; w ritten contracts
or for real property, five years; contracts or obligations n ot founded
on writing including open accounts, four years; trespass, trover
replevin and fraud, three years; personal injuries, two years; other
relief, four years. Revivor: by acknowledgment of debt in writing
or p a rt paym ent of principal or interest. Action against a director or
a shareholder of a corporation for illegal dividend m ust be brought
within tw o years from th e d a te of paym ent. The five year lim itation
prescribed for action On w ritten contract does not apply to actions in
th e nam e of or for th e benefit of th e sta te and shall n o t be asserted or
interposed as defense to any action in th e nam e of or for benefit of
th e sta te although lim itation m ay have been fully operative as a de­
fense prior to th e adoption of am endm ent. (C hapter 244, 1939
Session Laws.)
M a rrie d W o m e n . All property, real or personal, acquired before
m arriage and acquired after m arriage, by gift, bequest, devise, or
descent, Is th e wife’s separate property; all other property acquired
after m arriage, common property; wife m ust record inventory of
separate personal property. No estate as ten an t by courtesy allowed
the husband nor dower to the wife.
M in e s a n d M in in g . (Principal regulations under U nited States
S tatutes.) Quartz locations m ay be 1,500 feet long an d 300 feet on
each side of the middle of lode. M onum ents m ust be established at
all exterior angles of claim. Claim should be tied to some natural
or perm anent m onum ent. Copy of location notice m ust be posted
a t discovery w ithin ten days after discovery. N otice of location
m ust be recorded within ninety days after location;, within sixty days
ten-foot shaft m ust be sunk or its equivalent. Location M tice m ust
contain nam e of locator, nam e of claim, date of discovery, dimensions,
distance from some perm anent, natural, or artificial object; nam e of
mining district, county, and state. Placer locations m ade in same
m anner as au artz locations, except th a t w ithin fifteen days after
making location, locator m ust excavate not less th an 100 cubic feet
for purpose of prospecting claim, and m ust record notice of location
within th irty days after m aking location. Official p aten t survey of
lode or placer claim by U. S. M ineral Surveyor is labor performed
upon an for th è benefit of, said claim. S tate L and B oard m ay lease
m ineral rights in sta te lands and m ineral deposits which m ay belong
to sta te by reason of being situated between high-water m arks of
navigable rivers. N otice of application to lease lands belonging to
sta te situated between high-water m arks of navigable rivers m u st be
published before lease can be m ade.
M o rtg ag es. A real estate mortgage m ust be acknowledged and
certified* and recorded in like m anner as conveyances and deeds
of real property, and is foreclosed by action i n , th e district court.
Deficiency judgm ent cannot be had for an am ount greater th an differ­
ence between indebtedness, plus costs of foreclosure and reasonable
value of th e m ortgaged property. C h a ttel m ortgages m ust be
acknowledged as real estate mortgages. M u st be filed an d a m inute
record m ade by recorder, unless m ortgagee has possession. M o rt­
gages are discharged by a satisfaction duly executed an d recorded, or
b y en try on m argin of th e record, witnessed by recorder. Lien ex­
pires three years after m a tu rity of obligation secured, unless prior
to expiration of three year period, affidavit by m ortgagee, showing
d a te of m ortgage, nam es of parties, filing date and am ount due a t date
of affidavit, or condition of unfulfilled obligation is m ade and filed.
Such filing extends lien for additional three years and m ay be renewed.
N e g o tia b le I n s t r u m e n t s . Uniform N egotiable Instrum ents Act
adopted. (See com plete tex t of th e law following “ Digest of Banking
and Commercial Laws.” ) Negotiable instrum ents are governed
by the rules of the Uniform Negotiable Instrum en t Law, as recom ­
mended by the American B ar Association.
N o ta rie s, when requested, to dem and acceptance an d paym ent
of foreign, domestic, and inland bills of exchange or promissory
notes and protest the same for non-acceptance and non-paym ent;
exercise such other powers and duties as by the law of nations and
commercial usage, or by the laws of any other T erritory, State, govern­
m ent, or country m ay be perform ed by notaries. A ttach acknowl­
edgments or proof of powers of attorney; m ortgages, deeds, grants,
transfers, and other instrum ents of writing executed by any person.
Give certificate of such proof or acknowledgment, to ta k e depositions,
affidavits, and adm inister oaths and affirmations in all m atters incident
to duties of the office. To keep a record of all official acts; when
requested, and upon paym ent of his .fees therefor, to m ake an d give
a certified copy of any record in his office; to provide and keep an
official seal, on which m ust be engraved his name, the words “ N o tary
Public,” and “ S tate of Idaho. To authenticate w ith his official
seal all official acts. The commission is good throughout th e State.
P ow er o i A tto rn e y . Powers of atto rn ey for grants of real estate
and to execute a m ortgage m ust be in writing, subscribed, acknowl­
edged or proved, certified and recorded as other instrum ents affecting
real property. Powers of attorney which have been recorded must
be revoked by revocation in writing, acknowledged, proved, certified,
and recorded th e sam e as original power.
P ro b a te L aw . P robate courts have jurisdiction to open and
receive proof of wills and adm it them to proof; to grant letters testa­
m entary and guardianship and revoke sam e: appoint appraisers of
estates, compel executors, etc., to render accounts; order sale of prop­
erty of estates and minors; order paym ent of debts due from estates,
order and regulate distribution of property or estates; compel atten d ­
ance of witnesses and production of all instrum ents pertaining to
estates and property of minors, and m ake such orders as m ay be neces­
sary to exercise all powers conferred. _ Proceedings of this court are
construed th e sam e as courts of general jurisdiction and like force given
to its records.
P ro te s t. (See Notaries.)
R eco rd s. All deeds, m ortgages, real and chattel, and instrum ents
affecting th e title to lands m ust be recorded. Inventory of the
separate personal estate of a m arried woman when recorded, becomes
prima facie evidence th a t the property therein enum erated is her
separate property. In case of levy of attachm ent upon real estate, a
copy of the writ, w ith a copy of th e notice of levy attach ed thereto,
m ust be filed in the office of th e county recòrder.
R e d e m p tio n . P roperty 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 by successive redem ptioners
within sixty days from last redem ption, and within one year from
sale, by paying an additional 6% interest. In cases of tax sales, the
owner m ay redeem in three years.
R e p le v in . Action of, m ust be brought within three years from time
it accrues. Plaintiff m ay sue for the possession w ithout claiming
Immediate possession, or he m ay claim im m ediate possession a t tim e of
commencing suit or afterw ard. Affidavit showing th a t plaintiff is the
owner, the detention, the unlawfulness of the detention, etc...and bond
with sureties required to obtain im m ediate Dossession. D efendant
m ay execute undertaking, w ith approved sureties, for th e retention of
the property, and th a t it will be forthcom ing, subject to th e order of
the court in which th e action is pending, and thereupon retain th e pos­
session of the property involved.
S ales. Uniform sales Act recom m ended by American Bar Asso­
ciation.
S eals. The distinctions between sealed and unsealed instrum ents
are abolished. W ritten contracts presum ptive evidence of con­
sideration.

BANKING AND COMMERCIAL LAWS—ILLINOIS
T axes. All property m ust be assessed with reference to its value
a t twelve o’clock noon on the second M onday of Ja n u ary of each
year, a t its full cash value, and the owner or other claim ant of th e
property shall have the sam e listed for taxation, and such taxes are
a lien from and after th a t date. Personal property coming into
S tate after second M onday in Jan u ary subject to assessment w ith
reference to its full cash value as to th e date it -comes into S tate for
such proportion of full value as is represented by th a t p a rt of the
year subsequent to its date of entry. If taxes are n ot paid by the
fourth M onday in December they become delinquent, b ut half of the
taxes m ay be paid before said d a te and th e rem aining half before the
fourth M onday in June w ithout delinquency. A penalty of 2 per
cent is added on all delinquent taxes. Delinquency entries are m ade
as of th e first M onday in Ja n u ary in th e succeeding year by th e tax
collector and have th e force and effect of a sale to th e county. They
bear interest a t th e ra te of 8 percent per annum from date and are
not assignable. Redem ption m ay be m ade within three years from
th e d ate of such entry. N otice of expiration of redem ption period
m ust be given by tax collector not less th an three, nor more th a n five
m onths before such expiration in order to entitle county to deed.
T ru s t C o m p a n ie s . (See G uaranty Companies.)
W areh o u se R e c e ip ts. The Uniform W arehouse Receipts Act
recommended by th e American Bar Association.
W ills. Every person over the age of eighteen years, and of sound
mind, m ay make 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, m ust be executed by the testator subscribing thereto
or some person by his direction, which m ust be done in the presence
of two attesting witnesses, each of whom m ust sign his nam e and
state th a t the testa to r requested him to witness the testator's signa­
ture. and the testa to r m ust also declare in the presence of the w it­
nesses tljat such is his last will and testam ent. One-half of com­
m unity property m ay be disposed of by will to th e surviving spouse,
his, her, or their children, the grand-children or parents of either
spouse, or one or more of such persons, but not to exceed one-fourth
to a paren t or parents of either spouse, unless lim ited to an estate for
Ilf© or less, and an y p art of th e decedent’s share of the com m unity
property in excess of th e unencum bered appraised value of $25 000
m ay be disposed of as th e testato r sees fit.
W o rk m e n ’s C o m p e n s a tio n A ct. The W orkm en’s Compensa­
tion A ct of th is sta te is based upon the Act recommended by the
N ational Conference of Commissioners on Uniform S tate Law.
(I. O. A. T itle 43 C hapters 9—19 Inc.) The law provides Compensation for a workm an for personal injury by accident arising out of
and in th e course of his em ploym ent. Compensation is provided for
certain occupational diseases.

SYNOPSIS OF

THE LAWS OF ILLINOIS
RELATING TO

BANKING AND COMMERCIAL USAGES
Revised by W il l ia m H . B a r r ic k , A ttorney a t Law,
Brown Building, Rockford.
(See card in A ttorneys List)
A ck n o w led g m en t# . Of deeds of real estate and other Instrum ents,
may be taken before the following officers: W ithin this State before
a m aster in chancery, notary public, United States commissioner,
county clerk, justice of the peace, any court of record having a seal
or any judge, justice, clerk, or deputy clerk thereof. W hen taken
before a no tary public or U nited S tates commissioner, the sam e shall
be attested by his official seal: when taken before a court or the clerk
thereof, or a d ep u ty clerk thereof, the sam e shall be attested by the
seal of such court; and when taken before a justice of the peace .there
shall be added th e certificate of the county clerk under his seal of
office th a t th e person taking such acknowledgment or proof was a
justice of th e peace in said county a t the tim e of taking the same. If
the justice of th e peace reside in the county where the lands m entioned
in th e in strum ent was situated, no such certificate shall be required.
W ithout this S tate, and within th e United States,, its territories, de­
pendencies, or th e D istrict of Columbia, before a justice of th e peace,
notary public, m aster in chancery, U nited S tates commissioner, com­
missioner to tak e acknowledgments of deeds, m ayor of a city, clerk of
a county, or before any judge, justice, clerk or deputy clerk of the
supreme, circuit, or district court of the U nited States, or before any
judge, justice, clerk or deputy clerk, prothonotary, surrogate, or
registrar of th e suprem e, circuit, superior, district, county, common
pleas, probate, orphans or surrogate court of any of the States, Territories, or dependencies of the United States. In any dependency of
the U nited States, such acknowledgm ent or proof m ay also be taken
or m ade before an y commissioned officer in the, m ilitary service of the
U nited States. When such acknowledgment or proof is m ade before
a n otary public, U nited S tates commissioner, or commissioner of deeds,
it m ust be certified under his seal of office. If taken before a m ayor of
a city, it m ust be certified under th e seal of the city; if-before a clerk,
deputy Clerk, prothonotary, registrar, or surrogate, under the seal of
his court; if before a justice of th e peace or a m aster in chancery, there
m ust be added a certificate of th e proper clerk under the seal of his
office settin g forth th a t such person before whom such proof or ac­
knowledgment was m ade was a justice of th e peace or m aster in
chancery a t th e tim e of taking such acknowledgm ent or proof. An
acknowledgment or proof of execution m ay be m ade in conform ity with
the laws of th e S tate, T erritory, dependency, or district where it is
made. W ithout th e U nited States, before any Court of any republic,
dominion, state, kingdom, empire, colony, territory, or dependency
havmg a seal, or before any judge, justice, or clerk thereof, or before
any m ayor or chief officer of any city or tow n having a seal, or before a
notary public or commissioner of deeds, or any ambassador, m inister or
secretary of legation, or consul of th e U nited States, or vice-consul,
deputy consul, commercial agent, or consular agent of th e U nited
States. In an y foreign republic, dominion, state, kingdom, empire,
colony, territo ry or dependency atteste d by his official seal or before
any officer authorized by th e laws of the place where such acknowledg­
m ent or proof is m ade to take acknowledgments of conveyances of
real estate or to adm inister oaths in proof of the execution of convey­
ances of real estate. Such acknowledgments to be attested by the
official seal, if any, of such court or officer, and in case such; acknowledg­
m ent or proof is tak en or m ade before a court or officer having no
official seal, a certificate shall be added by some am bassador, m inister,
secretary of legation, consul, vice consul, deputy consul, commercial
agent or consular agent of th e U nited States residing in such republic,
dominion, state, kingdom, empire, colony, territory, or dependency
under his official seal, showing th a t such court or officer was duly
elected, appointed or created and acting a t th e tim e such acknowledg­
m ent or proof was m ade.
No judge or other officer shall take th e acknowledgment of any
person to any deed or instrum ent of writing, as aforesaid, unless the
person offering to m ake such acknowledgment shall be personally
known to him to be the real person who and in whose nam e such ac­
knowledgment is proposed to be m ade, or shall be proved to be such
by a credible witness, and th e judge or officer taking such acknowledg­
m ent shall, in his certificate thereof, sta te th a t such person was person­
ally known to him to be th e person whose nam e is subscribed to such
deed or writing, as having executed tb e same, or th a t he Was proved to
be such by a credible witness (naming him ), and on taking proof of any
deed or in strum ent of writing, by the testim ony of any subscribing
witnesses, th e judge or officer shall ascertain th a t the person who
offers to prove th e sam e is a subscribing witness, either from his own
knowledge, or from th e testim ony of a credible witness; arid if i t shall
appear from th e testim ony of such subscribing witness th a t th e person
whose nam e appears subscribed to such deed or writing is th e real


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2001

person who executed th e sam e, and th a t th e witness subscribed his
nam e as such, in his presence and a t his request, th e judge or officer
shall g ran t a certificate, stating th a t th e person testifying as sub­
scribing witness was personally known to him to be th e person whose
nam e appears subscribed to such deed, as a witness of th e execution
thereof, or th a t he was proved to be such by a credible witness (naming
him ), and stating th e proof m ade by him ; and where any grantor or
person executing such deed or writing, and th e subscribing witnesses,
are deceased or cannot be had, th e judge or officer, as aforesaid, m ay
take proof of th e handw riting of such deceased p a rty and subscribing
witness or witnesses (if any); and th e exam ination of a com petent and
credible witness, who shall s ta te on oath or affirmation th a t he person­
ally knew the person whose handw riting he is called to prove, and
well knew his signature (stating his m eans of knowledge), and th a t
he believes th e nam e of such person subscribed to such deed or writing,
as p a rty or witness (as th e case m ay be), was thereto subscribed by
such person; and when the handw riting of the grantor or person
executing such deed or w riting, and of one subscribing witness (if
any there be), shall have been proved, as aforesaid, or by proof of
signature of grantor where th ere is no subscribing witness, th e judge
or officer shall grant a certificate thereof stating th e proof aforesaid.
The acknowledgm ent of a conveyance by a m arried woman m ay be
m ade and certified as if she were single. A n acknowledgm ent taken
by any one interested in th e conveyance is void.
A ctio n s. The Civil Practice Act of 1933 abolishes the common law

forms of action and simplifies pleading; provides for uniform procedure
in law and equity by, in most cases, making the equity rules applicable
to both types of proceeding.
A d m in is tr a tio n of D e c e d e n ts ’ E s ta te . L etters testam en tary
issue to executor nam ed in will, jf he be a resident. If there be no
will, or no executor nam ed, or th e executor is disqualified, or refuses
to act, th e following persons are entitled to' preference in th e order
given in obtaining th e issuance of letters of adm inistration: Sur­
viving spouse, children, parents, brother or sister, grandchildren,
next of kin, public adm inistrator or creditors. If a person files a
petition and another is entitled to preference, petitioner shall give
tw enty (20) days notice to said person. A non-resident, an ineompeten t, a m inor and persons convicted of infam ous crimes are not
qualified to act as adm inistrator. W hen no letters are issued in
this sta te upon th e estate of a non-resident decedent, a foreign execu­
tor or adm inistrator, w ithin th e U nited States, m ay sue in this sta te
in any case in which a resident executor or adm inistrator m ay sue.
All claims except expense of adm inistration and widow’s or child’s
award, not filed w ithin nine m onths from th e issuance of letters,
are barred as to all property inventoried and share only in newly
inventoried property. Claim s are divided into classes (1) funeral
expenses and costs of adm inistration; (2) widow’s or child’s aw ard;
(3) D ebts due the U nited States G overnm ent; (4) money- due em­
ployees of decedent if n ot m ore th a n $400.00 for services rendered
within four m onths prior to decedent’s death; (5) money or property
held in tru s t which is not identifiable; (6) debts due to th e S tate of
Illinois and any C ounty, Township, C ity, Town, Village or School
D istrict located within the S tate of Illinois; (7) all other debts or
demands. W ithin sixty (60) days after th e issuance of letters
the representative m ust file an inventory of th e estate, and within
sixty (60) days after th e expiration of nine m onths after th e issuance
of letters or w ithin such fu rth er tim e as th e court m ay allow, th e
representative shall file his account. Claims are to be paid b y th e
representative a t expiration of nine 'm onths after issuance of letters
in th e order of classification as above.
Renunciation of will m ust be filed w ithin ten (10) m onths after
th e admission of th e will to probate or such extended tim e as shall
be granted by th e C ourt w ithin said ten (10) m onth period.
Surviving spouse is barred of dower unless he files an election to
take dower w ithin ten (10) m onths of death, if no letters of adm inis­
tration are issued w ithin th a t period; or w ithin ten (10) m onths of
letters if issued w ithin ten (10) m onths of d eath or if a will is filed
for probate th en w ithin ten (10) m onths after th e admission of th e
will to probate; or w ithin th e tim e as extended by th e C ourt.
A ffidavits. W ithin this S tate oaths and affirmations m ay be
adm inistered by any judge, justice of the peace, m aster in Chancery,
clerk of a court, police m agistrate, or notary public, in their respective
jurisdictions. W ithout th e State the oath or affirmation m ay be
adm inistered by any officer authorized by the laws of the particular
S tate, and if such officer has a seal, his certificate under his official
seal is received as prim e facie evidence of his authority.
A lien s. T he present law w ent into effect July 1, 1897. (Amended
m 1935.) I t does n ot affect the rights of aliens as to personal property,
who still tak e th e sam e as citizens. Its provisions are subject to
treaties m ade by th e U nited States with foreign countries. All aliens,
subject to certain restrictions m entioned in th e act, m ay acquire and
for a lim ited tim e hold real estate situated in this S tate by deed,
devise, or descent, and m ay transfer, devise or encum ber it.
A s sig n m e n ts. The operation of the Illinois Act relating to
voluntary assignm ents for the benefit of creditors has been suspended
by the national bankruptcy law.
A tta c h m e n ts . A creditor, resident or non-resident, whose claim is
mo,?’ m ay nring attach m en t in a court of record if th e am ount exceeds
f20, and in justice court for any am ount not exceeding $200, on any of
th e following grounds: 1. W here th e debtor is a non-resident of this
State. 2. W here th e debtor conceals himself, or stands in defiance of an
officer so th a t process can n ot be served upon him . 3. W here th e
debtor has departed from this S tate w ith the, intention of having
his effects rem oved from th is S tate. 4. W here th e debtor is about
to depart from th is S tate w ith th e intention of having his effects
rem oved from th is S tate. 5. W here th e debtor is about to remove
ms property from this S tate to th e injury of such creditor. 6. W here
the debtor has, w ithin two years preceding th e filing of th e affidavit
required, fraudulently conveyed or assigned his effects, .or a p a rt
thereof, so as to hinder or delay his creditors. 7. W here th e debtor
has w ithin tw o years prior to th e filing of such affidavit fraudulently
concealed or disposed of his property so as to hinder or delay his
creditors. 8. W here th e debtor is about fraudulently to conceal,
assign, or otherwise dispose of 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 p a rt of th e debtor, provided the statem ents of the
debtor, his agents or attorney, which constitute the fraud, shall have
been reduced to writing, and his signature attached thereto by him ­
self, agent, or attorney. T he creditor m ust give bond in double the
am ount of the c l a i m R e a l estate or personal property m ay be
attached or funds garnished. T he property or funds m ay be released
by the debtor giving a forthcom ing bond, or entering into a recog­
nizance in court to pay the judgm ent.
B a n k s a n d B a n k in g , f U nder th e sta te constitution stockholders
have a double stock liability, and every bank m ust m ake, under oath,
and publish each q u arter a full and accurate statem ent of its affairs.
An Act to revise the law in relation to banks and banking was
passed and approved June 23, 1919, and ratified by referendum a t
the election of N ovem ber 2, 1920. Banks m ay be form ed under the
sta tu te for the purpose of discount and deposit, buying and selling
exchange, and doing a general banking business, except th e issuing
of bills to circulate as m oney; m ay loan on both personal ahd real
estate security, and m ay accept and execute trusts. An association
of persons, as hereinafter set forth m ay organize a bank by filing a
statem ent -with the Auditor. T he m inim um num ber of persons in
such associations is fixed according to populations as follows:
P opulations.
No. of Persons
5
10.000 or less ........ ..
10.000 to 2 5 ,0 0 0 .............. ..................

............ 10

25.000 to 5 0 , 0 0 0 . . . . . . . . . . . . . . . . . " ' " ' ‘ i s
50.000 to 100,000. . .
!! ’20
Over 100.000......................................... 25

2002

BANKING AND COMMERCIAL LAWS—ILLINOIS

All such persons m ust be residents of place where bank is to be
established and in places exceeding 100,000 population, 20 persons of
th e association m ust reside w ithin 3 miles of the proposed location
of th é bank.
Accompanying the application m ust be a statem ent m ade before
some officer authorized to acknowledge deeds giving the net financial
worth of each of the m embers of such associations together w ith at
least three references as to personal character of each individual
nam ed therein. W hereupon the A uditor issues a perm it to organize.
T he shares shall be not less th an $10 nor more th an $100 each. After
th e perm it to organize is issued and th e stock fully subscribed, th e
stockholders m eet, fix th e num ber of directors and elect th e directors
who shall m anage th e corporation for one year, or until their successors
are elected. A t th e election of directors, stockholders have th e right of
cum ulative voting. The directors elect one of their num ber P resident,
appoint th e necessary Officers and employes, fix their salaries and m ake
by-laws. Bach director shall file w ith th e S tate A uditor an affidavit
th a t he will faithfully perform th e duties of his office in accordance
w ith law: th a t he is th e owner in his own right, of ten shares of the
stock of th e b ank of th e par value of $1,000 all told, free from incum ­
brance. T he directors m ust cause suitable books to be kep t and file
w ith th e A uditor a list of stockholders and a copy of any other records
th e A uditor m ay require. Unless another day is fixed by th e by-laws
of th e Association, th e stockholders shall m eet th e first M onday in
Jan u ary and elect directors. Vacancies are filled by vote of twoth ird s of th e directors. Bach director m ust own shares of th e stock
of th e bank of the p ar value of n ot less th a n $1000, and file a certificate
or certificates thereof w ith th e Cashier, to be held during his term as
director. A quorum of th e directors m ust m eet once each m onth.
Any officer, director or em ploye who shall m ake a false statem ent to
an y official authorized to examine th e affairs of th e bank, upon con­
viction shall be punished by im prisonm ent of n ot less th an one or more
th an ten years. W hen th e S tate A uditor is satisfied on exam ination
th a t th e bank has been duly organized and its stock fully paid, he
issues a certificate th a t th e bank is authorized to commence business,
which certificate m ust be filed w ith th e Recorder of Deeds of th e
county in which th e bank is to carry on its business.
T he double liability of stockholders applies to all debts contracted
while th ey hold stock in the bank and is not released by an assignm ent
of th e stock. T he President or Cashier m ust, within th irty days after
organization file with the Recorder of Deeds, a complete list of stock­
holders and their holdings and record thereafter a certificate of all
transfers w ithin ten days after such transfers. A statem ent of the
resources and liabilities of th e bank m ust be filed with th e S tate Auditor
when required by him . T he A uditor m ust call for such report a t least
once each three m onths. T his report m ust be published in a news­
paper of the city or town where tne bank is located.
T he S tate A uditor shall appoint a suitable person, n ot connected
with th e bank, to m ake a thorough exam ination of the affairs of each
bank once a year, and report the same to the Auditor. A bank m ay
hold only such real estate as m ay be necessary for a banking house or
such as m ay be acquired in the collection of debts. Real estate
acquired for debts m ust be disposed of within five years. No bank
m ay establish branches. T he to tal liability for money borrowed of
any person, corporation or firm (including th e m embers of the firm)
to any banking association shall a t no tim e exceed 15 per cent of the
capital and surplus (not including undivided profits) of such bank
and shall in no event exceed 30 per cent of th e capital stock actually
paid in. Provided, however, th a t money borrowed within the m ean­
ing of th e Act shall not include (1) th e discount of bills of exchange
drawn in good faith against actually existing values; (2) the discount
of commercial or business paper actually owned by th e person negoti­
ating the same; (3) the purchase of, or loaning money in exchange for,
evidences of indebtedness which shall be secured by m ortgage or tru st
deed upon productive real estate, th e value of which, exclusive of
buildings, as ascertained by the oath of two disinterested appraisers,
is double th e am ount of th e principal debt secured; b u t in no event
shall th e liabilities of any such person, corporation or firm to such bank
exceed th e am ount of its capital stock and unim paired surplus or 25
per cent of its deposits. D irectors are m ade personally liable for any
violations of this provision to the extent of the loss occasioned thereby
to th e bank, its stockholders or any other p arty. No loan shall be m ade
to th e President, Vice-President or any em ploye of th e bank or to cor­
porations or firms controlled by them , or in the m ahagem ent of which
any of th em are actively engaged, u n til th e loan shall have been
approved by th e Board of Directors.
T he m inimum am ounts provided for th e capital stock of banks
are as follows. In cities, tow ns and villages th a t have not exceeding
te n thousand inhabitants. $50.000; between ten thousand and fifty
thousand, $100,000; over fifty thousand, $200,000. U pon im pairm ent
of th e capital stock th e A uditor m ay require assessm ents of stock­
holders or a reduction of th e capital. I f be shall deem th e bank Is being
conducted in an unsafe, fraudulent or illegal m anner, he m ay, for the
purpose of reorganization, or liquidation through receivership take
possession and control of such bank. Such receiver m ay upon order of
C ircuit C ourt borrow m oney and issue evidences of indebtedness
therefor and m ay receive th e paym ent of such loan by pledge of assets
of such bank, for th e purpose or facilitating liquidation, protecting or
preserving th e assets.
Creditors m ay enforce stockholders liability by a bill in equity In
th e n ature of a creditor’s bill, provided sam e is bought w ithin one year.
T here are provisions for consolidation, change of nam e and voluntary
dissolution. All banking associations heretofore organized by general
or special Act, are m ade subject to all th e provisions of this Act.
After Jan u ary 1, 1921, no natural person or natural persons, firm
or partnership shall transact the business of baulking or the business
of receiving money upon deposit, or shall use the word “ B ank” or
“ B a n k er” in connection w ith said business; provided, th a t nothing
herein contained shall be construed to prohibit banks incorporated
under th e laws of this S tate or of the U nited States from appointing
n atural persons as agents to receive deposits of savings in and through
the public schools. Any person violating the Act is guilty o f a mis­
dem eanor and is subject to a fine not exceeding $1,000, or im prison­
m ent in th e penitentiary for one year. A banker is liable to fine and
im prisonm ent if he receives a deposit after he knows the bank has
become insolvent and thereby the depositor suffers loss.
One drawing and delivering a check, d raft, or order on a bank with
Intent to defraud, and knowing a t the tim e th a t he had not sufficient
funds In or credit w ith th e bank to pay th e check, d raft or order in
full is guilty of a m isdemeanor and is subject to a fine of $1,000 or
im prisonm ent for one year, or both. (See Negotiable Instrum ents.)
B ills o f L a d in g . T he Uniform Bills of Lading Law is in force in
Illinois.
B lu e S ky L aw w ent into effect June 10, 1919, governing the
sale of stocks of corporations. Securities are divided into six classes.
C ertain securities can be sold only after a full statem ent in regard
thereto has been filed w ith the Secretary of State and a perm it issued
T he law is stringent. Copies of the law and forms for use thereunder
can be obtained by writing to the office of the Secretary of State,
Springfield, 111 T he act is entitled “ The Illinois Securities Law.’
C h a tte l M o rtg a g e s. N o m ortgage, tru st deed, or other convey­
ance of personal property having the effect of a m ortgage or lien, is
valid against third persons, unléss possessiôn be delivered to, and
rem ain w ith the grantee; or the instrum ent provides for the possession
of th e property to rem ain w ith the grantor, and the instrum ent is
acknowledged and recorded. Such instrum ent shall be acknowledged
before any officer authorized by law to take acknowledgm ents of deeds.
After acknowledgm ent and within ten days after its execution the
instrum ent m ust be filed for record w ith th e recorder of the county
in which th e m ortgagor resides when the instrum ent is executed,
or, in case of a non-resident of the S tate, then in the county where
th e property is situated. The m ortgage is a valid lien until ninety
days after th e m aturity of th e entire debt or obligation, not exceeding


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five years from th e filing of th e mortgage, and m ay be renewed for
one year by affidavit which m ust also be filed for record. A note
secured by chattel m ortgage m ust sta te on its face th a t it is so secured,
otherwise th e m ortgage is void. A m ortgage m ay be released on the
m argin of th e record,- or by a release deed. H usband and wife m ust
join in C hattel M ortgages on household furniture. A ch attel m ort­
gage m ay be filed w ith th e recorder of deeds, and it is a valid m ortgage
though n ot recorded.
C o m m e rc ia l P a p e r. (See Negotiable Instrum ents.)
C o n s ig n m e n ts . Agreements to sell on consignment are valid.
If a commission m erchant, or p arty selling on commission, 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 of the property so converted.
C o n v e y an ces. (See Deeds.)
C o rp o ra tio n s. Corporations, except for charitable, educational,
penal, and reform atory purposes, m ay be organized only under gen­
eral laws. (Const, a rt. X L T.) In all elections of directors every
stockholder has the right to vote. In person or by proxy, for the num ber
of shares of stock owned by him, or m ay cum ulate his votes. (Const,
art. X I. 3.)
C orporations m ay be created under the act for any lawful purpose,
or except for banking, insurance, the operation of railroads: and m ay
be organized also for the purpose of acquiring and m aintaining a uni­
form local transportation syst em comprising several m eans of transpor­
tation in cities of 500,000 or more.
Corporations under the act have the following rights, powers, and
privileges: (1) succession: (2) to sue and be sued in its corporate
nam e; (3) corporate seal; (4) To hold, own and deal in and w ith, any
real or personal property or any interest therein, situated in or out of
th e S tate, which m ay be appropriate to enable it to accomplish any or
all of its purposes. (5) to sell and convey, m ortgage, pledge, lease as
lessor, and otherwise dispose of all or any p a rt of its property and assets.
(6) to acquire and to own real property, improved and unim proved,
and to lend money to its employees, 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
accomplish its purposes; to borrow money w ithout regard to th e usury
law of th e S tate; to issue its notes, bonds and/other obligations; and to
secure any of its obligations by mortgage, pledge, or deed of tru st of all
or any of its property, franchises and income; (9) to invest its surplus
funds from tim e to tim e and to lend money for its corporate purposes,
and to tak e and hold real and personal property as security for the
paym ent of funds so invested or loaned; flu) to conduct its business,
carry on its operations and have offices w ithin and w ithout this State
and to exercise in any other state, territory, district or possession of
th e U nited States, or in any foreign country th e powers granted by
th is Act.
The defense of u ltra vires is abolished as between th e Corporation
and any person, not a stockholder. If a proceeding shall be brought by
a stockholder against th e corporation to injoin it from continuing an
unauthorized Act or th e transaction or continuation of unauthorized
business. If th e unauthorized Acts or the business sought to be
enjoined are being transacted p u rsu an t to any contract to which the
corporation is a p arty , th e court m ay, if all of th e parties to th e con­
tra c t are parties to th e proceeding, and if it deems th e sam e to be
equitable, set aside and enjoin the perform ance of such co ntract, and
in so doing shall allow to th e corporation or th e other parties, as the
case m ay be, com pensation for th e loss or dam age sustained by either
of them which m ay result from th e action of th e court in setting aside
and enjoining th e perform ance of such contract, b u t anticipated
profits to be derived from th e perform ance of th e contract shall not be
aw arded by th e court as a loss or dam age sustained; (11) to elect or
appoint officers and agents of th e corporation, and to define their
duties and fix their compensations: (12) to m ake and a lter by-laws, not
inconsistent w ith its Articles of incorporation or w ith th e laws of this
State, for th e adm inistration and regulation of th e affairs of the
corporation; (13) in tim e of w ar to tran sact any lawful business in
aid of th e U nited States in th e prosecution of war, to m ake donations
to associations and organizations aiding in war activities, and to
lend money to th e S tate or Federal Governm ent for w ar purposes;
(14) to cease doing business and to surrender its charter; (15) to have
and exercise all th e powers necessary or convenient to carry into
effect th e purpose for which such corporation is formed.
T he board of directors m ust consist of a t least th ree persons. The
directors exercise th e corporate powers of th e corporation. T hey m ay
hold m eetings and tran sact business outside of this State. T hey elect
officers, adopt by-laws, and m ay appoint an executive com m ittee. The
nam e of a corporation m ust indicate th a t it is a corporation. If th e
nam e of a person or copartnership is used, it m ust be followed by th e
word “corporation,” “com pany, “ incorporated,” “lim ited,” or their
abbreviations. T he Secretary of S tate m ust be k ep t informed of any
change of address of such office or place of business.
Bach Corporation shall m aintain a registered office which m ay be
b u t need not be th e sam e as its place ot business and a registered
agent whose place of business shall be th e sam e as th e registered office.
Such registered agent shall be th e agent to receive service of process.
In default of such appointm ent then th e Secretary of S tate shall be
irrevocably appointed as such agent for such corporation.
N o Certificate of Stock shall be issued for any share u n til such share
is fully paid. E very certificate representing shares issued by a corpora­
tion which is authorized to issue shares of more th a n one class, shall
sta te upon th e face or back thereof, th e rights of th e shares of each
class authorized to be issued. All stockholders’ m eetings m ay be held
w ithin hr w ithout this S tate. D irectors are elected a t th e regular
annual m eeting of the stockholders. No stock can be voted which shall
have peen transferred after th e record date for closing th e stock trans­
fer books. No proxy is good after eleven m onths unless otherwise pro­
vided in th e proxy.
Stockholders are liable to creditors of th e corporation, only to the
am ount unpaid on th e shares held by them .
Corporation report between January 15 and last day of February
each year to secretary of sta te .
D ecree i n fo re c lo s u re . (See M ortgages.)
F o re ig n C o rp o ratio n s.. Bach foreign corporation organized for
profit (except banking, insurance, building and loan, and surety com­
panies) , shall before it transacts any business or m aintains an office in
this S tate, procure a certificate of authority therefor from th e Secretary
of S tate. No foreign corporation shall engage or continue in any kind
of business in this S tate, th e transaction or which by dom estic corpora­
tions is not perm itted by th e laws of this S tate. Each licensed foreign
corporation shall keep on file in th e office of th e Secretary of State a
copy of its charter and all am endm ents thereto. Foreign corporations
are required to m aintain a registered office and m aintain registered
agent and m ake th e sam e reports as a dom estic corporation. No foreign
Corporation can m aintain an action a t law or in equ ity u n til a certifi­
cate of a uthority is obtained.
F ees a n d T ax es. To th e Secretary of S tate on filing a certificate
of Incorporation one-tw entieth of 1 per cent upon th e am ount of
th e entire consideration received for issued shares of capital stock, but
in no event less th a n $10. A foreign corporation, other th a n an insur­
ance com pany or building and loan com pany, upon obtaining a certifi­
cate to do business in Illinois pays th e same fees upon th e am ount of
Its capital stock represented by business transacted and tangible pro­
p erty in Illinois as sim ilar dom estic corporations'pay upon incorpora­
tion. A dom estic corporation or a foreign corporation licensed to do
business in Illinois (except insurance companies) , and which are re­
quired to m ake annual reports, m ust pay to th e Secretary of State an

BANKING AND COMMERCIAL LAWS—ILLINOIS
annual license fee or franchise tax am ounting to 1-20 of 1 % proportion
of th e am ount received for its issued capital stock represented by busi­
ness transacted and property located in this S tate, b u t in no event
shall any such license fee or franchisé tax be less th an $10 for any one
year. The franchise tax is payable on Ju ly 1 for th e succeeding twelve
m onths. I f a corporation fails to m ake an annual report w ithin the
tim e required, th e Secretary of S tate assesses a franchise tax on the
best available inform ation, adding a penalty of 10 per cent on the
am ount of such assessm ent. Corporations are taxed on their tangible
property, real and personal, w ithin th e S tate, and also upon the fair
cash value of their capital stock, including franchises, over and above
th e assessed value of their tangible property. Shares of stock of
domestic corporations, whose tangible property or capital stock is
taxed, are not subject to taxation in th e hands of owners.
A corporation organized for the purpose of accepting and executing
trusts m ay be appointed assignee or trustee by deed, and executor,
guardian, or trustee by will, and any court m ay appoint such com­
pany receiver, assignee, guardian, conservator, executor, adm inis­
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 performance of a trust, b ut it is required
to deposit with th e A uditor of Public Accounts $200,000 (in case the
value of th e personal property by th e annual report exceeds 10 tim es
the deposit of th e bonds then in th e cities of 100,000 or more the
deposit shall be increased to $500,000, and in cities of 100,000 or
less th e deposit shall be increased to $125,000) in bonds of the United
States, or in m unicipal bonds of this State, or real estate mortgages,
and to m ake a statem ent, and file reports w ith the A uditor annually.
There are special acts also as to th e organization of corporations
not for pecuniary profit, religious corporations, loan associations,
co-operative associations for profit, insurance, etc. Corporations,
foreign or domestic, u n der certain restrictions m ay do a surety business.
C o u rts. Supreme court (seven judges) : four appellate court*
(interm ediate court of appeals, w ith certain exceptions final up to
$1,500, three judges each) ; circuit courts (in Cook C ounty also
superior court of equal jurisdiction); crim inal courts; county courts
(which also exercise probate jurisdiction in counties having less th an
70,000); probate courts (except where abolished by s ta tu te where the
county has less th an 85,000 population) (and in counties having
over 85,000 unless established by s ta tu te where th ey have over
70,000 population) ; m unicipal courts (Chicago has a m unicipal court
with a chief justice and thirty-six associate judges and special practice) ;
and justice courts.
D ays of G ra c e are abolished. (See Negotiable Instrum ents.)
Deeds conveying land should be signed, sealed, and acknowledged
by grantor. Scroll seal is sufficient. No subscribing witnesses are
required. S tatu to ry forms of w arranty and quit claim deeds and
mortgages are provided. The words employed are (1) conveys and
warrants, (2) conveys and quit claims, (3) mortgages and w arrants.
No deed releases the right of homestead unless it contains a clause
substantially as follows; “ H ereby releasing and waiving all rights
under and by virtue or the hom estead exemption laws of the State
of Illinois,” To release dower th e husband or wife m ust join in
the conveyance, except in the case of a m ortgage for purchase money;
otherwise th e husband and wife m ay convey as unm arried. Deeds
and other instrum ents 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 w ithout notice. (See
Land Registration.!
D ep o sitio n s. In chancery cases if the witness resides in the
county, depositions m ay be taken on five days’ notice; otherwise on
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 about to depart from the state. Where the witness
resides out of the county or state, the deposition m ay be taken before
a notary public or commissioner on a commission issued on ten days
notice, either on w ritten or oral interrogatories. If a witness sub­
poenaed to give his deposition before a notary public or other officer
under commission issued by a court of this State, or of any other State
or country, declines to appear or testify he m ay be cited before the
circuit court of th e county where he resides and be compelled to appear,
testify, and produce docum ents.
D e sc e n t a n d D is tr ib u tio n . P roperty in this S tate, both real
and personal, of residents and nonresident propriètors in this State
dying intestate, or whose estates or any p art thereof shall be deemed
and taken as in testate estate, after all ju st debts and claims against
•uch estate are fully paid, shall descend to and be distributed in
manner following, to w it: 1. To his or her children and their descend­
ants, in equal parts ; th e descendants of the deceased child or grand­
child taking th e share of their deceased parénts in equal parts among
them. 2. W hen there is no child of th9 intestate, nor descendant of
such child, and no widow or surviving husband, then to th e parents,
brothers and sisters of th e deceased and their descendants, in equal
parts among them , allowing to each of th e parents, if living, a child’s
part or to th e survivor of them if one be dead, a double portion; and
if there is no paren t living, then to th e brothers and sisters of the
Intestate, and their descendants. 3a. When there is a widow or
surviving husband and also parénts, brothers and sisters of the
deceased and their descendants b ut no child or children, or descend­
ants of a child or children of the intestate, then (after the paym ent
of all ju st debts) one-half of the real estate and the whole of the
personal estate shall descend to such widow or surviving husband as
an absolute estate forever and th e other half of the real estate shall
descend to th e parents, brothers and sisters of the deceased and their
descendants in equal parts among them , allowing to each of the
parents, if living, a child’s p a rt or to th e survivor of them , if one be
dead a double Dortioh; and if there is no parent living, then to the
brothers and sisters of the intestate and their descendants. (See
Dower.) 3b. W hen there is a widow or surviving husband and no
child or children or descendants of a child or children of the intestate
and no parents, brothers or sisters of th e deceased and their descend­
ants, th en after th e paym ent of all ju st debts, the entire estate, real and
personal, shall descend to th e surviving widow or husband outright.
4. When there is a widow or a surviving husband and also a child or
children or descendants of such child or children of the intestate, the
widow or surviving husband shall receive as his or her absolute personal
estate, one-third or all th e personal estate of the intestate; and he or
she shair also receive as his or her absolute estate, in lieu of dower
therein, one-third of each parcel of real estate of which th e intestatedied seized and in which such widow or surviving husband shall waive
his or her right of dower. 5. If there is no child of the intestate or
descendant of such child, and no parent, brother or sister, or descend­
ant of such parent, brother or sister, and no widow or surviving
husband, then such estate shall descend In equal parts to the next
of kin to th e in testate in equal degree (computing by the rules of Civil
Law), and there shall be no representation among collaterals, except
with th e descendants of brothers and. sisters of th e intestate; and
in no case shall there be any distinction between the kindred of the
whole and the half blood. 6. If 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 th e intestate leaves no kindred,
and no widow or husband, his or her estate shall escheat to and vest
In th e county in which said real or personal estate, or th e greater
portion thereof, is situated. (See Dowér and Curtesy.)
D ow er. A surviving husband has dower (i. e., life interest in a
third p a rt of all lanes whereof deceased was seized of an estate of
Inheritance during marriage) the same as a widow. E quitable estates,
and land contracted for before death, are subject to dower. If dower
is waived, surviving husband or wife takes one third of the real estate
and personal estate absolutely. Dower m ay be barred by jointure
assented to; by devise, unless widow or surviving husband renounces


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2003

benefit of devise w ithin one year from date of letters of adm inistration;
by divorce as to the p arty in fault; and by abandonm ent coupled with
adultery. T here is no dower in land as against a purchase-m oney lien
T he husband or wife m ay renounce any devise under the will of the
other and take if there be children, one third of the real estate, and
one-third of personal estate, or, if no children, one-half of all real
and personal estate absolutely.
E x e c u tio n s. (See Judgm ents and Executions.)
E x e c u to rs a n d A d m in is tr a to rs . (See A dm inistration.)
E x e m p tio n s . T here is a hom estead exemption to th e extent of
$1000. I t m ay be extinguished by conveyance joined in by husband
and wife properly acknowledged. (See Deeds.) The following
personal property is exem pt; 1. The necessary wearing apparel,
Bibles, school books, and fam ily pictures. 2. One hundred dollars
worth of other property, to be selected by the debtor, and in addition,
when the debtor is the head of a family and resides with the same,
$300 worth of other property, to be selected by the debtor. Exemp­
tions can not be claimed out of partnership property. The wages
of an employee being the head of a fam ily and residing with th e same
are exem pt from garnishm ent to the am ount of $20 per week.
F ra u d s , S t a t u t e o f. The following contracts should be in w ritin g :
1 A promise of an executor or adm inistrator to answer any debt or
dam ages out of his own estate. 2. A promise to answer for th e debt,
default, or miscarriage of another. 3. An agreem ent m ade in con­
sideration of m arriage. 4. An agreem ent not to be performed within
one year. 5. Any contract for th e sale of lands, or any interest
therein for a longer term th an one year. 3. Express tru sts relating
to real estate. •* a contract to sell or a sale of any goods or cnoses
In action of the value of five hundred dollars or upwards is n o t enforcible oy action, unless th e buyer accepts p a rt of the goods or choses
in action so contracted to be sold or sold, and actually receives the
same, or gives som ething in earnest to bind the contract, o r in p a rt
paym ent, or unless some note or m em orandum in writing of the
contract or sale be signed by the p arty to be charged or his agent in
th a t behalf. The act applies to sales for future delivery and to goods
to be obtained or m anufactured by the seller, b u t not to sales of goods
to be m anufactured on special order if they be not suitable for sale
to others in the usual Course of business.”
G a r n is h m e n t. The funds or property of a debtor in the possession
of a third party m ay be garnished in an attachm ent suit, or in a separate
proceeding after judgm ent has been obtained against the principal
debtor. (See A ttachm ents.) Wages up to $20.00 a week are exempt
from garnishm ent.
H o lid ay s. The legal holidays are: Sundays; January 1 (New Y ear’s
D a y ); F ebruary 12 (Lincoln’s b irth d a y ); F ebruary 22 (W ashington’s
birthday) th e F riday before E aster: M ay 30 (M emorial D ay); Ju ly 4
(Independence D a y ); first M onday in Septem ber (Labor D a y ); October
12 (Colum bus D ay); Thanksgiving D ay; T uesdays next after first
M ondays in N ovem ber in even years (election days); N ovem ber l'i
(Armistice D a y ); December 25 (Christm as D a y ); also every Saturday
from 12 o’clock nooD to 12 o’clock m idnight (in cities of 200,000 or
more population). W here holidays fall on Sunday, th e d ay following.
H u s b a n d a n d W ife. (See M arried Women.)
I n s u r a n c e , Agents are required to have license. W rite director
of T rade and Commerce, Springfield, 111. Insurance companies are
bonded to state.
I n t e r e s t . E xtrem e contract rate, 7 per cent, except as to corpora­
tions, no lim it as to corporations; legal rate, 5 per cent. In terest is
allowed a t th e legal rate on moneys after they become due on any bond,
bill, promissory note, or other instrum ent in w riting; on money loaned
or advanced for the use of another; on money due on th e settlem ent
of an account, from the date of ascertaining th e balance; on money
received to the use of another, and retained w ithout the owner’s
knowledge; and on money withheld by an unreasonable and vexa­
tious delay of paym ent. Judgm ents or decrees draw interest a t 5 per
cent. P enalty for contracting for more th an 7 per cent is th e loss of
the entire interest, and only the principal sum can be recovered. A
Written contract, wherever payable m ade, in this S tate between
citizens of this S tate and of a foreign S tate (or secured by a m ortgage
on lands in this State) is controlled by the law of this S tate as to the
rate of interest, and the penalty for usury. U sury m ust be specially
pleaded. In all com putations of time, and of interest and discounts,
a m onth is considered to m ean a calendar m onth, and a year twelve
calendar m onths, and a day the th irtieth p a rt of a m onth. A foreign
corporation is subject to the same penalties for usury as a citizen of
this S ta te .' Justice of Peace has ju risd ictio n ^ all claims under $500.
The interest ra te does n ot apply to th e loan business where $300 and
less is involved upon which 3% per m onth m ay be charged. This
requires an annual license fee of $200 in counties of 500,000 an d $100
in counties less th a n 500,000.
J u d g m e n ts a n d E x e c u tio n s. A judgm ent of a court of record
w ith county jurisdiction is a lien on real-estate situated in th e county
where th e judgm ent is rendered, for seven years from its d ate, and
to become a lien on land registered under Torrens System m u st be
filed with registrar of titles. If an execution is n o t issued on a judg­
m ent within one year th e judgm ent ceases to be a lien. A tran scrip t
of a judgm ent in another county m ay be filed and thereupon becomes
a lien upon real estate of the defendant in th e county where filed,
and execution m ay issue thereunder. An execution becomes a lien
on personal property from th e tim e it is delivered to the officer to
be executed. All 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 days’ notice. A forthcom ing bond m ay be
given by th e defendant to th e officer. A th ird p a rty claiming th e
property levied on m ay have a tria l as to th e rig h t of pro p erty in
th e county court. Judgm ents m ay be confessed by a debtor or his
authorized attorney w ithout process in term tim e or vacation. Land
Registration Torrens- System in use in Gook C ounty. (See M ortgage
Foreclosure.) Lien of judgm ent m ay be revived after expiration of
seven years by scire facias, b u t not after tw enty years.
L ie n s. A landlord has a lien for ren t upon crops growing on the
demised premises. Hotel, inn, and boarding-house keepers have a
Hen upon baggage and other valuables of guests. Stable-keepers have
a lien upon horses, carriages, and harness for the keeping thereof.
Garage keepers are entitled to liens on automobiles, parts and acces­
sories, for keeping, repairing, m aterials furnished thereto, and the
expenses bestowed thereon a t the request of the owner, or the person
having the possession thereof. Agisters and persons keeping, yarding,
and,feeding domestic anim als have a lien therefor. All persons furnish­
ing supplies, or doing work for any railroad organized under the laws
of this State, necessary for the construction, m aintenance, operation,
or repair of the road, have a lien therefor on all the property of the
company, which is good as against mortgages and other liens acquired
after the commencement of the delivery of supplies, or the doing of
the work. A ttorneys have liens on all dem ands, claims, and causes of
action of their clients, after the' service .of notice upon the adverse
party. C ontractors and sub-contractors, including architects, super­
intendents, tim ekeepers, etc., have liens on any real estate, interest
therein, or im provements thereon, for all kinds of labor and services
performed, and m aterials furnished for the erection of any building,
or the im provem ent of any real estate, or thing connected therewith.
A person furnishing m aterial, apparatus, fixtures, machinery or labor
to a contractor for a public im provem ent, has a lien upon the money,
bonds or w arrants due o r to become due under such co n tra c t: Pro­
vided, the claim ant serves upon the m unicipality a notice of his claim
before paym ent be m ade to such contractor; b ut the lien attaches only
to the portions of the money, bonds, or w arrants against which no

2004

BANKING AND COMMERCIAL LAWS—ILLINOIS

voucher or other evidence of indebtedness has been issued and delivered
to th e contractor. A ny person expending labor, service, skill or
m aterial oil any ch a tte l furnished a t th e request of th e owner has a
lien therefore n ot to exceed $25.00.
L im ita tio n s . In personal actions as follows: Libel and slander,
one year; actions for daniages for injury to persons, two years (where
death results, one year after death) ; for false im prisonm ent, malicious
prosecution, for a sta tu to ry penalty, for abduction, seduction, or
crim inal conversation, two years; actions on unw ritten contracts,
express or Implied, on awards of arbitration, to recover dam ages for
injury to property real or personal, to recover possession of personal
property, or dam ages for th e detention or conversion thereof, and
all civil actions not otherwise provided for, five years; actions on
bonds, promissory notes, bills of exchange, w ritten leases, written
contracts, or other evidences of indebtedness in writing, ten years;
b u t any paym ent or new promise to pay in writing renews the right of
action on such instrum ent for ten years from the tim e of such paym ent
or promise. A dom estic judgm ent of a court of record, tw enty years;
of a foreign court of record, five years. W hen a cause of action has
arisen in a sta te or territo ry o u t of th is state, or in a foreign country,
and, by th e laws thereof, an action thereon cannot be m aintained
by reason of th e lapse of tim e, an action thereon shall n ot be m ain­
tained in th is state. T his applies only where both debtor and
creditor are non-residents of this sta te when th e cause of action
accrues, and does n ot govern an indem nity contract where th e in­
dem nitors were residents of M ichigan and the other parties in Illinois.
I f a person liable to an action fraudulently conceals the cause of such
action from th e knowledge of th è person entitled thereto, th e action
m ay be commenced a t any tim e w ithin five years aftêr th e person
entitled to bring the sam e discovers th a t he has such cause of action,
an d n o t afterw ards.
L im ite d P a r tn e r s h ip . T here are sta tu to ry provisions as to the
form ation of lim ited partnerships, b u t such partnerships are not
common in Illinois.
M a rrie d W o m e n . A m arried woman m ay sue, be sued, or defend,
as if she were unm arried. When the husband deserts, the wife may
prosecute or defend in his nam e. The husband has the sam e right
upon th e desertion of the wife. T he husband is not liable for the
wife’s to rts except in cases where he would be jointly responsible
if th e m arriage did not exist. The husband or wife is not liable for
the debts of the other incurred before m arriage, or for the separate
debts of each after m arriage, except th a t the husband and wife are
jointly and severally liable for the expenses of the family and the
education of their children. T he wife m ay contract as if unm arried.
She m ay receive and use her own earnings free from the interference
of th e husband or his creditors. N either the husband nor the wife can
recover com pensation for any labor performed or services rendered for
th e other. She m ay own in her own right real and personal property
obtained by descent, gift, or purchase, and manage, sell and convey it
to th e same extent th a t the husband can property belonging to him;
b u t no trahsfer of personal property between the husband and wife
living together is good as against th ird persons, unless acknowledged
an d recorded as chattel m ortgages are required to be. A m arried
woman who w ithout her fault lives ap art from her husband m ay m ain­
tain an action for reasonable support and m aintenance. The wife
m ay insure her husband’s life. She m ay become surety for th e hus­
band. She m ay execute a will, if over eighteen years of age, a t which
age she attain s m ajority.
M o rtg a g e s. Beal estate m ortgages should be executed and ac­
knowledged the same as deeds. The wife m ust ioin to bar dower,
except in mortgages for purchase-money. T rust deeds are often
preferred to m ortgages because of thè facility in th e transfer of the
security and. in case of non-resident creditors, in obtaining a release,
the trustee generally being a resident. Beal estate mortgages may
be released upon the record or by release deed. M ortgages and
tru st deeds m ust be foreclosed by scire facias or by regular foreclosure
suit in a court of chancery. In extrem e cases, where the m ortgaged
property is clearly of less value than the debt secured and the m ort­
gagor is insolvent, there m ay be a strict foreclosure which cuts oft th e
right of redem ption, in which case the m ortgagee takes the property
in discharge of the debt. In o ther cases, after decree of foreclosure,
th e officer designated to execute the decree delivers a certificate of
sale to th e purchaser and files a copy thereof for record. T he debtor
m ay redeem w ithin tw elve m onths. Judgm ent creditor m ay redeem
after twelve m onths, b u t w ithin fifteen m onths; a t the end of which
tim e th e purchaser is entitled to a deed. Corporations m ay waive
right òf redem ption by provision in any m ortgage or tru s t deed waive
right of redem ption. The holder in due course of a note secured by a
m ortgage or tru s t deed on real estate in Illinois stands in no better
position, so far as th e enforcement of his security is concerned, th an
th e payee or original holder; b u t this doctrine does n ot apply to cor­
p orate bonds payable to bearer.
N e g o tia b le I n s t r u m e n t s . T he Uniform Negotiable Instrum ents
Act (see com plete tex t following “ Digest of Banking and Commercial
L aw s”) is in force in Illinois, with th e following m odifications: 1.
All Prom issory Notes, Bonds, Due Bills, and other instrum ents in
writing, whereby one promises or agrees, to pay any sum of money
or articles of personal property, or any sum of money in personal
property, or acknowledges any sum of money or article of personal
property to be due, are negotiable. Except as to Prom issory Notes
payable in money due diligence m ust be used^by the holder against
Mie m aker, if he be a resident and solvent, by suit a t first term of
C ourt after m aturity, in order to hold the endorser. 2. Accommoda­
tion paper m ay be issued after m aturity, if such was the intention of
th e accom m odating p arty. 3. T he addition of words of assignm ent
or guaranty to a blank indorsem ent does not affect the signature as
an indorsem ent unless otherwise expressly stated. 4. The defenses of
fraud and circum vention in th e execution of negotiable paper, or th a t
the consideration arose out of a gambling transaction prohibited by
sections 130, 131, and 136 of our Crim inal Code, m ay be asserted as
against a holder in due course. 5. T he fact th a t a depositor makes
his note payable a t a bank does n ot authorize the bank to pay it out
of bis funds on deposit. 6. An alteration of an instrum ent voids it
only when i t is m aterial or fraudulent, and m ade by th e holder. 7. A
promise in w riting to accept a bill m ade either before or after it is
draw n is deemed an actu al acceptance as to the person receiving the
bill on th e faith thereof. 8. Section 137 of th e Uniform Negotiable
In stru m en ts Law, providing th a t the destruction by the drawee of a
bill of exchange left w ith him for acceptance, or his refusal to retu rn
th e sam e w ithin tw enty-four hours after delivery to him or w ithin such
fu rth er period as th e holder m ight allow, should be deemed an accept­
ance of th e bill, is om itted from the Illinois act.
Except as otherwise provided by agreem ent and except as to sub­
sequent holders of a negotiable instrum ent payable to bearer or
indorsed specially or in blank, where an item is deposited or received
for collection, the bank of deposit shall be agent of th e depositor for
its collection and each subsequent collecting bank shall be sub-agent
of th e depositor b u t shall be authorized to follow th e instructions of
its im m ediate forwarding bank and any credit given by any such agent
or sub-agent bank therefor shall be revocable u ntil such tim e as the
proceeds are received in actual money or an unconditional credit given
on th e books of another bank, which such agent has requested or
accepted. W here any such bank allows any revocable credit for an
item to be withdrawn, such agency relation shall nevertheless con­
tinue except th e bank shall have all the rights of an owner thereof
against prior and subsequent parties to th e extent of th e am ount
withdrawn.
A credit given by a bank for an item draw n on or payable a t such
bank shall be provisional, subject to revocation a t or before th e end of
th e day on which th e item is deposited in th e event th e item is found
not payable for any reason. W henever a credit is given for an item


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deposited after banking hours such right of revocation m ay be exer­
cised during th e following business day.
An indorsem ent of an item b y th e payee or other depositor “ for
deposit” shall be deemed a restrictive indorsem ent and indicate th a t
th e indorsee bank is an agent for collection and not owner of th e item
An indorsem ent “ pay any bank or banker” or having equivalent
words shall be deemed a restrictive indorsem ent and shall indicate the
creation of an agency relation in any subsequent bank to whom the
paper is forwarded unless coupled w ith th e words indicating th e crea­
tion of a tru stee relationship; and such indorsem ent or other restric­
tive indorsem ent w hether creating an agency or tru stee relationship
shall constitute a guaranty by th e indorser to all subsequent holders
and to th e draw ee or payor o f th e genuineness o f and th e a u th o rity to
m ake prior indorsem ents and also to save th e drawee or payor harm ­
less in th e event any prior endorsement appearing thereon is defective
or irregular in any respect unless such indorsem ent is coupled with
appropriate words disclaiming such liability as guarantor.
W here a deposited item is payable to bearer or indorsed by the
depositor in blank or by special indorsem ent, th e fact th a t such item
Is so payable or indorsed shall n ot change th e relation of agent of th e
bank of deposit to th e depositor, b u t subsequent holders shall have
the right to rely on th e presum ption th a t th e bank of deposit is the
owner of th e item . The indorsem ent of an item by th e bank of deposit
or by any subsequent holder in blank or by special indorsem ent or its
delivery when payable to bearer shall carry th e presum ption th a t the
indorsee or transferee is owner provided there is nothing upon the
face of th e paper or in any prior indorsem ent to indicate an agency
or tru stee relation of any prior party. B ut where an item is deposited
or is received for collection indorsed specially or in blank, th e bank
m ay convert such an indorsem ent into a restrictive indorsem ent by
writing over th e signature of th e indorser th e words “ for d ep o sit” or
“ for collection,” or other restrictive words to negative th e presum ption
th a t such bank of deposit or indorsee bank is owner; and in th e case of
an item deposited or received for collection payable to bearer, m ay
negative such presum ption by indorsing thereon th e words “received
for deposit ” or “received for collection” or words of like im port.
I t shall be th e d u ty of th e initial or any subsequent agent collecting
bank to exercise ordinary care in th e collection of an item and when
such d u ty is perform ed such agent bank shall not be responsible if for
any cause paym ent is not received in money or an unconditional credit
given on the books of another bank, which such agent bank has
requested or accepted. An initial or subsequent agent collecting bank
shall be liable for its own lack of exercise of ordinary care b u t shall
n ot be liable for th e neglect, m isconduct, m istakes or defaults of any
other agent bank or of the drawee or payor bank.
W here an Item is received on deposit or b y a subsequent agent
bank for collection, payable in another town or city, it shall be deemed
th e exercise of ordinary care to forward such item by m ail, not later
th an th e business day next following its receipt either (1) direct to
the drawee or payor in the event such drawee or payor is a bank or
(2) to another bank collecting agent according to th e usual banking
custom , either located in th e town or city where th e item is payable
or in another town or city.
W here an item is received on deposit or by a subsequent agent
bank for collection, payable by or a t another bank in th e sam e town
or city in which such agent bank is located, it shall be deem ed the
exercise of ordinary care to present th e item for paym ent a t any
tim e not later th an th e next business day following th e day on which
th e item is received either (I) a t the counter of th e drawee or payor
by agent or messenger or (2) through th e local clearing house under the
regular established procedure, or according to th e usual banking cus­
tom where the collecting or payor bank is located in an outlying district.
T he designation of th e above m ethods shall not exclude an y other
m ethod of forwarding or presentm ent which under existing rules of
law would constitute ordinary care.
W here th e item is received by m ail by a solvent drawee or payor
bank, it shall be deemed paid when th e am ount is finally charged to
th e account of th e m aker or drawer.
W here an agent bank forwards an item for collection, it shall not
be responsible for its loss or destruction in tra n sit or, when in the
possession of others, for its inability to repossess itself thereof, pro­
vided there has been no lack of ordinary care on its p art.
W here ordinary care is exercised, any agent collecting bank may
receive in paym ent of an item w ithout becoming responsible as debtor
therefor, w hether presented by mail, through th e clearing house or over
the counter of th e drawee or payor, in lieu of money, either (a) the
check or d raft of th e drawee or payor upon another bank or (b) the
check or d raft of any other bank upon any bank other th an th e drawee
or payor of th e item or (c) such m ethod of settlem ent as m ay be cus­
tom ary in a local clearing house or between clearing banks or other­
wise : Provided th a t whenever such agent collecting bank shall request
or accept in paym ent an unconditional credit which has been given to
it on th e books of th e drawee or payor or on th e books of an y other
bank, such agent collecting bank shall become debtor for such item
and shall be responsible therefor as if th e proceeds were actually
received by it in money.
W here ordinary care is exercised, any agent collecting bank may
receive from any subsequent bank in th e chain of collection in rem it­
tance for an item which has been paid, in lieu of money, th e check or
d raft of th e rem itting bank upon any bank other th a n itself or the
drawee or payor of th e item or such other m ethod of settlem ent as
m ay be custom ary; provided th a t whenever such agent collecting
bank shall request or accept an unconditional credit which has been
given to it on th e books of th e rem itting bank or on th e books of any
other bank, such agent collecting bank shall become debtor for such
item and shall be responsible therefor as if the proceeds were actually
received by it in money.
W here an item is duly presented by m ail to th e drawee or payor,
w hether or not th e sam e has been charged to th e account of th e maker
or drawer thereof or returned to such m aker or drawer, th e agent
collecting bank' so presenting m ay, a t its election, exercised with
reasonable diligence, tre a t such item s as dishonored by non-paym ent
and recourse m ay be had upon prior parties thereto in any of the
following cases:
(1) W here th e check or d raft of th e drawee or payor bank upon
another bank received in paym ent therefor shall n ot be paid in due
course;
(2) W here th e drawee or payor bank shall w ithout request or
authority tender as paym ent its own check or d raft upon itself or
other instrum ent upon which it is prim arily liable;
(3) W here th e drawee or payor bank shall give an unrequested or
unauthorized credit therefor on its books or th e books of another
b an k ; or
(4) Where th e drawee or payor shall retain such item without
rem itting therefor on th e day of receipt or on th e day of m aturity li
payable otherwise th an on dem and and received by it prior to or on
such day of m aturity.
Provided, however, th a t in any case where th e drawee or payor
bank shall return any such item unpaid not later th an th e day or
receipt or of m aturity as aforesaid in th e exercise of its right to make
paym ent only a t its own counter, such item cannot be treated as
dishonored by non-paym ent and th e delay caused thereby shall not
relieve prior parties from liability.
Provided fu rth er th a t no agent collecting bank shall be liable to
the owner of an item where, in th e exercise of ordinary care in tne
interest of such owner, it m akes or does not m ake th e election above
provided or takes such steps as it m ay deem necessary in cases (2).
(3) and (4) above.

BANKING AND COMMERCIAL LAWS—INDIANA
In case of th e dishonor of an item duly presented by m ail as pro­
vided for in th e next preceding section, notice of dishonor of such
item to prior parties shall be sufficient if given w ith reasonable dili­
gence after such dishonor; and furth er in th e event of failure to obtain
th e retu rn of an y such item notice of dishonor m ay be given upon a
copy or w ritten particulars thereof, and delay in giving notice of dis­
honor caused by an attem p t with reasonable diligence to obtain return
of such item shall be excused.
t . W hen th e drawee or payor, or any other agent collecting bank
shall fail or be closed for business by th e A uditor of Public Accounts
in th e case of banks incorporated tinder th e laws of this S tate, or the
Com ptroller of th e Currency in th e case of banks incorporated under
the Federal laws, or by action of th e board of directors or by other
proper legal action, after an item shall be mailed or otherwise entrusted
to it for collection or paym ent b ut before th e actual collection or pay­
m ent thereof, it shall be th e d u ty of th e receiver or other official in
charge of its assets to retu rn such item , if sam e is in his possession, to
the forwarding or presenting bank with reasonable diligence.
2. Except in cases where an item or item s is treated as dishonored
by non-paym ent as provided in section 11, when a drawee or payor
bank has presented to it for paym ent an item or item s drawn upon
or payable by or a t such bank and a t the tim e has on deposit to the
credit of th e m aker or drawer an am ount equal to such item or item s
and such drawee or payor shall fail or close for business as above,
after having charged such item or item s to th e account of th e m aker
or drawer thereof or otherwise discharged his liability thereon b u t
w ithout such item or item s having been paid or settled ,for by the
drawee or payor either in money or by an unconditional credit given
on its books or on th e books of any other bank, which has been requested
or accepted so as to constitute such drawee or payor or other bank
debtor therefor, th e assets of such drawee or payor shall be impressed
with a tru s t in favor of th e owner or owners of such item or item s for
the am ount thereof, or for th e balance payable upon a num ber of items
which have been exchanged, and such owner or owners shall be
entitled to a preferred/claim upon such assets, irrespective of whether
the fund representing such item or item s can be traced and identified
as p a rt of such assets or has been intermingled with or converted
into other assets of such failed bank.
3. W here an agent collecting bank other th an th e drawee or payor
shall fail or be closed for business as above, after having received in
any form th e proceeds of an item or item s entrusted to it for collec­
tion, b u t w ithout such item or item s having been paid or rem itted for
by it either in money or by an unconditional credit given on its books
or on th e books of any other bank which has been requested or accepted
so as to co n stitu te such failed collecting or other bank debtor therefor,
the assets of such agent collecting bank which has failed or been
closed for business /as above shall be impressed with a tru st in favor
of th e owner or owners of such item or item s for th e am ount of such
proceeds and such owner or owners shall be entitled to a preferred
claim upon such assets, irrespective of whether th e fund representing
such item or item s can be traced and identified as p a rt of such assets
or has been interm ingled with or converted into other assets o f such
failed bank.
In any case not provided for in this Act th e rules of law and equity,
including th e law m erchant and those rules of law and equity relat­
ing to tru sts, agency, negotiable instrum ents and banking, shall
continue to apply.
P a r tn e r s h ip . The Uniform Partnership Act and the Uniform
Limited P artnership Act are in force in Illinois.
P ro b a te L aw . (See Adm inistration of E states.)
R e c o rd in g A cts. In counties having a population of less than
60,000, the clerk of the circuit court is ex officio the recorder. In
other counties a “ recorder of deeds" is elected. As to w hat instru­
ments m ust be recorded, see respective titles.
R e p le v in . T he action lies for personal property wrongfully de­
tained. The action m ay be brought in any county where the property
is, or where any of th e defendants reside or m ay be found, th e venue
provisions applicable to other civil cases shall apply to actions in
replevin; and in addition an action in replevin m ay be brought in
any county in which th e goods or chattels or any p a rt of them are.
Before th e execution of th e writ, th e plaintiff, or some one in his behalf,
must give th e officer a bond with sufficient security (a real estate
owner of th e county is generally required) in double the value of the
property defendant m ay execute bond for double value of property
conditioned on defense of suit and retain possession of property.
S ales. The Uniform Sales Act has been adopted in Illinois. Sales
of securities are by consent of Illinois Securities Commission and are
classified. (See Blue Sky Law.)
S ales In B u lk . Sales of the m ajor p art or all of a stock in trade,
chattels or fixtures not in the ordinary course of business, are fraudu­
lent and void as to creditors unless the buyer obtains from the seller
an affiaavit giving a list of his creditors with addresses and am ounts
due each, and th e buyer, five days before paym ent, gives notice to
each creditor personally or by mail of the contem plated purchase.
T r u s t E s ta te s . Subject to rules of Chancery disbursem ents to
be approved by court.
T r u s t R e c e ip ts. The uniform tru s t receipts act has been adopted
in Illinois.
W areh o u se R e c e ip ts. T he Uniform W arehouse Receipts Law
Is in force in Illinois.
W ills. E very male over twenty-one, and female over eighteen,
is com petent to m ake a will. I t m ust be signed by the testato r or
by some person in his presence and by his direction, and attested in
his presence a t his request by a t least two witnesses. The witnesses
should be disinterested. A devise to a witness is void unless the will
be otherwise duly attested by two witnesses exclusive of such person,
Where th e subscribing witnesses are dead, secondary evidence of the
execution is admissible. The will is proved, after notice to heirs and
legatees, in th e 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 of this
State, in accordance w ith the law of the State where executed, accom­
panied with a certificate of the proper officer of th a t fact, m ay be
recorded here. Wills executed and published out of this State m ay
be adm itted to probate in any county in this State where the testator
had lands or personal property upon like proof as if executed and pub­
lished here, w hether or not the will has been first probated in another
state or county. The Uniform Foreign Probate Act is in force in
Illinois. All originals wills, after being filed, m ust remain in the office
of the county (or probate) court. Children m ay be disinherited.

SYNOPSIS OF

THE LAWS OF INDIANA
RELATING TO

BANKING AND COMMERCIAL USAGES
Revised by L u t h e r M . S w y g e r t ,
Lloyd Building, Ham m ond, Ind.
(See card iff A ttorneys List)
A ck n o w le d g m e n ts. All conveyances of real estate, except leases
for less th an three years, m ust be in writing, and acknowledged and


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2005

recorded a t once, or th ey will not bind third Darties. W ithin the
S tate acknowledgments m ay be taken before a judge or clerk o f the
court of record, justice of the peace, auditor, recorder, notary public,
member of the general assembly, or m ayor of a city, and in other
states and territories before the like officers, or a commissioner of
deeds for Indiana. In any foreign country, before a diplom atic or
consular officer of the U nited States. If such acknowledgment or
proof is in some other than the English language, or is not attested
by such official seal, it m ust be accom panied by the certificate of an
officer of the U nited States, to th e effect th a t it is duly executed accord­
ing to the laws of such foreign country, and th a t the officer has legal
authority to certify to th e proof or acknowledgm ent and the meaning
of his ¡certificate, if m ade in a foreign language. Wife m ust join in
deeds and mortgages of husband’s lands in order to carry her in­
choate one-third interest in husband’s lands. No separate acknowl­
edgm ent of wife necessary in order to convey her inchoate interest
in husband’s lands, although she m ust acknowledge. The certifying
officer should sta te the date when his commission expires.
A c tio n s. T he distinction betw een actions a t law and suits in
equity, and th e forms of each, are abolished. T here is b u t one form
of action for th e enforcem ent of p riv ate rights and redress of priv ate
wrongs, denom inated by th e Code a civil action. E very action m ust
be prosecuted in th e nam e of th e real p a rty in interest, except in suits
by an executor, adm inistrator, guardian of an idiot or lunatic, trustee
of an express tru st, or person expressly authorized by sta tu te, who
needs not join w ith them th e person for whom th e action is prosecuted.
All parties in interest m ust be joined as plaintiffs or defendants;
and when a com plete determ ination of th e controversy can not be
had w ithout the presence of other parties, who have not been made
plaintiffs or defendants, the court m ust cause them to be joined.
Commencement. A civil action is commenced by filing in the
office of the clerk a com plaint and causing sum m ons to issue thereon;
and th e action is deem ed commenced from th e tim e of issuing the
summons, or, if publication be m ade, from th e tim e of th e first pub-1
lication.
Joinder of Causes. T he plaintiff m ay unite several causes of
action in th e sam e com plaint, b u t they m ust fall within th e term of
the sta tu te, and causes of actions so joined m ust affect all th e parties
to th e action, m ust not require different places of trial and m ust be
separately sta te d and num bered.
Severance. W here causes of action are Im properly joined the
court is required by s ta tu te to cause as m any separate actions to be
docketed as th ere are causes im properly joined.
Consolidation. T he courts have inherent power to consolidate
causes before them in th e absence of sta tu te , when necessary to. the
ends of justice and to avoid a m ultiplicity of suits.
Joint Debtors. In an action against defendants jointly indebted
on contract, plaintiff m ay proceed against such defendant or de­
fendants as are served. A judgm ent m ay be enforced against joint
property of all and th e separate property of those served. W here
judgm ent is recovered against one or m ore persons jointly liable on
contract, b ut judgm ent is rendered against only p a rt of th e persons
jointly liable for th e reason th a t others were not sum m oned or did
not appear, plaintiff m ay proceed against those n ot sum m oned and
not appearing, in th e sam e nlanner as if th ey Were alone liable, b u t
the com plaint m ust allege th e facts aforesaid.
Survival. All causes of action survival death of person en titled or
liable to such action except action for personal injuries and for promises
to m arry.
A d m in is tr a tio n of E s ta te s . Except where special sta tu tes
provide otherwise w ith respect to a particular county th e C ircuit
C ourt has exclusive probate jurisdiction. In cases of intestacy letters
are granted in following order; 1. Widow or widower. 2. N ext of kin.
3. Largest resident creditor. L etters of adm inistration shall be
granted in th e county; 1. W here in testate was in h ab itan t a t tim e of
death. 2. W here, not, being in h ab itan t of th e S tate he leaves assets.
W here an intestate, not being an inhabitant, shall die o ut of th e State,
leaving assets in several counties, letters m ay be granted in an y one
of th e counties in which such assets m ay be a t tim e of death, and
th e adm inistration first lawfully granted shall extend to all of th e
estate. Preference is given to foreign executor of a decedent not
an in h ab itan t of S tate, if, before letters are granted in this S tate
It appears th a t proper letters have been granted in another state,
except there be resident creditors, legatees and heirs entitled to dis­
tribution, who are inhabitants of the S tate. No action shall be
brought against an estate for any claim against th e decedent; b ut
the holder thereof, w hether the claim be due or not, shall file a suc­
cinct and definite statem ent thereof in the office of th e clerk of the
court, setting forth all credits to which th e estate is entitled, and
accompanied by the affidavits of the claim ant, his agent, or attorney,
th a t the claim is ju st and wholly unpaid. If claim be secured b y a ■
lien, the lien shall be particularly set forth. T he claim m ust be filed
within six m onths from th e notice of th e adm inistrator’s appointm ent,
or claim ant m ust pay costs; and if not filed a t least th irty days
before the final settlem ent of the estate, it shall be barred, except
th a t heirs, devisees and distributees shall be liable to the extent of
the property received by them , to any unpaid creditor who six m onths
prior to the final settlem ent was insane, an infant, or o u t of the
S tate,—suit to be brought w ithin one year of rem oval of disability,
and if upon claim of non-resident creditor, within two years of the
settlem ent of the estate.
A ffidavits m ay be taken before any officer qualified to take acknowl­
edgm ents (see above). D ate of expiration of officer’s commission
m ust be certified by the officer himself.
A liens. Resident aliens who have declared their Intention to
become citizens, m ay acquire, hold, and enjoy real estate, and may
convey, devise, m ortgage, or otherwise encum ber the same, in like
m anner and w ith the sam e effect as citizens of this S tate. - Aliens,
whether resident or not, m ay own real estate not exceeding 320 acres
lands in excess of th a t am ount they m ust convey w ithin five years or
suffer escheat as to such excess.
A s sig n m e n ts a n d In so lv e n c y . Any debtor m ay m ake a general
assignm ent of all property in tru st for benefit of all bona fide creditors
This tru st is adm inistered under the direction of the county court.
Dividends are allowed on all claims allowed by the trustee or court.
D ebtor is n ot discharged from his liabilities.
A tta c h m e n t m ay issue against th e property of a non-resident or
foreign corporation, and against any who m ay have disposed of, or be
about to dispose of, property, to cheat, hinder or delay creditors, or
against a debtor who conceals him self so th a t sum m ons can n ot be
served upon him or where th e debtor is secretly leaving th e state.
An affidavit is required, and a bond to p ay dam ages if the proceed­
ings be wrongful or oppressive. C reditors who file under th e original
attachm ent, before final judgm ent, are required to furnish a like
affidavit and bond, and all share pro ra ta in th e proceeds of th e
attached property. T he wages of a resident householder, not exceed­
ing one m onth a t any one tim e, are exem pt so long as debtor rem ains
in such em ploym ent. I t is a m isdem eanor to send claims o u t of
the S tate to be collected by attach m en t, or garnishm ent, when creditor,
debtor, and person owing for earnings intended to be reached are all
w ithin th e jurisdiction of th e court of this S tate. T he collection of
claims so sent m ay be enjoined.
B a n k C o lle c tio n C ode. Given directly following laws.
July 1, 1929, Acts 1929 Ch. 164.

Adopted

2006

BANKING AND COMMERCIAL LAWS—INDIANA

B a n k s a n d B a n k in g . All financial institutions are controlled by
th e “ Indiana Financial Institutions A ct.” (1933, c. 40, as am ended
by Acts 1935, C. 5.) T he D epartm ent of Financial Institutions
has all powers form erly possessed by th e banking departm ent and
is vested, w ith control over organization, supervision, regulation,
exam ination and liquidation of all financial institutions, which term
includes every bank, tru s t com pany, building and loan association,
credit union, ru ral loan and savings association, guaranty loan and
savings association, m ortgage guarantee com pany and credit union.
N o bank, tru s t com pany, building and loan association, savings
bank or credit union m ay be organized unless, after investigation and
public hearing, th e D epartm ent approves its articles and th e establish­
m ent of such institution in th e city or town where it is proposed to be
established.
Any existing private bank, bank of discount and deposit, tru st com­
pany, loan and trq st and safe deposit company, building and loan asso­
ciation or ru ral or' guaranty loan and savings institution m ay reorganize
under th e Financial Institutions Act, with approval of tw o-thirds of
th e outstanding shares and of th e D epartm ent.
Organization. Ten or more persons, a m ajority of whom are citi­
zens of Indiana, m ay organize a bank or tru s t com pany. Articles of
incorporation m u st set forth name, purpose, period of existence, ad­
dresses of principal officers, am ount of capital stock, par value of shares,
paid-in capital with which business will begin, and nam es and addresses
of directors and incorporators. N am e m u st include words to indicate
power as bank or tru s t com pany, and m ay not include words indicating
powers n o t possessed. A rticles m u st be approved after public
hearing b y D epartm ent and filed w ith Secretary of S tate.
Bank or tr u s t com pany m ay n ot begin business u n til: (a) Articles
approved by Secretary of S tate have been filed in recorder’s office of
th e county of location; (b) am ount of capital stock prescribed has been
aid in; and (c) affidavit of m ajority of directors, stating th a t capital
as been paid in. is filed w ith recorder.
M in im u m Capital Requirements of bank or tru st com pany are:
$25,000 in cities or towns of less than 3,000 inhabitants; $50,000 in
cities of 3,000 or m ore and less th an 6,000 inhabitants; $100,000 in
cities of 6,000 or more and less th an 75,000 inhabitants; $200,000 in
cities of 75.000 or more inhabitants.
Amendment o f Articles. Articles of incorporation of bank or
tru s t com pany m ay be am ended from tim e to tim e and capital stock
increased or decreased.
Reserve. B ank or tru s t com pany m ust m aintain reserve balance
equal to 1 2 of dem and deposits and 3% of tim e deposits.
Stock. Shares of a bank or tru s t com pany shall be of $100 par
value of of p ar value of such less am ount as provided by th e articles
of incorporation, b u t n ot less th a n $10, and m ay bave only such
preem ptive rights as are sta te d in th e articles. B ank or tr u s t com­
p any m ay n o t purchase its own stock, except when sam e is tak en on
a previous debt, in which case it m ust be resold.
General Powers. Every bank or tru st com pany has power to :
Act as fiscal or transfer agent; discount and sell negotiable or nonnegotiable instrum ents; purchase and sell securities w ithout recourse; pur­
chase, hold and convey real estate; act as commissioner, guardian,
tru stee, receiver, executor or adm inistrator; accept property m anage­
m ent; receive deposits for safekeeping and in escrow; become a m ember
of Federal Reserve System and Federal Deposit Insurance Corporation
to m ake loans under th e provisions of the N ational Housing Act.
Loans and discounts. T he obligation of any person to any bank
m ay n o t exceed 10% of th e sound capital except as follows: No
lim itation is placed on d rafts or bills of exchange draw n in good
faith against actually existing values, obligations arising out of
discounts on paper actually owned by person negotiating, obliga­
tions draw n against existing values and secured by goods in process
of shipm ent, or tax anticipation w arrants or loans to N ational or
Indiana S tate Banks. A 15% lim itation applies to obligations
as indorser of notes other th an commercial paper of n ot more th an
six m onths owned by person indorsing, obligations of any person
in form of notes or d rafts secured by shipping docum ents or ware­
house receipts covering readily m arketable non-perishable staples
or live stock when m arket of such staples or live stock is n ot less than
115% of such obligation or obligations secured by bonds or notes of
U nited States, obligations secured by loans under provisions of Agri­
cultu ral A djustm ent A ct of 1938 if Com m odity C redit Corporation
is under obligation to redeem same. Obligations in form of bankers’
acceptances, having n ot more th an six m onths sight to run, if the
accepting bank is secured by some adequate security are subject to a
90% lim itation. The to tal loans to all directors or companies in which
directors are interested m ay not exceed 15% of unim paired capital and
surplus and violation of th e sam e is a felony.
Loans on real estate are lim ited to th a t within fifty miles of the
bank, and m ust be secured by a first lien except for taxes and special
assessments; th e am ount of th e loan shall not exceed 60% of th e ap­
praised value and th e term of th e loan shall not extend beyond 16 %
years. I f loan is in excess of 50 % of appraised value' or fo r more th an
5 years a sem i-annual reduction of not less th an 3% of th e principal
m u st.b e required by contract. The aggregate of such loans together
with loans on which the bank is liable as guarantor shall n ot exceed
35 per cent of its deposits or in excess of its to ta l sound capital, which­
ever is greater.
Trust Department. E very bank or tru s t com pany exercising fidu­
ciary powers m ust m aintain a tru st departm ent, keeping separate
books of account and m aintaining all tru st securities segregated from
other property of th e bank. All tru st money not directed to be spe­
cifically invested m ay be invested in: (a) Obligations of the U nited
S tates; (b) obligations of m unicipalities or taxing districts of Indiana;
(c) bonds, notes or m ortgages with m aturities of five years or less
secured by first liens on fee simple of real estate in Indiana worth not
less th an twice the to tal obligation secured; (d) bonds issued by
au th o rity of Federal Farm Loan Act or Federal Home Loan Bank Act,
or Home Owners Loan Act or obligations of N ational Housing Act.
No profit, other th an interest a t legal rate on a loan, m ay be received
by any bank or tru s t com pany directly or indirectly out of the sale
or purchase to or from any estate. All money not invested in accord­
ance" with th e A ct is a t th e risk of the bank or tru st com pany except
tru st funds. M oney awaiting investm ent or distribution m ay be kept
on deposit provided sufficient book entries show true ownership of such
money in both bank and tru st departm ents, b u t no m oney in excess of
$1,000 m ay be held uninvested for longer th an six m onths unless'the
tru st provides otherwise. On liquidation of any bank or tru s t com­
pany, all persons beneficially entitled to receive property or proceeds
neld by it in tru s t have preference and priority in all the assets over
general creditors for all uninvested funds, to the extent th a t such money
is commingled w ith general assets and is n ot duly accounted for.
Examinations and Reports. All financial institutions are subject
to exam ination w ithout notice and the D epartm ent m ay require sub­
mission and publication of as m any statem ents of condition as are
deemed necessary in any year.
Consolidation or Disposition of Assets. Two or more banks or
tru st companies m ay consolidate if consolidation is approved by a
m ajority xof th e outstanding shares and by the D epartm ent. Any
bank or tru st com pany m ay sell, lease, exchange or otherwise dispose
of all its assets if such disposal is approved by tw o-thirds of the out­
standing Shares and by th e D epartm ent. In either event dissenting
stockholders are entitled to receive th e value of their shares.
Voluntary Dissolution of a bank or tru s t com pany m ust have
approval of a m ajority of the directors and of the D epartm ent. In

E


https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

such case, the directors, w ith approval of the D epartm ent, appoint a
liquidating agent, who winds up the affairs of th e corporation under
supervision of th e D epartm ent.
Insolvency or Suspension. I f any financial institution is insol­
vent, or in im m inent danger of insolvency, or fails or suspends opera­
tion, the officers of such institution m ust notify the D epartm ent. The
D epartm ent m ay take charge of the business of any financial institution,
except a sm all loan company, when such institution : (a) H as violated
its articles, law of S tate or regulation of D epartm ent; (b) is conduct­
ing its business in unauthorized or unsafe m anner; (c) is in unsound
or unsafe condition; (d) cannot with safety continue business; (e) has
an im pairm ent of capital; (f) has suspended paym ent of obligations;
(g) has failed for th irty days to comply with order of D epartm ent
essential to preserve solvency; (h) has refused to subm it its records
to D epartm ent; (i) has refused to be examined under oath regarding
its affairs; or (j) is insolvent or in im m inent danger of insolvency.
W hen possession of th e D epartm ent has once attached for an y of
the foregoing reasons it does not term inate until liquidation unless : (a)
The D epartm ent approves resum ption of business on conditions ap­
proved by it or w ith restricted deposits after consent by 75% of th e
unsecured creditors and depositors or tw o-thirds of stockholders; or '
(b) such institution, by proceedings instituted within five days after
th e D epai'tm ent takes possession, enjoins such possession; or (c) the
institution has undertaken voluntary liquidation.
W hen th e D epartm ent takes charge of any such in stitution it m ust
liquidate and distribute the assets of such institution. T he circuit,
superior or probate court of the county to which the D epartm ent m ust
m ake application has certain powers with reference to liquidation, al­
lowance of claim s and priorities, etc. T he D epartm ent is vested with
power to affirm or disaffirm leases and to enforce th e shareholders’
liability. After liquidation proceedings are complete, th e D epartm ent
m ust file articles of dissolution of th e institution.
Institutions Other Than Banks or Trust Companies. The Financial
Institutions Act contains detailed provisions with respect to th e forma­
tion, m anagem ent, etc., of various financial institutions other than
banks and tru s t companies, such as building and loan associations,
credit unions, etc.
Foreign Corporations. A bank, tru s t com pany, or building and
loan association organized under th e laws of any other state, before
transacting business in this state, m ust procure a certificate of admis­
sion from the D epartm ent and the Secretary of S tate. Before such
certificate of admission is granted, such corporation m u st deposit
$100,000 in m oney or bonds of th e U nited S tates or of any sta te of tbe
U nited States or of any m unicipal corporation of Indiana to th e satis­
faction of th e D epartm ent, w ith th e D epartm ent, or in lieu thereof, file
a w ritten contract or bond executed by a responsible su rety com pany to
the approval of the D epartm ent, by th e term s of which such surety
com pany agrees th a t on notice by registered m ail from th e D epart­
m ent, it will pay indebtedness to citizens of Indiana up to $100,000.
Such foreign corporation m ust also file with th e D epartm ent a w ritten
instrum ent •agreeing th a t summons m ay issue against it from any
county in th e sta te by service on th e D irector of th e D epartm ent.
No foreign corporation m ay be adm itted for the purpose of tra n s­
acting any kind of business in this sta te which a dom estic corporation
is not perm itted by the laws of the sta te to transact, nor m ay any such
corporation hold any real estate in this state, except such as m ay be
necessary for th e proper carrying on of its legitim ate business.
N g foreign corporation adm itted to do business in this sta te m ay
have a nam e which a dom estic corporation w ith like powers could not
have.
T he application subm itted to the D epartm ent and th e Secretary of
S tate m ust contain a copy of the articles of incorporation, and m ust
state the name, principal place of business, states in which it is ad­
m itted or qualified to do business, character of business, authorized
capital stock and am ount thereof outstanding,am ount of tangible
property and estim ated to tal of tangible property to be employed d u r­
ing current fiscal year and succeeding year, nam es of directors and
officers and resident agent of corporation. T he application m u st be
approved or disapproved by the D epartm ent in like m anner as in the
case of dom estic banks and tru s t companies. In case of approval, th e
application is filed by the Secretary of S tate and a certificate of adm is­
sion issued. W ithin ten days after admission of th e corporation,
there m ust be filed w ith county recorder of county wherein principal
office is to be located, a duplicate certificate of admission.
I f any foreign corporation transacts business in th is state, after it
has received, b u t before it has recorded its certificate of admission,-the
officers and directors participating therein are sevèrally liable for the
debts of the corporation arising out of such, business. The D epart­
m ent has power a t any tim e to interrogate the corporation in m atters
pertaining to its business.
Application for w ithdraw al from the sta te by any corporation m ust
be filed with and approved by the D epartm ent.
T he certificate of admission or any foreign corporation m ay be
revoked a t any tim e by the D epartm ent or by the Secretary of State
with approval of th e D epartm ent: (a) On failure of officer or director
to answer interrogatories of D epartm ent; (b) on failure to file reports;
(c) on failure to m aintain a resident agent; (d) on failure to keep
authenticated copies of instrum ents am ending charter of corporation
on file with Secretary of S tate; (e) on failure to file certificate of ad­
mission or am endm ents thereof with county recorder; (f) if corpora­
tion has not transacted business in sta te for a year and has no tangible
property in the sta te ; (g) on failure to pay fees required: (h) for
willful m isrepresentation of m aterial m atters in application, affidavits,
or other papers.
Foreign corporations entitled to transact business in th e sta te when
the Financial Institutions Act became effective are subject to th e limi­
tations of the act.
Corporation failing to m aintain an agent for service of process may
be served by issuing sum m ons to the Director of the D epartm ent.
Foreign corporation transacting busipéss w ithout procuring a certi­
ficate of admission m ay not m aintain any suit or action in any courts
of 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 axes on bank snares, surplus, undivided profits and deposits and
on building and loan associations, see T axation.
F id u c ia rie s . “ F iduciary” includes a trustee under any tru st,
expressed, implied, resulting or constructive, executor, adm inistrator,
guardian, conservator, curator, receiver, trustee in bankruptcy,
assignee for the benefit of creditors, partner, agent, officer of a cor­
poration, public or private, public officer, or any other person acting
in a fiduciary capacity for any person, tru s t or estate.
“ Person” includes a corporation, partnership, or other association,
or two or more persons having a joint or common interest.
“ P rincipal” includes any person to whom a fiduciary as such owes
an obligation.
If a fiduciary in whose nam e are registered any shares of stock,
bonds or other securities of any corporation, public or private, or
com pany or other association, or of any tru st, transfers th e same,
such corporation or com pany or other association, or any of the
m anagers of th e tru st, or its or their transfer agent, is not bound to

BANKING AND COMMERCIAL LAWS—INDIANA
Inquire whether th e fiduciary is com m itting a oreacn of his obligation
as fiduciary in m aking the transfer, or to see to the perform ance of
the fiduciary obligation, and is liable for registering such transfer
only where registration of the transfer is m ade with actual knowledge
th a t th e fiduciary is com m itting a breach of his obligation as fiduciary
in making th e transfer, or with knowledge of such facts th a t the
action in registering the transfer am ounts to bad faith.
If any negotiable instrum ent payable or endorsed to a fiduciary as
such is endorsed by the fiduciary, or if any negotiable instrum ent
payable or endorsed to his principal is endorsed by a fiduciary em­
powered to endorse such instrum ent on behalf of his principal, the
endorsee is not bound to inquire whether the fiduciary is com m itting
a breach of his obligation as fiduciary in endorsing or delivering the
instrum ent, and is not chargeable with notice th at the fiduciary is
com m itting a breach of his obligation as fiduciary unless he takes the
Instrum ent with actual knowledge of such breach or with knowledge
of such facts th a t his action in taking the instrum ent am ounts to bad
faith. If, however, such instrum ent is transferred by the fiduciary
in paym ent of or as security for a personal debt of the fiduciary to the
actual knowledge of the creditor, or is transferred in any transaction
known by the transferee to be for the personal benefit of the fiduciary,
the creditor or other transferee is liable to the principal if the fiduciary
In fact commits a breach of his obligation as fiduciary in transferring
the instrum ent
If a check or other bill of exchange is drawn by a fiduciary as such,
or in the nam e of his principal by a fiduciary empowered to draw
such Instrum ent in th e nam e o f the principal, the payee is not bound
to inquire whether th e fiduciary is com m itting a breach of his obliga­
tion in drawing or delivering the instrum ent, and is not chargeable
with notice th a t th e fiduciary is com m itting a breach of his obligation
unless he takes the instrum ent with actual knowledge of such breach
or with knowledge of such facts th a t his action in taking the instru­
m ent am ounts to bad faith. If, however, such instrum ent is pavable
to a personal creditor of the fiduciary and delivered to the creditor
In paym ent of or as security for a personal debt of the fiduciary, to
the actual knowledge of the creditor, or is drawn and delivered In
any transaction known by the payee to be for the personal benefit of
the fiduciary, the creditor or other payee is liable to the principal if
the fiduciary in fact commits a breach of his obligation in drawing or
delivering th e instrum ent
if a check or other bill of exchange is drawn by a fiduciary as such,
or in the nam e of his principal by a fiduciary empowered to draw
such instrum ent in th e nam e of his principal, payable to the fiduciary
personally, or payable to a third person and by him transferred to
the fiduciary, and is thereafter transferred by the fiduciary, w hether
in paym ent of a personal debt of the fiduciary or otherwise, the
transferee is not bound to inquire whether the fiduciary is com m itting
a breach of his obligation in transferring the instrum ent, and is not
chargeable with notice th a t the fiduciary is com m itting a breach of
his obligation, unless he takes the instrum ent with actual knowledge
of such breach or with knowledge of such facts th a t his action in
taking th e instrum ent am ounts to bad faith.
If a deposit is m ade in a bank to the credit of a fiduciary as such,
the bank is authorized to pay the am ount of the deposit or any p art
thereof upon the check of the fiduciary, signed with the nam e in which
such deposit is entered, w ithout being liable to the principal, -unless
the bank pays th e check with the actual knowledge th a t the fiduciary
is com m itting a breach of his obligation in drawing the check or with
knowledge of such facts th a t its action in paying the check am ounts
to bad faith. If, however, such check is payable to the drawee bank
and is delivered to it in paym ent of or as security for a personal debt
of the fiduciary to it, the bank is liable to the principal if the fiduciary
In fact commits a breach of his obligation in drawing or delivering
the check.
If a check is drawn upon th e account of his principal in a bank by
a fiduciary who is empowered to draw checks upon his principal’s
account, th e bank is authorized to pay such check without being
liable to th e principal, unless the bank pays the check with actual'
knowledge th a t th e fiduciary is com m itting a breach of his obligation
in drawing such check, or with knowledge of such facts th a t its action
in paying th e check am ounts to bad faith. If, however, such a check
Is payable to th e drawee bank and is delivered to it in paym ent of or
as security for a personal debt, of the fiduciary to it, the bank is liable
to th e principal if th e fiduciary in fact commits a breach of his obliga­
tion in drawing or delivering the check.
If a fiduciary m akes a deposit in a bank to his personal credit of
checks drawn by him upon an account in his own name as fiduciary,
or of checks payable to him as fiduciary, or of checks drawn by him
upon an account in the nam e of his principal if he is empowered to
draw checks thereon, or of checks payable to his principal and en­
dorsed by him, if he is empowered to endorse such checks, or if he
otherwise makes a deposit of 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 of his obligation; and the
bank is authorized to pay th e am ount of the deposit or any p art there­
of upon th e personal check of the fiduciary without being liable to
the principal, unless the bank receives the deposit or pays the check
with actual knowledge th a t the fiduciary is com m itting a breach of
his obligation in m aking such deposit or in drawing such check, or
with knowledge of such facts th a t its action in receiving the deposit
or paying th e check am ounts to bad faith.
When a deposit is m ade in a bank in the nam e of two or more
persons as trustees and a check is drawn upon the tru st account by
any tru stee or trustees authorized by the other trustee or trustees to
draw checks upon th e tru st account, neither the payee nor other
holder nor th e bank is bound to inquire whether it is a breach of tru st
to authorize such tru stee or trustees to draw checks upon the tru st
account, and is n ot liable unless th e circumstances be such th a t the
action of th e payee or other holder or the bank am ounts to bad faith.
In any case not provided for in this act, the rules of law and equity,
including th e law m erchant and those rules of law and equity relating
to trusts, agency, negotiable instrum ents and banking, shall continue
to apply. (Acts Feb. 23, 1927, effective M ay 16, 1927, Uniform
Fiduciaries Act.)
B ills of E x ch an g e a n d P ro m is so ry N otes. No grace is allowed.
Damages for protest on bills upon any person a t any place out of
this State, b u t within the United States, 5 per cent on bills drawn
upon any person a t any place without the United States, 10 per cent.
The Uniform Negotiable Instrum ent Law has been in force in Indiana
since 1913. Instrum ents calling for the paym ent of money containing
a cognovit feature are void. I t is a misdemeanor, punishable by
fine or im prisonm ent to possess a cognovit note. (See Negotiable
Instrum ents.)
Cognovit Notes. The execution, indorsem ent and procurem ent of
such notes, and th e taking of judgm ent thereon otherwise than by
action of court upon a hearing after personal service upon the debtor,
are prohibited. (Act M arch 10. 1927, effective M ay 16. 1927).
B lu e S k y L aw (Enacted 1937 and am ended in 1941). T he A ct
known as th e Indiana Securities. Law was effective M ay 6, 1937. Pro­
vides for a Securities Commission. The Secretary of S tate shall con­
stitu te th e Securities Commission w ith plenary power to adm inister
the Act.
•‘Security" shall include any note, stock, treasury stock, bond,
debenture, evidence of indebtedness, certificate of interest or par­
ticipation, certificate of interest in a profit-sharing agreem ent, certifi­
cate of in terest in an oil, gas, or mining lease, collateral tru s t cer­
tificate, pre-organization certificate, pre-organization subscription,
beneficial in terest in a tru s t or pretended tru st, any transferable share,
investm ent contract, or beneficial interest in or title to property or
profits, income contracts, contracts for sale of securities on installm ent
plan
“ Person” shall include a natural person, a corporation created
under the laws of th is sta te 'o r any other state, country, sovereignty,
or subdivision thereof, a partnership, an association, a joint stock
company, a tru st, and any unincorporated organization.


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2007

“ Sale” shall include every disposition or attem p t to dispose of a
security or interest in a security for value.
“ D ealer” shall include every person other th an an agent, who in
this sta te engages either for all or p art of his tim e directly or through
an agent in the business of selling any securities. The word “dealer"
shall not include a person having no place of business in th is state,
who sells or offers to sell securities exclusively to a prom oter or dealer
actually engaged in buying and selling securities nor to banks and
tru s t companies.
Issuer" shall mean and include every person who proposes to issue,
has Issued, or shall hereafter issue any securities. Any natural person
who acts as a prom oter for and on behalf of a corporation to be formed
shall be deemed to be an issuer.
“ A gent" shall Include every natural person, other than a dealer,
employed or appointed or authorized by a dealer or issuer to sell
securities in any m anner in th is state.
“ F ra u d " and “ fra u d u le n t” include any m isrepresentations of a
relevant fact which are intentional or due to gross negligence; any
prom ise as to future not m ade in good faith; intentional failure to
disclose a m aterial fact.
T his Act shall not apply to the following classes of securities:
(a) Any securities issued or guaranteed by th e U nited States or
any territory or insular possession thereof, or by the D istrict of Colum­
bia or by any state or political subdivision thereof, having th e power
of taxation or assessm ent; or by any public instrum entality of a S tate
or by any person acting as an. instrum entality of U. S., or an y security
issued or guaranteed by any N ational, or State, or Federal Reserve
Bank.
(b; Any securities issued or guaranteed either as to principal.
Interest or dividend by a corporation owning or operating a railroad
or any other public service u tility : Provided, th a t such corporation
Is subject to regulation or supervision as to the issue of its own
securities by a public commission of th e U. S. or Dominion of Canada.
(c) Any securities issued by a corporattion organized under th e
law s of this sta te exclusively for educational, benevolent, fraternal,
charitable, or reform atory purposes, and n o t for pecuniary profit.
(d) Securities appearing in any list of Securities dealt in on th e N . Y.
Stock Exchange, th e N . Y. C urb Exchange or th e Chicago Stock
Exchange.
(e) Negotiable prom issory notes or commercial paper.
(f) Any security except common stock which has been issued and
in hands of public w ithout default for a t least five years.
The Act does not apply to the sale of any securities a t any judicial,
executor’s, adm inistrator’s, guardian's, or conservator’s sale, or a t
the distribution by a corporation of capital stock, to its stockholders
as a stock dividend.
The transfer or exchange by one corporation to another of their
own securities in connection w ith a consolidation or merger of such
corporations.
No securities except those exem pted shall be sold or resold w ithin
this sta te unless and u n til such securities shall have been registered by
notification or by qualification.
Securities entitled to registration by notification shall be registered
by the filing by any registered dealer interested in the sale thereof in
the office of the Commission of a w ritten statem ent containing the
following;
Nam e of issuer and nam e of sta te under which it is organized.
Brief description of the securities Including the am ount of th e issue.
Amount of securities to be offered In the state.
Brief statem ent of the facts which show th a t the securities fall
within one of the notification classes.
The price a t which th e securities are to be offered for sale and
num erous other specific regulations.
The filing of such statem ent in the office of the Commission and the
paym ent of the fee shall constitute registration of such security, and
such security when so registered m ay be sold in this sta te by any
registered dealer.
Applicants for registration shall pay to the Commission a fee of
one-twentieth of one per cent of the aggregate par value of the securi­
ties to be sold in th is state, b ut in no case shall such fee be less th an
$25.00.
All securities required by this Act to be registered before being sold
in this state, and not entitled to registration by notification, shall
be registered only by qualification, as follows;
Applications shall be in writing and sworn to upon prescribed forms.
The applicant shall pay to th e Commission a fee of one-twentieth
of one per cent of the aggregate par value of the securities to be sold,
b u t in no case shall such fee be less th an $25.00.
Upon application for registration by qualification, w hether made
by an issuer or registered dealer, where the issuer is not domiciled
In th is state, there shall be filed with such application the irrevocable
w ritten consent of the issuer th a t suits and actions growing out of
the violation of any provision or provisions of this Act m ay be com­
menced against it In the proper court, said consent agreeing th at
such service of process upon th e Secretary of S tate shall be tak en as
valid and binding as if due service had been m ade.
The Commission m ay revoke the registration of any securities upon
cause, and the Commission shall have access to and m ay compel the
production of all the books and papers of such issuer.
N o dealer or agent shall engage in th e business of selling securities
until he has been registered. Provided th a t p artners of a partnership
and officers of a corporation registered as a dealer shall n ot be required
to register as agents.
The fees shall be $75.00 in th e case of dealers and $5.00 in th e case
of agents.
Registration m ay be refused such applicant or registrant upon
cause.
Nothing in this Act shall be construed to relieve corporation from
making reports now or hereafter required by law to be m ade to the
Secretary of State or any other sta te officer, or paying the fees now or
hereafter to be paid by corporations.
This Act shall not be construed to repeal any law now in force regu­
lating the organization of corporations or the admission of any foreign
corporations.
An appeal m ay b e'tak e n by any person Interested from any final
order of the Commission to the M arion C ircuit C ourt by serving upon
the Commission within tw enty days from the entry of such order a
written notice of such appeal, and executing a bond in the penal sum
of $500.00.
The Act approved July 26, 1920, and am ended M arch 9, 1921,
provides various penalties for violation of the various sections ranging
from a fine of $500 to a fine of $2,000 or im prisoned up to 5 years.
u i a t r g i m o rtg a g e s , x ne hen of a chattel m ortgage th a t has been
filed is superior to other forms of liens, allows for sale of mortgaged
property if funds applied in paym ent of debt. Invalid after 3 years
unless extended. Removal of p roperty from county does not extin­
guish lien. (For new act see C h a ttel M ortgage Act of 1935, c 147.)
F o r certain restrictions on th e lending of money on m ortgage of house­
hold goods, see statu tes. Conveyances as security by way of T rust
Receipt are regulated by th e Uniform T ru st Receipts Act (Acts 1935
c. 206). C onditional Sales are .regulated by th e Uniform Conditional
Sale Act (Apts 1935, c, 182) and by th e Uniform R etail Installm ent
Sale Act (Acts 1935, c. 231).
C o n v ey an ces. All conveyances, m ortgages or leases for more than
three years shall be recorded and take priority according to tim e of
filing as against good faith purchaser, lessee or mortgagee. Lands In
this S tate m ay be taken, held, conveyed, devised, or passed by
descent, by or from any citizen of the U nited States; or by or from
any alien (see Aliens'), w ith some provided exceptions as to descent
or devise. Lands which m ay have come by descent or purchase to
the wife of an alien, m ay be held, conveyed, devised and passed by
descent by and from her, notw ithstanding the fact Of her residence
with her husband in a foreign state or country.

2008

BANKING AND COMMERCIAL LAWS—INDIANA

Except bona-fide leases for a term not exceeding three years, con­
veyance of lands, or of any interest therein, m ust be by deed, sub­
scribed, and acknowledged by the grantor or by his attorney in fact.
The joint deed of a husband and wife is sufficient to pass the lands
of the wife. E xcept in cases of m ortgages, conveyances in trust,
conveyances to husband and wife, and cases of estates vested in
executors or trustees, as such, and so held by them in joint tenancy,
all conveyances and devises of lands, or of any interest therein, made
to two or more persons, shall be construed to create estates in com­
mon, and not in joint tenancy, unless it shall be expressed therein
th at the grantees or devisees shall hold the same in joint tenancy
and .to th e survivor of them , or it shall manifestly appear from tenor
of instrum ent, th a t it was intended to create an estate in joint tenancy.
A deed or release or quit-claim shall pass all the estate which the
grantor could convey by a deed of bargain and sale. If it be the
intention of the grantor to convey any lesser estate it m ust be so
expressed in the deed. Liability on lineal and collateral warranties
Is expressly abolished; a covenant or agreem ent of any person leaves
heirs and devisees answerable thereon only to the extent of property
descended or devised to them . Any conveyance of land worded—
“ A, B. conveys and w arrants to O. D. (here describe the premises)
for the sum of (here insert the consideration)," or “ A. B. quit-claims
to G. D. (here describe the premises) for the sum of (here insert the
consideration),”—the same being dated, and duly signed and acknowl­
edged by the grantor,—shall, in the one case, be a conveyance in fee
simple to th e grantee, his heirs and assigns, w ith covenant from the
grantor for himself and his heirs and personal representatives th a t
he is lawfully seized of the premises, has good right to convey the
same, and guarantees the quiet possession thereof, th a t the same are
free from all incumbrances, and th a t he will w arrant and defend the
title of the sam e against all lawful claims; and shall, in thq other
case, be deemed to be a good‘and sufficient conveyance in quit-claim
to th e grantee, his heirs and assigns. Any m ortgage of lands worded
—“ A. B. mortgages and w arrants to O. D. (here describe the premises)
to secure the repaym ent of (here recite the sum for which the m ortgage
Is granted or the note or other evidences of debt, or a description
thereof, sought to be secured, also the date of the repaym ent”—the
same being dated and duly signed and acknowledged by the grantor
—is a sufficient m ortgage to the grantee, his heirs, assigns, executors
and adm inistrators, with w arranty from the grantor and his legal
representatives of title perfect and unincum bered in the grantor.
When a deed purports to convey absolutely any estate in lands, b ut
Is m ade, or Intended to be m ade, defeasible by force of a deed of
defeasance, bond or other instrum ent for th a t purpose, the original
conveyance shall not thereby be defeated or affected as against any
person other than th e maker, of the defeasance, or his heirs or devisees,
or persons having actual notice thereof, unless the instrum ent of
defeasance shall have been recorded, according to law, within ninety
days after the date of said deed. Every conveyance or m ortgage of
lands, or of any interest therein, and every lease for more th an three
years, shall be deemed fraudulent and void as against any subsequent
purchaser, leasee or mortgagee in good faith and for a valuable con­
sideration. unless recorded in the recorder’s office of the county where
such lands are situated. (See Acknowiedgments, M arried Women.)
When either the- husband or wife is of unsound mind the party
with the sound mind can either join in th e guardian’s deed or make
his separate deed and the effect would be the same as a joint deed of
husband and wife both of whom are of sound mind.
C o lle c tio n s . Uniform Bank Collection Code as recommended by
American Bankers Association, see com plete tex t back of Laws.
C o rp o ra tio n s . T hree or more persons m ay form a corporation for
an y lawful purpose by filing articles of association with th e Secretary
of S tate an d th e Recorder of th e C ounty. Special charters are neces­
sary for banks, building an d loan associations, insurance, security,
railroad, telegraph, telephone, turn-pike com pany, etc. T he liability
of 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 th e subscription
price of his stock.
A corporation act was passed by th e legislature in 1929, which gives
great liberality. A corporation m ay change its powers, increase or
decrease its capital stock, change th e par value of any class or classes
of shares of its capital stock with par value, change the num ber of its
outstanding shares of any class of stock into different num bers of
shares of said class, increase its Board of Directors, fill vacancies therein,
hold its meetings w ithin or w ithout th e state, transfer its stock free
of taxes and m ust report b u t once each year to the Secretary of S tate.
T his report is merely a form al one giving am ounts of stock outstanding,
list of officers, etc. T he corporation is assessed for local taxes upon the
value of its holdings w ithin th e S tate of Indiana and only upon such
holdings.
Foreign corporations, or their agents, before entering upon the
duties of their agency in this S tate shall deposit in the C lerk’s office of
th e C ounty where they propose doing business th e power of attorney
an d appointm ent under which they act. T hey shall also file w ith the
Secretary of S tate an application to do business in the S tate of Indiana,
nam ing a resident agent therein. Foreign Corporations m ust p ay a
fee of $10 if proportion of its stock represented in Indiana is less th an
1,000 shares and one cent a share if in excess of $1,000. T hey also
agree th a t th e secretary is authorized to accept service of process in
an y su it against them .
C o u r ts a n d J u r is d ic tio 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 th e counties of Lake and M arion in
which there are crim inal courts, probate jurisdiction in m ost counties,
p robate exclusive and concurrent jurisdiction in civil m atters, also
appellate jurisdiction in appeals from Justices of Peace, M ayors of
cities an d B oard of- C ounty Commissioners. Superior C ourts are
established in m any counties w ith original concurrent jurisdiction
w ith th e circuit courts in all Causes except slander and libel, crim inal
causes, probate m atters and concurrent appellate jurisdiction w ith
eircuit courts. Justices of th e Peace in all townships, jurisdiction
in civil actions for $200.00 or less, in th e township, also jurisdic­
tion in p e tty crim inal causes. P a rty m ay confess judgm ent in
Ju stice’s court for $300.00. In actions on w ritten obligations for
money of more th a n one p a rty Justice has jurisdiction in township
where either p arty resides and m ay issue process to any county in
th e sta te for other parties. Supreme C ourt is highest appellate
court and has no original jurisdiction except in a few specified cases.
Appellate C ourt has final appellate jurisdiction in m any cases, no
original jurisdiction. In some specified classes of cases defeated
p a rty m ay have cause transferred to Supreme C ourt. Both Supreme
and Appellate C ourts s it'o n ly in Indianapolis. M unicipal C ourt,
M arion C ounty (Indianapolis), four judges. Original jurisdiction
concurrent with Superior and Circuit C ourts in all civil cases founded
on contract or to rt in which debt or dam age or value of property
sought to be rem oved does not exceed $500. Jurisdiction irrespective
of value of property in possessory actions between landlord and
te n a n t. Crim inal jurisdiction as is now vested in city courts in cities
of first class. Jurisdiction in cases involving violation of ordinances
of cities and towns or other m unicipalities.
Courts of record within their respective jurisdictions shall have
power to declare rights, status, and other legal relations w hether or
not fu rth er relief is or could be claimed.
Any person interested under a deed, will, w ritten contract or other
writings constituting a contract, or whose rights, sta tu s or other legal
relations are affected by a sta tu te, municipal ordinance, contract or
franchise, m ay have determ ined any question of construction or
validity arising under th e instrum ent, sta tu te, ordinance, contract, or
franchise and obtain a declaration of rights, sta tu s or other legal
relations thereunder.
A contract m ay be construed either before or after there has been
a breach thereof.


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Any person interested as or through an executor, adm inistrator,
trustee, guardian or other fiduciary, creditor, devisee, legatee, heir,
next of kin, or cestui’ que tru st, in th e adm inistration of a tru st, or of
the estate of a decedent, infant, lunatic, or Insolvent, m ay have a
declaration of rights or legal relations in respect thereto.
T he court m ay refuse to render or enter a declaratory judgm ent or
decree where such judgm ent or decree, if rendered or entered, would
not term inate the uncertainty or controversy giving rise to th e p ro ­
ceeding.
All orders, judgm ents and decrees under this act m ay be reviewed
as other orders, judgm ents and decrees. (Act M arch 5, 1927, in effect
M ay 16, 1927).
D ays of G race are no longer recognized.
D e p o sitio n s. Depositions m ay be taken anywhere in th e United
S tates w ithout a commission, before any judge, justice of th e peace
notary public, m ayor, or recorder of a city, clerk of a court of record,
or commissioner appointed by the court to take depositions. Per­
son taking deposition m ust not be of kin to either p arty or interested
in the action. When taken outside of the U nited S tates they shall
be taken pursuant to an order of the court, under a commission, with
such reasonable notice of the tim e and place of taking th e same as
the court shall require, and they shall be certified and returned by
the commissioner in such m anner as the court shall direct. Notice
of the taking of the deposition should be served upon th e adverse
p arty or his. attorney, specifying th e cause, the court or tribunal of
trial, the tim e and place of taking, and th e names of th e witnesses.
Reasonable tim e shall be allowed for th e attorney so served to com­
m unicate with the client, and for travel to the place of taking, exclud­
ing th e day of service, of the taking and intervening Sundays. The d e­
ponent shall be first sworn according to law. H e shall then be examined
by the p arty producing him, and then by the adverse p arty, and then by
the officer, if he see cause. The deposition shall be w ritten down by the
officer, by the deponent, or by some disinterested person, in th e presence
and under the direction of the officer, and after th e same has. been
carefully read shall be subscribed by deponent. The following facts
shall be stated in a certificate to be annexed by the officer; 1. T hat
the deponent was sworn according to law. 2. By whom th e depo­
sition was w ritten, and if w ritten by deponent or some disinterested
person, th a t it was w ritten in the presence and under th e direction of
the officer- 3. W hether the adverse p arty attend ed . 4. The tim e
and place of taking, and the officer shall sign and a tte s t the certificate,
and seal the same, if he have a seal of office. If he have no seal, his
certificate shall be authenticated by the certificate and seal of the
clerk or prothonotary or any court of record of the county in which
certificate shall be authenticated by the certificate and seal of the
clerk or prothonotary of any court of record of the county in which
the officer exercises the duties of his office. The officer taking the
deposition shall seal the same in a sufficient envelope and himself,
post, or express, or deliver the same to the clerk, of th e court in which
the action is pending, endorsing on the envelope th e names of the
parties and of the court and of the witnesses whose depositions are
enclosed. Adjournm ents m ay be had from day to day after the
deposition has been begun, and for longer periods, upon written con­
sent of the parties, which w ritten consent m ust be attached to the
deposition. Adjournm ents should be noted a t th e place In the
deposition when they occur. A narrative form m ay be used. A
witness identifying a w ritten instrum ent should attach it to his
deposition. m aking it a p a rt of his answer.
D escen t. The real and personal property of any in testate shall
descend to his or her children equally; and posthum ous children
Inherit equally with those born before the death of the ancestor.
Children of deceased children take the share which would have
descended to th e father or m other; and grandchildren, and more
rem ote descendants, and other relatives, lineal and collateral, inherit
by the same rule, excepting th a t if the heirs are ail grandchildren
they inherit equally". W here there are no heirs as aforesaid, onehalf of the estate goes to the father and m other as joint tenants, or
to the survivor, and the other half to the brothers and sisters, and
to the descendants of such as are dead, as tenants in common. If
there be neither fath er nor m other, the brothers and sisters, and
the other descendants, take the estate as tenants in common; or.
per contra, the father and m other as joint tenants of th e survivor.
Kindred of the half-blood inherit equally w ith those of th e wholeblood in property purchased by the ancestor; otherwise, as to property
acquired by gift, devise, or descent. Illegitim ate children inherit
from the m other same as if they were legitim ate, and vice versa.
T enancy by the curtesy ana dower are abolished, an a widows take
one-third of the real estate in fee simple, unless the property is worth
over $10,000, in which case, as against creditors, she takes one-fourth
only; and where the real estate is w orth over $20,000, one-fifth only
as against creditors, b u t as against other heirs she takes one-third
In fee simple, regardless of value, except where there is b u t one
child, in which casé each inherits one-half. A second or subsequent
wife, however, takes only a life estate in her husband's lands, if there
be a child or children by a previous m arriage, and none by such
widow. O ther special provisions of the sta tu te are too extensive to
set out. The estate of a person dying Intestate w ithout kindred
capable of inheriting will escheat to the S tate for th e support of th e
common schools. W hen th ere is no evidence b u t th a t tenants by
en tirety died sim ultaneously, property so held is distributed one-half
as if one had survived and th e other half as if th e other had survived:
p roperty of joint ten an ts are sim ilarly distributed in like situations
according to th eir respective interests.
D ow er. (See M arried Women.)
E x e c u tio n s m ay issue a t any tim e within ten years after judg­
m ent and are returnable in 180 days. From a court of record may
Issue to any county in the S tate. Are a lien on personal property
within the county from the tim e they are placed in bands of officer.
The liens upon p erso n alp ro p erty attach in the order In which the
officer receives them . When levy is upon real estate the dates of
the judgm ent control the right to participate in the proceeds, and
they m ust be applied according to their priority. Personal property
taken in execution m ay be left with execution defendant by the
giving to the officer of a delivery bond with sufficient surety; debtor
may, by giving sufficient freehold sureties, have a stay of execution
on any sum exceeding $100, for six m onths. W here the sum is less
than $100. the stay is not so long, varying with am ount of judgm ent.
Lands sold under execution m ay be redeem ed within one year by
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 of failure to redeem.
E x e m p tio n s . Personal property up to $600 and real property up
t o $700, nor in any event more th an $1000 in both personal and real
p roperty is exem pt in suits on contract where debtor is a resident
householder. Resident householder is entitled to exemption as
well when in tra n sit with his fam ily and property as when perma­
nently settled. T he debtor m ust file a schedule of all of his property,
and select the property claimed, which is then appraised. Contract
waiving exem ption is void. Pension m oney in tra n sit to pensioner
is exem pt, b u t when received by him and invested in o th er property
is no more so th an any other property. One m o n th ’s wages also
exem pt if the debtor is still employed. No exem ption of mechanics
liens or purchase-m oney liens.
F r a u d . Assignments, in writing or otherwise, of any property
made or suffered with in ten t to hinder, or defraud are void as to the
persons defrauded. The question of fraudulent inten t is a question
of fact.
Frauds— S tatu te of. T he following contracts, if enforceable in court,
m ust be in writing and signed by the p arty to be charged: 1. To
charge an executor or adm inistrator, upon any special promise, to
answer dam ages out of his own estate. 2. To charge any person,
upon any special promise, to answer for the debt, default, or mis­
carriage of another. 3. To charge any person, upon any agreement
or promise, m ade in consideration of m arriage. 4. Upon any con-

BANKING AND COMMERCIAL LAWS—INDIANA
tract for th e sale of land (except loan not exceeding the term of three
re a rs).' 5. Upon any agreem ent not to be performed within one
year from th e m aking thereof. 6. Sale of goods exceeding $500 in
value, unless p art paym ent or part delivery be made. 7. Upon
any representation made concerning the character, conduct, credit
ability, trad e or dealings of any other person.
G a r n is h m e n t. If a t th e tim e an order of attachm ent issues, or at
any tim e before or afterw ards, th e plaintiff, or other person in his
behalf, shall file w ith the clerk an affidavit th a t he has good reason to
believe th a t any person nam ed has property of the defendant in his
possession or under his control, which th e sheriff cannot attach by
virtue of such order; or th a t he is indebted to th e defendant, or has
control or agency of any money, property, credits or effects; or th a t
defendant has any shares or interest in th e stock of any association or
corporation, the clerk shall issue a sum m ons to such person, corpora­
tion, or association, to appear and answer as garnishee in the action.
Prom th e service of sum m ons the garnishee is accountable to plaintiff
for th e money, property, etc., in his hands, or due to defendant. If
the summons issues before attachm ent, th e affidavit m ust show some
one of th e Causes authorizing attachm ent. The garnishee is required
to furnish th e sheriff, w ithin five days after service, a certificate of
the property, etc., of defendant in his hands or due to him, to be
returned with th e summons. If 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. If it appear by affidavit th a t a garnishee
is about to abscond before judgm ent can be had, an order of arrest
m ay issue and he be held to special bail. R eturn of “ No property
found” on an order of attachm ent does not affect th e proceedings
against th e garnishee. He may, before judgm ent against the de­
fendant, by delivery of all th e defendant’s property in his possession
to th e sheriff, or paym ent of all money due him to the sheriff, or into
court, discharge himself from th e suit w ithout costs, and from all
liability to th e defendant or the money or property so paid or de­
livered, n o t exceeding th e plaintiff’s claim.
Clerks of th e circuit courts, sheriffs, justices of the peace, constables
and all other officers who m ay collect money by virtue of their office,
executors, adm inistrators, guardians, and trustees, are subject to
garnishm ent as other persons.
The wages of all householders in th e employ of any person or
corporation are exem pt from garnishm ent and proceedings supple­
m ental to execution, in th e hands of th e employer, so long as the
employee rem ains in such em ploym ent, not exceeding twenty-five
dollars a t any one tim e, and the employee is allowed no other exemption
as against garnishm ent. (B urns’ Ann. S. 1933, §3-505.) Applies to
householders in other jurisdictions. Resident householders still have
six hundred dollars exemption. (Pomeroy v. Beach, 143 Ind. 511..)
See also 15, 47, 50, 71, 114.
H o lid ay s. The legal holidays are: Sundays; January 1 (New Y ear’s
D ay ): F ebruary 12 (Lincoln’s b irth d a y ); February 22 (W ashington’s
birthday); Good Friday; M a y ,30 (Memorial D ay); July 4 (Indepen­
dence D ay); first M onday in Septem ber (Labor D ay); October 12
(Columbus D ay); Novem ber 11 (Armistice D ay); Thanksgiving D ay;
December 25 (Christm as D a y ); an d any election day. W hen any
holiday (other th an Sunday) comes on Sunday th e M onday next suc­
ceeding shall be th e legal holiday; S aturday afternoon is a legal half­
holiday in all cities over 35,000 in population. E very S aturday after
12 o clock noon shall be a legal half-holiday for banks and tr u s t com­
panies. The validity of transactions by a bank, otherwise legal, are
not affected if perform ed on a legal holiday. However, banks m ay
a t their option open an y legal holiday.
H u s b a n d a n a W ile. (See M arried Women.)
I n h e r ita n c e T ax. (See Taxes.)
in te r e s t. The legal rate is 6 per cent, but Interest may be taken
in advance. No agreem ent to pay a higher rate is valid unless the
tam e be in writing, and in such case it is not lawful to contract for
more than 8 per cent. When a greater rate is contracted for. the
contract is void as to ail interest in excess of 6 per cent; is usurious
and illegal, and the excess may be recouped by the debtor whenever
It has been reserved or paid before the bringing of the suit. Interest
on judgm ents runs from the date of the verdict or finding, a t the
rate specified in the original contract, not exceeding 8 per cent, and
If no contract has been made 6 per cent is allowed.
J u d g m e n ts of courts of record are a lien upon ail real estate of
defendant within the county for ten years. Judgm ent may be
obtained a t the first term of the court, after process has been served
on debtor ten days prior tq the first day thereof. Judgm ent in justice
court becomes a lien on real estate of judgm ent defendant! rom tim e
of filing a transcript in office of the clerk of circuit court. A certified
copy of any judgm ent rendered by the D istrict C ourt of the United
S tates for district of Indiana m ay be filed with the county clerk.
L iens. Liens are granted by sta tu te to attorneys; to persons
holding claims against w atercraft on account of supplies furnished or
work done; also for dem ands for dam ages arising out of freight con­
tracts. or for willfulness or negligence of the m aster, owner, or agent
or out of any contract relating to transportation, and for injuries to
persons or property; also to employes of any corporation as against
any of its corporate property or earnings for labor done; also to
keepers of livery stables and all persons engaged in feeding stock, for
the feed and care bestowed upon the same, also to blacksmiths; also to
contractors, sub-contractors, mechanics, journeymen, laborers, and all
persons performing labor or furnishing m aterial or m achinery for
erecting, laboring, repairing or removing any house, mill, manufactory
or other building, bridge, reservoir, system of water-works, or other
structure, kno.wn as a mechanic’s lien; also to bailees and tradesm en
for their valid and reasonable charges in tne construction, repair,
or alteration of any article of value; also to the bailee or keeper of
pergonal property for any feed or care bestowed by him upon such
property; special lien for storage or repair of m otor vehicles; also to
forwarding and commission m erchants 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 of storing, warehousing and
forwarding, goods remaining in possession of such person, firm or
corporation for more th an six m onths m ay be sold a t public auction
to pay am ount of lien; also to landlords upon crops. Persons storing,
furnishing supplies or repairing a motor vehicle or garage owners
have lien on m otor vehicle which can be foreclosed within one year
from failure of owner to pay charges. Judgm ents rendered in any
county in the S tate are a lien upon the real estate situated in such
county for a period of 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 by statute, how­
ever, for the filing in the county where the real estate is situated of a
transcript of any judgm ent rendered in the United States courts
The office of the clerk of the circuit court in each county contains a
public record known as the lis pendens record, in which notice of the
filing of com plaints to enforce liens are required to be recorded, and
also in cases where real estate is seized by attachm ent or execution.
Unless so recorded the bringing suits does not operate as a constructive
notice
L im ita tio n s to S u its . Actions for injury to person and character,
and for statu to ry penalty or forfeiture, two years; against public
officers relating to their official duties, and on public improvement
assessments, five years; open accounts and contracts not in writing,
for use, rents and profits of real estate, injuries to and detention of
property, recovery of personal property and relief against frauds, sis
years; upon promissory notes, bills of exchange and other written
contracts for paym ent of money, ten years; actions not lim ited by
statute, fifteen years; other w ritten contracts, judgm ents of courts of
record and real actions, tw enty years. Persons under a legal dis­
ability m ay sue 2 years after disability removed. R evivor: p art pay­
ment or new prom ise in writing. E xcept in favor of sureties, the
sta tu te of lim itations does not ru n against th e State.
M a rrie d W o m en control their real and personal property. The
husband is liable for the wife’s debts contracted before m arriage to


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2009

the extent of the personal property he m ay receive from her, and no
further, and her lan d s'are liable for such indebtedness. A married
woman m ay devise her separate estate; m ay sell and transfer her separ­
a te personal property; 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
femme sole; and her husband is not liable for such debts, nor for
indebtedness created b y the wife for im provem ent of her separate
real estate. She can m ake leases of real estate for term s of three
years or less, and execute m ortgages to secure purchase m oney, w ith­
out husband joining. She is bound by covenants of title in convey­
ances of her separate real estate. H er deed conveying her real estate,
her husband not joining, is absolutely void. . She m ay sue as a femme
sole for any dam age to her person or character. She is bound In
like m anner as principal on her official bond. Disability as to, surety­
ship has been abolished, therefore, in m aking loans to m arried women
It is not necessary for her to m ake an affidavit th a t the money 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 th e am ount of $600
and real property to the am ount of $700. A widow takes one-third
of her deceased husband’s real estate in fee, and free from all dem ands
of creditors, where th e estate does n ot exceed $10,000; one-fourth,
if under $20,000, and one-fifth, if above th a t am ount. She also
takes a child’s interest in th e personalty where th e num ber of children
does not exceed two, and where th ere are more th an two, her interest
shall n ot be less th an one-third of the whole of personalty after
paym ent o f debts, and in all cases takes $500 w ithout accounting,
and m ay occupy the dwelling of forty acres of her husband’s land for
a year, rent free. B ut the one-third of her real estate which the
widow takes in, fee, can not, upon her m arrying again, be effectively
conveyed or m ortgaged by her, if thSre be a m inor child or children, or
their descendants, alive by th e previous m arriage. Real estate which
husband and wife hold by title m ade to them as husband and wife,
is held as an estate by entirety; it cannot be taken for the debt of
either; is not subject to the lien of a judgm ent against either, except
In case of the death of either or upon divorce granted, when th e estate
is destroyed and becomes subject to levy and sale; and a mortgage
thereof by them both for a debt of the husband has no legal validity.
M o rtg ag es. (See Conveyances.)
N e g o tia b le I n s t r u m e n t s . Uniform Negotiable Instrum ents Act
adopted 1913. (See com plete tex t of th e law following “ Digest of
Banking and Commercial Laws.” )
P ow er of A tto rn e y m ust be executed and acknowledged, and (If
for the conveyance of real estate, or to affect real estate) recorded. In
the same m anner th a t deeds are m ade.
P ro b a te L aw . (See A dm inistration of E states.)
P ro te s t. The sta tu to ry dam ages on such protest are 5 per cent
on the principal of a bill of exchange, if drawn or negotiated within
this S tate, upon any person, a t any place out of this S tate, but within
the U nited States, and 10 per cent if upon any person, a t any place
without the U nited States.
R e p le v in . When any personal property is wrongfully taken or
unlawfully detained, or, if taken on execution or attachm ent, is
claimed by a third party, the owner or claim ant m ay bring an action
for possession thereof. He m ay claim im m ediate delivery upon
affidavit therefor, whereupon the sheriff takes possession of the
property, and if delivery bond is given on behalf of the defendant
within tw enty-four hours, the property is returned to him, otherwise
the plaintiff m ay give bond and take the property: failing to do so
it is returned to the defendant. The plaintiff has tw enty-four hours
in which to file bond. Justices of the peace have jurisdiction in
replevin suits involving property w orth $200 or less. Procedure is
same before justice of the peace, except th a t the plaintiff m ust file
bond in all such cases. Replevin m ay also be had w ithout bond, by
allowing defendant to retain possession of property pending suit.
S ales. Uniform Sales Act adopted by Acts of 1929.
S u its . (See Actions.)
T ax es. T he general tax law of Indiana was revised and codified
by th e acts of 1919, p. 198. Personal property is listed for taxation
between th e first day of M arch and th e 15th day of M ay of each year
w ith reference to the q u an tity held or owned on th e first day of M arch
In th e year for which th e property is required to be listed. R ealty is
listed and assessed by th e tow nship assessor. Assessment lists of
personal property are filed with th e tow nship assessor. From th e
assessm ent of th e tow nship assessor, an appeal m ay be taken to the
county assessor an d th e county board of review. An appeal lies from
th e county board to th e S tate T ax Board. T hereafter illegal taxes
will be enjoined by th e courts in accordance w ith th e usual rules of law.
Valuation. All property m ust be assessed and valued for taxation
purposes a t th e tru e cash value thereof. (64-103).
Liens. Taxes a ttach as a lien on real estate on M arch 1 each year.
T he lien is perpetual and is not divested by any sale or transfer. The
first half of taxes becomes delinquent if not paid on the first M onday
m M ay of th e succeeding year, and th e second half on the first M onday
of Novem ber following. (64-2001,2008).
Sales. I f not paid by th e first M onday of F ebruary following, the
property, or so m uch thereof as m ay be necessary, will be sold for th e
paym ent of taxes and penalty. Sales of real estate for taxes are m ade
on th e second M onday in February, annually. ((64-2201, 2211).
Redemption. T he property m ay be redeem ed w ithin 6 m onths
by paym ent of th e am ount bid a t th e sale, with 10 per cent penalty:
if redeem ed after 6 m onths and within 12 m onths, th e penalty is
15 per cent; after 12 m onths and within 2 years. 25 per cent; a t the
expiration of which tim e th e purchaser is entitled to a deed, and no
redem ption m ay thereafter be m ade. B ut infants and Insane persons
m ay redeem w ithin 2 years after rem oval of: their disability. A tax
deed m ay be set aside if any substantial provision of th e law has not
been complied w ith, and redem ptions are generally favored by th e
courts, even after a deed has issued. (64-2301, 2314).
Intangibles. Intangible personal property is taxed by m eans of a
stam p tax (Acts 1933, q. 81, as Amended Acts 1935, C. 294).
Exemptions. The property of th e U. S. and of this state, and th e
property of any county, city, tow n or tow nship is exem pt from tax a­
tion. Generally, and under certain conditions, th e following property
Is exem pt from ta x a tio n : property Used for educational, literary,
scientific, religious, fraternal, benevolent, or charitable purposes,
b attle grounds, and other historic sites and public libraries. Ceme­
teries incorporated under the law of this state, not for pecuniary
profit, and certain funds for th e care and m aintenance of cemeteries,
are exem pt. M em bers of th e sta te m ilitia and every soldier and
sailor m th e service of th e U . S. are exem pt from paying poll or road ta x .
All bonds and other evidences of indebtedness hereafter issued by
or m the nam e of any m unicipality Or other political or civil subdivision of this state, or by or in th e nam e of any taxing district in
this state, for the purpose of paying the cost of im provem ent or
m aintenance ot streets, highways, etc., and other im provem ents of
public benefit, and which bonds, or other evidence of indebtedness are
payable from special assessm ents or special taxes, are exenlpt from
taxation. (64-201).
_
Income Tax. A tax is imposed on th e gross income of all residents
of Indiana or persons domiciled here and on all income arising from a
business conducted on p roperty located in Indiana (Acts 1937, c. 117).
Inheritance ■Tax. ( 1931, c. 75.) Tax is imposed subject to con­
ditions and lim itations, on all transfers in tru st or otherwise of th e
following property or interests therein or income therefrom : When
transfer is from a resident of sta te , real property situated in state, all
tangible personal property except such as has an actual situs w ithout
sta te and all intangible personal property wherever situated ; when
transfer is from a nonresident, all real and personal property within
jurisdiction of state.
The following transfers are taxable: By will; by sta tu te regulating
descent; m ade m contem plation of death of transferor, if m ade within

BANKING AND COMMERCIAL LAWS—IOWA

2010

tw o years, it is presum ed to be in contem plation of death, in absence
of contrary showing, m ade by gift or grantr to take effect in pos­
session or enjoym ent after death of transferor; m ade in paym ent of
debt created by antenuptial agreem ent by its term s payable by will
or contract a t or after death. I f transfer is for a valuable considera­
tion; except love and affection, no tax is imposed on the value up to th e
money value of th e consideration received by th e transferor, but th e
excess is taxed. Where property is held in joint names of tw o or
more persons as joint tenants or otherwise, except real estate held
by entireties, or is deposited in banks, etc., in joint names and pay­
able to survivor or survivors, exercise of right of 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 of insurance on decedent's life, payable to his estate, are
taxed; b u t insurance payable to some other person and not a p a rt of
decedent’s estate is not taxed. A transfer by deed of tru st (before or
after enactm ent, of statute) wherein tru sto r reserved to himself any
income or interest, or reserved powers of revocation, alteration or
am endm ent, on exercise of which property would revest in him , is
taxable on his death to extent of value of 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 of commissions, allow­
ances or fees, is taxable on excess over commissions, etc., which would
be payable in absence of any such transfer.
Rates of tax and exemptions vary according to relationship of
beneficiary and am ount of transfer, as follows:
C lass A. H usband, wife, lineal ancestor or descendant, legally
adopted child and child to whom transferor stood in acknowledged
relationship of parent and child for n ot less th an ten years prior to
transfer.
E X E M PT IO N S
W ife.............................................................................
Child under 18 years of a g e ...................................
O ther members of C lass..........................................

$15,000
5,000
2,000

RATES
1 per cent not exceeding...................... .
$25,000
2 per c e n t..................................................
25,000 to $50,000
3 per c e n t...................................................
50,000 to 200,000
4 per c e n t................................................. .
200,000 to 300,000
5 per c e n t...................................................
300,000 to 500,000
6 per c e n t...................................... ..
500,000 to 700,000
7 per c e n t................. ............................... .
700,000 to 1,000,000
8 per c e n t...................................................
1,000,000 to 1,500,000
10 per c e n t...................................................
Over
G lass B . Brother, sister, or a descendant of a brother or sister,
a wife or widow of a son, or th e husband of a daughter.
Exem ption. $500.
RATES
5
8
10
12
15

per cent not exceeding
per c e n t.........................
per c e n t.........................
per c e n t.........................
per cent | . . ..................
C lass C. All others.
Exem ption. $100.

$ 100,000

100.000 to $200,000
200.000 to 500,000
500.000 to 1,000,000
Over

RATES
per cent not exceeding.......................
$100,000
per c e n t..................................................
100.000 to $200,000
per c e n t..................................................
200.000 to 500.000
per c e n t.............. ...................................
500.000 to 1.000,000
per c e n t..................................................
Over
R ates on previous page stated apply to entire transfer in excess of
exemption.
Following transfers are entirely exem pt: To U. S., any sta te or
territo ry or political subdivision thereof, or any corporation, in­
stitu tio n , association or tru st formed for charitable, educational or
religious purposes, provided property is to be used exclusively for
such purposes in Indiana.
Tax is imposed on full, fair cash value of property, subject to
exemptions above stated in case of transfers by will or intestate laws.
Tax is payable a t tim e of transfer and is a lien against th e land.
T rustees, executors or adm inistrators of estates are personally liable
for th e tax.
Tax is determ ined by any court having probate jurisdiction, on
appraisem ent by county assessor, or by inheritance ta x appraiser in
counties of 400,000 or more population. Provision is m ade for notice
of appraisem ent, hearing upon report and rehearing to persons in­
terested or S tate Board of Tax Commissioners. The B oard m ay move
for a rehearing within 2 years after entry of delivery by th e court if
th ey believe appraisem ent was fraudulently, collusively, or erroneously
made.
Tax on resident decfedent’s estate is payable to treasurer of county
where court having jurisdiction is situated. If paid w ithin 1 year
after accrual, deduction of 5 per cent is allowed; if not paid within 18
m onths, interest a t 10 per cent from date of accrual is assessed.
D eterm ination of tax on taxable transfers from nonresidents is
under exclusive jurisdiction of Tax Commissioners. Appeal from
appraisem ent lies to M arion county circuit court. Tax is payable to
S tate Board of Tax Commissioners. Taxes erroneously assessed m ay
be refunded on order of Tax Commissioners. Person or institution
perm itting stock or personal property or securities to be transferred
w ithout consent of T ax Commissioners is liable for th e tax and subject
to p enalty of n ot more th an $1,000 in addition.
In case of contingent or expectant estate where taxes are not
presently payable, T ax Commissioners and A ttorney General m ay
enter into agreem ent with trustees, executors or adm inistrators to
com pound taxes and grant discharges therefor. I f agreem ent cannot
be reached, tax is held in abeyance and trustees, executors or adm in­
istrators m ust give bond for prom pt paym ent.
S tate Board of Tax Commissioners is charged with enforcem ent of
th e act and will provide forms required.
W ills. No will except a nuncupative will shall affect any estate
unless it be in writing, signed by the testato r or by someone in his
presence, with his consent, and subscribed in his presence, by two or
more com petent witnesses in the presence of each other. A will m ade
before m arriage becomes void on marriage of testator. No nun­
cupative will shall be valid when more th an the value of $100.00 is
bequeathed, nor unless it is m ade in the last sickness of the testator,
and the subject thereof be reduced to writing within fifteen days after
it shall have been declared and proved by two com petent witnesses
who shall have heard the testator, in effect, request some of those
present to bear witness thereto; and no such nuncupative will shall be
proved after six m onths from the death of the testator, nor until his
widow and heirs shall have reasonable notice of the tim e and place of
proving the same
Any soldier or sailor in actual service m ay dispose
of bis personal estate, in his actual possession, and his wages, by a
nuncupative will. Any person m ay contest the validity of any will
or resist the probate thereof a t any tim e within one year after the will
has been offered for probate, b u t an infant, an insane person or one
who has been absent from the sta te m ust contest or •resist within
3 years. Upon the death of any testa to r any person interested in any
p a rt of j;he estate specified in the will m ay have the will probated. A
will in w riting shall be proven by one or more of the subscribing wit­
nesses, or, if they be dead, o ut of the state, or have become incom­
peten t from any cause since attestin g the will, th en by proof of the
handw riting of the testa to r or of the subscribing witnesses thereto.
7
10
12
15
20


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Federal Reserve Bank of St. Louis

SYNOPSIS OF

THE LAWS OF IOWA
RELATING TO

BANKING AND COMMERCIAL USAGES
Revised by S t a n l e y A. P r i c k , A ttorney a t Law, Wilson Building,
Rockwell C ity, Iowa
(See card in A ttorneys List)
A c c o u n ts . In all instances where any sum o f money is claimed
on an account, th e sam e m ust be itemized.
If su it is brought on
such an account the item s thereof should be consecutively numbered
and th e account m ust be sworn to. Such a sworn statem en t of
account together with a petition which has been likewise sworn to,
constitutes a prim a facie case enabling th e creditor to tak e judgm ent
thereon in th e event th e debtor is unable to disprove th e item s.
A ck n o w le d g m e n ts. All instrum ents affecting real estate, includ­
ing m ortgages, deeds of tru st, powers of attorney relating thereto,
and leases for more than one year, m ust be acknowledged or the
execution thereof proved and the instrum ents m u st 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 m ust be signed by both vendor and vendee, or lessor and lessee
and' acknowledged by one of them , and m ust be filed th e sam e as
chattel m ortgages (see C hattel M ortgages). Articles of incorporation
m ust also be acknowledged and recorded. Form s of acknowledgments
are prescribed by sta tu te, and m ust be substantially as follows;
1. In th e case of natural persons acting in their own right:
l
S tate o f . .....................
C ounty o f ........................../
On this d a y ...........o f ........... A. D. 1 9 .., before m e............... ..............
(Insert title of acknowledging officer).................. personally appeared
...............to me known to be th e p e rs o n .. nam ed in an d who executed
th e foregoing instrum ent, and acknowledged t h a t ...............executed the
sam e a s ............vo lu n tary act and deed.
N otary Public in and for said County
2. In th e case of n atu ral persons acting by atto rn ey :
S tate o f . .....................
l
C ounty o f .......................... J
On th is ...........day o f............. A. D. 1 9 .., before m e ........................... .
(Insert title of acknowledging officer)............ personally ap p eared . . . .
to me known to be th e person who executed the foregoing instrum ent
in behalf o f............................. and acknowledged th a t he executed the
sam e as th e voluntary act and deed of sa id ........................................
N otary Public in and for said County
3. In th e case of corporations or joint stock associations:
S tate o
f . ........... \
C ounty o f .........................j '.
On th is ...........day o f............A. D ., 1 9 .., before me, a . . . . (Insert
title of acknowledging officer)............ in and for said county, person­
ally appeared..................................to m e personally known, who being
by me duly (sworn or affirmed) did say th a t he i s ...........(Insert title
of executing officer)...........of said (Corporation or association)...........
th a t (the seal affixed to said instrum ent is the seal of said) or (no
seal has been procured by th e said) (corporation or association) and
th a t said instrum ent was signed and sealed on behalf of th e said
(corporation or association) by au th o rity of its board of (directors or
trustees) and th e sa id ........................................ acknowledged th e execu­
tion of said instrum ent to be th e voluntary act and deed of said
(corporation or association) by it voluntarily executed.
N otary public in and for said County
(In all cases add signature and title of the officer taking th e ac­
knowledgm ent, and strike from between th e parentheses th e word or
clause not used, as th e case m ay be.)
A c tio n s . T he common law forms of pleading are n o t used,
although th e common law forms th e basis of procedure. Pleading,
practice, and procedure are sta tu to ry , and accord, in th e main,
with w hat is known as th e reform ed, or code procedure.
A d m in is tr a tio n of E s ta te s . When an executor is not appointed
by will adm inistration shall be granted to any suitable person or
persons on th e request and application of: 1. T he surviving spouse.
2. T he next of kin. 3. Creditors. 4. Any other person showing good
grounds therefor.
To each of the above classes in succession, a period of 20 days,
commencing with th e burial of th e deceased, is allowed within which
to apply for adm inistration.
A special adm inistrator m ay be appointed 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 th e d eath of th e decedent, or from th e tim e his death was known,
in case he died o u t of the sta te of Iowa; except, however, when personal
property belonging to th e estate of th e decedent is discovered after
th e expiration of said five years, adm inistration m ay be granted for
th e purpose only of m aking proper disposition thereof.
Claims against th e estate of a deceased person are payable in the
following order: 1. Charges of th e last sickness and funeral of the
deceased. 2. Any allowance m ade by th e court for th e m aintenance
of the widow and m inor children. 3. D ebts entitled to preference under
th e laws of the U. S. 4. Public ra te and taxes. 5. Claims filed
within 6 m onths after the first publication or posting of th e notice
given by th e executors or adm inistrators of their appointm ent. In
this class, claims for labor performed w ithin th e next preceding 90
days of t h e . death of decedent are preferred. 6. All other debts.
7. Legacies and th e distributive shares, if any.
All claims of th e sixth of th e above classes n o t filed and allowed,
o r if filed and notice thereof not served w ithin 12 m onths from the
giving of th e notice of appointm ent are barred, except as to actions
against decedent pending in th e district or suprem e court a t th e time
of his death or unless peculiar circum stances entitle th e claim ant to
equitable relief.
A ffidavits. Affidavits m ay be taken before an y person author­
ized to adm inister oaths in th e sta te where taken. Those taken out
of th e sta te before any judge or clerk -of a court of record, or before
a notary public, or a commissioner appointed by th e governor of
this sta te to take acknowledgm ent of deeds in th e sta te where such
affidavit is taken, are of th e sam e credibility as if taken within the
stare. Affidavits m ay be taken w ithin th e sta te for an y lawful
purpose, of one unwilling to voluntarily m ake an affidavit, by filing
a petition w ith an officer authorized to adm inister oaths, who may
cause thé person to come before him and m ake affidavit. This
proceeding is sta tu to ry and m ust conform strictly to th e statu tes of
Iowa.
Affidavits for proving accounts and form: S tate o f ..........................
C ounty o f................... ss, I ....................being first duly sworn, on oath
depose and say th a t I am (a m em ber of the firm o f . .................and
th at said firm is) the owner of the account hereto attached, marked
exhibit A, and m ade a p art hereof, th a t the same is correct in all
particulars and th a t the articles named' therein were sold and delivered
to sa id ................... a t the prices and tim es therein nam ed and agreed
upon, and th a t said articles were reasonably of the value charged,
and th a t th e said account is due and unpaid. T h at there is no legal
set off or credit to the sam e or any p a rt thereof except as herein stated.
Subscribed and sworn to before me, by the sa id ................. .th is ...day. etc.

BANKING AND COMMERCIAL LAWS—IOWA
A liens. Non-resident aliens or corporations Incorporated under
the laws of any foreign country or corporations organized in this
country, one-half of the stock of which Is owned or controlled by non­
resident aliens are prohibited from acquiring title to or holding any
real estate in Iowa, b u t the non-resident alien widow, heirs, or devisees
of an alien or naturalized citizen m ay hold the same for tw enty years,
and if n ot sold within th a t tim e, escheats to the S tate. Aliens m ay
acquire p roperty of 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 th e same, b ut this law does not affect personal
property. A lien holder m ay acquire title to the property embraced
in such lien b u t real estate so acquired m ust be sold within ten years
after title is perfected in an alien, otherwise it will escheat to the
State.
A rrest. No person can be imprisoned for debt on either mesne
or final process, unless in case of fraud. Debtors, however, m ay be
ordered to appear before a court of record wherein a judgm ent has
been rendered, and if th e debtor is about to leave the State, or conceal
himself, he m ay be arrested and compelled to give bond to appear
before th e court for exam ination, and in the m eantim e, not dispose
of his property. (See Supplem entary Proceedings.)
A ssig n m e n ts a n d In so lv en cy . General assignments not valid
unless for benefit of all creditors, when assent of creditors is presumed.
The debtor m ust annex to the instrum ent of assignment a sworn
inventory and list of creditors; and such instrum ent m ust be acknowl­
edged and all of th e papers recorded like a deed of real estate. The
assignment vests in th e assignee title to all property of the debtor.
Assignee m ust give bonds, prepare a verified inventory and valuation,
and notify creditors by mail to file claims within three m onths.
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 n ot yet due, can not be paid until all claims
filed within said tim e are paid. An assignm ent does not discharge
the debtor from his debts and liabilities, b ut only entitles creditors
to share equally in his estate. All claims filed m ust be itemized
and sworn to.
A tta c h m e n ts . An attachm ent, auxiliary to the ordinary pro­
ceedings, m ay be sued o ut a t the comm encem ent or during the progress
of th e proceeding if th e petition is sworn to and states one or more of
the following grounds;
1. T h a t th e defendant is a foreign corporation or acting as such.
2. T h at he is a nonresident of th e state.
3. T h at he is ab o u t to rem ove his property o u t of the sta te w ith­
out leaving sufficient rem aining for th e paym ent of his debts.
4. T h a t he has disposed of his property, in whole or in p art, with
inten t to defraud his creditors.
5. T h at th e defendant is about to dispose of his property with
in ten t to defraud his creditors.
6. T h a t he has absconded, so th a t th e ordinary process cannot
be served upon him.
7. T h a t he is ab o u t to rem ove perm anently o ut of th e county,
and has p roperty therein n ot exem pt from execution, and th a t he
refuses to pay or secure th e plaintiff.
8. T h a t he is ab o u t to remove perm anently o ut of the sta te , and
refuses to pay or secure th e d eb t due th e plaintiff.
9. T h a t he is ab o u t to rem ove his property or a p a r t thereof
out of th e county w ith in ten t to defraud his creditors.
10. T h a t he is ab o u t to convert his property or a p a rt thereof
into m oney for th e purpose of placing it beyond th e reach of his
creditors.
11. T h at he has p ro p erty or rights in action which he conceals.
12. T h at th e d eb t is due for property obtained under false pretenses.
P roperty of debtor m ay be attached for debt not yet due if his
petition states one or more of following grounds: 1. T h at defendant
is about to dispose of his property with intent to defraud his creditors.
2. T h at he is abo u t to rem ove or has rem oved from th e state, and
refuses to secure th e paym ent of th e debt when it falls due, and which
removal or contem plated rem oval was not known to the plaintiff a t
the tim e th e debt was contracted. 3. T h at the defendant has dis­
posed of his property in whole or in p art with intent to defraud his
creditors. 4. T h at th e debt was incurred for property obtained under
false pretences.
Special attach m en ts are perm itted in certain cases.
On all above cases th e plaintiff m ust file a bond in a penalty a t
least double th e value of th e property sought to be attached except in
landlord’s attach m en ts on re n t accounts, and in any case where
only real p ro p erty is sought to be attached the bond shall be in an
am ount fixed by th e court or clerk, usually considerably less.
B a n k s a n d B a n k in g . Savings banks and tru s t companies m ay be
formed by not less th an five persons of lawful age, a m ajority of whom
shall be citizens of th e sta te . T he minimum paid up capital depends
upon th e population of th e city wherein the bank is located.
At least three-fourths of th e directors m ust be citizens of this sta te
and all m ust be shareholders.
No banking in stitution organized under th e laws of this sta te shall
declare or pay any dividend until it has first established a surplus of
at least tw enty per cent of its capital except dividends required to be
paid on Class “A” preferred stock held by R. F. C.
Bank d rafts are preferred claims against the assets of the State,
Savings Bank or T ru st Companies issuing them. (Does not apply
to private banks.)
State banks, savings banks, and tru st companies have a prior lien
on their d ebtors’ shares of stock for all obligations to th e bank subject,
however, to loans against th e stock which the bank has acknowledged
by w ritten notice.
State an d savings banks and tru st companies have power when so
authorized by their articles of incorporation, to act as assignee or
trustee by deed and guardian, executor, or trustee by will or to be
appointed receiver, assignee, guardian, adm inistrator or other trustee
by any court of record in this sta te :
N ational banks m ay exercise th e sam e powers when so authorized
by any law of th e U nited States.
Any sta te , savings bank or tru st com pany, m ay become a member
of the Federal Reserve System.
I t is unlawful for any officer or employee of any bank or tru st
company to offer for sale or prom ote th e sale of any stock, real estate,
life insurance, fire insurance, bonds or other securities, unless the
■ale of th e sam e shall have been sanctioned and approved by the
Board of Directors and such approval entered of record. I t is a
misdemeanor for an y officer or employee to violate th e above.
The president and cashier of every savings bank and every sta te
bank shall cause to be k ep t a t all tim es, a full and correct list of the
names an d residences of th e officers, directors, examining com m ittee
and all th e stockholders of th e bank. T his list shall also show the
number of shares held by each. Such lists shall be subject to the
inspection of all th e stockholders and creditors of the bank during
business hours of every day in which business m ay be legally tran s­
acted. The president and cashier shall verify by oath a copy of the
fist and send tn e sam e to th e Superintendent of Banking within ten
bays after each annual meeting. And th e Superintendent m ay, if
ne desires, require th e president or cashier to furnish him with financial
■tatements of th e stockholders.
In $he event any sta te bank, savings bank or tru st com pany holding
a charter to tran sact business within th e sta te fails to transact business
or perform th e duties imposed on it by th e banking law, such charter
“ ay be cancelled on proper hearing by th e D istrict Court.
No person shall be eligible as a director of any savings or sta te
pank or tru st com pany unless such person owns shares of stock in
th at bank as follows:
i
banks whose capital is less th an $30,000 he m ust hold a t
least $200 worth of stock a t par value.
(b) In banks having a capital of $30,000 or more he m ust hold and
own a t least $500 w orth of stock a t par value.


https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

2011

No sta te bank, savings bank or tru st com pany shall pay interest
on savings accounts or certificates of deposit or any other tim e deposit
a t a rate greater th an 4 per cent per annum payable sem i-annually.
No interest in any event shall be paid upon such tim e deposits for
any period less th an three m onths.
If, however, there are any savings accounts or tim e deposits bearing
Interest a t a rate greater th a n 4 per cent th e sam e shall be considered
borrowed money and shall be so reported to th e superintendent of
banking.
Before any director of a sta te bank, savings bank, or tru s t com pany
acts as such, he m ust tak e an oath th a t he will diligently, faithfully,
and im partially perform th e duties imposed upon him by law. T h at
he will n ot violate nor perm it to be violated any of the banking law,
and th a t he is a bona fide holder in his own right of th e num ber of
shares required to be owned by him. and th a t th e sam e have n ot been
hypothecated.
The Board of Directors m ust hold a t least one m eeting each calendar
m onth. T he S tate S uperintendent of B anking m ay require, if in his
opinion it would prom ote th e banking industry to do so, th a t un­
secured loans in am ounts exceeding $500, shall not be m ade except
where th e borrower subm its a financial statem ent.
No executive officer of any bank or tru st com pany shall use directly
or indirectly any money of th e bank in excess of 10 per cent of th e
capital and surplus. N or shall th e to ta l am ount loaned to all executive
officers of th e bank exceed 25 per cent of th e combined capital and
surplus. No such loans can be m ade unless th e sam e shall first be
approved in w riting by a m ajority of th e board of directors, exclusive
of th e p arty borrowing.
I f any bank officer certifies a check in excess of th e balance on
deposit or issues a certificate of deposit when th e full am ount has
not been deposited, he is guilty of a m isdem eanor. No officer of any
bank shall have power to pledge or hypothecate any obligations owned
by the bank unless authorized to do so by a resolution of th e board
of directors. Any pledging or hypothecation w ithout such au thority
is void and th e p arty guilty is liable fot im prisonm ent up to tw enty
years.
All officers and employees of any bank having th e care or custody
of any funds or securities of th e bank m ust furnish a bond subject to
th e approval of th e board of directors.
Any person knowingly issuing a false financial statem ent to a bank
with in ten t to defraud respecting his financial condition, shall be guilty
of a misdemeanor.
W hoever m aliciously or with Intent to deceive, m akes or circulates
any false report concerning any bank which tends to im pute an
unsound financial condition of th e bank or cause a general w ithdrawal
of deposits, shall be guilty of a felony and subject to fine and im­
prisonm ent.
Banks m ay with approval of Superintendent of Banking establish
offices in their own county or in counties contiguous to the one in
which th e bank is located only for the purpose of receiving, depositing,
paying checks, and performing other clerical and routine duties in
connection therewith.
T he superintendent of banking upon application of th e officers ordirectors of any s ta te bank, savings bank, or tru s t com pany, or private
bank doing banking business and consent of th e executive council, or
th e governor or lieutenant governor, shall have power to tak e over th e
m anagem ent of any such bank for a period n ot exceeding twb years
unless special consent to operate for a longer period is given by the
executive council.
T he rem edies a t law or in equity of any creditor or stockholder
against any such bank or tru s t com pany are suspended and th e sta tu te
of lim itations tolled during th e period m anaged by th e superintendent
of banking. T he governing board of any county, city, town, township,
or school district, in its discretion m ay enter into depositors’ agreem ents
of unsecured and unpreferred claims for th e reorganization, re-opening,
or consolidation of th e bank.
T he banking departm ent, w ith th e approval of th e governor m ay
designate w hat th e officers, directors, and stockholders should be re­
quired to pay if the bank is reorganized.
Preferred stock issued by any bank or tru s t com pany in this sta te
shall be included in determ ining w hether such banking institution has
complied w ith th e m inim um capital requirem ents provided by law for
banking institutions.
Banks as depositories of public funds m u st p ay assessments thereon
to th e country treasurer of th e County in which such depository is
located on or before th e 10th of each m onth, and on or before th e
20th of each m onth county treasurers shall rem it th e am ount of
such assessm ents to th e sta te treasurer to be placed by him in the
sta te sinking fund for public deposits. T he assessm ent periods
commence on Ju ly 1st and Ja n u ary 1st of each year and th e ra te of
assessm ent for each such period is fixed by the sta te treasurer with
approval of th e Executive Council. T he rate of assessment shall
not be less th an one-half of one per cent per annum on ninety per cent
of collected daily balances nor m ore th a n two and one-half per cent.
W hen th e am ount in the sta te sinking fund has reached $500,000.00,
above accrued and contingent liabilities, no assessments shall be
paid u n til said sinking fund has been reduced to less th an $250,000.00.
S tate banks. Savings banks and tru s t companies m ay m ake loans
pursuant to T itles I and I I of th e N ational Housing Act or amendm ents thereto, and invest in m ortgages insured and in debentures
issued by the_F. H. A. and invest in capital stock and securities of
national housing associations or sim ilar credit institutions.
Any banking institution is empowered on th e authority of its board
of directors or m ajority thereof, w ith th e approval of th e Superin­
tendent of Banking, to enter into contracts, incur obligations and
perform any other acts necessary to take advantage of m embership
HJfhe F. D. I. C. T he F. D. I. C. is authorized to m ake exam ination
of banking institutions incorporated under th e laws of the S tate oflowa.
The taxable value of shares of stock in a sta te bank, savings bank or
tru st com pany shall be of the assessed value and shall be taxed as
moneys and credits. S urplus and undivided profits after deduction
o f real estate, is also taxable as moneys and credits,
B ills °1 E x c h a n g e . T he uniform negotiable instrum ents law is in
effect in Iowa.
■B lu e S ky L aw . A com plete system of law for th e regulation of
th e sale of securities known as th e "Io w a Securities L aw ” is now in
force. This act applies to sales and purchases w ithin th e S tate of
Iowa of stocks, bonds, notes, debentures and practically all other
evidences of indebtedness. A copy of this law in pam phlet form as
well as all necessary blanks, etc., m ay be obtained free on application
to th e Secretary of S tate.
C h a tte l M o rtg a g e s. N o sale or m ortgage of personal property,
where the vendor or m ortgagor retains actual possession, is valid
against existing creditors or subsequent purchasers w ithout notice,
unless a w ritten instrum ent conveying same, be executed acknowledged
like conveyances of real estate, and such instrum ents, or a duplicate
thereof duly recorded, or filed and deposited w ith the recorder of the
county where the property shall then be situated or if the m ortgagor
be a resident of th e state, then of th e county where the holder of the
■property resides. No encum brance of personal property which m ay
be exem pt from execution by the head of a fam ily if a resident of the
State shall be of any validity unless 'the sam e be by w ritten instru­
m ent and unless the husband and wife concur in and sign the same
Joint instrum ent.
■
C o lla te ra l S e c u ritie s. T here are special sta tu to ry provisions
concerning the pledging of corporate stock, as security; and also
upon the subject of sales of collaterals by action in court and judicial
sale. Otherwise the subject is governed by the common law.

2012

BANKING AND COMMERCIAL LAWS—IOWA

C o n d itio n a l S ales. No sale, contract, or lease wherein the
transfer of title or ownership of personal property is m ade to depend
upon any condition, shall be valid against any creditor or purchaser
of th e vendee or lessee in actual possession, obtained in pursuance
thëreof, without notice, unless the same be in writing, executed
by th e vendor and vendee, or by the lessor and lessee, acknowledged
by th e vendor or vendee, or by the lessor or lessee, and recorded or
filed and deposited the sam e as chattel mortages.
C o n v ey an ces. No particular form is necessary for conveyances
or m ortgages. The nam e of the parties, the description of the property,
the consideration, the date, signature, and acknowledgment. Is all
th a t is necessary; as between the parties they are valid w ithout
being recorded. T he wife m ust join with her husband in conveyances,
And a conveyance of the hom estead is of no validity unless husband
and wife concur in and sign the sam e joint instrum ent. A corporation
executes conveyances under its corporate seal, except where the
corporation has not adopted a seal. Such conveyances m ust be signed
In the nam e of the corporation by the officers authorized so to do,
by th e Articles of Incorporation, or By-Laws, or by resolution duly
entered of record in the m inutes of the corporation, and duly acknowl­
edged by such officers, as the act of the corporation.
T he legislature has by sta tu te approved th e foil owing forms:
1. Quit claim deed.
For th e consideration of $ ........ .. I hereby quit claim t o ............. .,
all m y interest in th e following described tra c t of real estate: (De­
scribing it.)
. ,
2. For a Deed conveying fee sim ple w ithout w arranty:
For th e consideration of $ ............... . I hereby convey t o .....................
th e following tra c t of real estate (Describing it.)
3. For a D eed conveying fee simple with full w arranty: add to
num ber 2 th e following:
And I w arrant th e title against all persons whomsoever.
4. For a M ortgage; add to num ber 2 the following: To be void
upon condition th a t I pay, etc.
Of Course, th e above instrum ents m ust be signed by th e grantor,
and if he is m arried his wife m ust also sign to convey her dower
Interest. I f it is desired th a t any of th e above instrum ents be recorded,
then th e sam e m ust be acknowledged.
C o rp o ra tio n s . P rivate corporations, sole or aggregate, m ay be
formed for any lawful purpose. B ut there are special statutory
provisions which m ust be complied with for the organization and
governm ent of insurance, banking, loan and trust, building and loan,
and railway corporations. In all cases, the articles of incorporation
m u st be acknowledged and recorded, in the m anner provided by
law, and approved by the secretary of state. W ith a few exceptions,
an incorporation fee or $25. plus $1 for each thousand dollars of
capital in excess of $10,000 m ust be paid, upon the organization
or renewal of a private corporation. The general term of the life
of 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 do business in the
state. The sta tu te provides in detail w hat the application shall
contain, and m ust pay to th e Secretary of the State a fee of $25 upon
$10 000 or less of m oney and property of th e com pany actually within
the S tate, and $1.00 for each $1,000 of such money or property within
the State in excess of $10,000. No foreign stock corporation doing
business in th is state shall m aintain any action in this state upon
any contract m ade by it in th is state, unless prior to th e making of
such contract it shall have procured such perm it. T his prohibition
shall also apply to any assignee of such foreign stock corporation and
to any person claiming under such assignee of such corporation or
under either of them .
T he Articles of Incorporation m ay prescribe any figure as th e par
value o f each share of stock, or th e stock m ay be issued. W ithout
P ar Value.”
C o u rts . Term s and Jurisdiction. The district court has jurisdic­
tion of all actions, civil and equitable, and has crim inal and probate
Jurisdiction. Superior courts m ay be established by the vote of
the people in any city of 4,000 inhabitants. I t has jurisdiction to
try all violations of city ordinances, and the same criminal jurisdiction
as justice of th e peace courts. I t has jurisdiction to try and determ ine
civil and criminal appeals and civil writs of error from justices of
the peace, situated in th e township where the court is located. Has
the same jurisdiction as the district court to try ail suits in law and
equity, except grant divorces, alimony, and separate m aintenance,
and it has no probate jurisdiction. T ranscripts from, superior and
Justice's courts m ust be filed in district court to create a lien on real
estate, and are then enforced as judgm ents of the district court;
Justice’s jurisdiction, $100, or, by w ritten consent of parties, $300.
The suprem e court has only appellate jurisdiction and holds sessions
at Des Moines, January to M ay, from M ay to Septem ber (less vaca­
tion), and from Septem ber to December. _
M unicipal C ourt m ay be established by the vote of people in cities
ef 5,000 inhabitants. I t has jurisdiction to try all violations of city
ordinances, and th e sam e crim inal jurisdiction as Justice or th e Peace
court, and exercise the jurisdiction conferred on the D istrict Court
for th e trial of misdemeanors. I t has concurrent jurisdiction with
th e D istrict court In all civil m atters involving $1,000 or less, b u t has
no jurisdiction to grant divorces, alim ony or separate m aintenance,
and has no probate jurisdiction. T ranscripts m ust be filed in D istric t
C ourt to create a lien, and appeals are taken direct to the Supreme
Court.
D ays of G race. Every negotiable Instrum ent is payable a t the
Mme fixed therein w ithout grace.
D e p o sitio n s m ay be taken within the State, on notice, and within
or w ithout th é S tate, on commission or agreem ent of parties issued
after notice by th e clerk of th e proper court. W hen to be taken on
commission, d efen d an t'm ay elect, in writing, duly served, to cross
examine orally; thereupon plaintiff m ay also elect m writing to exam ­
ine orally. Exceptions m ust be filed w ithin three (3) days, after the
filing of the deposition, b ut objections m ay nevertheless be m ade at
th e trial for competency; m ateriality, and relevancy.
D e sc e n t a n d D is tr ib u tio n of P ro p e rty . Subject to rights^ of
dower and other charges thereon, and burdens imposed during the
lifetim e of the decedent, and in the absence of a valid will, the estate
of one deceased shall descend In equal shares to his children, lh e
heirs of any deceased child shall inherit in same m anner as though
such child had outlived his parents. If the intestate leave no issue
the whole of the estate to the extent of $7,500 after paym ent of debts
and adm inistration expense, and one-half of the estate in excess of
said $7,500 goes to the surviving spouse and the other half to the
parents/. If no surviving spouse, the whole thereof shall go to his
parents or the survivor of them ; and so on through ascending an­
cestors and their issue, if both parents be dead. Personal property
hot necessary to pay debts is distributed to the same persons, and in
the same proportions as though it were real estate.
D ow er. The surviving spouse is entitled to one-third in value of
all th e legal and equitable estates in real property possessed by the
deceased spouse a t any tim e during th e m arriage, which have not been
sold on execution or any other judicial sale, and to which such survivor
has m ade no relinquishm ent of right. A spouse, heir or devisee
feloniously taking or procuring the taking of the life of th e other
spouse, or decedent, cannot have dower or inherit power or take under
th e will of the decedent. (See Lim itations.)
E m p lo y e rs L ia b ility . Em ployers liability and workm en's com­
pensation is governed by statu te.
E x e c u tio n s m ay be stayed, according to their am ount, for ninety
days or six m onths, w ith a few specified exceptions The issuance of
execution m ay be prevented by filing an appeal bond. Otherwise
execution m ay issue im m ediately after rendition of judgm ent. A
stay of execution waives right of appeal. The judgm ent is a lien on


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realty w ithin the county where rendered, or by transcript, it m ay be
m ade a lien in any other country. Executions become liens on per­
sonal property only from the tim e of th e levy and seizure. Real
estate is sold on execution subject to redem ption within one year,
except in appealed cases, or where th e interest is a leasehold of two years
or less. Creditors having liens, m ay redeem from the sale after six
m onths and before nine m onths from date of sale. Personal property
is sold w ithout redem ption.
E x e m p tio n s . T he head of a family is entitled to a homestead of
forty acres or less of farm land or half an acre or less in a city or town.
When a debtor absconds and leaves his fam ily, such property as is
exem pt to him shall be exem pt in the hands of his wife and children
or either of them . The sta tu te provides for num erous exemptions of
personalty to th e head of the fam ily including: 1. The proper tools.
Instrum ents or books of th e debtor, if a farm er, mechanic, surveyor,
clergyman, lawyer, physician, teacher, or professor, except th a t no
m otor vehicle shall be held exem pt from any order, judgm ent or
decree for dam ages occasioned by the use of said m otor vehicle upon
a public highway of this state. None of th e above articles are exempt
for th e purchase price thereof. 2. All money received by a person
as pension money w hether deposited loaned or invested by him. 3.
Earnings for his personal services a t any tim e within 90 days next
preceding the levy. 4'. Any com pensation due or m ay become due
under th e W orkm en’s Com pensation Act.
A policy of insurance on the life of an individual, in th e absence of an
agreem ent or assignm ent to th e contrary shad inure to the separate use
of th e husband or wife and children of th e said individual independently
of all his creditors. T he proceeds of an endowm ent policy payable to
th e assured on attaining a certain age shall be exem pt from liability
for any of his debts. Any benefit or indem nity paid under an accident
policy shall be exem pt to the assured, or in case of his death to th e hus­
band or wife and children of th e assured, from his debts. The avails or
all policies of life or accident insurance payable to th e surviving widow
shall be exem pt from liability for all debts of such beneficiary contracted
prior to the d eath of th e assured, b ut the am ount thus exem pted shall
not exceed $5,000.00.
,
,,
There are sta tu to ry provisions concerning th e creation of liens on
exem pt real or personal property and th e assignm ent of exem pt wages.
There is no exemption to debtor under a decree for th e support of
minors. N or is there any exemption for th e paym ent of alimony
unless the p arty in whose favor th e decree was rendered remarries.
F rk u d . In actions for fraud, heretofore solely cognizable in a court
of chancery, the cause of action shall not be deemed to have accrued
until the fraud complained of shall have been discovered by the party
aggrieved by the exercise of due diligence. In actions brought by a
Judgment creditor to set aside a fraudulent conveyance of property
from one spouse to the other and to subject said property to execution,
either husband or wife m ay be compelled to testify against the other.
Gross fraud is punishable by fine or imprisonm ent.
G a r n is h m e n ts . (See A ttachm ents.)
H u s b a n d a n d W ife. (See M arried Women.)
H o lid ay s. T h e legal holidays are: Sundays; Jan u ary L(New Yearns
D ay); F ebruary 12 (Lincoln’s birthday); February 22 (W ashingtons
birthday); M ay 30 (Memorial D ay); July 4 (Independence Day);
first M onday in Septem ber (Labor D ay ); general election d ay; Novem­
ber 11 (Armistice D ay); Thanksgiving D ay; December 25 (Christm as
Day). For all purposes relating to th e presentation for paym ent
or acceptance, and for th e protesting and giving notice of th e dis­
honor of bills of exchange, drafts, bank checks, orders and promissory
notes, any bank or m ercantile paper falling due on any of th e above
nam ed days, shall be considered as falling due on th e succeeding busi­
ness day.
I n te r e s t. By w ritten contract, maximum legal rate, 7 per cent
Judgm ents draw 5 per cent, or such rate as is fixed by th e contract
on which the judgm ent or decree is rendered, n o t exceeding 7 per
cent per annum . O pen/accounts draw 5 per cent after six months
from date of last item ; money loaned, money due. money due on
settlem ent of accounts, bear interest a t 5 per cent per annum . Con­
tra c t for more than 7 per cent forfeits all Interest and costs.
J u d g m e n ts in th e district and superior courts m ay be obtained
a t first term after su it commenced, if undefended. Causes shall be
triable a t th e first term after legal and tim ely service has been made.
Judgm ents of thé district court are liens on real estate owned by
the debtor a t the tim e of rendition, if the lands lie in any other
county, from the tim e of filing therein an attested copy of th e judg­
m ent. Lien also covers all lands which defendant m ay acquire
within ten years from date of judgm ent, or upon which a levy 1»
m ade after ten or before tw enty years from the date of the judgment,
but this lien dates only from the tim e of the levy. Judgm ents of
superior courts and justice of peace courts become liens on real estate
by filing transcript in district court within county where obtained,
and become liens in other counties in the same m anner as if rendered
In the district court.
„
,
J
I
A judgm ent in an action for th e foreclosure of a real estate mortgage
or deed of tru s t or in any action on a claim for ren t or judgm ent as­
signed by th e receiver of th e closed bank, or rendered upon credits
assigned by th e receiver of th e closed bank, when th e assignee is not
a tru stee for th e depositors or creditors of th e bank cannot be enforced
nor execution issued thereon and no force or validity is given thereto
except for th e purpose of set off or counterclaim after th e expiration
of a period of tw o years from th e entry thereof unless a voluntary
w ritten stipulation of th e parties continuing it in force for a longer
period is filed in th e case.
L ie n s. These are m ainly created by sta tu te and are enforceable
in equity. In a few cases, and under peculiar circumstances, equitable
liens on real estate are established and enforced in equity.
L im ita tio n s . Actions, according to their subject m atter, have
various periods of lim itation, fixed by statute, extending from tnree
months to ten years after the cause of action aqcrued. Actions upon
judgm ents rendered in courts of record have a lim itation of twenty
years. There are special lim itations barring action for interest in
real estate based on defective trustees, guardians, adm inistrators,
executors and sheriffs deeds; also as to other defects in th e title to
real estate.
M a rrie d W o m en m ay own in their own right, real and personal
property, and m ay manage, sell, convey, and devise the same by
will. N either husband nor wife is liable for th e separate debts or
liabilities of the other incurred before or after marriage, nor are the
wages, earnings, or property of either liable for th e separate debts or
the other. C ontracts m ay be m ade by a wife, liabilities incurred, ana
enforced by or against her, as if unm arried. Both husband ana
wife are liable for the reasonable and necessary expenses of the family,
and the education of the children.
M o rtg ag es. M ortgages m ust be subscribed and acknowledged by
the parties creating th e lien and recording th e sam e as deeds, in e
wife should join in the instrum ent, except m ortgages for purchase
money, and m ortgages upon non-exem pt personal property. When a
m ortgage is paid off, satisfaction thereof m ust be m ade on th e margin
of th e record, or by a satisfaction piece, acknowledged and recorqea.
If no such satisfaction is entered within 30 days after request m writing,
the m ortgagee forfeits $25.00, T he m ortgagor has one year in which
to redeem real estate after execution sale.
The owner is entitled to possession and exclusive right to redeem
during th is period and th e court in its discretion may appoint a re­
ceiver. The income shall be paid to th e Clerk of th e D istrict Court
to be applied in th e following order: 1. Cost of R eceivership,^.
P aym en t of taxes due and to become due during receivership; 3.
pay the insurance on buildings on the premises or such other benents
to th e real estate as m ay be ordered by th e court; 4. The balance
shall be paid and distributed as determ ined by th e court. (See execu­
tions, chattel m ortgages, lim itations.)

BANKING AND COMMERCIAL LAWS—KANSAS
N e g o tia b le I n s t r u m e n t s . UDiform Negotiable Instrum ents Act
adopted April 12, 1902.
N o n -re s id e n ts. Action m ay be brought against non-residents to
enforce liens on any property within the sta te ; to enforce any debt
against a non-resident where action is aided by attachm ent on prop­
erty found within th e S tate. 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 n ot sell- a t auction as auctioneers unless reciprocal legislation
exists in th e sta te of their residence.
N o ta rie s. These officers are appointed and commissioned by the
governor, upon filing a bond and paying the fee required by law.
They have power to adm inister oaths, take depositions, and the
usual power of such officers concerning presentation,, demand, protest,
and notice o f protest of negotiable commercial paper, only within the
county in which commissioned.
All notarial commissions expire July 4, 1939 and are renewable for
three year periods commencing with th a t date.
P a r tn e rs h ip s , L im ite d a n d S p ecial. Lim ited and special p art­
nerships are perm itted, b u t not favored. The statutes on this subject
m ust be strictly complied with. A certificate showing prescribed
details and particulars of the partnership m ust be signed, acknowl­
edged, and filed in th e office of the C ounty Recorder of the county in
which th e principal place of business is situated, to be there recorded
and sim ilarly recorded in -each county where such partnership has a
place of business. T here m ust be an affidavit th a t the am ount stated
in th e certificate has been actually contributed by each separate partner.
Publication should be m ade of the certificate and affidavit for six
weeks in two newspapers in each senatorial district in which the
partnership is to tran sact business.
P ow ers of A tto rn e y . A power of attorney to convey, or in any
m anner affect real estate, m ust be acknowledged and recorded. A
revocation of sucn power m ust be acknowledged and recorded in the
same office wherein th e original power of attorney is recorded.
R eceiv ers. A receiver m ay be appointed on th e petition of either
p arty to a civil action or proceeding wherein he shows th a t he has a
probable right to or interest in any property which is th e subject of
the controversy and th a t such property is in danger of being lost or
m aterially injured or im paired. When th e property of any person,
partnership, com pany or corporation has been placed in th e hands of
a receiver for distribution, after th e paym ent of all costs, the following
claims shall be entitled to priority of paym ent. 1. Taxes or other
debts entitled to preference under the laws of the U. S. 2. D ebts
due or taxes assessed and levied for the benefit of the state, county,
or other m unicipal corporations in th e state. 3. D ebts owing to
employees for labor perform ed within the, 90 days next preceding the
transfer of such property.
R e co rd s. All instrum ents conveying or creating liens'upon the
real or personal property and all conditional sales m ust, after having
been signed and acknowledged, be recorded in the office of the recorder
of deeds'in th e proper county or counties where the property conveyed
is situ ated . M ortgages and conditional sales of personal property
executed by residents of th e sta te of Iowa m ust be recorded in the
county where th e m aker resides. Unless so recorded, such instru­
m ents are invalid as to a bona fide purchaser or encumbrancer.
R e d e m p tio n - Redem ption from a sheriff’s sale of real estate,
whether sold under a general or special execution, m ay be m ade by
the debtor during a period of one year and by a creditor who has a lien
on th e propertysold, any tim e after six m onths and within nine m onths
from d ate of sale by paying to the clerk of the co u rt the am ount pro­
vided by sta tu te, being generally, th e am ount of the purchaser’s bid.
with interest a t th e sam e ra te th a t the judgm ent bears. W ithin the
tim e nam ed creditors m ay redeem from each other. After nine
m onths, and within one year from the date of sale the owner of the
real estate sold has th e exclusive right to redeem from such sale, and
in so doing, th e debtor m ust pay off the claims of judgm ent creditors,
who have m ade redem ptions as herein above stated in addition to the
am ount originally bid.
R e p le v in . In actions for the recovery of personal property, the
petition m ust be verified; and if plaintiff desires immediate delivery,
of the property, he shall execute a bond for double the value of the
property sought to be recovered. The defendant m ay stay all pro­
ceedings and retain the property by executing a bond to the plaintiff
with sureties to be approved by the clerk.
S ales. This S tate has a uniform sales law.
S ales of G oo d s In B u lk . The sale, transfer or assignment in bulk
of any p art of th e whole or a stock of merchandise and fixtures per­
taining thereto otherwise than in the ordinary course of trade and
In the regular orosecution of business, is void as against the creditors
of seller: 1. unless a t least seven days before the sale a detailed
Inventory is m ade, and 2. unless the purchaser dem ands and receives
from th e seller a w ritten list of names and addresses of the creditors
of the seller, with the full am ount of indebtedness due or owing to
each and certified by the seller under oath to be a full, accurate and
complete list of his creditors and of his indebtedness, and 3. unless
the purchaser shall a t least seven days before taking possession or
paying the purchase price, notify personally or b y registered mail
every creditor whose nam e and address are stated in said list or to
which he has knowledge, of the proposed sale and of the price, term s
and conditions thereof.
The bulk sales law does n ot apply to sales by executors, adm ini­
strators, receivers, trustees in bankruptcy, or any public officer under
judicial sale. A purchaser n ot complying with these provisions be­
comes a receiver and accountable to the creditors for all Merchandise
and fixtures coming into his possession by virtue of the purchase.
S e c u rity fo r C o sts. Nonresident and corporation plaintiffs m ay,
on m otion of defendant, be required to file a bond with sureties to be
approved for security of costs either in Justice C ourt, Municipal
Court, or D istrict Court.
S t a t u t e of F ra u d s . No evidence except in writing and signed
by the p arty to be charged or by his authorized agent, is com petent
relative to th e following contracts’: 1. In relation to sale of personal
property, when no p art of the property is delivered and no p art of
the price is paid. 2. In consideration of m arriage. 3. Wherein
one promises to answer for the debt, default or miscarriage of another,
including promises by executors to pay the debt of decedent from their
own estate. 4. For the creation or transfer of any interest in lands,
except leases for a term not exceeding one year. 5. Those not to,
be performed within one year from the making thereof.
S to ck s a n d B o n d s. The sale of stocks and bonds is governed by
what is term ed a “ Blue Sky Law."
S u p p le m e n ta r y P ro c e e d in g s. When an execution has been
returned unsatisfied, plaintiff m ay have an order for the appearance
and exam ination of the judgm ent debtor; or such order m ay be
obtained after execution has issued upon proof by plaintiff’s affidavit
or other proof th a t debtor has property which he unjustly refuses to
apply to the satisfaction of the judgm ent. If any property be found
by such exam ination it m ay be levied upon; if in the hands of others
the court m ay require its delivery to satisfy the judgm ent, and
appoint a receiver of debtors property, forbid the sale thereof and
order E quitable in terests in realty to be sold.
. T axes. P roperty shall be taxed each year, and personal property,
shall be listed and assessed each year in the nam e of the owner thereof
on th e first day of January.
Beal estate assessed every four years. N ext assessment in 1941.,
All p ro p erty is assessed a t 60% of its actual value and taxed a t
actual value. All road taxes and one-half of the other taxes levied
are payable w ithout in terest or p enalty before April 1st. T he balance
is payable before October 1st. D elinquent taxes bear interest a t
the rate of % of 1 per cent per m onth.


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2013

Real estate taxes are liens thereon and personal property taxes are
liens upon th e owner’s real estate except th e hom estead and m ay be
continued as liens from year to year by compliance with th e sta tu te.
Taxes upon stocks of goods or m erchandise, fixtures and fu rn itu re in
hotels, restaurants, rooming houses, billiard halls, moving picture
shows and th eatres 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 th e real estate.
Taxes assessed on personalty in this sta te owned by a non-resident is
a lien thereon. Personal property m ay be levied on and sold for taxes
by a distress and sale. Real estate is sold for unpaid taxes after notice
by publication on th e first M onday of Decem ber of 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 of redem ption
exists from the date of sale by paym ent to the county auditor th e
am ount for which the sam e was sold and 4 per cent of such am ount
added as a penalty, w ith 6 per cent per annum on the whole am ount
thus m ade from the day of sale, and the am ount of all taxes unpaid
and delinquent the first day of April, the interest and costs paid by
th e purchaser, or his assignee for any subsequent year or years with
a sim ilar penalty added as before on the am ount of the paym ent and
each subsequent year, and 6 per cent per annum on th e whole of such
am ount from the day of paym ent.
T r u s t C o m p a n ie s. Domestic tru st companies are organized under
and governed by the general corporation laws of the S tate. Foreign
tru st companies doing business in this S tate are governed and con­
trolled by the general sta tu te s concerning and relating to foreign
corporations doing business in Iowa. (See Corporations.)
T r u s t D eeds. T hey m ust be executed and foreclosed, and consid­
ered as mortgages. T h at is, .the power of sale on notice is abolished,
and they m ust be foreclosed by equitable action.
W areh o u se R e c e ip ts. Any person, firm, or corporation desiring
to issue elevator or warehouse certificates (or receipts) m ust file a
written declaration with the recorder of deeds in the county where
his or its elevator or warehouse is situated, setting forth the particu­
lars required by sta tu te, which declaration m ust be recorded by the
recorder of deeds. T hereafter he or it m ay issue certificates for
commodities actually in such elevator or warehouse, b u t the, certifi­
cates m ust conform to the sta tu to ry provisions. A register of
certificates issued m ust be kept by the parties issuing them . A
violation of these provisions, issuing double certificates for th e same
property, or selling or encum bering property included in any ware­
house receipt, is m ade a crim inal offense. T here is also a criminal
sta tu te against issuing false warehouse receipts or certificates.
WTlls. Any person of full age and sound mind m ay dispose of
his property by will, subject tb the rights of hom estead and exemp­
tion created by law and the distributive share in his estate given
by law to the surviving spouse, except sufficient to pay his debts
and expenses of adm inistration. Also if a testa to r has spouse, child,
grandchild or parent living he cannot give more th an 26 per cen t of
his p roperty to a corporation organized for charitable purposes.
Wills, to be valid, m ust be w ritten, witnessed by two com petent wit­
nesses, signed by th e testator, or by some person in his presence and
by his express direction. Subscribing witnesses can derive no benefit
from a will, unless there be two com petent witnesses besides them .
Wills executed outside of Iowa, in accordance w ith th e laws of th e
S tate where executed or of the te s ta to r’s domicile, if in w riting and
subscribed by th e testa to r are valid in Iowa. I f probated in any
other sta te or country th ey shall be ad m itted to probate in this
S tate on the production of a copy ,of such will, and of the original
record of probate thereof, authenticated by th e attesta tio n of th e
clerk of the court in which such probation was m ade or of th e probate
judge, under seal, if they have one. All wills m ust be ’probated
before th ey can be effectual.

t

SYNOPSIS OF

THE LAW S OF KANSAS
RELATING TO

BANKING AND COMMERCIAL USAGES
Revised 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 ij s s è l l ,
N ational Bank of T opeka Bldg., T opeka, Kans.
(See card in A ttorneys List.)
A c k n o w le d g m e n ts . (See Deeds.)
A c tio n s. Civil actions are conducted as required by a code of
procedure. Security for costs m ust be given or résident plaintiffs
m ay deposit $15 in lieu of bond for cost. N onresident plaintiffs
m ay be required to give bond for costs.
A d m in is tr a tio n p f E s ta te s . P robate courts in each county
have jurisdiction of estates. Dem ands against th e estate are divided
into th e following classes: F irst, reasonable and necessary funeral
expenses. Second, reasonable sum s for necessary expenses of last
sickness of decedent including wages of servants and for th e appro­
priate and necessary costs of adm inistration. T hird, judgm ents
rendered against th e decedent in his lifetim e. All judgm ents or linn«
upon th e p ro p erty of th e decedent shall be paid in th e order of their
priority. F ourth, all o ther dem ands duly proved, provided th a t
debts having preference b y laws of th e U nited S tates and dem ands
having preference by laws of this s ta te shall be paid according to such
preference.
T he executor m ay a t th e expiration of nine m onths proceed to pay
th e debts and other item s due from th e estate according to their
classification if said executor does n o t have notice of dem ands against
the estate of decedent which will authorize him to represent it in­
solvent. E very executor and adm inistrator shall have one year from
the date of his appointm ent for th e settlem ent of th e estate. Dem ands
of creditors against th e estate m u st be m ade w ithin nine m onths
from th e d ate of th e first published notice of th e appoin tm en t of
said executor or adm inistrator and dem ands n ot thus exhibited shall
be forever barred. D em ands payable a t a fu tu re day m ay be allowed
a t the present value thereof or th e court m ay order the executor
or adm inistrator to retain sufficient funds to satisfy th e sam e upon
m atu rity ; or th e heirs, devisees, or legatees m ay be perm itted to
give bond to a creditor for th e p aym ent of his dem ands according
to th e term s thereof,
Upon the filing for record in th e p robate court of th e proper county
of an authenticated copy of his letters or other record of au th o rity
and a certificate th a t th e sam e are in force, a fiduciary appointed by
a court of com petent jurisdiction in another sta te or country m ay
assign, extend, release, satisfy, or foreclose any m ortgage, judgm ent,
or lien, or collect an y debts secured thereby belonging to th e estate
represented by him. T he sale, lease or m ortgage of any real estate
acquired on execution or judicial sale by a foreign representative
shall be m ade pu rsu an t to sta tu te .
No bank or other corporation unless organized under th e laws of
and has its principal place of business in this s ta te or is a national
bank located m this s ta te shall be appointed or authorized directly
or indirectly to act as a fiduciary in th is sta te except in ancillary pro­
ceedings. In cases_ of dom iciliary adm inistration, letters te sta ­
m entary or of adm inistration shall in no case be granted to a non­
resident of th is state.
A ffidavits. Affidavits m ay be m ade in or out of the S tate by the
sam e authority and with like authentication, as depositions.

2014

BANKING AND COMMERCIAL LAWS—KANSAS

A llen s. Aliens m ay hold real estate. Rights of intestate alien
forfeited to sta te if alien citizen of a foreign country which has no
tre a ty relations w ith the U nited States affecting th e rights of an alien
to hold property in this country and such alien has no relatives or
next of t i n who are citizens of th e U nited States.
A rb itra tio n s . Persons having controversies m ay subm it them to
the arbitration of any person or persons m utually agreed upon and
m ay m ake such submission a rule of any court of record in the S tate.
The parties m ay en ter into arbitration bonds conditioned for the
faithful perform ance of the award. Award to be filed in court agreed
on and judgm ent entered as on a verdict of jury. P arties m ay have
process, orders, and execution as in civil cases.
A rre s t. Upon the plaintiff filing a bond in double am ount of his
claim, a defendant m ay be arrested in a civil action upon filing an
affidavit w ith the clerk of the court th a t he has assigned, removed or
begun to rem ove his property o ut of th e jurisdiction of the court with
Intent to defraud his creditors; or has begun to convert his property
into cash, for th e purpose of placing it beyond the reach of his creditors;
or has property which he fraudulently conceals; or fraudulently con­
tracted th e debt.
A s s ig n m e n t (V o lu n ta ry ) fo r C re d ito rs a n d In so lv e n c y . Such
assignm ents m ay be m ade for benefit of all creditors and should be
acknowledged and recorded in th e sam e m anner as real estate convey­
ances. Assignee in tru s t m ust file inventory within th irty days in
office of clerk of district court of county in which assignor resides
and give bond in double am ount of appraised value of estate assigned.
Only discharges debtor to am ount of paym ents m ade.
A tta c h m e n t. A t or after the commencement of an action an
attach m en t m ay be had by plaintiff. T he affidavit of the plaintiff,
his agent, or attorney m ust be filed, stating the nature of the claim
th a t it is just, the am ount affiant believes ought to be recovered,
an d th e existence of some one or more of the following grounds: 1.
T h at defendant is a foreign corporation or a non-resident of the State
(but in this case for no other claim th an a dem and arising upon con­
tract, judgm ent, or decree, unless the cause of action arose wholly
within th e lim its of the State). 2. T h at the defendant absconded
with th e intention to defraud his creditors. 3. T hat the defendant
has left th e county of his residence to avoid a service of summons.
4. T h a t he so concealed himself th a t summons can not be served
upon him . 5. T h at he is about to remove his property or a part
thereof o u t of the jurisdiction of the court with the intent to defraud
his creditors. 6. T h at he is about to convert his property or •
p art thereof into money for the purpose of placing it beyond the
reach of his creditors. 6. H e has property or rights in action which
he conceals. 8. Has assigned, removed, or disposed of, or is about
to dispose of his property, or a p a rt thereof, with the in ten t to defraud,
hinder, or delay his creditors. 9. Or fraudulently contracted or
Incurred th e debt on which the suit is brought. 10. Or th a t the
suit is brought for dam ages from the commission of some felony or
m isdemeanor. 11. Or th a t the debtor has failed to pay for any
article or thing delivered for which by contract he was bound to pay
upon delivery. A bond in double the am ount of plaintiff’s claim is
required except where by the attachm ent affidavit defendant Is shown
to be a non-resident of the State.
B a n k s a n d B a n k in g . T here is no constitutional provision relating
to banks, except banks of issue. Other banks are organized under a
general act. The C harter, in addition to the requirem ents of th e
law relating to corporations, shall contain th e names and places of
residence of the stockholders and th e am ount of stock subscribed by
each, and m ay contain such other provisions, not inconsistent with
law, as th e stockholders m ay deem proper, and shall be subscribed by
a t least five of the stockholders of th e proposed batik who are residents
of th e S tate of Kansas. Board of Directors not less th an five nor
more th an twenty-five in num ber, a m ajority of whom shall be resi­
dents of th e county or adjoining counties to th a t in which the bank is
located. T he word “ S ta te ” shall be included in the title. The full
am ount of th e capital stock m ust be subscribed before the charter is
filed. The bank shall transact no business, except the election of
officers, th e taking and approving of their official bonds, and the
receipts of paym ents on account of subscriptions to its capital stock,
until it has been authorized by the bank commissioner to commence
business. C apital stock shall be subscribed in full before charter is
filed. T he capital stock shall be not less th an *20,000 in unincor­
porated towns and in cities of the th ird class; not less th an *30,000 in
cities of second class; not less th an $50.000 in cities of the first class
w ith $100,000 required in cities of more th an 75,000 population.
M anaging officers of banks m ust qualify by ownership of stock of par
value of a t least $500.00. No bank shall employ its money directly or
Indirectly in tra d e or commerce by buying and selling goods, chattels,
wares and m erchandise, and shall not invest in th e stock of any bank
or corporation except federal land banks, and banks m ay become m em ­
bers of a federal reserve bank m ay do anything necessary to appro­
priate,' acquire and m aintain insurance of its deposits in accordance
w ith th e provision of any federal law and its am endm ents authorizing
th e insurance of bank deposits and m ay pay all assessments levied
for such insurance. T he Federal D eposit Insurance Corporation,
created by Sec. 12B of th e Federal Reserve Act, as am ended, is
authorized an d empowered to act w ithout bond as receivor or liqui­
d ato r of an y banking institution, th e deposits in which are to any
extent insured by said corporation and which shall have been closed
on account of inability to m eet th e dem ands of its depositors. No
b ank m ay . . . m ake any loans on th e security of th e shares of its
own capital, nor be th e purchaser or holder of any such shares, except to
prevent loss upon a debt previously contracted in good faith, nor loan
m ore th a n 5 per cent of capital and surplus to any officer, agents, or
employees of bank. All such property coming into the posession of the
b ank in th e collection of debts shall not be considered assets after the
expiration of six m onths. Banks m ust m aintain a reserve consisting
of 15 per cent of am ount of its dem and deposits and 5 per cent of
am ount of its tim e deposits. One-half of said reserve shall be in cash
or balances in correspondent 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 of 100 per cent of paidup capital and 50 per cent of surplus. Banks in liquidation or in
charge of a receiver m ay borrow in excess of said percentages as bank
commissioner should perm it. All banks m ay hold, purchase and con­
vey real estate fo r: (a) Building and furniture necessary in transaction
of business; (b) Satisfaction of debts: (c) Purchase under judgm ent
or m ortgage foreclosure. Real estate acquired under (b) and (c)
m ay be held five years, b u t m ust be sold a t public or private sale
within th irty days thereafter, unless Bank Commissioner grants
extension for not to exceed four years. Officers are personally liable for
paying overdrafts. N ot more th an 15 per cent of th e capital stpcK
and surplus can be loaned to any one person, com pany or corporation.
Penalties are provided for false statem ents and for receiving deposits
when th e bank is in a failing condition. P rivate banks are subject to
th e provisions of th e law. Since 1929 all banks m ust be incorporated.
T he Bank Commissioner or d ep u ty m ust m ake exam ination of each
bank a t least twice each year. Four reports per annum are required
and th e commissioner m ay call for others. H as authority to examine
an y co-partnership, association or corporation located in or organized
under th e laws of K ansas or any other state, holding as much as
25 Der cent of any capital stock of any banking or tru s t com pany doing
business in Kansas. I f paid up capital not less th a n $100,000 rnay
exercise fiduciary powers. Application shall be m ade to Bank Com­
missioner and special perm it secured. B ank shall segregate assets so
held and keep separate books therefor. Bank shall not use such funds
in conduct of b an k ’s business w ithout first setting aside in T ru st De­
p artm en t U. S. bonds or other securities approved by the Bank Com­
missioner. Shareholders are additionally liable for a sum equal to th e
par value of stock owned and no more provided such liability shall not
app ly with respect to shares issued by any bank after M arch 24, 1937.
Respecting shares Issued prior to M arch 24,1937 .banks m ay term inate
such additional liability by causing notice of prospective term ination


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to be published according to sta tu te. BanKs m ay now issue pre­
ferred stock of one or more classes w ith right of cum ulative dividend
not exceeding six per cent and with assent of seventy-five per cent of
the stock and approval of the bank commissioner, said stock carrying
no liability for debts of bank or any assessment. If the Bank Com­
missioner finds a bank insolvent or violating any banking law, he
shall take charge and m ay appoint a special deputy to handle affairs
of the bank for a period of not longer th a n six m onths, a t which tim e
Commissioner m ust appoint receiver, who serves under orders of
D istrict C ourt. Claims of creditors m ust be filed w ith receiver
within one year from appointm ent.
N ational banks by vote of seventy-five per cqnt of stock and after
exam ination by Bank Commissioner and approval of com ptroller of
currency m ay become sta te banks.
D eputies for Insolvent banks m ay, subject to approval of bank
commissioner, borrow money and pledge assets. Receivers in charge
of bank and creditors m ay reorganize th e bank if approved by 80
per cent of depositors, general creditors and Bank Commissioner.
Credit unions are subject to exclusive supervision of th e bank
commissioner, and m ust file reports on forms provided by commis­
sioner.
B ills of E x c h an g e. (See N otes and Bills of Exchange.)
B ills of L a d in g . These are governed by th e common law.
B u lk S ale. “ T he sale or disposal of any p a rt or th e whole of a
stock of merchandise or the fixtures pertaining thereto, otherwise
than in the ordinary course of his trade or business, shall be void as
against the creditors of the seller, unless the purchaser receives from
the seller a list of the names and addresses of th e creditors of the
seller certified by the seller under oath to be a complete and accurate
list of his creditors and unless the purchaser shall, a t least seven days
.before taking possession of the property, or before paying therefor,
notify in person or by registered mail, every creditor whose name
and address is stated in said list, or of whom he has knowledge, of
the proposed sale.”
In lieu of notice, seller m ay give to purchaser a bond conditioned
upon th e paym ent of debts due creditors of the seller and upon which
creditors m ay sue in an am ount equal to present value of th e property
transferred and signed by a t least two resident sureties; th e bond to
be approved by and filed with the clerk of th e district court of the
county where th e property is sold is located before purchaser takes
posesssion or pays.
C h a tte l M o rtg a g e s. A m ortgage of personal property, where the
property Is not im m ediately delivered to th e 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 mortgage, or a copy thereof is filed in th e office
of the register of deeds in the county where the property is situated,
and if the m ortgagor is a resident of the state, then also in th e county of
which he is a t the tim e a resident. A m ortgage so filed is Invalid
as against creditors or subsequent purchasers in good faith after
two years unless within th irty days next preceding th e expiration
of such two years and each two years thereafter th e mortgagee, his
agent or attorney, m akes an affidavit exhibiting the interest of the
m ortgagee in the property and showing the balance unpaid on the
debt, and files the same in the same m anner as th e m ortgage. In
case of default the m ortgagee m ay sell in the m anner provided in the
chattel mortgage.
A m ortgage of exem pt personal property is invalid unless executed
jointly by husband and wife where th a t relation exists unless it be
given for the purchase price of the mortgaged chattel.
Livestock pasturing lien, duly recorded, has priority over o ther liens.
C o lla te ra ls. Governed by the common law on Bailm ents and
Pledge.
C o n d itio n a l S ales. Conditional contracts, by which th e owner­
ship rem ains in the p arty proposing to sell until th e purchase price
Is paid, are treated as chattel m ortgages and m ust be filed in the
office of the register of deeds in the same m anner as such chattel
mortgages b u t rem ain in force w ithout the renewal affidavit required
In chattel mortgages.
C o n tr a c ts . All contracts which, by the common law, are joint
only, shall be construed to be joint and several. The use of private
seals in w ritten contracts (except seals of corporation) is abolished,
and in suits upon w ritten contracts, as to the perform ance of con­
ditions precedent, it is sufficient after setting out th e contract to
allege generally th a t plaintiff has fully perform ed th e contract.
C o n v e y an ces. (See Deeds.)
C o rp o ra tio n s . C hapter 152 of th e 1939 Session Laws of the
S tate of Kansas largely revises th e K ansas Corporation Law. Cor­
porations are formed under a general s ta tu te requiring th ree or more
incorporators. Incorporation is effected by filing in th e office of the
Secretary of S tate articles of incorporation signed and acknowledged
by each incorporator; recording a certified copy of th e articles with
th e R egister of Deeds for th e county where th e registered office of
th e corporation in th e sta te is located, and paym ent of a $25.00
application fee, capitalization fee and filing and recording fees. The
capitalization fee is one-tenth of one per cent of th e authorized capital
stock upon th e first $100,000.00; one-tw entieth of one per cent on
all in excess of $100,000.00.Duration of corporate existence is limited
to n o t to exceed one hundred years. E very corporation m u st main­
tain a registered office in th e s ta te and a resident agent who m ay be
either a n individual or a corporation residing in or located in th e state.
T he nam e of such corporation m u st be displayed a t its registered office.
N o corporation shall commence active business u n til its corporate
existence has been established in the- m anner outlined above and
th e am ount of capital w ith which it will begin business as stated m
th e articles of incorporation fully paid in; and an affidavit filed,in the
office of th e Register of Deeds of th e county where th e registered
office of th e corporation is located; and an affidavit signed by tne
T reasurer sta tin g th e am ount of capital which th e articles or incor­
poration recite will be paid in before com m encement of business
has been fully paid. T he nam e adopted m ust, indicate th e nature
of th e business and shall be followed by th e word “ Incorporated
or th e abbreviation “ Inc.” except banks and corporations not ror
profit. The articles of incorporation m ust sta te th e nam e or tne
corporation, th e location of its registered office, th e nam e or its resi­
dent agent, th e nam e and address of th e registered agent, th e nature
of th e business to be carried on, th e to ta l num ber of shares of stocx
which th e corporation shall have au th o rity to issue, th e par value
of each share, or a statem en t th a t all such shares are to be without
p ar value if th e corporation is to issue only one class of stocK. ii
th e corporation is to be authorized to issue m ore th an one class oi
stock th e articles should also se t forth th e to ta l num ber of shares
of all classes which th e corporation shall have a u th o rity to issue,
th e num ber of shares of each class th a t are to have a p ar value anu
th e p ar value of each share of each class or th e num ber of snares
th a t are to be w ithout p ar value, th e consideration therefore and a
sta te m e n t of all preferences, rights and lim itations w ith respect to any
class or classes of stock. T he articles shall also contain a grant or au­
th o rity to th e board of directors to fix by resolution any such powers,
preferences, lim itations or qualifications on classes of stock, and snau
se t forth th e m inim um am ount of capital w ith which th e cOTporation
will com m ence business, which shall n ot be less th a n $ 1 ,000.00, t
nam es and places of residence of each incorporator, th e d uration o n ™
corporate existence and th e num ber of directors. Numerousg otner
provisions in th e articles of incorporation are permissible b u t no*
required. By-laws m ay be am ended in accordance w ith provisions
of th e articles of incorporation or b y the board of directors subject
to am endm ent, alteration or repeal by m ajority vote of th e stoca
holders. An annual statem ent shall be m ade by, each corporatio
for profit except banking and insurance corporations and DUUdims

BANKING AND COMMERCIAL LAWS—KANSAS
and loan associations on or before M arch 31st of each year on forms
furnished by th e Secretary of S tate showing a complete detailed
statem en t of th e conditions of the corporation. Failure to file this
rep o rt w ithin ninety days from th a t tim e works a forfeiture of incor­
poration an d works a penalty for each day th e report is delayed.
Dividends m ay be declared from n et profits or net assets in excess
of capital as com puted in accordance w ith provisions of th e sta tu te.
C orporations m ay borrow money and m ay pledge p roperty 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 o t organized for profit) m ust pay an annual franchise tax
on paid-up capital as follows: N o t over $10,000, $10; over $10,000;
and n o t over $25,000, $25; over $25,000 and not over $50,000, $50;
over $50,000 an d n o t 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 n o t 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 n ot over $5,000,000, $2,000: over
$5,000,000, $2,500.
C o sts. In th e D istrict C ourt a bond for costs or a cash am ount
of fifteen dollars in lieu thereof m ust be deposited by resident plaintiffs.
Non-resident plaintiffs m ay be required by order of court to give
additional security for costs. In Justice C ourts cost deposits m ay be
$3.00 to $5.00, depending on custom of Justice. In C ity C ourts cost
deposits are custom arily $5.00., nonresident plaintiffs, $3.00 residents.
C o u r ts . T erm s and Jurisdiction. D istrict courts, holding two to
three term s a year in every county, have general original jurisdiction
In law and equity. Regular term s of the probate court are held in
each county on the first M ondayin each m onth and special or adjourned
term s m ay be held as business m ay require. Justice’s jurisdiction in
civil actions for th e recovery of money, $300; to recover specific
personal property not valued in excess, $300. The suprem e court is
th e court of last resort. C ity courts with jurisdiction in civil actions
for am ounts n ot in excess of from $300 to $1,000 are established in
th e following cities: Arkansas City, Atchison, Coffeyville, TTangag
C ity, Leavenworth, T opeka, and W ichita. Procedure corresponds
to th a t of justice courts.
D ay s o f G ra c e . Abolished.
D eed s. N o particular form s of conveyances are required. As
a rule the form used in other States is sufficient. As between
the parties conveyances are valid w ithout being recorded. Deeds
m ay be valid as against attaching creditors without being recorded.
The wife should join w ith her husband in the conveyance, and any
conveyance or mortgage of the hom estead without her uniting in the
same is absolutely void. If the wife has never resided in the S tate
her signature is n ot necessary. G rantors need not attach any seal
or scroll to th eir signatures, and no witnesses are necessary unless
grantors are unable to write. Corporations convey by deed, sealed
with th e corporate seal and signed by president, vice-president, pre­
siding m em ber, or trustee. T he acknowledgm ent m ust be before a
judge or clerk of the district court having a seal, a justice of th e
peace, n o tary public, .county clerk, register of deeds, m ayor or clerk
of an incorporated city. E very notary public shall add to his official
signature th e d ate of the expiration of his commission as notary
public. In cases where the acknowledgment is m ade out of th e
S tate it m ust be m ade before a court of record, a clerk, or other
officer having th e seal thereof, a commissioner of deeds for Kansas,
justice of the peace or notary public, or before any consul of the
United S tates resident in any foreign country or port. Deeds and
m ortgages m ust be recorded in the office of the register of deeds of
the county in which the land is situated, or they will be void as to
subsequent grantees in good faith w ithout notice.
D eeds o f T r u s t in the nature of mortgages are not used so far as
sale by th e tru stee is concerned. (See T rusts, etc.)
D e p o sitio n s. Depositions are taken upon notice to the opposite
p arty. C ourts are also authorized to appoint commissioners to take
depositions. T he depositions m ay be taken before any person author­
ized to take acknowledgments. Each witness m ust sign his own
deposition. T he notice m ust be attached to the depositions and
Inclosed w ith them . Depositions should be taken on the date nam ed
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 riot being regarded.
If taken by interrogatories and cross-interrogatories, under agreem ent
or otherwise, each interrogatory and cross-interrogatory m ust be
p u t to each witness and answered so far as he can answer it, and th e
answer w ritten down. I f th e depositions are taken before the m ayor,
notary public, o r commissioner appointed as aforesaid, they m ust
be certified under his official seal. If before any officer not possessing
a seal, a certificate m ust be annexed, under the seal of the county, or
the great seal of th e S tate, th a t th e officer by whom the depositions
were tak en was, a t th e tim e of taking the sam e, such officer as he
represents him self to be in his certifictae. This should be attached
to th e certificate of the officer (not possessing a seal) who took the
depositions.
D e s c e n t a n d D is tr ib u tio n . T he hom estead is th e absolute
p roperty of .the widow and children—one-half in value to th e widow,
th e other h alf to th e children, when both survive. T he hom estead
shall n o t be subject to forced partition unless th e surviving spouse
rem arries nor u n til all th e children arrive a t th e age of m ajority.
When a resident of th e s ta te dies testa te or intestate the surviving
spouse>shall be allowed for th e benefit of such spouse and th e de­
cedent s m inor children during th e period of their m inority from the
personal p roperty of which th e decedent was possessed or to which
he was entitled a t th e tim e of d eath th e following: One, wearing
apparel, fam ily library, pictures, musical instrum ent^, furniture and
household goods, utensils and im plem ents Used in th e home, one
autom obile and provisions and fuel on hand necessary for th e sup­
p o rt of th e spouse and m inor children for one year; Two, other p e r­
sonal p ro p erty n o t exceeding an appraised value of $750.00. Onehalf of all real estate owned by husband during coverture, and n ot
conveyed by husband and wife, nor sold a t judicial sale, and not
necessary to pay debts goes to th e wife in fee sim ple: except of land
sold by husband whose wife never before such conveyance resided
in th e S tate. Rem aining real estate goes to th e surviving children,
an d living issue of prior deceased Children, children taking per stirpes,
in equal shares, or, if none, th e whole estate goes to the Widow. For
w ant of wife or child or living issue of deceased child the whole estate
goes to th e parents. T he rules applicable to widow of deceased
husband apply to husband of deceased wife. Illegitim ate children
inherit from th e m other, and also fro m 'th e father, if his recognition
has been general an d notorious, or in writing. W hen a child would 1
inherit from either parent, such parent will inherit from the child.
.Personal property descends in th e sam e way as real estate except
exem pt household furniture is sole property of surviving spouse.
P roperty descending by law or will is subject to an inheritance tax,
varying in percentage according to relationship and am ount. Special
sta tu te provides for adm inistration and distribution of estate of
persons dying w ithout known heir or wili. (Chapter 168, Laws. 1835).
. D ow er. Dower Is abolished by law. (See Descent and D istri­
bution.)
E x e c u tio n s m ay be ordered as soon as judgm ent Is obtained If stay
**■
been granted or supersedeas given. Executions running to
the sheriff of th e county where the levy is to be m ade, m ay be levied
on property in an y county of the State and issue only out of court
where judgm ent obtained except where abstract or transcript of justice
Judgment filed in d istrict court of same county as th a t of the justice
court, execution will issue on said judgm ent only out of said district
court’ There is no stay of execution in the district court except by
supersedeas bond which m ay be given on appeal. In justice’s courts,
by filing bond, stays of execution are granted as follows. On any


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56
Federal Reserve Bank of St. Louis

2015

judgm ent for $20 and under, th irty days; over $20 and under $50,
sixty days; over $50 and not exceeding $100, ninety days; over $100,
one hundred and tw enty days. Real estate is only subject to execu­
tion issued out of district court of county wherein judgm ent rendered
or ab stract or transcript from justice o f the peace filed. Executions
are liens on personal property only from tim e of levy. Real estate
sold on execution or order of sale, giving the debtor eighteen m onths
In which to redeem . T he debtor is entitled to possession of the
property and rents and profits, during the period provided for redem p­
tion. except in case of waste. Receiver m ay be appointed to prevent
waste and m ay use so much of rents and profits as are necessary to
repair waste and pay costs of receivership. Surplus If any to be paid
to judgm ent, debtor free from the lien of any judgm ent.
E x e m p tio n s. Hom estead of 160 acres of farm ing land, or of one
acre within an incorporated town or city, w ith buildings thereon,
appurtenant to the use of the property as a hom estead, unlim ited in
value. To the head of a fam ily the following articles of personal
property: All books, pictures, m usical instrum ents; pews in churches,
burial lots; wearing apparel of debtor and fam ily; beds and bedding,
cooking utensils, stoves and appendages necessary for use of fam ily;
sewing machine and all other household furniture not exceeding $500;
tw o cows, 100 chickens or other dom estic fowl, ten,hogs, one horse
or m ule; yoke of oxen or in lieu thereof span of horses or mules;
tw enty sheep; food necessary for support of stock hereinbefore m en­
tioned; also one wagon, two plows, one drag and other farm ing utensils
not exceeding $300; all provisions and fuel necessary for support of
fam ily for one year; necessary tools and im plem ents of mechanic,
m iner or other person used and k ep t for carrying on trade or business,
and in addition thereto stock in trad e not exceeding $400; library,
im plem ents and office furniture of professional m an. Also personal
earnings of th e debtor earned during three m onths preceding the
garnishm ent or attachm ent, and three m onths’ pension m oney, where
such earnings or pension money is necessary for the support of the
d e b to rs family, b u t 10 per cent of such earnings m ay be required to
be paid in and applied on the judgm ent.
F o re ig n C o r p o r a tio n s . A foreign corporation seeking to do
business in this S tate m ust m ake application to th e S tate C harter
Board showing a copy of its charter, or articles of incorporation, th e
place where the principal office is located, place where th e principal
office in this S tate is to be located, n atu re and Character of th e
business to be conducted in this state, nam es and addresses of officers,
trustees or directors, statem ent of assets and liabilities subscribed and
sworn to by president and secretary of th e corporation, w ritten consent th a t actions m ay be commenced against it in courts of th is state,
and paying to th e S tate T reasurer th e sam e fees upon th e am ount
of capital invested or used in th is s ta te as a dom estic corporation.
A registered office m ust be m aintained in th e S tate w ith a resident
agent who m ay be an individual or a corporation.
W hen it receives a certificate authorizing it to do business, i t is then
subjected to substantially th e sam e provisions, and judicial control
as a dom estic corporation. Annual statem ents m ust be filed on or
before M arch 31st, giving condition on th e 31st of December preceding.
I f a foreign corporation fails to file w ith th e secretary of sta te th e sta te ­
m ent required by law within ninety days after th e tim e provided for
its right to do business in th e S tate is thereby forfeited. A penalty
Is imposed of $100 and in addition $5.00 for each day this rep o rt is
delayed. Foreign corporations m ust pay an annual franchise tax on
th a t portion of their capital represented by its property and business in
Kansas on th e sam e basis as dom estic corporations. Failure of foreign
corporations who tran sact business in Kansas, other th an in terstate
commerce to comply w ith th is law renders them subject to ouster and
receivership proceedings on th e p a rt of th e S tate b u t does n o t now
a? ?ct the right of such foreign corporation to sue in th e courts
of this State. A foreign corporation transacting business in TTn.n«n.a
vnth a m ajority of its property located in K ansas m u st have two
directors residents of the S tate.
,
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G a r n is h m e n t. A t or afte r th e time, of beginning an action to
recover dam ages founded upon contract, judgm ent or decree, or after
th e issuance of an execution and before it is returned, if th e plaintiff
cause to be filed w ith th e clerk an affidavit stating th e am ount of his
claim over and above all offsets, th a t he believes th a t some person
nam ing him, indebted to, or has property in his possession or u nder his
control belonging to th e defendants, and th a t such defendant has no
property liable to execution sufficient to satisfy his debt, and th a t th e
Indebtedness or property so held is not by law exem pt from seizure or
sale upon execution, th e clerk shall issue a garnishm ent summons. In
justice courts th e affidavit differs from th a t acquired in district court
actions qnlv in th a t affiant states th a t plaintiff is in danger of losing his
claim, in lieu of th e allegations th a t the defendant has n o t property
subject to execution sufficient to satisfy th e debt. In th e district courts
bond in double am ount claim ed is required on garnishm ents before
Judgm ent, except where defendant is a non-resident or when garnishm ent is issued on a judgm ent rendered in any court. N o bond required In justice courts. D efendant m ay a t or a fter com plaint is filed
and before judgm ent, release garnishm ent by entering into undertaking
w ith sufficient su rety to th e effect th a t th ey will pay bn dem and any
judgm ent rendered against defendant. T he bond shall be not less th an
double am ount of plaintiff s claim .
N o garnishm ent shall be issued against salary or wages of any
persons dropped from public emergency relief work by obtaining
regular em ploym ent until after th e expiration of 60 days from the
tim e of his leaving such relief work.
G u a r a n ty C o m p a n ie s . (See T ru st Companies.)
H o lid ay s. T he legal holidays are: Sundays; Jan u ary 1 (New Y ear’s
F ®br£ ary 12 (Lincoln’s b irth d a y ); F ebruary 22 (W ashington’s
birthday); M ay 30 (M em orial D ay); Ju ly 4 (Independence D ay);
first M onday in Septem ber .(Labor D ay); October 12 (Colum bus Day)
(but does not affect commercial paper); Novem ber Iff (Armistice
D ay); Thanksgiving; and December 25 (Christm as D ay). If any
or these days fall on Sunday th e 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 Women.)
.
Injunctions m ay be granted by a district court or
«5® judge thereof a t the beginning of an action or afterw ards, in
his discretion. A bond m ust be given to protect the defendant
against any loss In case the injunction is wrongfully obtained. In
the absence of the judge from the county the probate judge m ay
grant tem porary injunctions.
;
“ “
In so lv e n c y . (See Assignments.)
I n t e r e s t . Legal rate, 6 per cent, b ut 10 per cent m ay be agreed
uP0,i1-, Excess of 10 per cent is forfeited, and in addition thereto there
shall be deducted from th e am ount due for principal, with lawful
interest, an am ount equal to the interest contracted for in excess of
10
« e !jgal interest originally contracted for continues
until the debt is paid, and no additional interest can be charged by
way of penalty for default except from date of default. A purchaser of
a negotiable note in due course takes the note free of the usurious tain t.
J u d g m e n ts . Judgm ents o f courts of record are liens on th e real
estate or the debtor within the county from the first day of th e term
a t which the judgm ent was rendered; b u t judgm ents by confession
and judgm ents rendered a t th e same term during which th e action
was commenced are liens only from the day on which the judgm ent
was rendered. Judgm ents lose th eir prio rity over subsequent judg­
m ents unless execution is issued and levied within one year after
judgm ent. A certified copy of the judginent appearing of record in
the district court m ay oe filed in the office of the clerk of th e district
court of any o ther county an a the judgm ent will then be a lien on
real estate in th a t county. A bstracts or transcripts of justice court
judgm ents m ay be filed in the district court or the sam e county,
are liens on real estate in such county from the date of filing, after
which executions issue only out of said district court on such judgm ents.

2016

BANKING AND COMMERCIAL LAWS—KANSAS

J u r is d ic tio n . (See Courts.)
t e a s e s . In farm leases, burdensom e provisions are unlawful and
unenforceable, b u t a fair and reasonable ren t Is valid and m ay be
secured by liens on to ta l crops grown on th e leased land and on live
stock raised on share or lease and on receipts from pasture received
by ten an t.
L icen se. Agents of insurance companies are required to take out
licenses from th e superintendent of insurance. Cities are authorized
to enact license ordinances and certain classes of business are required
to tak e o u t a license. T ransportation of m otor fuels over highways
m ust be licensed. T he owner of a m otor vehicle, trailer or sem i­
trailer m u st have th e sarne registered and obtain a certificate of title
therefor.
Persons seeking perm ission to practice the healing a rt m ust be
licensed, and are required to tak e an exam ination for license. No
persons, individuals, firms, co-partnerships, corporations and asso­
ciations shall engage in th e sale of any cereal m alt beverage, w hether
for wholesale or retail, w ithout having first secured a license. Any
dealer prom oting com m unity sale of livestock m ust be properly
licensed. O perators and chauffeurs who drive m otor vehicles upon a
highway m u st be licensed, excepting (1) persons operating a vehicle
in th e service of th e arm y, navy, or m arine corps of th e U nited States;
(2) persons driving farm m achinery temporarily; moved on to high­
way; (3) non-resident, 16 years of age, who has in possession a valid
operator’s license issued in his home sta te ; (4) non-resident over
18 years of age who has a valid operator’s license issued in his home
sta te ; (5) non-resident, 18 years of age, whose home sta te does not
require license, m ay operate for a period of n ot m ore th an 90 days,
an y calendar year, If operating duly registered vehicle.
L ie n s. Mechanics, m aterial-m en, and laborers, both original con­
tractors, and sub-contractors, and laborers of sub-contractors are
entitled to obtain liens upon real estate for labor performed or m aterial
furnished in th e erection or repair of any building. Sworn statem ents
item ized as fully as practicable as to the am ount of the claim, for
w hat and when it was rendered and by whom, giving nam es of con­
tracto r and owner and description of property and date of last m aterial
furnished, m ust be filed in the office of the clerk of the court. Original
contractor's lien claim m ust be filed within 4 m onths from date of
last m aterials, or labor furnished and others entitled to lien within
sixty days after last m aterials or labor furnished. Lien claim ants
other th an original contractors, m ust give im m ediate notice of filing
of lien claim to owner or person in possession of the premises, where
th a t m ay be done, otherwise m ust post notice on the premises.
Action to foreclose lien m ust be begun w ithin one year a fter filing claim
Livery-stable keepers, forwarding m erchants and common carriers have
liens. (See Judgm ents.) A ttorneys have lien on papers and funds in
hand for general balance of com pensation and have lien on moneys
In hands clients adversary due client in any m atter, action or proceed­
ing, in which th e attorney was employed for services therein from the
tim e of service on th e adverse p arty , in th e m anner of a summons, of
w ritten notice of th e lien.
• Blacksm ith, horseshoer, wagon m aker, keeper of garage or any
other person shall have lien on any goods, chattels, horses, wagons,
automobiles, etc. for value of labor and m aterial used thereon as long
as said property rem ains in his possession. Such person m ay retain
lien by filing statem ent thereof under oath in office of Register of
Deeds within th irty days after parting with possession. Such liens
hold priority over prior recorded chattel m ortgages. Threshers
shall have lien on grain threshed and sam e m ust be filed within fifteen
days from com pleting threshing and has priority over prior chattel
m ortgages. Action m ust be brought w ithin ninety days after filing
of th resh er’s lien or sam e will be deem ed to have been abandoned.
Liens sim ilar to ordinary mechanics lien are given by sta tu te for
m aterials and labor furnished on oil leases in th eir developm ent,
an d are foreclosed in like m anner. A ny person who tran sp o rts oil
field equipm ent under express contract shall have a lien upon th e in­
terest of owner or operator.
Any re n t due for farm ing land shall be a lien on crops growing or
m ade on th e premises. A ny person renting pasture lands under con­
tr a c t w ith owner for th e purpose of p asturing cattle, horses, sheep or
o th er livestock shall have a first and prior lien upon all such livestock
to secure th e paym ent of said lien and said lien shall be prefererd to
th a t of an y prior ch attel m ortgage If said lien is recorded in th e county
where such livestock is p astured before such livestock is rem oved.
T he operator of a hospital is given a lien upon all causes of action
accruing to a p atien t therein or to the legal representative of such
p atien t for th e reasonable charges for hospital care necessitated by
th e injuries giving rise to such causes of action.
L im ita tio n s of S u its . An action for th e recovery of real property,
sold on execution or by executors, adm inistrators, or guardians,
brought by th e execution debtor, or the heirs, ward, or guardians,
within .five years after the deed is recorded. O ther actions for
recovery of real property, within fifteen years, except recovery of 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. C ontracts not in writing, three
years. Trespass, detinue, replevin. Injuries n ot arising on contract,
and relief on th e ground of fraud, tw o years. Action for libel, slander,
malicious transaction, or false Im prisonment upon a suit for penalty
or forfeiture,- one year. Action for any other relief not before
provided for, five years. In any case founded on contract, part
paym ent, or an express w ritten acknowledgement or prom ise, renews
th e contract. The sta tu te runs from the date of such renewal. Con­
tra c tu a l lim itations differing from the sta tu tes are void.
M a rrie d W o m en . The real and personal property owned by a
woman a t th e tim e of her m arriage, and any property which comes
to her by descent, devise, or bequest, or gift of any person except her
husband, rem ains her sole and separate property notw ithstanding her
marriage, and is not subject to the disposal of her husband or liable
for his debts. M arried women m ay sell and convey their real and
personal property and enter into any contract with regard to the
same in th e same m anner and to the same extent as a m arried m an
m ay in relation to his property. She m ay sue and be sued in the
same m anner 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 rem ain her separate
property, and m ay be used and Invested by her in her own name.
H er husband is not liable for her debts incurred in her separate busi­
ness undertakings by virtue of th e m arriage relation. She m ay also
contract with her husband w ith the same effect as though the m arried
relation between them did not exist.
M in e s a n d M in in g . The law provides for the appointm ent of a
mine inspector w ith authority to require mine owners to provide
certain facilities for the health and safety of persons employed and
compel proper ventilation, regulate excavations, air courses, etc.
This law is quite elaborate and violations of the safety provisions of
the act—resulting in injury to employees. Usually results in liability
even where the Kansas W orkm en’s Com pensation Act does not
apply, on th e p a rt of the m ine operator to the employees because of
th e positive d u ty resting on th e operator to comply w ith such sta tu to ry
provisions.
M o n o p o lie s a n d U n f a ir T ra d e . Any retailer or wholesaler who
shall advertise, offer to sell or sell m erchandise a t less th a n cost to
said retailer or wholesaler (as defined by th e Act) shall be guilty of a
m isdem eanor subject to a fine of n o t m ore th a n $500. Advertising,
offering to sell or sale of m erchandise, either by retailers or wholesalers,
a t less th a n cost (as defined by th e Act) w ith in te n t of unfairly av ert­
ing tra d e from a com petitor or otherwise injuring, im pairing or pre­
venting fair com petition, is unfair com petition, contrary to th e policy
of th e Act, where th e resu lt of such advertising, offer or sale is to ten d
to deceive an y purchaser or prospective purchaser or to substantially
lessen com petition or unreasonably restrain tra d e or ten d to create a
monopoly in an y line of commerce. T he A ct does n ot apply to sales


https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

a t retail or wholesale where (a) m erchandise is sold in bona fide clear­
ance sales; (b) perishable m erchandise sold to forestall loss; (c) mer­
chandise im perfect or dam aged or being discontinued as advertised,
m arked and sold as su c h ; (d) m erchandise sold upon final liquidation
of any business; (e) price of m erchandise is m ade in good faith to
m eet price of a com petitor in sam e locality; (f) m erchandise is sold
b y an officer acting under order of court; (g) m erchandise is sold for
charitable purposes or relief agencies; (h) m erchandise is sold on con­
tra c t to departm ents of governm ent or governm ental institutions.
Provisions of th e A ct do n ot apply to grain and feed dealers.
M o rtg ag es. A m ortgage of real estate, to be valid as against
subsequent bona-fide purchasers w ithout notice, m ust be duly ac­
knowledged and recorded in the office of the register of deeds of the
county where the land is situated. M ortgages m ay be valid as against
attaching creditors without recording. M ortgages m ay be discharged
on margin of record by m ortgagee or attorney or assignee by duly
acknowledged power of attorney or assignm ent in presence of register,
or by satisfaction entered on the instrum ent when copied on the
margin by the register; or by an independent release duly acknowledged
and recorded, .w ife m ust join in all m ortgages except those for
purchase money, except in cases where she has never been a resident
of the S tate. M ortgages are foreclosed by suit only. By an act
of the Legislature which took effect M ay 18, 1893. real estate sold
under foreclosure of m ortgage is subject to eighteen m onths
period of redem ption. Period of redem ption m ay be extended as the
court m ay fix, b u t not beyond January 15, 1937, and provided m ort­
gagor pays rental ordered by court. Corporation m ortgagor m ay
agree for a shorter period of redem ption or m ay wholly waive it.
Ir th e m ortgage foreclosed is on abandoned property or n o t occupied
in good faith and the court so finds, six m onths only is allowed for
redem ption. This act does not apply to m ortgages executed prior
to th e d ate the a ct took effect. W hen a m ortgage is assigned th e
assignm ent should be acknowledged and recorded. (For Forms,
see Deeds: see Executions.)
(For M ortgages on C hattels, see C hattel M ortgages: see Execu­
tions.)
N e g o tia b le I n s t r u m e n t s . T he Uniform Negotiable Instrum ents
Act adopted. (See com plete tex t of this law following “ Digest of
B anking and Commercial L aw s.”)
N o ta rie s. N otaries are appointed by the G overnor and serve for
four years. T hey give bond in the sum of $1,000 and are required
to affix the date of the expiration of their commission to all certifi­
cates.
N o tes a n d B ills of E x ch an g e. Uniform N egotiable In stru m en t
Act took effect June 8. 1905.
P a r tn e r s h ip s . Lim ited or special partnerships m ay be formed
for any legal purpose except banking or insurance. Such partnerships
m ay consist of one or more persons who are general partners, and
one or more who contribute a specific am ount of capital and shall
be called special partners. The special partners are n ot liable for the
debts of the partnership beyond the am ount contributed by them
respectively b ut th e nam es of the special partners m ust n ot be used
in connection with the business. Such a partnership is formed by
executing a certificate stating the nam e, the nature of th e business,
the nam es of the general and special partners, and their place of
residence, and the am ount of capital contributed by each special
partner, and the perioa when the partnership is to commence and
term inate. T he certificate m ust be acknowledged, filed and recorded
in th e office of th e county clerk in county of principal place of business
and copies in clerk’s office of all other counties where partnership
m aintains a place of business.
P ow er of A tto rn e y . (See Deeds.)
P ro b a te L aw . (See Adm inistration.)
P ro te s t. (See N otes and Bills.)
R a ilro a d s . E very railroad organized or doing business in the
S tate has th e power to tran sp o rt persons, property and mail by high­
way, air or water.
R e co rd s. (See Deeds.)
R e d e m p tio n . (See M ortgages.)
R ep lev in . The plaintiff in an action to recover th e possession of
specific personal property m ay claim the im m ediate delivery of the
same by filing affidavit and giving bond double the sworn value of
the property. P roperty replevined m ust be held by th e officer taking
it tw enty-four hours, during which tim e the p arty from whom the
property is taken .may give bond to the plaintiff for not less than
double the am ount of the value thereof conditioned for the return
of 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 ritie s . N o securities n ot exem pt can be sold w ithin the
S tate unless such securities have-been registered by notification and
those by qualification are classified under th e sta tu te. Registration
by notification is secured by filing in the office of th e Corporation
Commission a statem ent with respect to such securities contain­
ing th e following: Nam e and location of issuer, location of issuer’s
principal place of business, and principal office in th is state, if any;
brief description of the security including am ount of th e issue; the
am ount of securities to be offered in this sta te ; price a t which securities
are to be offered for sale; ra te of commission to be paid; a brief state­
m ent of facts which shows th e security falls w ithin one of th e classes
in th e Kansas law. Financial statem ent of issuer as of current
date; income statem ent of issuer for th a t fiscal period; copy of the
security. R egistration by qualification is required of those securities
not entitled to registration by notification, and is secured by filing
w ith th e Corporation Commission a copy of the security to be sold,
a statem ent of assets and liabilities of the issuer including th e total
am ount of such securities and any in te re s t'o r lien authorized or
issued by such person or com pany; th e nam e of th e fiscal agent or
broker w ith a statem ent of the financial standing of such agent;
a statem ent showing gross and n et earnings of issuer; a statem ent
of inform ation relative to the character of security and earning
power of issuer; a statem ent showing plan of business; charter and
by-laws if issued by a corporation or articles of association if issued
by partnership; a statem ent showing price a t which security is pro­
posed to be sold including am ount for commission, location of issuer s
principal business office and office in this sta te (see N ote “ A ” ),
and all other m atter as m ay be required by th e Corporation Com­
mission. F or registration of such securities, a fee of one-tenth of
one percent of th e am ount of the-aggregate value of th e securities
sought to be registered, up to $100,000, plus one-tw entieth of one
percent of th e am ount in excess of $100,000, and n o t exceeding $400,000, and one fortieth of one percent on th e am ount in excess of $400,000, b u t in no case greater th en $500 for eacb issue. T he Corporation
Commission m ay prescribe a m axim um to be registered a t an y one
*tim e. T he Corporation Commission, after investigation and ex­
am ination m ay g ran t or deny perm it to sell securities registered with
it, or cancel previously granted perm its. T he Commission m ay order
an appraisal of all assets of any business issuing securities for sale in
th e sta te , said appraisal to be m ade by three appraisers appointed by
th e Commission. All books of account of persons and corporations
w ithin th e Act are subject to exam ination by th e C orporation Com­
mission. Semi-annual statem ent of financial condition m u st be filed
w ith th e Commission. License is required of all brokers doing busi­
ness in this sta te and any such broker m ust file in th e office of the
Corporation Commission a bond in th e sum of n o t less th a n $5,000.
Agents and salesm en m ust also be registered and p ay a fee of $10.00.
Provided th a t, for licenses granted after Septem ber 1st, th e fee shau
be $5.00. B roker’s license fee is $100. Provided, any license issued
on or after June 1st of any year, fee shall be com puted a t ra te of $10
per m onth for rem aining period of fiscal year. Renewal fee, $50.
General accounts and books of brokers subject to exam ination and
au d it by C orporation Commission.
N O T E “ A ”— Copy of th e security to be sold, am ount and par
value of securities or num ber of no p ar shares to be offered in th e state.

BANKING AND COMMERCIAL LAWS—.KENTUCKY
Service. All service of process Is m ade by the sheriff or by con­
stables, or by some one specially authorized in any particular case,
and m ust be issued in th e nam e of the sta te with the seal of the officer
Issuing the same affixed.
S u its . (See Actions.)
T axes. All taxes are due on th e first day of Novem ber of each
year, and if half of th e same are not paid on or before th e 20th day
of December, a ten p er cent per annum interest charge on said first half
is added, and if not paid by June 20 all unpaid taxes draw interest a t
ten per cent. If half of th e taxes are paid by December 20, paym ent
of th e rem aining half m ay be deferred until June 20 of th e succeeding
year w ithout penalty. P aym ent of taxes in full on or before December
20 entitles payer to 2 per cent discount on last half of taxes. When the
tax upon real estate is delinquent it is sold for taxes on the first Tuesday
in Septem ber following. After sold it bears interest a t the rate of 10
per cent per annum and th e sam e rate upon subsequent taxes paid and
indorsed on th e tax certificate. L ands bid off for taxes by county a t
tax sale of Septem ber, 1940, or prior years, and held by county, m ay
be redeem ed an y tim e prior to Septem ber 1, 1941, by paying delin­
quen t taxes, w ithout penalties, costs or interest. M ortgagor m ust
pay in terest of 6% from date of redem ption by a m ortgage holder.”
The tax lien attach es to real estate on Novem ber 1, in th e year in
which th e tax is levied. A fter land is sold for taxes, it m ay be re­
deemed w ithin four years from date of sale. The interest of a m inor
m ay be redeem ed a t any tim e w ithin one year after he attain s his
m ajority, and idiots and insane persons m ay redeem within five years
after th e sale.
No tax certificate issued for delinquent taxes for which no tax
deed shall have been taken out shall be a lien en such real estate after
the expiration of five years from the date of sale, providing th a t when­
ever any extension of the tim e for redem ption is secured by sta tu te,
the lien of th e tax certificate shall be extended for a like period.
The sta te imposes an inheritance tax and income tax.
The sta te imposed the “ Kansas Retailers Sales T ax,” effective
Ju n e 1, 1937. D irect sales tax, payable by the purchaser, m ust be
collected by th e person m aking a sale and reports are reauired to be
m ade to tn e S tate Tax Commission. The tax directs those engaged
in th e business of selling tangible personal property a t retail to charge
and collect a tax a t'th e rate of (a) 2% from the gross receipts received
from th e sale of tangible personal property a t 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 of gas, w ater, electricity and heat; (d) 2% upon gross
receipts from sale of meals or drinks; (e) 2% upon gross receipts from
sale of admissions to place of am usem ent, excepting fairs, educational,
religious and charitable activities. Purchaser of business is required
to w ithhold sufficient am ount of purchase price to pay taxes until
seller produces receipt therefor.
A registration fee of 25 cents on each $100 of the principal debt
secured by real estate m ortgage m ust be paid to the Register of
Deeds when such m ortgage is filed for record and thereafter such
real estate m ortage and th e note which it secures is not subject to
taxation.
T r u s t C o m p a n ie s . T rust companies m ay be organized with a
capital of not less th an $100,000 and issue preferred stock of different
classes carrying no liability or assessm ent and m ay receive moneys in
tru st and execute any tru s t com m itted to them , either by any person or
by order of 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 investm ent of money, and for the purpose of issuing, registering,
transferring or countersigning certificates of stock, bonds or other
evidences of debt, act as guardian and guarantee the fidelity and per­
formance of d u ty of persons holding public offices or private trusts,
and certify and guarantee title to real estate and sell all kinds of
negotiable paper, and receive deposits from banks and other tru st
companies or public officers and w ith approval of banking board tru st,
company m ay receive deposits subject to check. T hey are required to
keep on hand 25 per cent of deposits subject to check and 10 per cent
of tim e deposits, in th e sam e m anner as sta te banks. Each director
m ust be a stockholder in the sum of not less th an $1,000. T ru st comanies are under th e supervision of, and subject to, exam ination by the
ank commissioner, and th e provisions of th e banking law relating to
im pairm ent of capital, insolvency and shareholders’ liability, and the
d u ty of th e bank commissioner in such cases. T rust companies m ay
own and hold real estate fo r: (a) Suitable building for transaction of
business; (b) T h at which is acquired through collection of debts,
“ b u t th e real estate so owned shall not exceed 50 per cent of the
capital of th e com pany for a longer period th an six m onths. W henever
th e value of real estate so owned shall exceed 50 per cent of the capital
of th e com pany, it m ust be reduced to the proper lim it within five
years” unless Bank Commissioner grants an extension which cannot
be for m ore th an two years.
T ru s ts a n d P o w ers. All tru sts concerning lands m ust be created
In writing except such as arise by implication of law.
W areh o u se R e c e ip ts. Practically the Uniform “ Warehouse
Receipts A ct.”
: W ills. Any person of full age and sound mind and memory, hav­
ing an interest in real or personal property, m ay give and devise the
same to any person by last will and testam ent lawfully executed,
subject, nevertheless, to the rights of creditors and the estate given
a spouse by sta tu te. Wills m ust be in writing, signed a t the end by
the testator, or another in his presence and by his express direction,
and subscribed in his presence and a t his request by two or more
com petent witnesses who saw him subscribe or heard him acknowledge
it. Wills executed w ithout the State in the m anner prescribed by the
iaw either of th e place where executed or of the testa to r’s domicile or
of th e State of Kadsas are declared legally executed. Compliance with
these requirem ents should appear in the witnessing clause. A will
executed, proved, and allowed in another State, in the court of
original probate, according to the laws of th a t S tate, m ay, relative
to p ro p erty in this S tate, be adm itted to record in th e probate court
of th e county in which such property is situated, by producing an
authenticated copy of the will and order of probate adm itting it to
probate by th e proper court of the county and State of which
deceased died a resident, after due publication of notice thereof
Every will, when adm itted to probate shall be filed in the office of
the probate court and recorded. N o will shall be effectual to pass
real or personal property unless it shall have been duly adm itted to
probate.

SYNOPSIS OF

THE LAWS OF KENTUCKY
R E L A T IN G TO

BANKING AND COMMERCIAL USAGES
Revised by W o o d w a r d , D a w s o n & H o b s o n , A ttorneys a t Law,
1805-26 K entucky Home Life Bldg., Louisville,, Ky.
(See Card in A ttorneys' List)
A c k n o w le d g m e n ts. Deeds executed within the S tate m ay be
acknowledged before th e clerk of the proper county court or a notary
public, or m ay be acknowledged before and proven by tw o subscrib­
ing witnesses. Deeds executed w ithout th e State and within the
U nited S tates m ust be acknowledged before the clerk of a court or
his deputy, notary Dublic. m ayor of a city, secretary of state, com­
missioner of deeds, or judge or a court, or before a justice of the
eace; if executed w ithout th e United S tates m ust be acknowledged
efore a foreign m inister consul or secretary of legation of the United
States, or th e secretary of foreign affairs, or notary public of the
nation in which th e acknowledgment was m ade or judge or clerk of
a superior court of the nation where the deed shall be executed,
attested in either case by th e officer’s seal of office. W hen the acknowl­
edgm ent is taken, the officer m ay sim ply certify th a t th e deed was
acknowledged before him , and when i t was done. All deeds m ust
show a source of g rantor’s title


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A ctio n s. Actions are commenced by filing petition and causing
summons or warning order to be issued. An action in th e circuit
court requires a deposit of $5.50 to cover probable cost and tax.
A d m in is tr a tio n of E s ta te s . An adm inistrator m ust be a resident
of the sta te prior to appointm ent. An executor should be a resident
or intend to become a resident im m ediately upon appointm ent. E ither
m ay be removed if , he moves from the state. Inventories of the
estate m ust be filed w ithin tw o m onths of qualification and settle­
m ent within one year and as often thereafter as th e court requires.
I A ffidavits. An affidavit m ay be read to verify a pleading ; to prove
th e service of a sum m ons, notice, or other process in an action; to
obtain a provisional rem edy, an exam ination of a witness, a stay of
proceedings or a warning order or upon a motion. An affidavit m ay
be m ade: 1. In this S tate, before a judge of a court, or a justice of the
peace, examiner, n otary public, clerk of a court, or master-commission­
er. 2. O ut of this S tate, before a commissioner appointed by the
governor of this S tate; or before any other person empowered by a
commission directed to him by consent of th e parties or by order of
th e court, or before a judge of a court, a justice of the peace, a m ayor
of a city, or notary public.
A ppeals. Appeals m ay be taken from m agistrate’s court to
quarterly court regardless of th e am ount involved: from the q uarterly
court to the circuit court when the am ount, exclusive of interest and
costs, exceeds Tw enty-five Dollars; from county court to th e circuit
court When th e am ount, exclusive of interest and costs, exceeds
Twenty-five D ollars; from th e circuit court to the court of appeals
in all cases in which th e title to land or the right to enforce a s ta tu ­
to ry lien is involved and in all cases where the am ount in controversy,
exclusive of interest and costs, am ounts to $500 or more, as a m atter
of right, b u t when the am ount in controversy exceeds $200 and is
less th a n $500, the granting of th e appeal is optional with th e court
of appeals.
A s sig n m e n ts a n d In so lv e n c y . A deed of Assignment for th e
benefit of creditors vests in the assignee th e title to all of the assignor's
property except such as is exem pt by law. Every voluntary assign­
m ent m ade by a debtor to any person in tru st for his creditors shall
be for the benefit of all the creditors in proportion to their respective
claims.
A tta c h m e n ts . The writ m ay issue against a defendant who is a
foreign corporation or non-resident of the S tate; or has been absent
from the S tate four m onths: or has left th e S tate witb in ten t to
defraud creditors; or has left bis county to avoid service ot summons;
or so conceals himself th a t summons cannot be served; or is abo u t to
remove, or has removed his property or m aterial p a rt o u t of the
State not leaving enough to satisfy claim of plaintiff or defendant’s
creditors; or has disposed or is about to dispose of his property, witb
fraudulent in ten t to cheat, hinder or delay creditors. Also in action
for money due upon contract judgm ent or aw ard, if defendant have
no property in State subject to execution, or not enough to satisfy
plaintiff and collection will be endàngered by delay in obtaining judg­
m ent and return of nulla bona. Also in action for personal p roperty
ordered to be delivered to plaintiff which or p a rt thereof has .been
disposed ot, removed, or concealed, so th a t order of delivery can not
be executed. Affidavit as prescribed by civil code and bond required,
except no bond or affidavit required in action upon nulla bona return.
B a n k C o lle c tio n C ode. Effective June 18, 1930. Given directly
following Laws.
B a n k s. Five or m ore persons m ay incorporate a bank. The
m inim um capital requirem ent is $25,000 in cities of 7,500 or less;
not less th an $50,000 in cities in excess of 7,500 b u t less th an 25,000 ;
n ot less th an $100,000 in cities in excess of 25,000 b u t less th an 100,000;
not less th an $200,000 in cities whose population exceeds 100,000; and
if such banks engage in business of tru s t com pany or title insurance
com pany, th e am ount of capital shall be a t least double th e am ounts
se t forth above. W hen m inim um capital stock is paid in full, and in
addition thereto a surplus of 20 per cent of th e m inim um capital shall
be paid and in th e custody of th e directors th e bank m ay do business.
N o dividends m ay be paid to stockholders u n til there is a surplus fund
equal to 10 per cent of th e capital stock. I f any officer or director of
a bank shall receive or assent to th e receiving of deposits after knowl­
edge of th e b ank's insolvency, such officer or director shall be individu­
ally responsible for such deposits and tfe guilty of felony. All banks
and tr u s t com panies are under supervision of th e D irector of th e Divi­
sion of B anking which is under th e supervision of th e D epartm ent of
Business Regulation. This departm ent m ust m ake periodical examin­
ations and reports of all banks and tr u s t companies, th e fees for such
exam inations to be paid by th e institution examined. N o bank m ay
perm it any person to become indebted to it in a sum exceeding 20 per
cent of th e capital actually paid in and actual surplus unless secured
by good collateral or m ortgage on property, th e Cash value of which
above all other encum brances exceeds such indebtedness. I f bor­
rower is a director or officer of th e bank he m ay n ot become indebted
to it in excess of 10 per cent of its paid up capital stock w ithout
first securing th e excess by a m ortgage or pledge of property double
in value th e am ount of such excess. In no event m ay th e indebtedness
of any person exceed 30% of th e bank’s paid up capital an d actual
surplus. Stockholders in banks, tru s t companies, and combined banks
and tru st com panies are liable individually for all contracts and
liabilities of such corporation, equally and ratably, and not one for the
other, to th e extent of the p ar value of their stock, in addition to th e
am ount of such stock and a transfer of stock does not release liability
provided th e action to enforce such liability shall be commenced within
tw o years from th e tim e of th e transfer. T his liability term inated
on Ju ly 1, 1937, as to such banks as published notice thereof.
The uniform bank collection code has been adopted.
Any bank or tru s t com pany, or combined bank and tr u s t com pany,
heretofore or hereafter organized under th e laws of this Common­
wealth, m ay issue non-assessable preferred capital stock, of one or
more classes, to which the doublé liability shall not apply. Such
preferred capital stock m ay be considered as p a rt of th e minimum
“capital stock” , and in th e case of existing corporations shall be
issued in th e m anner now provided for increasing capital stock.
T he holders of such preferred capital stock shall be entitled to receive
such cum ulative dividends a t a ra te not exceeding 6 per cent per
annum and shall have such voting and conversion rights, and such
control of m anagem ent, and such preference over the holders of
common stock in th e event of liquidation, as m ay be provided in
th e original or am ended articles of incorporation under which said
stock is issued. No issue of preferred stock shall be valid u n til th e
par value of all stock so issued shall, be paid in.
Any bank or tru s t com pany or combined bank and tru s t com pany,
organized under the laws of this Commonwealth, m ay subscribe for
and own stock of th e Federal Reserve Bank w ithin the Federal reserve
district where such bank is located and m ay take any steps necessary
to become a m em ber of such Federal Reserve Bank.
Any bank or tru s t com pany organized under the laws of this Com­
m onwealth is hereby em powered upon authority of a m ajority of
its board of directors to do anything necessary to acquire insurance
of its deposits in the Federal D eposit Insurance Corporation, estab­
lished pursuant to Section 12 B of th e Federal Reserve act, as am ended,
and to acquire stock or securities of such corporation, and to enter
into and take advantage of all contracts, rights and privileges which
m ay a t any tim e be available to said bank-or tr u s t com pany pursu­
a n t to said Federal Act.
;
No Bank shall perm it any one person to become indebted to it,
either as principal or surety, in excess 20% of its capital and surplus
unless good collateral pledged. I f borrower is director or officer, tb e
lim itation is 10% of paid up capital stock. In no event'shall th e in­
debtedness of any one person exceed 30% of capital and surplus.
B lu e S ky L aw . K entucky’s Blue Sky Law is a comprehensiveregulation of the sale of corporate securities. Before transacting;
business in K entucky, investm ent companies m ust file a detailed!
statem ent of tneir _organization and financial condition w ith th e
D irector of th e Division of Securities who has th e power to investi­
gate, approve or disapprove any such business proposed. : Non-

BANKING AND COMMERCIAL LAWS—KENTUCKY

2018

residents m u st appoint th e Banking Commissioner as agent for service
o f process. Dealers and salesmen m ust obtain licenses from the
D irector of th e Division of Securities.
■.
,
C h a tte l M o rtg a g e s a n d D eeds o f T r u s t . M ortgages, deeds of
tru st, conditional sales contracts m ust be recorded to be valid against
a purchaser for a valuable consideration ■without notice or against
antecedent creditors who have acquired some interest in th e chattel
and subsequent creditors. I t is a penal offense for any person to sell
or rem ove from th e sta te any personal property on which there is a
recorded m ortgage w ith th e in ten t to prevent th e foreclosure of th e
m ortgage. T o be valid, an assignm ent of any ch attel m ortgage m ust
be filed or recorded in th e sam e m anner as th e original m ortgage.
C h e c k s. Any person who w ith in ten t to defraud shall m ake or
draw or u tte r or deliver any check, draft, or order for th e paym ent
of money upon any bank or depository, knowing a t th e tim e of such
making, drawing, uttering, or delivery th a t th e m aker or drawer has
n o t sufficient funds in or credit with such bank or other depository
for th e paym ent of such check, d raft or order in full upon its presenta­
tion; or who after having m ade, u ttered or delivered any check, draft,
or other order for th e paym ent of money upon any bank or other
depository shall w ithdraw or cause to be w ithdraw n, th e money or
an y p a rt thereof to th e credit of th e m aker of such d raft, check or
other order for th e paym ent of m oney w ithout leaving with such
bank or other depository a sum sufficient to cover such check, draft,
or other order for th e paym ent of money, shall be guilty of a mis­
dem eanor, if th e am ount of such check, d raft or order be under
T w enty Dollars, and if th e am ount of such check, d raft or order be
for T w enty Dollars or over, he shall be guilty of a felony. T he
making, drawing, u ttering or delivering of such check, draft, or ordOT
as aforesaid, shall be strong prim a facie evidence of in ten t to defraud.
C o lle c tio n s . Uniform Bank Collection Code as recommended by
American B ankers Association, see com plete tex t back of Laws.
C o n tr a c ts . 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
county seal, or the seal of a court, corporation, or notary to any
w riting has not. however, been dispensed with.
C o n v e y an ces. (See Acknowledgments.)
C o rp o ra tio n s . Form ed under the general laws for transaction or
any lawful business. Special regulations prescribed for foreign cor­
porations doing business in the S tate, and for banking, building and
man, tru st, insurance, and railroad companies. Cum ulative voting
for th e election of directors prescribed. Stockholders m guaranty
companies, investm ent companies and insurance companies are
liable equally and ratably, and n ot one for the other, for all con­
tracts an d liabilities of corporation, to extent of th e am ount of their
stock a t p ar value in addition to am ount of such stock; b u t per­
sons holding stock, as fiduciaries, are n ot personally liable, b u t estates
in their hands are in sam e m anner and to sam e extent as other stock­
holders, and no transfer of stock operates as a release, of any such
liability, l i s t i n g a t tim e of transfer, provided action to enforce
th e liability be commenced w ithin two years from tim e to the transfer.
For liability of stockholders in banks and tru st companies, see Banks,
supra. Articles acknowledged and recorded like deeds in county in
which principal place of business is situated, and a copy thereof filed
an d recorded in the office of th e secretary of S tate. A fter such filing
and recording, and paym ent to S tate of license tax of one-tenth of 1 per
cent on its capital stock, corporation is deemed organized; b u t, before
transacting business other th an w ith its own stockholders, a t least 50
per cent of stock m ust in good faith be subscribed, payable a t such
tim es as board of directors m ay require.
. . .
,,
„
Corporations, organized in K entucky m u st indem nify its officers
an d directors for liabilities incurred b y him or his estate arising o u t
of an y action in which he is m ade a p a rty by reason of his being or
having been an officer or director, except in relation to m atters where
he shall be adjudged to be liable for actual negligence in th e perform ­
ance of his duties as officer or director.
.
.
T he issue of no par value stock is perm itted where provided for in
th e articles and such stock is deemed fully paid when consideration
determ ined on by board of directors is paid. B u t for purposes of cor­
poration license or franchise taxes value is fixed a t $100.00.
All foreign corporations, except insurance companies which are now,
or hereafter shall be, authorized to do business in this sta te , m ust file
certified copies of their articles of incorporation and am endm ents
th ereto in Office of Sec. of S tate and pay a filing fee of $25.00 plus 25c
for each 100 words for recording sam e. Such corporation m ust on or
before Ju ly 1, 1941, and annually thereafter file a statem ent of exist­
ence w ith th e Sec. of S tate form as prescribed by him, and pay a fee
Agt. for serving process m ust be verified before Ju ly 1, 1941.
F©6 $1.00«

C o u rts." General civil and crim inal jurisdiction is vested in cir­
cuit courts which hold term s in each county as provided by sta tu te .
C re d its . A person who shall knowingly in person or through any
agency m ake any false statem ent in w riting with in ten t it shall be relied
upon, respecting his financial condition, or m eans or ability to pay,
for the purpose of procuring delivery of personal property, th e pay­
m ent of cash, th e m aking of a loan or credit, or extension of credit,
and procures upon faith thereof either or any of the things or benefits
m entioned, shall be guilty of a felony and upon conviction, shall
be confined in the penitentiary n ot less th an one nor more th an five
y6D ay s o f G ra c e . (See N otes and Bills of Exchange.)
D e p o s itio n s . Depositions m ay be taken in this sta te before an
examiner appointed b y a Judge of a circuit court, a Judge or Clerk of
th e court, Ju stice of th e Peace or N o tary Public. Depositions m ay
be taken o u t of th is s ta te before a Commissioner appointed by Gov­
ernor of th is sta te , or any other person empowered by a commission
issued to him by consent of th e parties or order of court; or before
a Judge of a court, a Justice of th e Peace, M ayor of th e city or N otary
Public.
I f deposition is taken on interrogatories, neither p a rty is
allowed to be present, either in person or by counsel. T he officer s
certificate m u st sta te when and where th e deposition was taken, th a t
th e witness was duly sworn before giving it and th a t it was w ritten and
subscribed b y him in officer’s presence, or was w ritten by officer in
presence of w itness and read to and subscribed by witness in presence
of officer, and th e parties present in person or by attorney.
D e s c e n t a n d D is tr ib u tio n of P ro p e rty . T he real estate of a
person dying in testate shall descend in parcenary to his kindred, male
or female, in th e following order, viz.: (1) T o his children and
th eir descendants; if none, then (2) to his father and m other equally
if both be living; if either be dead, th e whole estate descends to the
one living; if both be dead, then (3) to his brothers and sisters and
th eir descendants; if none, then (4) one m oiety of the estate shall
pass to th e paternal and th e other to the m aternal kindred, in the
following order: (5) to th e grandfather and grandm other, or which­
ever m ay be living; if both are dead, then (6) to uncles and aunts
a n d their descendants! if none, then (7) to great grandfather and
great grandm other, and so on In other cases w ithout end, passing
to th e nearest lineal ancestors and their descendants. (8) I f there
is no kindred to one of th e parents, the whole shall go to the kindred
of th e other. I f there is neither paternal nor m aternal kindred, the
whole shall go to the husband or wife of th e intestate, or if he or
she be dead, then to his or her kindred as if he or she had survived
the in testate and died entitled to th e estate. W hen any or all of a
class first entitled to take are dead, leaving descendants such descend­
an ts shall tak e per stirpes, th a t is to say, by representation, the shares
of their respective deceased parents. Collaterals of the half blood
shall Inherit only half as m uch as those of the whole blood. In making
title by descent, i t shall be no bar to a p arty th a t any ancestor,
through whom he derives his descent from th e intestate. Is or has
been an alien. B astard can inherit in the descending line only from
the m other and her kindred, and can transm it inheritance in the
descending line only to th e m other and her kindred.


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D ow er. (See H usband and Wife.)
E s c h e a ts . L and held by a corporation for more th an 5 years,
which is not proper and necessary to carrying on its legitim ate business
becomes subject to escheat. Land held by a non-resident alien for
m ore th a n 8 years becomes subject to escheat. (See unclaim ed Bank
Deposits.)
.
.
D em and Bank deposits are deem ed abandoned if no com m unication
received thereto for 10 years. N on-dem and deposits, 25 years.
E x ecu tio n s m ay Issue upon judgm ent any time until collection of
It is barred by lim itation, b ut no execution shall issue on any Judg­
m ent, unless ordered by the court, until after ten days from rendition.
Execution constitutes lien on property of debtor from tim e it reaches
hands of Droper officer. Provided th a t such lien shall be void as to a
purchaser for value w ithout notice unless and until notice of such exe­
cution shall be filed in the office of the C ounty Clerk. Execution m ay
be replevied for three m onths, any tim e before sale under same, by
defendant giving to th e officer an obligation (replevin bond) payable to
plaintiff, w ith good security for th e am ount thereof, interest and costs.
A judgm ent to enforce a lien cannot be replevied. No replevy allowed
upon judgm ent against any collecting officer, attorney a t law, or
agent, for a delinquency or default in executing or fulfilling duties
of his office or place, or for failing to pay over money collected by
him in such capacity, nor against a principal by his surety, nor upon
a debt due by obligation having the force of a judgm ent, nor upon
judgm ent for specific property, or for th e property or its value. If
land sold does n ot bring tw o-thirds of appraiser’s valuation, defend­
a n t and his representatives have right to redeem within a year from
the day of sale, by paying purchaser or his representatives original
purchase money and ten per centum per annum interest. L and in
which the execution defendant has a legal or equitable title or a con­
tingent rem ainder, a defeasible fee, m ay be taken and sold under
execution.
E x e m p tio n s . The following property of persons with a family
resident in this Commonwealth, shall be exem pt from execution,
attachm ent, distress, or fee bill, nam ely: Two work beasts, or one
work beast and one yoke of oxen; two plows and gear; one wagon
and set of gear, or cart or dray; two axes, three hoes,, one spade, one
shovel; two cows and calves; beds, bedding and furniture sufficient
for family use; one loom and spinning wheel and pair of cards; all
the spun yarn and m anufactured cloth m anufactured by th e family
necessary for fam ily use; carpeting for all fam ily rooms In use; one
table; all books not to exceed seventy-five dollars in value; two
saddles and their appendages: two bridles; six chairs; or so many
as shall n ot exceed ten dollars in value; one cradle; poultry on hand
n ot to^exceed one hundred dollars in value; ten head of sheep, n o t to
exceed twenty-five dollars in value; all wearing apparel; sufficient pro­
visions, including breadstuff and anim al food to sustain th e 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 n ot on
hand, such other property as shall n ot 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
stove and appendages, and other cooking utensils n o t to exceed in
value twenty-five dollars; ninety per centum of th e salary, wages, or
income earned by labor, of every person earning a salary, wages, or
income of seventy-five dollars or less per m onth, provided th a t the
lien created by service of garnishm ent, execution, or attachm ent, shall
only affect ten per centum of such salary, wages, or income, earned a t
the tim e of service of process; of th e salary, wages, or income earned
by labor, of every person earning a salary, wages or income in excess
of seventy-five dollars per m onth, sixty-seven and one-half dollars per
m onth and no m ore shall be exem pt.
Tools of a mechanic, not exceeding one hundred dollars in value
libraries of m inisters of the Gospel, professional libraries of lawyers
professional libraries and instrum ents of physicians and surgeons, not
to exceed In value five hundred dollars. In addition tp personal
property there Is for actual bona fide housekeepers w ith a family
resident in this Commonwealth a hom estead exemption of so much
iunrt including the dwelling house and appurtenances owned by
debtor as shall not exceed in value one thousand dollars. This
does not extend to a m ortgage on or purchase money due for th e land
or for debts or liability existing prior to th e purchase of th e land, or
of the erection of the im provem ents thereon.
Personal property or money on hand or in bank to the am ount of
$750.00 shall be exem pt from distribution and sale and shall be set
ap a rt by th e appraisers of the estate of an in testate to his widow and
infant children, o r ,if no widow, to his infant children or child surviving
him. T he appraisers shall sta te in their appraisem ent th e money or
th e articles and value of each set a p art by th em to th e widow, or in­
fants, separately to th e articles appraised for sale, b u t if th e widow be
present a t th e tim e of th e appraisem ent, or any one authorized by her in
writing, she m ay m ake her selection out of the property appraised to
th e am ount of said $750.00 and said appraisers sh all so report. These
provisions also apply to cases where th e husband dies testate, ana
th e widow renounces th e provisions of th e will in th e tim e prescribed
byH oU days. T he legal holidays are: Sundays; Jan u ary 1 (New
Y ear’s D ay); Ja n u ary 19 (Robert E . Lee’s b irth d a y ); F ebruary 12
(Lincoln’s birthday); F ebruary 22 (W ashington s b irth d a y ); M ay 30
(M emorial D ay); June 3 (Confederate M em orial D ay); Ju ly 4 (Inde­
pendence D a y ); th e first M onday in Septem ber (Labor D a y ); Octo­
ber 12 (Columbus D ay); Novem ber 11 (Armistice D ay)¡ Thanksgiving
D ay and all days appointed by President of th e U nited S tates or by
th e Governor of this S tate as of days of fasting and Thanksgiving;
and December 25 (Christm as D ay). All such legal holidays shall
be treated as Sunday. If any of those days nam ed as holidays shall
occur on Sunday, th e next day thereafter shall be observed a s a holiday.
T he observance of all H olidays other th a n Independence D ay, Labor
D ay and C hristm as D ay are suspended during th e continuation or
hostilities. A t th e end of hostilities th e governor shall issue a pro­
clam ation so declaring and thereupon th e holidays now provided by
law shall again be observed.
.
,
, .
. _
H u s b a n d a n d W ife. M arriage gives to th e husband during
th e life of th e wife no interest in any of th e wife’s property. She
has full power to contract and to bind herself an d her property,
except th a t she can not bind herself to answer for th e debt, default,
misdoing of another, except as to property set a p art for th a t pinpose by m ortgage. She m ay sell and dispose of personal property
as if unm arried, b u t m ay not sell or convey real estate unless her
husband unites in th e contract, or Conveyance unless empowered
to do so by decree of court, in case of insanity, conviction or felony,
or abandonm ent by the husband. A fter th e death of either husband
or wife the survivor shall have a life estate in one-third of all tne
realty of which the decedent was seized in fee simple during the
coverture unless such right shall have been forfeited or relinquished.
Such survivor has also absolute title to one-half th e personality
of th e decedent left after th e paym ent of debts. Abandonment
and living in adultery by either p arty , or divorce works a forfeiture
of these rights.
,
. „
J
__
i n t e r e s t . The lawful rate of interest is 6 per centum per annum,
and contracts for a greater rate are void as to the excess of interest.
The C ourt of Appeals has refused repeatedly to allow attorneys fees
to be collected. U nder Sections 883 i-14, etc., a com pany engaged in
m aking loans of $300.00 or less m ay obtain a license from th e Director
of Division of B anking and legally charge 3 H % per m onth on th e un­
paid balance, on loans of less th a n $150.00, and 2 % per m onth on un­
paid balance on loans of more th a n $150.00 n ot exceeding $300.00.
j u d g m e n t s . A judgm ent does not constitute a lien on property
in this S tate. All judgm ents bear interest from their dates. Judg­
m ent can be kep t alive for 15 years additional by having execution
issued a t any tim e w ithin 15 years after date of judgm ent, (see
Executions and Lim itations.)
L im ita tio n s .
The following are th e periods within which actions
m ust be brought, the tim e commencing to run from th e accrual oi
the cause of action. F ifteen years: Actions t o recover real property.

2019

BANKING AND COMMERCIAL LAWS—LOUISIANA
actions upon judgm ents and w ritten contracts, except negotiable
instrum ents actually negotiated. Seven years: Actions by senior
patentees against junior patentees, who have held possession for seven
years. Five years: Actions upon m erchants’ accounts for goods sold;
actions upon verbal contracts; upon a liability created by sta tu te;
actions for trespass to real or personal property or for damages for
withholding same; for the specific recovery of personal property;
actions upon negotiable instrum ents, though as to the m akers of an
undiscounted note it is fifteen years and as to sureties seven years;
actions upon accounts between m erchants, and actions for relief from
fraud or m istake and all other actions not arising on contracts and not
included in th e 1 an d 2 year statu tes. One year: Actions for injury
to person or character and for breach of promise of m arriage.
M e rc h a n d is e i n B u lk . W hen any one who shall buy any stock
of goods in bulk or fixtures before he shall deliver to the vendor the
purchase price or any promissory note therefor shall obtain from the
vendor a verified w ritten statem ent of all the creditors of the vendor
together w ith their addresses and the am ount of indebtedness due
to each, also an accurate inventory of th e stock or fixtures to be
purchased and m aking it th e d u ty of the vendor to furnish such
statem en t under oath. Upon receiving such a statem ent th e pur­
chaser shall notify, personally or by registered mail, each of the
creditors of said vendor as appears on th e list, of th e proposed sale,
th e price to be paid therefor, the conditions of the sale and a copy of
th e statem en t furnished by th e vendor. This notice shall be given
or sent a t least ten days before th e com pletion of th e sale. I f any such
purchaser fails to obtain a verified statem ent from the vendor or to
give th e notice to th e creditors as above or to see th a t th e proceeds
of th e sale are p rorated am ong creditors according to dignity of their
claims th en such sale or transfer shall be fraudulent and void and
shall operate as a general assignm ent for the benefit of the creditors
of th e vendor and th e purchaser shall a t the suit or option of the
creditor be held liable to th e creditors for the fair value of all property
so bought or sold, provided, however, such su it m ust be brought
within four m onths.
N eg o tia b le I n s t r u m e n t s . T he Uniform Negotiable Instrum ents
Law was approved M arch 24, 1904. (See complete tex t following
“ Digest of Banking and Commercial Laws.”)
N o tes a n d B ills of E x c h a n g e . The uniform negotiable instru­
m ents law was approved M arch 24, 1904.' Section 1 declares th a t an
Instrum ent to be negotiable m ust conform to the following require­
ments. (1) I t m ust be in writing and signed by the m aker 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 dem and, or
a t a fixed or determ inable future tim e. (4) M ust be payable to the
order of a specified person or to bearer. (5) Where the instrum ent
Is addressed to a drawee, he m ust be nam ed or otherwise indicated
therein w ith reasonable certainty. Days of grace are abolished.
The signature of any p arty m ay be m ade by an agent duly authorized
in writing thus differing from the uniform negotiable instrum ents
law as enacted elsewhere. Every negotiable instrum ent is payable
a t the tim e fixed therein; when the day of m aturity falls upon Sunday,
or a holiday, th e instrum ent is payable on the next succeeding business
day. T he N egotiable Instrum ents Law has been am ended and
enlarged by Acts of 1930 which should be consulted by those interested.
P o w ers o f A tto rn e y . Powers of attorney to convey or release real
or personal property m ay be acknowledged, proved and recorded in the
proper office in th e m anner prescribed for recording conveyances. If
the conveyance m ade under a power is required by law to be recorded
or lodged for record to m ake the same valid against creditors and pur­
chasers. then th e power m ust be lodged or recorded in like m anner.
P ro te s t. W here any negotiable instrum ent has been dishonored
It m ay be protested for non-acceptance or non-paym ent as the case
may be; b u t p rotest is not required, except in the case of foreign bills
of exchange. I t is the safer practice to protest in an cases, because
In all cases notice of dishonor is necessary to charge parties secondarily
liable.
S ales. On M arch 24,1928 the uniform sales act drawn by Professor
W illiston was enacted w ithout change from the original as drawn by
Professor W illiston.
T axes. S tate and C ounty taxes are due on M arch 1st annually
unless otherwise provided. Assessments are m ade by the sta te and
counties as of Ju ly 1st in each year for taxes for the following year.
The Sheriff is collector of state, county and school district taxes.
M unicipalities select their own collector.
M unicipal taxes are due a t different dates as m ay be fixed by the
municipal government.
All taxes on real estate are a lien thereon from th e date of assessment.
T he sta te gasoline tax is 5 cents per gallon.
T he sta te has an income and an inheritance tax.
U n c la im e d B a n k D e p o sits. E very bank organized under the
laws of K entucky or doing business under any law of K entucky, m ust
annually, in Jan u ary, publish in a t least tw o issues of a newspaper
published in th e C ounty in which th e bank is located, a statem ent
under oath o f its Cashier, of all deposits m ade w ith it and of all the
dividends and interest declared and payable by it which, a t th e date
of such 'statem en t shall have rem ained unclaimed by any person
authorized to receive th e sam e for five years, giving th e tim e when,
and th e nam e of, th e person by whom th e deposit was m ade and the
nam e of the'person in whose favor th e dividend or interest was declared
and when and from w hat source derived. I t is th e d u ty of all sta te
and n ational banks and all other bailees of property to report annually
in duplicate to th e D epartm ent of Revenue as of Ju ly 1st all property
held b y them declared by this Act to be presum ed abandoned. T he
report shall be filed on or before September 1st of each year for th e
preceding Ju ly 1st and give th e nam e of th e owner, h is5last known
address, am ount an d kind of property and such other inform ation as
th e D epartm ent shall require. P roperty held by any person for th e
benefit of another shall be presum ed abandoned unless claimed by
beneficiary or person entitled thereto w ithin 10 years. Person m aking
such rep o rt required to tu r n over property to D epartm ent of Revenue
between N ovem ber 1st and 15th. (See escheat).
W ills. Any person of sound m ind and over twenty-one years of
age m ay m ake a will. Wills m ust be in writing with the nam e of
the testa to r subscribed thereto either by himself or by some other
person in his presence and by his direction. If not wholly w ritten
by th e testato r the subscription m ust be m ade or the will acknowledged
by the testato r in the presence of two witnesses, who shall subscribe
their nam es in th e presence of the testator. The will of a person
domiciled out of th is S tate is valid as to personalty, if executed accord­
ing to th e law of th e domicile; b u t to be valid as to lands, it m ust be
executed as required by the law of this State. The county court
has exclusive original jurisdiction over the Drobate of wills. Holo­
graphic wills are valid if entirely w ritten, signed and dated in th e
testa to r’s own hand.

SYNOPSIS OF

THE LAW S OF LOUISIANA
RELATING TO

BANKING AND COMMERCIAL USAGES
Revised by M e s s r s . S c h w a r z , G u s t e , B a r n e t t & R e d m a n n
A ttorneys a t Law, Canal Bldg., New Orleans.
(See Card in A ttorneys’ List.)
A c c o u n ts . (See Acknowledgments.) .
A c k n o w le d g m e n ts . The uniform foreign (Act 154 of 1916), and
domestic (Act 226 of 1920) acknowledgment laws have been adopted.
Acknowledgments m ay be taken within the state by a notary
public or by a recording officer.
Acknowledgments m ay be .taken in the United States, outside of
the state, b y any judge, justice of the peace, notary, commissioner for
Louisiana, or by any officer authorized to take acknowledgments
where he acts.
, .
Acknowledgments m ay be taken in foreign countries by any am ­


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bassador, m inister, envoy or charge d ’affairs of the U nited States, in
the country to which he is accredited, or before any officer of the
U nited States, a notary public, or a commissioner or other agent of
Louisiana authorized to take acknowledgments, if such officers, have
an official seal, and are commissioned or accredited to act where the
acknowledgment is taken.
Any commissioned officer of the arm y or navy of the U nited States
is authorized to take acknowledgments in any foreign country in which
he m ay be serving. (Act 192 of 1918.)
All acknowledgments taken within the United States m ust be
witnessed by two witnesses over the age of fourteen years, who m ust
subscribe the certificate of acknowledgment. I f the p arty making
acknowledgment be blind, three witnesses are required. W itnesses
are n ot necessary when acknowledgments are taken outside of the
U nited States. The officer taking the acknowledgment m u st not act
as a witness. While a female m ay act as a witness, th is is of doubtful
advisability.
. . .
T
T he acknowledgment of a m arried woman m ay be taken as though
■he were single, separate exam ination being unnecessary.
No authentication is required of certificates of acknowledgments
taken in the state, or taken in foreign countries, or taken in th e United
S tates by notaries public, or commissioners for Louisiana, under their
official seals. Certificates of acknowledgm ents taken in th e U nited
S tates before other officers m u st be authenticated by a certificate of
a secretary of state as to the capacity of the officer.
A uthentication for use out of th e sta te m ay 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 tio n s . Commenced by petition setting forth cause of action,
articulated in num bered paragraphs, signed by plaintiff or his attorney
and duly sworn to. Plaintiff m ust give resident security for costs or
m ake deposit to cover sam e if dem anded. (See Act 300 of 1914
regulating pleadings and practice as am ended by a ct 27 of 1926.)
After filing of petition, defendant is cited to appear ten days after re­
ceipt of citation in D istrict C ourts and Justice of Peace courts outside
of city of New Orleans. One day additional for every ten miles bis
residence is d istan t from court. D elay in no case to exceed fifteen days.
In city courts of New Orleans, defendant m ust appear three days after
receipt of citation. N either day of service nor day on which answer
m ust be filed is included in delay. I f defendant fails to appear, judge­
m ent by default is rendered against him . In district courts such judge­
m ent is confirmed two judical days after prelim inary entry of default.
In Justice of Peace courts judgm ent of default is confirmed th e same
day as th a t on which default is entered.
A d m in is tr a tio n of E s ta te s by executors, adm inistrators, or tutors
who are ex-officio adm inistrators—also by dative executors— where
there is no heir present or agent of heir, public adm inistrator takes
charge in New Orleans. A non-resident executor of a will m ust in all
cases give bond; a resident need n ot unless required by creditors.
Adm inistrators and executors of other states m ust open succession of
deceased in the courts of this S tate, and be recognized as such here
before they can sue or be sued or transfer property in this S tate. Stock
in local corporations m ay be transferred by non-resident executors,
etc., w ithout the necessity of securing an order from the local court, but
no transfer chn be m ade until the Inheritance tax Is adjusted. No
debts can be paid by adm inistrator w ithout authorization of probate
court. T he adm inistrator or executor presents to the court an
account or tableau of distribution setting forth the paym ents and
disbursem ents he proposes to m ake. P arties interested are notified
by publication to’show cause w ithin te n days why the account so filed
should not be approved. Any p arty interested m ay oppose the
account by opposition in writing a t any tim e w ithin th e said ten days
In absence of opposition account is hom ologated upon production of
satisfactory evidence by adm inistrator or executor, and the funds
ordered distributed in accordance therew ith.
Claims against estates should be presented in writing to the ad m in ­
istrato r or executor. Should he approve the same in writing, no
further action is required except to see th a t the claim is placed upon
his account when filed. Should he decline to recognize th e claim,
creditor m ay file suit against succession representative and obtain a
Judgm ent to be paid' in ordinary course of adm inistration. If there
is no danger of prescription, creditor m ay aw ait filing of account and
then oppose sam e if claim is not included.
A ffidavits. (See Acknowledgments.)
§5 * ,
A liens. No alien who is ineligible to citizenship of th e U nited
States m ay hold land or any real right. Aliens m ay not v o te ..
A r b itra tio n . Agreem ents to subm it to arb itratio n recognized by
law. “ L ouisiana A rb itratio n a c t” adopted A ct 262 of 1928. Arbi­
trato rs m ust be sworn, otherwise decision is n ot binding. S tate board
of arbitration of labor troubles established. [Act 139 of 1894.]
A ssig n m e n ts a n d In so lv e n c y . S tate Insolvent laws superseded
by N ational B ankruptcy act.
A t ta c h m e n t. W rits of attach m en t issue on application of credi­
tor, under o ath, when debtor about perm anently leaving sta te , w ithout
possibility in ordinary course of obtaining or executing judgm ent
previous to departure, or when such debtor has already left sta te
perm anently, when th e debtor resides out of th e sta te ; 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 some p a rt thereof, w ith in ten t to defraud
his creditors or give an unfair preference to some of them : and when
he has converted, or is about to convert, his property into money
or evidences of deb t w ith in ten t to place it beyond th e reach of his
creditors, o r, if d eb t n ot due. is about to remove his property out
of th e State. C reditor m ust furnish bond equal to th e am ount claimed
to he due. with a t least one solvent surety, residing within th e juris­
diction of th e court, conditioned for paym ent to any p arty injured by
Issuance of w rit of all dam ages sustained by him in case It is decided
th a t th e attachm ent was wrongfully obtained. (Act 119 of 1916).
Bond for $250 is sufficient if debtor resides outside of sta te b u t bond
m ay be increased to am ount of claim upon order of court a t dem and
of debtor. G arnishm ent m ay be had as an accessory either to a writ,
of attachm ent or fieri facias A ttachm ent m ay now issue for an offense,
quasi offense or to rt if defendant is non-resident (Act 215 of 1920).
B a n k s . Capital Stock and Surplus Requirements. Savings banks
m ust have a capital stock of $30,000.00, all fully paid, in tbw ns of
less th an 15,000 population; or $50,000.00 in tow ns of more th an
15,000 population, and less th a n 30,000 population; or $100,000.00 in
towns of more th a n 30,000 population. Corporations carrying on
general banking business m ust have capital of $25,000.00 in tow ns of
less th a n 3,000 population; or $50,000.00 in towns of more th an 3,000
population and less th a n 30,000 population; or $100,000.00 in towns
of more th an 30,000 population. Surplus of all banks m ust be 50%
of th e capital stock.
Reserve. A cash reserve of 20% of th e dem and deposits is required,
4% to be k ep t on th e premises or on deposit in th e Federal Reserve
Bank in cash. F or th e rem ainder òf th e liabilities for dem and depos­
its, an am ount equal thereto in discounted paper or bonds, stocks,
etc., should be m aintained as reserve.
Incorporators. N o t less th a n seven persons are required to form
a corporation for th e purpose of carrying on generai banking business.
N o t less th an five persons m ay form a savings or tru st bank.
Directors. T here m ust be a board of directors of n ot less th an five,
nor more th a n 30 mem bers, th e m ajority of whom m ust be citizens
of Louisiana, owning a t least $100.00 of stock.
Supervision— E xam ination and Reports. A S tate Bank Commis­
sioner is appointed by, th e Governor w ith th e consent of th e Senate,
who examines th e banks twice each year, and reports thereon to the
Legislature a t th e com m encem ent of each session. In addition all
banks m ust file sworn reports w ith Commissioner four tim es each year.
Loan Limitations. Loans cannot be m ade to one borrower for
more th a n 20% of th e b an k ’s capital stock and declared surplus.
However, loans secured b y good collateral m ay be m ade to one bor­
rower for one-half of th è capital and declared surplus, and loans to
one borrower of an am ount not greater th a n th e capital and declared

jgy

2020

BANKING AND COMMERCIAL LAWS—LOUISIANA

surplus m ay be m ade when the loan is s ecured by th e pledge of obliga­
tions of th e U. S. or of th e S tate of Louisiana. Loans to any em­
ployees are prohibited.
,
K inds of Banks. Companies organized under th e banking laws
of th is sta te consist of banks of deposit, discount, exchange and circu­
lation, savings banks, safe deposit and tru st banks.
Branch Banks. N o banking association or savings bank with
capital stock of less th an $50,000 capital m ay locate or operate branch
offices. T he to ta l num ber of branch banks perm itted any one bank is
determ ined according to a scale dependent upon th e capital of the bank.
Stockholder's Liability. No stockholder is liable for more th an the
unpaid portion of the original purchase price of his stock. Act No. 180
of 1934 authorizes banks of th is S tate to contract for Federal Deposit
Insurance. T he act further provides th a t upon assuming the powers
of receiver or liquidator of a bank in this S tate, the Federal Deposit
Insurance Corporation shall have the. right and power to enforce the
individual liability, under th e laws of this State, of each stockholder
of any such banking institution, when it ascertains th a t th e assets
thereof will be insufficient to pay its debts and liabilities.
C h a tte l M o rtg a g e s. As provided by Act 198 of 1918, as am ended,
any kind of m ovable property m ay be m ortgaged for debts, for money
loaned, fu tu re advances or to guarantee contractual obligations.
T he act of m ortgage m ay be passed before a N otary Public and two
witnesses, or by private Act duly acknowledged by one of the parties
thereto or a witness before a N otary Public (If acknowledged by
witness no rig ht of executory process), and m ust be recored in Parish
where p ro p erty is situated and parish where m ortgagor resides in
order to affect th ird persons w ithout notice. C hattel so m ortgaged
cannot be transferred from one parish of th e S tate into another w ith­
o ut w ritten consent of mortgagee. Inscription of chattel mortgage
m ust be renewed within five years.
C o lla te ra ls m ust be delivered to be effectual. Act 9 of 1914
m akes it a felony for a custom er of bank to wrongfully dispose of
collateral security pledged to bank. Uniform Bills of Lading law
obtains. \ (Act 94 of 1912.)
C o n d itio n a l S ale. Act 119 of 1918 m akes lawful a conditional
sale of tan k cars providing for retaking of car by conditional vendor
w ithout right of redem ption being given to vendee, all paym ents of
such d ate of retaking being forfeited. Act 111 of 1894 provides for
conditional sale of railway equipm ent. Other conditional sales of
m ovable property are ineffective as between the parties or Innocent
third persons.
_
,
C o n v e y an ces. All agreem ents affecting real property m ust be
in writing, and transfers and mortgages, etc., m ust be recorded in
th e place where the property is situated to affect the rights of third
persons. D eeds are m ade under private signature or by act passed
before a n o tary public in the presence of two witnesses. Both vendor
and Vendee sign, though signature of vendee is not essential, as any
act of acceptance will answer. T he notary in P arish of Orleans pre­
serves th e originals of deeds passed before him and certified copies
given by him are received as evidence in th e courts. E very notarial
deed should contain (1) date of a ct and place where it was passed, (2)
names and surnam es and qualities of contracting parties, (3) descrip­
tion of th e property, etc., (4) price of transfer and term s and conditions.
(5) T he m arital statu s, of all parties m ust be given. M arried women
m ay now dispose of separate property without authorization of husband
or court. T he husband acts alone In th e sale of com m unity property;
th e signature of th e wife being unnecessary. E ither husband or wife.
If husband refuses to do so, m ay designate fam ily home by registration.
If so designated, wife’s signature necessary to pass title.
C o rp o ra tio n s . Any num ber of persons, exceeding six, m ay form
themselves into corporations for literary, scientific, religious, and
charitable purposes; for works of public im provement, and generally
all works of public u tility and advantage; and any num ber of persons,
not less th an three, m ay form them selves into a corporation for the
purpose of carrying on m echanical, mining, or m anufacturing business,
except distilling or m anufacturing intoxicating liquors, with a capita)
not less th an $5,000 or more th an $1,000,000. Any num ber of per­
sons n ot less th an three, m ay form them selves into a corporation on
complying with th e general corporation laws, ror cue purpose of carry­
ing on any lawful business or enterprise not otherwise specially pro­
vided for, except banking and insurance, hom estead and building
and loan associations. By act 250 of 1928 th e corporation law of
Louisiana has been largely revised, generally along th e lines of the
uniform corporation law b u t with distinctive features. The act is
effective as from Jan u ary 1st, 1929. T he legislature can not pass a
special act conferring corporate powers. C orporation com m itting a
trespass or dam age m ay be sued a t place where it occurred. [Act 130
of 1926.] (See Act 154 of 1902 for form ation of corporations for works
of public im provem ent.) Act 120 of 1902 provides for organization,
etc., of local and foreign building and loan or hom estead associations.
No corporation can declare dividends out of its capital stock. Annual
m eetings of corporations m ay be held anywhere within or w ithout
th e sta te .
,
§ t
.
Foreign Corporations m ay be licensed and taxed by a mode differ­
ent from th a t provided for home corporations. No dom estic or for­
eign corporations shall do any business in this S tate without having
one or more known places of business and an authorized agent or
agents in th e S tate upon whom process m ay be served. All corpora­
tions (except m ercantile corporations) domiciled out of the State and
doing business in th e S tate in default of filing w ith the secretary of
state a declaration of the place of its locality or domicile together with
a resolution authorizing the appointm ent of an agent together with
a power of attorney appointing an agent in the S tate upon whom
service of process m ay be made, m ay be sued upon any cause of action
in any parish where the right of action arises and such corporation
m ust show its principal place of business and the places of business
it proposes to have in Louisiana.
Foreign corporations m ust flie in office of secretary of sta te a w ritten
declaration setting forth and containing the place or locality of it®
domicile, th e places in the S tate where it is doing business, and the
name of its agent or other officer in this S tate upon whom process may
be served. (Act 54 of 1904 am ended by Act 284 of 1908. Act 284
of 1908 am ended by Act 243 of 1912. See Act 194 of 1912.) Act 107
Of 1922 requires foreign corporations doing business in this sta te to
pay a tax of one-tw entieth of 1 per cent on the am ount of the capital
stock employed in this state. Act to operate prospectively only.
Foreign Corporations are denied th e right to sue in th e courts of this
sta te unless qualified to do business herein. (Act 27 of 3rd E xtra
Session of 1935.)
.
,f
As to non trading corporations, see Act 259 of 1914.
Act No. 16 of 1934 provides for th e cancellation of the charter of
any corporation failing to m ake any report or pay any tax as „Pro­
vided by law. Act No. 18 of 1934, as am ended by Act No. 25 of the
F irst E x tra Session of 1934, provides for th e levying of a franchise,
tax on corporations doing business in this state, and provides for
annual rep o rt by them . Acts Nos. 12 and 23 of the T hird E xtra
Session of 1934 provide th a t dom estic and foreign corporations are
required to keep detailed books showing stock, ownership, transfers
of stock, assets, liabilities, and business transaction in Louisiana.
C o u rts . T erm s and Jurisdiction. In parishes other th an Orleans;
Justices’ courts, concurrent w ith D istrict courts up to $100. 2.
D istrict courts, concurrent w ith justices’ courts* up to $100, exclusive
for all civil m atters over $100, and in all probate m atters and appellate
jurisdiction in all civil m atters in justices' courts. In Orleans Darish,
1 C ity courts, exclusive up to $100. C oncurrent w ith Civil D istrict
court from $100 to $300. 2. Civil D istrict court, concurrent up to
$300, exclusive over $300. Justices and city courts open a t all times.
In parishes other th an Orleans, district courts shall hold continuous
sessions during ten m onths of the year. In parish of Orleans, civil
district court sits during 9 and H m onths of the year, b ut shall remain
open on all legal days during th e whole year for granting interlocutory
orders issuing writs, trials of rules to quash same, trying proceedings
instituted or on appeal therein by a landlord for the possession of
leased property, partition proceedings, and for such special probate


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and insolvency business, as th e courts en banc m ay by rule determ ine.
On all am ounts up to $2,000 Inclusive, and m suits ror dam ages or
death caused by wrongful injury, an appeal m ay be taken to the
court of appeals, from the city and district courts respectively, and
on all am ounts over $2,000, except suits for damages or death caused
by wrongful injury, to the sta te suprem e court. An appeal lies on
both law and facts. Appeals from the city courts shall be tried de
novo, except suits for am ounts between $100 and $300.
D ays o f G race. Abolished.
D ep o sitio n s. To take testim ony of witness residing out of parish
or S tate it is necessary to file m otion duly sworn to showing non-resi­
dence and m ateriality of evidence. W ritten interrogatories are pre­
pared and served on opposite party, or his counsel, who has three days
to which to cross. Commission then issues, directed to some proper
officer, w ith interrogatories and cross interrogatories annexed, who
m ust cause witness to appear before him to answer under oath the
direct and the cross Interrogatories. He should reduce answer to
writing, read same to witness and cause witness to sign same. The
officer then prepares a process verbal of the whole, attaches it to the
commission, interrogatories, etc., and should return same to the court
issuing the commission w ithin the tim e fixed therein for taking the
deposition. The deposition of a fugitive f rom justice is not admissible
in evidence. (Also see Act 176 of 1910 and 98 of 1926.) The uniform
foreign depositions act has been adopted (Act 34 of 1922).
An additional method of taking depositions of witnesses residing out
of th e parish, b ut in th e state, or residing out of the sta te is provided
by Act No. 143 of 1934.
D escen t. If one dies leaving no descendants, but a father and
m other and a brother and sister, or descendants of these last, the
succession is divided into two equal parts, one goes to father and
mother, the other to brothers and sisters or their descendants. If
either father or m other of deceased dies before him, the portion which
would have been inherited by such deceased parent goes to thebrothers and sisters of the deceased, or tneir descendants. If deceased
left neither descendants nor brothers nor sisters, nor descendants from
them , nor father nor m other, but only other ascendants, th ey inherit
to the exclusion of all collaterals. If ascendants to paternal and
m aternal lines are all of th e same decree, the estate is divided into
tw o parts, one goes to ascendants on the paternal and th e other to
ascendants on the m aternal side. If there is in the nearest degree
b u t one ascendant in the two lines such ascendant excludes all other
ascendants of a more rem ote degree If one dies leaving no descen­
dants, and his father and m other survive, his brothers and sisters,
or their descendants, take half of his estate. If the father or m other
only survive, brothers and sisters, or their descendants, take threefourths. If one dies leaving no descendants nor fath er nor m other,
his brothers and sisters, or their descendants, take all the estate.
T he partition of th e half and three-quarters, or th e whole of th e suc­
cession falling to brothers and sisters, as above set forth, is m ade in
equal portions, if th ey are of th e sam e m arriage; if they are of different
m arriages, th e succession is equally divided between th e paternal and
th e m aternal lines of th e deceased, the Germ aine brothers and sisters
taking p art in th e tw o lines, th e paternal and m aternal brothers and
sisters each in their respective lines only; if there are brothers and sis­
ters on one side only, th ey inherit th e whole succession to th e exclusion
of all other relations of the other line. I f deceased died w ithout 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 th e others. W hen the deceased has
left neither lawful descendants nor law ful'ascendants, nor collateral
relations, the law calls to his inheritance either th e surviving husband or
wife, or his or her natural children, or th e S tate. If natu ral m other
left no lawful children or descendants, her n atu ral children, acknowl­
edged by her, inherit to th e exclusion of her father and m other and
other ascendants or collaterals of lawful kindred. N atu ral children
inherit from their natural father, who has acknowledged them , when he
has left no descendants nor ascendants, nor collateral relations, nor
surviving wife, and to the exclusion only of the S tate. Donations
Inter vivos or m ortis causa cannot exceed tw o-thirds of the property
of the disposer if he leaves a t bis decease a legitim ate child, one-hair
If he leaves two children, and one-third if he leaves three or more.
If he leaves no descendants but a m other or father or both, cannot
exceed tw o-thirds. T he rem aining half, th ird or fourth, as th e case
m ay be is th e legitime of th e child or children and fath er and for
m other. T ax: To descendants, etc., 2 per cent from $5,000 to
$20,000, 3 per cent above $20,000. To collaterals, 5 per cent on
$1,000 to $20,000, 7 per cent above $20.000. To strangers 5 per
cent from $500 to $5,000, 10 per cent above $5,000. Exem 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 w ithin th e sta te are exempt.
B. C. C. 915 am ended to read, “ W hen either husband or wife shall
die, leaving neither a father nor m other nor descendants, and with­
out having disposed by last will and testam ent of his or her share
of the com m unity property, such undisposed of share shall be inherited
by the surviving spouse in full ownership. In th e event th e deceased
leave descendants his or her share in th e com m unity estate shall
be inherited by such descendants in th e m anner provided by law.
Should th e deceased leave no descendants, b u t a father and mother,
or either, then the share of th e deceased in th e com m unity estate
shall be divided in two equal portions, one of which shall go to the
father and m other or th e survivor of them , and th e other portion shall
go to th e surviving spouse.
„ , , ■
N ote: T his article controls com m unity property; for inheritance
of separate property by surviving spouse see above.
D ivorce. (See Separation from Bed and Board.)
D ow er. (See M arried Women.)
E m p lo y e rs L ia b ility A ct. T here is a general Em ployers Liability
Act in the S tate setting forth special compensation for various injuries.
E x ecu tio n - P ropertv taken under a writ of fieri facias m ust be
advertised and appraised, and can not be sold for less th an two-thirds
of the appraised value, until it has been re-advertised. Advertise­
m ents of movables three tim es in ten days—of real estate once *
week for th irty days. If tw o-thirds of appraised value is not bid,
property m ust be re-advertised for fifteen days, and sold on a credit
for twelve m onths for w hatever it will bring. T here is no redemption
of property sold under execution or mortgage. No stay of execution
Is given except on appeal, and execution m ay issue a t any tim e after
the delay for appealing suspensively has expired. Act 113 or 1906
authorizes sheriffs and constables to p u t purchaser of seized property
to possession. On proper petition the court can order an examination
of a judgm ent debtor as to his assets and liabilities. (Act 198 of 1924,)
E x e m p tio n s . To head of family, real estate if owned and occupied
as a residence, together with certain furniture, stock, implements,
provisions, etc., the property not to exceed $2,000, m eans or property
of wife deducted from exem ption of husband. If the property exceed;
$2,000 in value, it m ay be sold. Beneficiary entitled to $2,000 of
proceeds. No registry required in parishes o th e r , th an Orleans.
Surviving spouse or minor child or children m ay claim benefit of true
exemption. Widow or minor children surviving, entitled to $1,000 out
of deceased h usband’s estate, if in necessitous circumstances, by pre­
ference over all other debts except those secured by vendor s privilege,
conventional, mortgage, and expenses incurred to selling th e property.
Sheriff or constable cannot seize linen and clothes belonging to debtor
or his Wife, nor his bed, bedding or bedstead, nor those of his family,
nor his arm s and m ilitary accoutrem ents, nor th e tools and instru­
m ents and books and sewing m achines, necessary for th e exercise of
his or her calling, trad e or profession by which he or she m akes a living;
nor shall he, in any case, seize rights of personal servitude, of use
and habitation, of usufruct to th e estate of a m inor child, nor the
income of dotal property, nor money due for salary of a Public Officer,
nor th e cooking stove and utensils of said stove, nor th e plates, dishes*
knives and forks, and spoons, nor th e dining table chairs, nor wash-

BANKING AND COMMERCIAL LAWS—LOUISIANA
tub, nor sm oothing irons and ironing furnaces nor fam ily portraits
belonging to debtor, nor m usical instrum ents played or practiced
on by any member of th e family, nor any poultry or fowls belonging
to debtor for fam ily use. Also proceeds of life, health and accident
insurance exempt, except for debt secured by pledge of policy or rights
under* policy. (Act 88 of 1916.)
In th e case of all other laborers, wage earners, artisans, mechanics,
engineers, firemen, carpenters, bricklayers, secretaries, bookkeepers,
clerks, employees on a commission basis, or employees of any nature
or kind w hatever, whether skilled or unskilled, 80% of th e wage,
salary, commission or other compensation thereof cannot be seized
or garnisheed, b u t only 20% of such com pensation shall be subject
to such seizure or garnishm ent, and in no case shall the seizure or
garnishm ent infringe upon a m inim um of $60 per m onth of such
salary, wage, commission or other com pensation, which said $60 per
month shall always be exem pt. (Act. 183 of 1932.)
Act No. 2 of th e Second E x tra Session of 1934 provides for th e relief
of debtors who are unable to m eet their obligations for th e tim e
being, by petitioning to. th e S tate Bank Commissioner who shall act
as th e D ebt M oratorium Commissioner, w ith th e power to suspend
all laws or' parts of laws relative to th e enforcement of public and
private debts, after notice and hearing to th e creditors. Extended
by Act 121 of 1938.
F ra u d . F raud vitiates of contracts. See Act 114 of 1912. Mis­
dem eanor to purchase goods, wares or m erchandise on credit and dis­
pose of sam e with intent to defraud and so forth. Unlawful to sell
stock of goods, wares, m erchandise and fixtures in bulk out of usual
course of business w ithout complying with “ bulk Sales L aw .” See
Act 270 of 1926.
G a r n is h m e n t. Wages earned out of this State and payable out
of this S tate, shall be exem pt from attachm ent or garnishm ent in ail
cases where cause of action arose out of this State, and it shall be the
duty of garnishees in such cases to plead such exemptions unless 4he
defendant is actually served w ith process. (Act 165 of 1904.) (See
A ttachm ent an d Exem ptions.)
H o lid ay s. T he legal holidays are; Sundays; January 1 (New Y ear’s
D a y ): Ja n u ary 8 (B attle of New O rleans); January 19 (Robert E.
Lee D ay); F ebruary 22 (W ashington’s birthday); Good Friday; M ay
30 (National M em orial D ay); June 3 (Confederate M em orial D ay);
Ju ly 4 (Independence D a y ); August 30 (Huey Long’s B irthday); the
first M onday in Septem ber (Labor D ay ); October 12 (Christopher Co­
lum bus D a y ); Novem ber 1 (All S aint’s D a y ); Novem ber 11 (Armistice
D a y ); Thanksgiving D ay; December 25 (Christm as D ay ); Inauguration
D ay in th e C ity of B aton Rouge. And every Saturday from 12 o’clock
noon u n til 12 o’clock m idnight, to be known as a half-holiday; and
in th e parishes of Orleans, St. Bernard, Jefferson, St. Charles and
St. John th e B ap tist and in all m unicipalities of the S tate of Louisiana
where th e governing authority of the sam e so declare by ordinance
duly adopted. M ardi Gras; and whenever January 1, January 8,
February 22, June 3, July 4, October 12, Novem ber 1, Novem ber -11
and December 25 fall on a Sunday, th e succeeding day shall be a legal
holiday; and all prom issory notes, bills of exchange and commercial
paper m aturing on Sunday, a legal holiday, or legal half-holiday,
which, by law or commercial usage, are required to be protested for
non-paym ent, shall be deemed to be, and shall be, due and payable
on th e first day, n o t a Sunday or legal holiday or legal half-holiday,
succeeding th e d ay of its m aturity; and in com puting the delay
allowed for giving notice of non-acceptance or non-paym ent of 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 th e day or days next succeeding the protest for nonacceptance or non-paym ent shall be days of public rest or legal holi­
days or legal half-holidays, then th e day next following shall be
com puted as th e first day after protest. Provided, however, for the
purpose of protecting or otherwise holding liable any p arty to any bill
of exchange, check or promissory note which shall not have been paid
before 12 o’clock noon on any half-holiday, a dem and or acceptance
or paym ent m ay be m ade, and notice of protest or dishonor thereof
m ay be given, on th e next succeeding secular or business day. Pro­
vided fu rth er, th a t nothing in this A ct shall in any m anner effect the
validity of th e paym ent, certification or acceptance of a check or other
negotiable instrum ent, or any other transaction, by a bank in this
S tate 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. Act 285 of
1940.
„
H u s b a n d a n d W ife. (See M arried Women.)
I n te r e s t. Legal rate Is 5 per cent, but 8 per cent m ay be agreed
upon in writing. If higher th an 8 per cent is charged, it is reducible
to 8 per cent. If paid, it m ay be sued for and recovered within two
years. 2 H % per m onth m ay be charged on loans of $300.00 and under.
(Small Loan A ct as am ended by 108 of 1940.)
J u d g m e n ts recorded in the office of the parish recorder become
mortgages from date of record upon all real estate of the debtor, and
m ay be thus recorded in any parish where debtor owns real estate.
T hey are valid for ten years, when they m ust be renewed
L ie n s o r P riv ileg es. T he following have special privileges, viz.:
1. Lessor's privilege. 2. Privilege of the creditor on the thing
pledged. 3. Privilege of a depositor on the price of a thing deposited.
4. Privilege for expenses incurred in preserving thing. 5. Privilege
of th e vendor of movable effects so long as they are in the possession
of the vendee. 6. Privilege of the innkepeer on the effects of the
traveler. Privileges resting upon immovables are as follows, viz.:
1. The vendor on the estate by him sold, for the paym ent of the
price or so milch of it as is unpaid, whether it was sold on or without
a credit. 2. Architects, undertakers, bricklayers, painters, m aster
builders, contractors, sub-contractors, journeym en, laborers, cartmen, and other workmen employed in constructing, rebuilding, or
repairing houses, buildings, or making other works. 3. Those who
have supplied th e owner or other person employed_ by the owner,
his agent, or sub-contractor, w ith m aterials of any kind for the con­
struction or repair of an edifice or other work, when such m aterials
have been used in the erection or'repair of such houses or other works.
(Art. 3252.) Privilege on crops to be recorded (Act of 1890.) The
vendor of an agricultural product of the U nitea S tates has a five days’
privilege for unpaid purchase price in preference to all others. P rivi­
lege granted employes in saw mills- etc. (Act 145 of 1888, amended
by Act 52 of 1910 an d Act 23 of 1912.) Laborers have lien on oil and
gas wells, rigs and m achinery for wages. (Act 171 of 1928.) Widow
and children left In necessitous circum stances are entitled to an am ount
tn husband’s or fath er’s succession sufficient to m ake $1,000 inclusive
of property already possessed by them . This privilege primes all
others except vendor's privilege, th a t for expenses of selling property
and conventional mortgages, representing money actually loaned for
not less th an one year a t not exceeding 6 per cent for interest, dis­
count and charges.
L im ita tio n of A c tio n s. L im itation of actions,_ or prescription,
under th e law of Louisiana is a m anner of acquiring ownership of
property, or of discharging debts by the effect of tim e and under the
conditions regulated by law
,
Of the prescription by which the ownership of property Is acquired.
He who acquired an immovable in good faith and by a ju st title pre­
scribes for it in ten years, provided he has had continuous and
uninterrupted possession during th a t time. This runs against minors
in tw enty two years from birth and all others excepted by law. Act
161 of 1920.
,,
The ownership of immovables is prescribed for by th irty years
w ithout any need of title, and w ithout reference to good faith, pro­
vided there has been continuous and uninterrupted possession as
owner during this time..
If a person is possessed In good faith, and by a ju st title of a movable
during three years w ithout interruption he acquires the ownership
by prescription, unless the thing was stolen or lost.


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2021

When the possessor of any m ovable Whatever has possessed it for
ten years without Interruption he shall acquire the ownership of it
w ithout being obliged to produce a title, or to prove th a t he did not
act in bad faith.
Prescription runs against all persons unless they are included in
some exception established by law
M inors and persons under interdiction cannot be prescribed against
except in certain cases provided by law.
H usbands and wives cannot prescribe against each other.
Of the prescription which operates a release from debt. Various
actions are prescribed by one year. Among these m ay be m entioned
those of m asters and instructors for lessons wnich they give by the
m onth. Those of inn keepers, on account of lodging and board which
they furnish. Those of retailers of liquors. Those of workmen,
laborers and servants, for the paym ent of their wages, and actions
for injurious words, w hether verbal or »written. Those for damages
caused by anim als, and all actions for dam ages or torts.
This prescription runs against minors and Interdicted persons,
reserving, however, to them their recourse against their tutors and
curators.
Actions by or against common carriers for collection or recovery
of freight charges or for loss of or dam age to freight are prescribed by
two years from date of shipm ent. - ,
,
The following actions are prescribed by three years, to w it: F irst—
T h at for arrearages of ren t charges, annuities and alimony, or for hire
of movables and immovables. Second— T h at for paym ent of money
lent. T hird—T h at for the salaries of overseers, clerks, secretaries
and of teachers who give lessons by the year or quarter. F ourth—T h at
of physicians, surgeons and apothecaries for visits, operations and
medicines. F ifth— T h at of parish recorders, sheriffs, clerks and
attorneys for their fees and em olum ents. Sixth—T h at on accounts
of m erchants. Seventh—T h at on all other accounts. E ighth—Tax
inscriptions. N inth— Licenses. T enth— Inheritance taxes as against
purchasers and th ird persons in good faith.
T his prescription runs against minors -and interdicted persons,
reserving to them , however, their recourse against their tu to rs and
curators.
Four years’ prescription applies to special action—as action of minor
against tu to r respecting acts of tutorship; of m inor for rescission of
judgm ent; action of lesion.
The following actions are prescribed by five years, to w it: Actions
on bills of exchange, notes payable to order or bearer, except bank
notes. Those on all effects negotiable or transferable by endorsement
or delivery, and those on all prom issory notes negotiable or otherwise.
Inheritance taxes as against heirs in five years from opening of suc­
cessions.
This prescription runs against minors and interdicted persons,
reserving to them , however, their recourse against their tu to rs and
curators.
Second—Actions for th e nullity or rescission of contracts, testam en t
or other acts.
T hird— Actions for the reduction of excessive donations.
Fourth—Actions for th e rescission of partitions.
Any and all inform alities of legal procedure connected w ith or
growing out of any sale a t public auction of real or personal property
m ade by any sheriff of th e parishes of this S tate, licensed auctioneer,
or other persons, authorized by an order of th e courts of th is S tate,
to sell a t public auction, shall be prescribed against by those claiming
under such sale after th e lapse of tw o years from th e tim e of m aking
said sales, except where m inors or interdicted persons were p art
owners a t th e tim e of m aking it, and in th e event of such p a rt ownership
by said minors or interdicted persons, th e prescription thereon shall
accrue after five years from th e date of public adjudication thereof.
Act 231 of 1932.)
All personal actions, except those above enum erated, are prescribed
by_ ten years.
Actions for imm ovable property, or for an entire estate, as a suc­
cession, are prescribed by th irty years.
L im ita tio n o n T o rt A ctio n s. All actions on to rts are prescribed
by one year.
L im ita tio n s to S u its .
Prescription — Accounts stated and
acknowledged in writing are prescribed only by ten years. (Act of
1888.) Personal actions one year; action for to rts of all kinds; for
injury to or non-delivery of merchandise shipped on vessels; for fees
of justice, notary, or constable; for innkeepers’ accounts; for accounts
of retailers of liquors; for wages of laborers or sailors; for freight; and
for tuition by m onth. T hree years: Action for arrearages of rent
charges, or hire of m ovables or im m ovables or money lent; for salaries
of overseers, clerks, or tuition by q u arter or y e a r; for fees of physicians
apothecaries, attorneys, sheriffs, clerks, and recorders; on open
accounts of m erchants, w hether wholesale or retail, and others. Four
years: Actions by m inors against their tutors, counting four years
from m ajority. Five years: Action on bills of exchange or prom is­
sory notes, counting from m aturity, and for nullity of contracts or
wills; for recisio'n of partitions; to set aside public and judicial sales
for informalities. Ten years: All other actions; the right to a usu­
fruct or servitude, all judgm ents, w hether rendered w ithin or without
the State, b u t judgm ents m ay be revived before lapse of ten years,
and are then good for ten years from date of revival. Prescription of
ten and th irty years now runs against minors, interdicts and married
women (Act 161 of 1920). H usband and wife can not prescribe
against each other. Prom ise to pay or paym ent on account will
in terru p t prescription, Only w ritten prom ise to pay will revive
when prescription has accrued.
L im ite d P a r tn e r s h ip s . (See Partnership.)
M a rrie d W o m e n . Act 132 of 1926 and Act 283 of 1928 provide
th a t a m arried woman, w hether a resident of this sta te or not, shall be
com petent to contract debts, purchase, sell and m ortgage, an d to bind
and obligate herself personally and w ith reference to her separate and
paraphernal p ro p erty ; to appear in court and to sue and be su ed ; to sell,
alienate or otherwise dispose of, and to m ortgage and pledge, or other­
wise encum ber, her separate and paraphernal property for th e benefit of
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
th a t such rights m ay be exercised w ithout th e necessity of obtaining th e
authority of her husband or th e judge; provided, however, th a t th e
rights granted by said act shall not apply to m arried women under
th e age of eighteen years or t6 m arried women who are interdicted,
nor shall anything therein contained be deemed or construed to affect
ih any way the sta tu tes of this sta te establishing and regulating th e
m atrim onial com m unity of acquets and gains an d prescribing w hat
shall be deemed separate property of th e spouses. Revenues of all
separate property adm inistered by th e husband, and all property
acquired by either husband or wife after m arriage, except by donation
or inheritance constitute p a rt of com m unity, unless bought w ith th e
separate m eans of either and as a separate acquisition. Wife has no
dower in her husband's real estate. T he wife can have no claim upon
the property of th e husband to th e prejudice of th ird parties, unless
recorded. W here one of th e spouses is agent for th e other, he or she
m ay be witness for th e other in a m atter connected w ith th a t tran s­
action. Act 157 of 1916 perm its b u t does not compel one spouse to
be a witness either for or against th e other in any eivil proceeding.
After dissolution of m arriage .by death or divorce th e survivor is
entitled to one-half of all p roperty rem aining after paym ent of debts,
acquired during m arriage, and in case of death, if there is issue,
the usufruct of the other half, unless th is half is disposed o f by will
of deceased spouse. Wife cannot be a witness to husband’s will.
(See “ Liens and Privileges.” )
M o n o p o lies o r T r u s ts are regulated and rights are given against
them sim ilar to those existing under Federal Law. The 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 rtg a g e s can be foreclosed a t any tim e after m atu rity of the
debt, by instituting a regular suit and obtaining judgm ent thereon, or

2022

BANKING AND COMMERCIAL LAWS—MAINE

If th e act im ports a confession of judgm ent In favor of the holder, he
can apply to the court for an order directing the sheriff to seize and
sell the property. All m ortgages m ust be recorded before they can
have any effect as against third parties. T rust deeds are not legal,
except as provided under “ T ru sts.” T here is no redem ption of prop­
erty sold under mortgage. All tacit m ortgages have been abolished
since 1870. I n m aking sales or giving a m ortgage upon his property,
it is not necessary for the husband to obtain the signature of the wife,
except as affecting th e hom estead and fam ily home. A mortgage
resulting from recording a judgm ent cannot have th a t effect until
after adjournm ent of court. [Act 1888.] Lessee, sub-lessee or
assignee of 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, dim inish or destroy
lessor’s privilege. Leases and contracts to explore for oil, gas and
m inerals m ay be m ortgaged., [Act 232 of 1910.1
Act 118 of 1934 authorizes the issuance of an order for executory
process when there is a variance between an act of m ortgage and the
note, or notes issued in connection therew ith, due to clerical error.
Act 421 of 1934 authorizes adm inistrators and executors to transfer
property, encumbered w ith m ortgages in excess of the value of such
property, to th e holder of such m ortgage. Act 159 of 1934 provides
for a general suspension on all foreclosures of m ortgages of real estate.
Act N o. 199 of 1934 provides th a t m ortgages on ru ral real estate shall
n o t cover or affect th e live stock and im plem ents and m achinery used
in th e farm ing thereof.
N e g o tia b le I n s t r u m e n t s . Uniform N egotiable Instrum ents Act
adopted Aug. 1, 1904, Act. No. 64 of 1904. (See com plete tex t follow­
ing “ Digest of Banking and Commercial Laws.”) Sec. 86 of the
negotiable instrum ents a c t was am ended by Act No. 89 of 1926,
abolishing days of grace and providing th a t when th e day of m atu rity
falls upon Saturday, Sunday, or a holiday, th e instrum ent is payable
on th e next succeeding business day which is not a Saturday. This
am endm ent fu rth er provides th a t instrum ents payable on dem and
m ay a t th e option of th e holder be presented for paym ent before
12 o’clock noon on S aturday, when the entire day is not a holiday,
however, said holder shall not be guilty of neglect for failure to present
on Saturday. Sec. 132 of the negotiable instrum ents act was am ended
by Act No. 189 of 1908, providing th a t th e acceptance of a bill m ust
be in writing.
P a r tn e r s h ip , L im ite d a n d S p ecial. Stipulations th a t one shall
p articipate in the profits and shall not contribute to losses is void,
both as regards partners and third persons. Partnerships are divided
as to their object into commercial and ordinary partnerships. Com­
mercial partnerships are such as are form ed: 1. For the purchase
of any personal property, and the sale thereof eith er in the same
sta te or changed by m anufacture. 2. For buying or selling any
personal property whatever, as factors or brokers. 3. For carrying
personal property or passengers for hire, in ships, vessels, or in any
other vehicle of transportation. (Act 150 of 1932.) T here is also a
species of partnership which m ay be incorporated with either of the
other kinds,1called partnership In commendam. I t is formed by con­
tra c t, 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
employed by the person or partnership to whom it is furnished, in
his or their own nam e or firm, on condition of receiving a share in
the profits, in the proportion determ ined by the contract, and of being
liable to losses and expenses to the am ount furnished and no more.
P artn er in com mendam cannot bind other partners by his act. P a rt­
nership in commendam m ust be m ade in w riting; m ust express am ount
furnished or agreed to be furnished; m ust sta te w hether it be received
in goods or money, e tc .; th e proportion of profits which p artn er is to
receive and expenses and losses he is to bear; m ust be signed by
parties In presence of a t least one witness and recorded in full within
six days in m ortgage office. I f branch houses are established the con­
tract m ust be recorded in parish where branches are located. If
partner in com mendam allow his nam e to be used, or if he take any
p art in the business of the partnership, he will be liable as a general
partner. O rdinary partners are not bound in solido for debts of
partnership, and no one of them can bind his partners unless they
have given him power to do so; each is bound for his share of the debt
in proportion to the num ber of partners. Commercial partners are
each liable for the entire debts of the partnership.
P o w ers o f A tto rn e y . M ay be w ritten or oral. M ay be either
general for all affairs or special for one affair only. One conceived in
general term s confers only power of adm inistration; to sell, m ortgage
or do any other act of ownership, the power m ust be express and
special.
P ro b a te L aw . T here Is no special probate court. D istrict courts
are vested w ith probate jurisdiction. Successions are opened upon
petition of interested persons in the parish where the deceased resided.
If he h ad a domicile or fixed place of residence in th e sta te ; in th e parish
where he left his landed property, if he had neither domicile nor
place of residence in the sta te ; or in the parish in which it appears
from th e 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 domicile nor any ttxea Droperty. I f Dresumptive heir
does not begin legal proceedings to settle succession within ten days
after d eath of “ de cujus," creditors m ay dem and th a t he state whether
he accepts or rejects succession, or if no heirs appear, th a t a curator
ad hoc be appointed to settle the estate. T he judge appoints an
adm inistrator when deceased leaves no will. A dm inistrators m ust
render annual accounts, and are allowed 2 ^ per cent on the inven­
tory as commissions. A ttorneys a t law are appointed to represent
absent heirs. Properties acquired during m arriage are presumed to
be com m unity property, an d surviving spouse is owner of one-half.
When either husband or wife dies, leaving no ascendants or descend­
ants, and w ithout having disposed by will of his or her share in the
com m unity, such undisposed of share shall be inherited by th e surviving
spouse in full ownership. (See Successions).
P r o te s t. (See N egotiable Instrum ents.)
S e p a ra tio n f ro m B ed a n d B o a rd . M ay be claimed reciprocally
for: 1. A dultery. 2. When spouse condemned to infamous pun­
ishm ent. 3. H abitual intem perance, excesses, cruel treatm ent, or
outrages, when such renders living together insupportable. 4. Public
defam ation of one spouse by the other. 5. Abandonm ent. 6.
A ttem pt of one spouse against life of other. , 7. When one spouse
charged w ith infam ous offense actually flees from justice.
Judgm ent of Divorce “ a vinculo m atrim onii” can be obtained
Immediately for first two causes. F or other causes it is necessary
first to obtain judgm ent of separation “ a m ensa et thoro." After
judgm ent of separation from bed and board, if there has been no
reconciliation, p arty in whose favor judgm ent is rendered can obtain
final divorce one year after finality of judgm ent of separation. P a rty
against whom judgm ent is rendered m ust w ait one year and sixty days
W hen m arriage is celebrated outside of sta te parties cannot obtain
divorce in sta te on grounds occurring outside o f state, except, as pro­
vided by C. C. A rt. 142, as am ended by Act No. 1 of th e Second E x tra
Session of 1934, when the wife shall have been domiciled in Louisiana
prior to th e m arriage. Divorce m ay now be obtained' if both parties
have lived separate for tw o years*, A ct 430 of 1938.
T ax es. Taxes on real estate cannot be enforced until th e expira­
tion of th e year for which th ey are levied and after legal notices to
delinquents an d advertisem ent. Lands sold for taxes are redeem able
Within three (3) years, by th e owner, his agent, or heirs, or any creditor,
on pay m en t of th e purchase money, w ith 5 per cent interest plus 1
per cen t per m onth, and costs, and all subsequent taxes paid. Lands
sold for taxes due prior to 1880 are n ot redeem able. S tate taxes are
5 mills on actual value, parish taxes n ot exceeding 4 mills. C ity of
New Orleans taxes are 21 Vi mills on 85 per cent of actual value plus
7 mills (Orleans Parish School Board) on 100 per cent of actual value,
other m unicipal taxes n ot to exceed 7 mills. D elinquent sta te taxes
bear interest a t 2 per cent a m onth, city taxes, 10 per cent a year.


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Act No. 21 of 1934, as am ended by Act No. 2 of th e F irst E xtra
Session of 1934, and as am ended by Act No. 7 of th e Second E xtra
Session of 1934, provides for a sta te income tax of 2% on th e first
$10,000, 4% on th e next $40,000, and 6% on any am ount in excess of
$50,000; allowing th e following exem ptions: $1,000 for a single person,
$2,500 in th e case of the head of a fam ily or m arried person living
w ith husband or wife, and $400 for each additional dependent. The
act also provides for a tax of 4% upon th e net income of every cor­
poration, in excess of $3,000.
T r u s ts . Act 81 of 1938. Allows T rusts to be established for a
period of ten years.
W ills. T here are four different kinds of wills, viz.: T he olo­
graphic, nuncupative by public act, nuncupative by private act, and
m ystic (or sealed) will. The olographic will m ust be wholly w ritten,
dated and signed by the testator, and m ay be m ade within or w ith­
out the State. N uncupative will by public act is w ritten by a notary
in presence of three witnesses, over the age of 16 years complete,
not insane, deaf, dum b or blind, residing In th e place where will
is executed, or five witnesses not residents of the place, a t th e dictation
of the testato r. N uncupative will by private act and m ystic wills
are subject to m any form alities which m ay be best obtained by refer­
ence to Civil Code Arte, 1581-1587 both inclusive. All persons
of sound m ind over sixteen years of age m ay dispose of their property
by will. Wills executed without the sta te given force and effect
provided sam e be in writing and subscribed by testa to r and follows
form of place where executed, or of testa to r's domicile. (See act 176
of 1912.)

SYNOPSIS OF

THE LAW S OF MAINE
RELA TING TO

BANKING AND COMMERCIAL USAGES
Revised by P t jl s ip b b & L c d d i n ,
68 M aine St.. Lewiston, Me.
(See C ard in A ttorneys’ List.)
A c k n o w le d g m e n ts. (See Deeds.)
A ctio n s. At law begun by writ, under common law practice, but
containing declaration. Suite in equity are begun by bill of comlaint, filed w ith clerk of court and subpoena issued by him, or may
e inserted In w rit of attachm ent and served by copy of bill and writ
or sum m ons. On m otion non-resident plaintiffs required to give se­
cu rity for costs. An affidavit in actions brought on an item ized ac­
count, m ade before a N otary Public having a seal m akes a prim a facie
case, if w ithout th e S tate au th o rity of N otary m u st be certified by
clerk of court of record.
A d m in is tr a tio n of E s ta te . (See E states of Deceased Persons.)
A ffidavits. Affidavits m ay be m ade before a notary public or
Justice of the peace. In some court m atters authority of m agistrate
m ust be proved by certificate of clerk of a court of record.
A liens. Aliens m ay hold and convey real estate and personal
property. Wills of aliens m ay be proved and allowed in this State.
Widow of a citizen of U nited States who was an alien when she married
him has right of descent in his estate (but see M arried Women).
A s sig n m e n ts. Common law assignm ents for thè benefit of
creditors m ay be m ade, and after four m onths will be good against
bankruptcy proceedings. Assignments of wages m ust be recorded
in town clerk’s office In town where assignor is employed. Invalid
unless employer has notice.
A tta c h m e n t. All property not exem pt attachable on mesne proc­
ess as of course w ithout affidavit; security for costs by indorser of
writ only if creditor is non-resident; lien by attachm ents In th e order
In which they are m ade continue for th irty days after judgm ent
(extended where execution is delayed, appeal from taxation of costs
Is taken, or decision of law court certified down in vacation), within
which tim e levy m ay be m ade. Personal property m ay be appraisea
and sold on mesne process to avoid expense, depreciation or loss,
on request of either p arty and proceeds held by officer in lieu of the
property, foreign attachm ent (garnishm ent), known as tru stee process,
attaches property by or debt due from trustee unless: 1. Due on
negotiable paper. 2. M oney collected on process by officer. 3.
In hands of public officer. 4. D ue on contingency. 5. Trustee
liable to execution on sam e. 6. T w enty dollars wages, for personal
labor of the debtor, wife or m inor child within one m onth, and $10
exem pt in all cases. 7. In certain cases money due on life and
accident policies, and from fraternal beneficiary associations. (See
Creditors* Bills.)
Banks* Kinds perm itted: Savings Banks, T ru st Com panies and
Loan and Building Associations.
Savings Banks. M ay be organized and certificate of authority
issued by th e bank commissioner. No capital stock and operates
solely for th e benefit of depositors. Under th e supervision and
exam ination of, and required to report to, th e bank commissioner.
M u st not pay over 2 % dividends sem i-annually. M u st pay
one-half of 1% of net earnings to reserve until it equals 5% . Sub­
ject to varying loan lim itations.
Trust Corrtpanies. M ay be organized under th e general statu tes
on approval of th e bank commissioner. M u st repo rt to and subject
to exam inations and supervisions by th e bank commissioner. Capital
stock m ay be assessed to m eet deficits. Directors and th e officers
personally responsible for loans illegally granted. M u st carry 10%
of annual n et earnings to surplus until it am ounts to one-half of
capital stock. M ay have branches.
Loan and Building Associations. M ay be Incorporated and sub­
ject to th e sam e supervision by th e bank commissioner as Savings
Banks. M ay issue perm anent shares or serial m aturing shares.
Under th e general m anagem ent of a board of directors. Shares fully
paid for n ot subject to assessment.
C o lla te ra ls . (See M ortgages.)
C o n d itio n a l S ales, C o n s ig n m e n ts . No agreem ent th a t personal
property bargained and delivered to another shall rem ain the propertj1
of the seller until paid for, is valid unless in writing and signed by the
person to be bound. Such agreement. In w hatever form it m ay be,
is not valid except as between original parties, unless recorded in the
office of the clerk or the town in which the purchaser resides at the
tim e of the purchase. Ails uch property whether said agreements
are recorded, or not shall be subject to redem ption. T his does not
apply to goods consigned for sale.
C o n v e y an ces. (See Deeds.)
C o rp o ra tio n s . Three or more persons m ay rorm a corporation to
carry on any lawful business excepting banking, insurance, construct­
ing and operating railroads, savings banks, tru st companies, or cor­
porations intended to derive profits from the loan or use of money,
and safe deposit companies, b u t corporations m ay be formed under
the general law for the construction and operation of railroads ourside
the S tate of M aine. Corporations for other purposes, excepting for
municipal purposes, and where the objects of the corporation can not
be attained w ithout special acts, are also formed under general laws.
Organization becomes void unless corporation begins business within
two years. C orporation m ay capitalize to an unlim ited am ount and
m ay increase or decrease the am ount of their capital or th e par value
of the shares. No portion of capital is required to be paid in; stock
m ay be issued for property or for services and in absence of fraud

BANKING AND COMMERCIAL LAWS—MAINE
the Judgment of th e directors as to the value of such property or
services is conclusive, the stock thereupon becoming fully paid.
Only original subscribers and takers of stock are liable on same to
extent of unpaid par value and then only for debts contracted during
their ownership of stock, and action to enforce such liability m ust be
commenced witliin two years and can be m aintained only by a judg­
m ent creditor of th e corporation who shall have begun proceedings
to obtain such judgm ent against the corporation during the owner­
ship of such stock or within one year after its transfer by such stock­
holder is recorded on th e corporation books. D irectors m ust be
stockholders or m em bers of another corporation which is a stockholder
If corporation fails for gix m onths to elect directors, court m ay appoint.
Corporations m ust pay to th e S tate upon organization, a fee as fol­
lows: *10 for each *100,000 stock up to $1,000,000 sliding scale above.
Other fees for organization are: attorney-general’s fee $5; register
of deeds $5, secretary of sta te $5. T he annual franchise tax is as
follows: $5 provided authorized capital does not exceed $50,000;
exceeding $50,000 and up to $200,000, $10; exceeding $200,000
and up to $500,000, $50; exceeding $500,000 and up to $1,000,000,
$75; and th e fu rth er sum of $50 per $1,000,000 or any p a rt thereof
in excess of $1,000,000. C orporations which have suspended busi­
ness tem porarily and have been excused from filing returns of am ount
of capital stock, etc., are n ot liable for franchise tax. M eetings
of stockholders m u st be held within th e State. Clerk m ust be resi­
dent and keep stockholders’ records in th e S tate. His records are
open to inspection by stockholders b u t not by mere creditors. W ith
th e exception of banking corporations no public reports are required
except one to th e secretary of sta te showing nam es and residences
of officers and am ount of capital stock. Delivery of certificate of
stock to bona fide purchaser or pledgee for value together w ith w ritten
transfer of sam e or w ritten power of attorney to sell, assign, and
transfer same, signed by owner of certificate, transfers title against
all parties. Foreign corporations have practically same rights as
domestic, b u t are required to file copy of charter w ith secretary of
state, also a copy of the by-laws, and are also require^ under severe
penalties to file certificate showing among other things the names
of officers, am ount of capital stock authorized, am ount issued and
am ount paid in; also m ust file certificate showing any change in above
articulars. Such corporations m ust also appoint a resident of M aine,
aving an office or a place of business in th e state, to be its attorney
on whom process m ay be served in any legal proceeding. Corporations
m ay dispose of their franchises or consolidate on piajority vote of the
stockholders; m ay sue and be sued, and have generally th e powers of
individuals. Public service corporations are subject to a Public
U tilities Commission.
C re d ito rs ’ B ills. Bill in equity m ay be m aintained to reach
property of debtor which cannot be reached by process a t law, and
Is not exem pt from attachm ent; also property conveyed in fraud of
creditors and property secreted so th a t it is not repleviable.
D ays o f G ra c e . (See N egotiable Instrum ents.)
D eeds. Any owner of real estate having right of entry m ay con­
vey it by deed. No estate greater th an tenancy-at-will can be created
except in writing. Deeds m ust be acknowledged by a grantor or
one of them or by an authorized agent, executing th e same, before
a justice of th e peace, notary public having a seal, or woman qualified
to tak e acknowledgm ents; outside th e S tate, and in the United States,
before a clerk of a court of record having a seal, notary public; or
commissioner of deeds for this S tate, and in a foreign country before
a notary public, or a consul or m inister of the United States, b ut If
m agistrate acting outside of S tate has no official seal, his authority and
the genuineness of his signature m ust be authenticated by th e secre­
tary of sta te or th e clerk of a court of record in county where he resides.
Unacknowledged deeds cannot be recorded. No special form of
acknowledgment required. Deeds m ust be recorded to be valid
against parties w ithout notice of the conveyance. Deeds m ust be
under seal, b u t witness is not required for validity although usual
to have one. Leases for m ore th an two years should be acknowledged
and recorded to be effectual except between th e parties. T rusts
concerning real estate can be created only in writing, except those aris­
ing by im plication of law.
.
D ep o sitio n s. Depositions m ay be taken by disinterested justice
of the peace or notary public; m ay be taken When deponent is unable
through age, infirm ity, or sickness to attend a t place -of trial; when
deponent resides o ut of, or is absent from th e State; when deponent
resides in town other th an th a t in which trial is to be held, etc. Depo­
sitions so taken m ay be used In all civil suits or causes, petitions for
partition of land, libels for divorce, prosecutions for the m aintenance
of children, petitions for opinions in trial before courts of arbitrators,
referees and county commissioners, and in cases of contested senatorial
or representative elections. Depositions or affidavits m ay also be
taken in applications for pensions, bounty, or arrears of pay under
any law of the U nited States. C ourts m ay Issue commissions to
take depositions o ut of the S tate, dr they m ay be taken o u t of State
by a justice, notary, or other person empowered, b ut in the latter
case it is within the discretion of the courts to adm it or reject them .
D escen t a n d D is tr ib u tio n of P ro p e rty . (See E states of De-

E

D ow er. Abolished by laws of 1895, chap. 157, taking effect as
to persons n ot then m arried. M ay 1, 1895; as to others, Jan. 1, 1897.
Wife or husband m ay bar the right by inheritance to one-third or
one-half, as th e case m ay be, of realty by joining in the other s deed,
or by sole deed, or by ante-nuptial settlem ent, or by jointure. E ither
refusing to join in other's conveyance (or If incapacitated with no
guardian in this state, other being a non-resident) m ay be barred of
*inheritance upon application to suprem e judicial court and decree
after hearing. (See E states of Deceased Persons.)
E s ta te s o f D eceased P e rso n s . One year after notice of ap­
pointm ent allowed creditors to present claims and suit m ust be
begun and service of process m ade within tw enty m onths after such
notice- of appointm ent. Allowance to widow and minor children,
made by court from estate. Non-resident executor.or adm inistrator
m ust appoint attorney. Tim e of dem and or notice extended for absent
creditor if further assets, b u t prior paym ents not disturbed thereby.
No adm inistration granted after tw enty years. The real and personal
estate of a person deceased intestate (excepting wild lands conveyed by
him) being subject to the paym ent of debts descends according to the
following rules: 1. I f he leaves a widow and issue, one-third to
the widow. I f no issue, one-half to the widow. tAnd If no kindred,
the whole to th e widow. And to the widower shall descend the same
shares in his wife’s real and personal estate. There shall likewise
descend to th e widow, or widower, the same share in all such real
estate of which th e deceased was seized during coverture, and which
has not been barred, or released, as herein providedany event,
qne-third shall descend to the widow or widower free from the pay­
m ents of debts. 2. T he rem ainder of which he dies seized, and If
no widower, or widow, th e whole, together with all wild lands shall
descend in equal shares to his children, and to the lawful issue of a
deceased child by right of representation. If no child is living at
the tim e of his death, to ail his lineal descendants; equally. If all are
the same degree of kindred; if not, according to the right of repre­
sentation. 3. I f no such issue, It descends to his father and m other
In equal shares. 4. If no such issue, or father, it descends one-half
to his m other. If no such issue or m other, it descends one-half to
his father. In either case, the rem ainder, or if no such Issue, father
or m other, th e 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. If no such issue,
father, brother or sister, it descends to his m other. If no such issue,
m other, brother or sister, it descends to his, father. In either case,
to the exclusion of th e issue of deceased brothers and sisters. 6 .' If
no such issue, father, m other, brother or sister, it descends to his next
of 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 more rem ote. 7. W hen a m inor dies


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2023

unm arried, leaving property inherited from either of his parents, it
descends to the other children of the sam e parent, and th e issue of
those deceased; in equal shares if all are of the same degree of kindred;
otherwise, according to the right of representation. 8, If the
Intestate leaves no widower, widow or kindred, it escheats to the
S tate. An illegitimate child Is an heir of its parents who interm arry;
also of Its m other, also of its father, who adopts it or acknowledges
It before a m agistrate; and in any case where the child is treated as
an heir it inherits from the lineal and collateral kindred of th e parent,
and they from it. (See Wills.)
E x e m p tio n s f ro m A tta c h m e n t a n d E x e c u tio n . Hom esteads,
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 sta tu tes; library, $150; regular pew; cook" stove and
iron warming stoves; charcoal, twelve cords of wood, five tons an ­
thracite coal, fifty bushels bitum inous coal, $10 worth of lum ber
wood, or bark; produce of farm s till harvested; barrel of flour, th irty
bushels of corn and grain, potatoes for fam ily, one-half acre of flax
and m anufactures therefrom for fam ily; tools of trade, and m aterials
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; two swine, one cow and one heifer,;
if no oxen, horse or m ule, tw o cows; ten sheep, their wool, their lam bs
u ntil one year old; hay to keep them and cattle; plow, cart, tru ck or
express wagon, harrow, yoke with bows, ring and staple, tw o chains,
mowing m achine; fishing boat of tw o tons; debtor m ay elect if he has
more th a n is exem pt. Life and accident policies are exem pt from
creditors, except any excess of $150 per year prem ium paid within
two years, except suits for necessaries. (See A ttachm ent.)
F o re ig n J u d g m e n t. Action of debt lies on a foreign judgm ent
and record of it is prim a facie evidence of indebtedness. Is conclusive
except for fraud when given by court having jurisdiction of parties
and subject m atter.
F ra u d . Usual common law rules as to w hat constitutes fraud,
fraudulent representations, etc.; also sta tu to ry penalties for fraud,
cheats, etc. C ourt of equity has power to afford relief. Statutory
provisions to prevent sale in bulk of p a rt or whole of stock of m er­
chandise in fraud of creditors.
F ra u d s a n d P e r ju rie s . No action shall be m aintained upon any
contract to charge an executor or adm inistrator upon any special
promise tc answer dam ages out of his own state; nor to charge
any person upon any special promise to answer for th e debt, default,
or misdoings of another; nor to charge any person upon an agree­
m ent m ade in consideration of m arriage nor to charge any person
upon any contract for the sale of lands, tenem ents, or hereditam ents,
or of any Interest therein; nor to charge any person upon any agree­
m ent th a t is not to be perform ed within one year from th e making
thereof; nor to charge any person upon any contract to pay a debt
after discharge therefrom under bankrupt laws of th e United States
or assignm ent or insolvent laws o f this S tate; unless th e promise,
contract, or agreem ent or some m em orandum thereof is in writing
and signed by the p arty to be charged, or his agent. No action shall
be m aintained on a m inor s contract unless ratified by him in writing
after becoming tw enty-one years of age, except the contract be for
necessaries or real estate where he has received title and obtained
benefit. No contract for sale of goods, etc., of $30 or more in value
Is valid unless purchaser accepts or receives a portion of th e goods
or gives som ething to bind the bargain, or in p art paym ent thereof,
or some m em orandum Is m ade and signed by p arty charged or his
agent. C ontracts whereby one becomes agent for sale of lands become
void in one year unless tim e for term ination definitely stated.
G a r n is h m e n t. (See A ttachm ent.)
H o lid a y s. T he legal holidays are: Sundays; Jan u ary 1 (New
Y ear’s D a y ); F ebruary 22 (W ashington’s b irth d a y ); April 19 (P atri­
ots); M ay 30 (M em orial D a y ); Ju ly 4 .(Independence D a y );_ th e first
M onday in Septem ber (Labor D ay); Novem ber 11 (Armistice D a y );
Thanksgiving D ay; December 25 (Christm as D ay); and days of pub­
lic fast or thanksgiving and Arbor D ay appointed by Governor and
Council.
H u s b a n d And W ife. E ach m ay hold and deal w ith property
Individually, subject to right of descent in real estate. (See E states
of Deceased Persons.) H usband not liable for debts of wife con­
tracted before m arriage, nor afterw ard in her own nam e, nor for her
Sorts. E quity C ourt has special jurisdiction of disputes between
husband and wife relating to property. After petition to and decree
by probate court either m ay convey real property as if sole, and other
Is barred of all right by descent where deserted w ithout ju st cause
or if actually living ap art for just cause, and desertion or living ap art
has continued one year.
I n te r e s t. Six per cent or any other rate agreed upon in w riting;
Judgments, same r a te ; accounts and debts n o t ,on tim e bear interest
from dem and. Special rate in tim e notes does not continue after
m aturity, unless so provided; nor after judgm ent In any case; no usury
laws. On loans for less th an $300 secured by m ortgage or pledge
of personal property, the rate shall not exceed 3 per cent per m onth.
Loans negotiated in this state by agent of non-resident borrower with
Intent to evade usury laws of state where borrower resides are voida­
ble.
J u d g m e n ts . At law; by general order a t end of term on all cases
where verdict or default, unless stayed by proceedings for new trial,
or continued for judgm ent by plaintiff; in equity, only by decree
signed by justice. No lien except by virtue of attachm en t on mesne
process (q. v.) and where specially provided by law.
L ie n s. (Voluminous S tatute Provisions, for Mechanics, M aterial
M en, H otel and Boarding-House Keepers, Stable Keepers, Agister,
etc.).
- L im ita tio n of A ctio n s. Six years; d eb t on unsealed contract or
liability (except judgm ents); actions upon judgm ents o ut of S tate of
court not of record; for arrears of ren t; of account, assum psit, or
case on contract or liability express or Implied; w aste; trespass qu.
cl. and d. b. a.; replevin; case, except slander and libel. Four years;
against sheriff. Two years: assault and b attery , false im prisonm ent.
Blander, libel and penalty. One year: escape, scire facias and on
recognizance. Eighteen m onths: stolen bonds and coupons, except
by owner. T w enty years: witnessed notes, bank bills, specialties,
real action, other judgm ent and all other personal actions. Suit
begun when w rit was m ade. Incapacity of plaintiff, death of either
p arty before or within th irty days after expiration of time,, fraudu­
lent concealm ent of action, absence from S tate when cause accrues
or residence o ut of the S tate and absence afterw ards, extends time.
Actions barred where both parties lived are" barred here. New
promise m ust be in writing or p a rt paym ent m ust be m ade, to extend
tim e. Against executors and adm inistrators, tw enty m onths after
filing of affidavit of notice given of appointm ent of executor or adm in­
istrator, unless fu rth er assets or claim not m atured. Against heirs
or devisees, one year after claim accrued; rem edy in equity, if not
prosecuted within tim e lim ited and if without culpable neglect.
L im ite d P a r tn e r s h ip . M ay consist of one or more general p a rt­
ners and one or more special. Special shall contribute specific am ount
of capital or property a t cash value, and be not liable for debts beyond
th a t am ount. General p artners m ust transact the business.
M a rrie d W o m en have same rights and liabilities as to property
contracts and all suits as m en. W ife's property not liable for her
husband’s debts, nor his liable for her prior debts, nor for others m ade
on her credit, i She m ay sue and be sued as if sole. M ay n ot be
partner of husband and not liable for fam ily expense except by express
promise. (See Arrest, also Dower, also E states of Deceased Persons,
also H usband and Wife.)

2024

BANKING AND COMMERCIAL LAWS—MARYLAND

M o rtg a g e s. Of real estate executed and acknowledged as deeds
and m ust be recorded as to third parties; convey fee w ith condition
of defeasance. Foreclosed without possession by serving or adver­
tising notice, or by possession obtained peaceably, or by consent, or
by suit. Redem ption in one year from notice or possession; power
of sale m ortgages not authorized by sta tu te and n ot much used.
Suprem e or Probate courts m ay authorize a m ortgage by a person in
possession o f an estate subject to a contingent rem ainder, "executory
devise, or power of appointm ent, and such m ortgage is binding on all
parties. C h attel m ortgages unless and until possession taken and
retained by m ortgagee to be good against th ird parties m ust be
recorded in town clerk’s office where m ortgagor resides when m ortgage
is given; or, if any of mortgagees are nonresidents, then in registry
o f deeds in county where m ortgagee resides, when m ortgage is given.
M ortgage on household furniture m ust sta te am ount of loan, interest
rate, and cost of procuring loan. Agreements, w hether In form of
note, lease, conditional sale, etc., or otherwise, th a t chattels bargained
and delivered shall rem ain property of seller till paid for, m ust be in
writing and recorded as chattel m ortgages; such m ortgages and notes
foreclosed by sixty days’ notice to m ortgagor or assignee of record
or, if out of S tate, by publication; redem ption in sixty days. Col­
laterals pledged on notes, etc., or for the performance of anything
after failure to pay or perform by the pledgor, m ay be sold by the
pledgee, he flpst giving w ritten notice to the pledgor of the proposed
sale, or if his residence is unknown, by publication of notice once a
week for three successive weeks in a newspaper in the city or town
where the pledgee resides, recording said notice and affidavit of service
of same in the clerk's office of city or town where the pledgee resides
and after the expiration of the sixty days from the tim e of said record­
ing.
N e g o tia b le I n s t r u m e n t s . Uniform N egotiable Instrum ents Act.
Public Laws 1917, Chap. 257. (See com plete text following “ Digest
of Banking and Comm ercial L aw s.” ) D ays of grace abolished.
Falling due on Sunday or bank holiday payable and, presentable
for paym ent on secular or business day next succeeding. I f holiday
falls on Sunday then following M onday is deemed bank holiday.
On notes payable a t fixed place on dem and a t 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
of dem and and notice, acceptance of bill, draft, or order m ust be
in w riting and signed. Recovery from indorser w ithout suing m aker.
R ate of dam ages on protested bills of 100 or m ore payable in this
country, 1 to 9 per cent according to place. N egotiable paper pre­
sum ed to be taken in paym ent of d eb t or liability for which it is
given, unless creditor would thus lose security he otherwise would
have had. I f note reads “ I prom ise to pay ” all signers are jointly and
severally liable.
P a r tn e rs h ip . Personal property of partnership, or Interest of
partner therein, exem pt from attachm ent on mesne process, or seizure
on execution for any individual liability or such p a rtn e r; b u t is sta tu ­
tory provision for reaching sam e after judgm ent. P artners in m ercan­
tile enterprise m ust file sworn certificate w ith city or town clerk
where business to be carried on. showing nam es and residences of
partners, natu re of business and partnership nam e. (See Lim ited
Partnership.)
Powers o f A ttorn ey. Usual common law rules.
P robate Law. (See E states of Deceased Persons.)
P ro test. (See N egotiable Instrum ents.)
R e p le v in . Goods or chattels wrongfully taken or detained m ay
be replevied by owner or p arty entitled to possession.' Replevin bond
m ust be double the value of property replevied. If dismissed w ith­
out trial, suit m ay be brought on the bond, in which suit title m ay be
sbown to m itigate damages.
T axes m ay be collected by arrest, distress, or suit. On real estate
th ey are a lien; proceedings to enforce by sale begin upon non-pay­
m ent for eight m onths; non-resident owners have tw o years from sale
to redeem b y paying tax, costs, and 8 per cent interest from day of
sale; residents, tw o years with 8 per cent interest from day of sale
on whole sum of tax and costs. Collector m ay give notice to resident
• a fter eight m onths after com m itm ent, and if not paid w ithin eighteen
m onths of filing th e notice, right of redem ption lost. L and on which
taxes are unpaid, sold on first M onday in February in year succeeding
th e year in which tax was assessed; sale is of sm allest fractional p a rt or
Interest to one who will pay taxes, interest, and costs therefor. S tate
tax assessed by board of sta te assessors on gross receipts of railroads
and express companies, and telegraph and telephone lines, collected by
suit. Corporations, other th a n those especially provided for, pay a
franchise tax of $5.00 if authorized capital does n ot exceed $50,000.00;
of $10.00 if capital does not exceed $200,000.00; of $50.00, if capital
does n ot exceed $500,000.00; of $75.00, if capital does not exceed
$1.000,000.00; and the further sum of $50.00 for each $1,000,000.00,
or fraction thereof. In excess of $1,000,000.00. Foreign corporations
pay annual license fee of $10. Inheritance tax ranging from 1 to 7
per cent, according to degree of relationship and am ount of bequest,
$500 exem pt in all cases, and $10,000 exem pt in case of certain near
relatives. Special exceptions and exemptions from assessment, and
special provisions for taxing personal property situated here but
owned out of th e S tate. Real estate m ortgages exem pt. (See
Banks.)
W ages. Weekly paym ent required in most industries. (See
Assignments, A ttachm ent.)
W arehouse R eceip ts. Holder deem ed true owner so far as to
give validity to contract for sale of m erchandise covered, or to protect
one acting on faith of such ownership; b ut one taking from agent as
security for antecedent debt gets no greater right than agent. Title
to property passed by endorsem ent, b u t not in blank, to purchaser
or pledgee in good faith. P roperty in warehouse m ay be attached
as th a t of person nam ed in receipt, or of last endorsee shown by books
of warehouseman. Common law rules prevail generally.
W ills. Wills m ust be in writing signed by the testator, or a t his
request by some person in his presence, and subscribed in his presence
by three witnesses n ot beneficially interested, in presence of each other,
m ay be m ade by any person of age and of sound m ind, and m ay dispose
of all property. Wills executed in another S tate or country accordihg
to laws thereof, m ay be proved and allowed in this S tate in the county
where th e testator had his residence a t tim e of decease; if proved
without this State (at his domicile), m ay be allowed in any county
here where he has property. Widow or widower m ay w ithin six
m onths waive provision in will of deceased husband or wife and claim
same share in property as would have had in case deceased died
intestate. (B ut see H usband and Wife.)
N uncupative will m ust be reduced to writing w ithin six days, or
proved by testim ony within six m onths, from tim e words spoken.
No letters in such till fourteen days after decease of testato r. N ot
effectual to dispose of more th an $100.00 w orth of property unless
proved by three witnesses who acted a t testa to r’s request.

SYNOPSIS OF

THE LAWS OF MARYLAND
R E L A T IN G TO

BANKING AND COMMERCIAL USAGES
Revised b y B l a d e s & R o s e n f e l d , A ttorneys a t Law,
1206-1207 Fidelity Building, Baltim ore.
(See Card in A ttorneys’ List.)
I n g e n e ra l. F lack’s A nnotated Code—E dition of 1939 (two
volumes) as am ended by th e Acts of 1941, embraces th e Public General
Laws of M aryland and, by an A ct of th e General Assembly, has been
legalized and m ade evidence of th e law. Especial reference to sta tu te s
in th e following, is, therefore, unnecessary.


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A c k n o w le d g m e n ts . M aryland has adopted th e Uniform Ac­
knowledgm ents Act. (1) The acknowledgm ent of any instrum ent
m ay be m ade in this S tate before: a Judge of a court of record; a Clerk
or D eputy Clerk of a court having a, seal; a N otary Public; a Justice
of th e Peace; or a M aster in Chancery. (2) T he acknowledgm ent of
an y instrum ent m ay be m ade w ithout th e S tate b u t w ithin th e United
S tates or a territory or insular possession of th e U nited States or th e
D istrict of Colum bia or th e Philippine Islands and w ithin th e juris­
diction of th e officer, before: a Clerk or D eputy Clerk of an y Federal
C o u rt;_a Clerk or D eputy Clerk of an y court of record of an y S tate or
other jurisdiction; a N o tary Public; a Commissioner of Deeds. (3)
T he acknowledgm ent of any instrum ent m ay be m ade w ith o u t th e
U nited States before: an Am bassador, M inister, Charge ¿ ’Affaires,
Counselor to or Secretary of a Legation, Consul General, Consul, ViceConsul, Commercial A ttache, or Consular Agent of th e U nited States
accredited to th e country where th e acknowledgm ent is m ade; a
N o tary Public of th e country where th e acknowledgm ent is m ade; a
Judge or Clerk of a court of record of th e country where th e acknowl­
edgm ent is m ade.
The officer taking th e acknowledgm ent shall know or have satis­
factory evidence th a t th e person m aking th e acknowledgm ent is th e
person described in and who executed th e instrum ent. An acknowl­
edgm ent of a m arried wom an m ay be m ade in th e sam e form as though
she were unm arried. The certificate of th e acknowledging officer
shall be com pleted by his signature, his official seal if he has one, th e
title of his office, and if he is a N otary Public, th e date his commission
expires. I f th e acknowledgm ent is taken w ithout th is S tate th e
certificate shall be au thenticated by a certificate as to th e official
character of th e acknowledging officer. C orporations acknowledge
either by atto rn ey appointed for th a t purpose in th e body of th e in­
strum ent itself, or b y th e President or Vice-President of th e corpora­
tion w ithout such appointm ent. All conveyances acknowledged prior
to June 1, 1941 in which th e acknowledgm ent is defective, have been
validated by C hapter 141 of th e Acts of 1941 (See Conveyances).
A d m in is tr a tio n o f E s ta te s . T he O rphans’ C ourts of th e Counties
and th e O rphans’ C ourt of Baltim ore C ity are the courts of probate.
Where decedent leaves a will, letters testam entary are com m itted te
th e executor or executors (male or fem ale)nam ed in th e will, if any are
nam ed. L etters testam entary or of adm inistration will n ot be granted
to any person under th e age of eighteeh years or of unsound m ind, or
convicted of any infam ous crime nor to any person not a citizen of the
U nited States. A non-resident of M aryland m ay be appointed as the
personal representative of a decedent resident of M aryland only when
th e S tate of his or her residence extends reciprocal privileges to resi­
dents of M aryland. In granting letters of adm inistration 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 he order of pre­
ference follows: 1. Surviving spouse, or child, or children (in discretion
of th e C o u rt); 2. G randchild; 3. F ather; 4. M other; 5. B rothers and Sis­
ters; 6. N ext of kin. W here one of a class of persons is entitled th e ap­
pointm ent is in the discretion of th e C ourt. Relations of th e wholeblood are preferred to those of th e half-blood in equal degree, and rela­
tions of th e half-blood are preferred to those of th e whole-blood in a
rem oter degree. A single woman is preferred to a m arried woman in
equal degree. 7. I f there be no relations who qualify, letters of adm inis­
tratio n shall be granted to th e largest creditor applying for th e same.
8. I f there shall be none of the first five groups above nam ed, or if these
he incapable or refuse to act, and if th e sixth and seventh groups neglect
to apply, th e appointm ent is in th e discretion of th e C ourt. Bond is re­
quired with two sureties, or one of certain su rety corporations authorized
by th e law of M aryland to qualify upon such bonds. W hen testa to r re­
quests in will th a t executor therein appointed be excused from giving
bond, then bond shall be given only in such am ount as th e co u rt shall
consider sufficient to secure paym ent of debts of deceased. Six m onths’
notice to creditors m u st be given by publication in as m any news­
papers as th e O rphans’ C ourt shall , direct (usually one) before the
estate is distributed. Personal property of th e decedent m u st be
appraised, an itemized inventory thereof filed in th e O rphans’ C ourt,
and distribution thereof m ade through th e O rphans’ C ourt. All
sales m ade by th e personal representative m u st be authorized and
ratified by th e O rphans’ C ourt which appointed him. T he personal
representative m ust within twelve m onths of his appointm ent file
in th e O rphans’ C ourt of his appointm ent a detailed account of
his adm inistration, and if such first account does not show th e estate
to be fully adm inistered, further accounts m ust be filed a t six-month
intervals until th e estate is fully adm inistered. T he O rphans’ Courts
also have sim ilar powers to adm inister upon th e estates of persons
found to be dead pursuant to th e Uniform Absence as Evidence of
D eath and A bsentees’ P roperty Act.
A ffidavits. (See Acknowledgments.) No particular form neces­
sary, b u t whoever can tak e an acknowledgm ent can tak e an affidavit
Affidavit of mortgagee always required in a m ortgage as to th e bonafldes of m ortgage consideration. (See Mortgages.)
A liens. Aliens, not enemies, m ay tak e and hold lands, tenem ents,
and hereditam ents acauired by purchase, or to which th ey would, if
citizens, be entitled by descent; and m ay sell, devise or dispose of the
same, or transm it th e sam e to their heirs, as fu lly and effectually, and
in th e same m anner, as if by birth, they were citizens of th is State.
A r b itra tio n . Any cause in th e law courts or O rphans’ C ourts
of th is S tate (in their respective spheres) m ay, by rule of court and
by consent and agreem ent of th e parties thereto, be subm itted and
referred to th e aw ard and arbitram ent of any person or persons, and
th e C ourt m ay give judgm ent on th e aw ard of th e person or persons
to whom such submission and reference shall be m ade as of th e term
to which said aw ard shall be returned and aw ard execution thereon a supon verdict, confession or non-suit. B y agreem ent, disputes between
employer and employee m ay be subm itted, for arbitratio n , to any
Judge or justice of th e peace, or if th e parties so elect, to a group of
arbitrators appointed by such judge or justice of th e peace, th e deter­
m ination of such judge, justice of th e peace or of th e arb itrato rs
appointed by them to be filed as a judgm ent of the court presided over
by th e judge or justice of th e peace to whom th e dispute was sub­
m itted for arbitration. An agreem ent to arbitrate, as distinguished
from a case actually subm itted for arbitration, cannot be specifically
enforced.
A tta c h m e n ts for debt or for liquidated dam ages can be obtained
in all cases when th e defendant is a non-resident or has absconded,
affidavit being first m ade by th e plaintiff to th e correctness of his claim
and th e fact th a t th e defendant is a non-resident or has absconded.
T hey m ay be also obtained in connection w ith an original process when
th e creditor or some one in his behalf shall give bond in double the
am ount of th e debt, w ith sureties to be approved by th e clerk, and
m ake affidavit before th e clerk of th e C ourt where th e su it is brought
th a t th e defendant is bona fide indebted to th e plaintiff in th e sum
claimed, and th a t th e plaintiff knows or has good reason to believe th a t
the debtor has absconded or is about to abscond from th e S tate, or
th a t th e defendant has assigned, disposed of, or concealed, or is about
to assign, dispose of, or conceal, his property, or some portion thereof,
with in ten t to defraud his creditors, or th a t th e defendant fraudu­
lently contracted the d eb t or incurred the obligation; or th a t the
defendant has rem oved or is about to remove his property, or some
portion thereof, o ut of this State, w ith intent to defraud creditors
and th e attachm ent m ay be m aintained, although th e debt or obliga­
tion upon which th e action is brought m ay not have m atured, b u t the
date of th e m atu rity of the debt or obligation m ust be set forth in
the affidavit. A claim ant m ay have th e attached property released
by filing a bond in double th e am ount of th e appraisem ent. Any
kind of property or credits belonging to th e defendant, in th e plaintiff’s
own hands or in the hands of any one else m ay be attach ed . There
is a special provision for capital stock of a corporation. T he certifi­
cate itself m ust be seized. C redits not due m ay be attach ed , b ut
wages, hire or salary not due cannot be attached, and $100 of wages,
hire, or salary due shall always be exem pt. Im prisonm ent for debt
is abolished. D efendant m ay be sued in th e city or county of his
residence or th a t of his place of business. In addition to attachm ents

BANKING AND COMMERCIAL LAWS—MARYLAND
against non-residents or absconding debtors for debt (i. «., a liqui­
dated sum) attach m ents m ay be issued against such debtors in cases
arising from contracts when the1 damages are unliquidated, and in
actions for wrongs independent of contract; b u t in such cases no
attachm ents can be issued until a declaration is filed setting out
specially and in detail the breach of th e contract complained of or the
to rt actually com m itted, verified by the affidavit of th e plaintiff or
some one in his behalf, and u ntil a bond shall be filed sim ilar to the
bond required in attach m en ts for fraud. All papers in attachm ent
proceedings can be am ended as in any other actions a t law. I f neither
th e D efendant nor Garnishee appear condem nation m ay be had upon
filing" bond to be in force for period of six m onths, accounting from the
retu rn of th e attachm ent.
B a n k C o lle c tio n C ode. Effective June i , 1929. Follows directly
after Laws.
B a n k s, Any num ber of persons, not less th a n five, citizens of th e
U nited States an d a m ajority of them citizens of this. State, m ay asso­
ciate to establish a bank upon th e term s and conditions and subject to
th e liabilities prescribed in Article Eleven of th e Code. T he capital
stock for any bank shall n ot be less th a n twenty-five thousand dollars
($25,000.00) in cities, towns, or villages having up to fifteen thousand
(15,000) inhabitants, and shall n ot be less th an seventy-five thousand
dollars ($75,000.00) in cities, towns, or villages having more th an
fifteen thousand (15,000) and up to fifty thousand (50 000) inhabitants,
and shall n o t be less th a n one hundred thousand dollars ($100,000.00)
in cities, towns and villages having more th an fifty thousand (50,000)
and u p to one hundred and fifty thousand (150,000) inhabitants,
and shall n o t be less th a n five hundred thousand dollars ($500,000.00)
in any city, town or village having more th an one hundred and fifty
thousand in h ab itan ts (150,000); the num ber of inhabitants in each
case to be ascertained or determ ined by the last Federal or State
enum eration; and no bank shall s ta rt business until all of th e capital
stock provided for in its charter and an additional sum equal to 20%
thereof, as surplus shall have been paid for in full in money and no
paym ent shall be regarded as m ade by th e delivery of any note,
security or p ro p erty of any kind as a su bstitute for m oney, except
as otherwise provided by law. Provided th a t th e above shall not
apply to any person, co-partnership, incorporated bank, or other
incorporated in stitution engaged in the banking business in this S tate
on April 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 of th e 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 complied w ith, by adding to th e capital
and surplus of th e parent institution, the am ount th a t would be
required if such branch or branches were separately incorporated.
And provided, further, th a t in estim ating such addition to th e capital
and surplus of th e parent institution, credit shall be given for the
am ount th a t th e existing capital and surplus of such parent insti­
tu tio n exceeds th e am ount thereof required by law; and provided
further, th a t no branch shall be established By any bank, in the
city, town, or village, where said bank is located, until said bank
conforms to th e requirem ents, as to the m inim um am ount of capital
stock for banks in said city, town or village.
E very b ank (other th an a savings bank w ithout capital stock)
shall keep on hand a t all tim es a reserve of a t least 15 per cent of its
dem and deposits an d of a t least 3 per cent of its tim e deposits.
These reserves m ay be kep t as cash on hand, or on deposit in such
bank or banks, or tr u s t com pany or tru s t companies of th e S tate of
M aryland, or elsewhere, of good standing, as th e board of directors
or executive com m ittee by resolution m ay direct; in addition to the
above m ethods of keeping reserves, th e reserve of a t least 3 per cent
of tim e deposits m ay be k ep t in th e form of direct obligations of the
U nited States Governm ent, or th e S tate of M aryland. E very tru s t
com pany shall keep on hand a t all tim es a reserve of a t least 15 per
cent of its dem and deposits (not including any deposits m ade by the
C ity of Baltim ore and secured by the counter deposits of Baltim ore
C ity stock). Of th is 15 per cent, 10 per cent shall be k ep t on deposit
in such b ank or banks, or tr u s t com pany or tr u s t companies of good
standing, either in th e S tate of M aryland or elsewhere, as th e board
of directors or executive com m ittee m ay direct, and th e other 5
per cent m ay be k ep t in th e sam e m anner as th e 10 per cent, or in
th e form of registered or coupon bonds or public stock of the United
States, or th e S tate of M aryland, or of Baltim ore C ity, or of the
bonds of an y county or m unicipal corporation of this S tate which
shall be approved by th e Bank Commissioner. E very tru s t com pany
shall also keep on h and a t all tim es a reserve of a t least 3 per cent
of its tim e d eposits; which reserve m ay be k ep t in the sam e form as
tim e deposits of banks are required to be kep t as set forth above.
Cash item s shall n o t be considered as a p a rt of th e reserve required
to be k ep t by either banks or tru s t companies, b u t pash actually on
hand held by a tru s t com pany shall be considered as a p a rt of the
10 per cent reserve above m entioned.
No savings institution or savings bank incorporated after 1910
could have any capital stock, b u t m ust be a m utual association.
Such “ association for carrying on th e business of savings banking m ay
be formed by any num ber of persons, not less than fifteen, citizens of
the U nited States, and a m ajority of them citizens of this S tate, who
shall enter into articles of association which shall specify th e object for
which th e association is formed and shall sta te ; The nam e by which
the savings in stitution is to be known, th e village, town or city and
county where sucb institution is to be located, the names and resi­
dences of th e members thereof, th e date on which it is proposed to
commence operations, th e num ber of directors proposed to manage
the association’s affairs, which shall not be less th an five, who m ust
be members of th e association, and th e names and residences of the
directors who shall serve the first year.” T he articles of association
shall be presented to th e B ank Commissioner for exam ination. H e will
m ake an investigation and will either approve or refuse th e form ation
of th e savings institution.
The banking laws of M aryland provide for the appointm ent of a
Bank Commissioner w ith broad powers for th e exam ination or all
banking in stitutions in this S tate other th an N ational Banks, w hen­
ever capital is reduced by im pairm ent commissioner m ay require
Bank to m ake such deficiency good w ithin sixty days, and upon its
failure to do so m ay tak e possession of property and business of such
in stitution and retain u ntil affairs are finally liquidated,_ or u ntil
a- reorganization has taken place which will fully protect depositors
and creditors. T his also applies where the business is conducted in
an unsafe or unauthorized m anner. Every banking and tru s t insti­
tu tio n shall have the right of perpetual succession u ntil forfeiture.
E very b ank and tru s t com pany shall m ake to the Bank Commissioner,
not less th a n three reports during the calendar year, a t such tim es as
/ th e B ank Commissioner shall require. At least once a year th e b ank or
tru st com pany shall report to th e Bank Commissioner, on call by him,
a list of its stockholders. T he Bank Commissioner shall have a right
to call for special reports, whenever in his judgm ent th e sam e a,re
necessary.
_
.
,
. . . . ..
Banks are perm itted to establish and operate brandfies within the
S tate after having first obtained the approval of the Bank Commis­
sioner. N o bank or tru st com pany m ay have any affiliate or closeiy
allied corporation, or own controlling stock in any other corporation.
Stockholders of every bank and tru s t com pany were form erly held
individually responsible, equally and ratably, and not one for another,
for all contracts, debts and engagem ents of every such corporation,
to th e extent of th e am ount of their stock therein, a t th e par value
thereof, in addition to th e am ount invested in such stock. By an Act
of th e General Assembly of M aryland (Chapter 81, Acts of the.R egular
Session of 1937) th is liability does n ot apply with respect to stock
originally issued by any bank or tru s t com pany subsequent to Novem ­
ber 23, 1936. Such responsibility, with respect to all outstanding
stock issued by any bank or tr u s t com pany, shall cease three m onths
after .such b ank or tr u s t com pany shall cause a notice of such pros­


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2025

pective term ination o f responsibility to be published in a newspaper
published in th e City, village or cou n ty in w hich th e bank or trust
com pany is lo c a te d ; provided th a t such Dank or trust com pany shall
certify to th e B ank Com m issioner th e fact of such publication. In
th e even t of th e term ination o f th e individual responsibility of stock­
holders as above provided, such bank or trust com pany is required to
transfer to surplus at th e Close o f a fiscal period, either annually or
sem i-annually, not less th an 10 % o f its net earnings, u n til such surplus
shall equal and thereafter continue to equal 100% o f its capital.^

E very bank, savings institution and tru s t com pany is specially
granted th e power' and authority, if th e action is approved by a vote
of a m ajority of its B oard of D irectors, to become a m em ber of th e
Federal D eposit Insurance Corporation.
B lu e S ky L aw . N o “prelim inary reports or qualifications are
required and only if it shall appear to th e A ttorney General of M ary­
land th a t in the issuance, sale, prom otion, negotiation, advertisem ent
of securities within th e S tate of M aryland, any person, partnership
or corporation, is employing or is about to employ any device, scheme
or artifice to defraud, or for obtaining money or property by m eant
of any false or fraudulent pretense, representation or promise, th e
said A ttorney General m ay require said person, partnership or cor­
poration to file with him a statem ent in writing under oath of all the
facts concerning th e same. From th e action of th e Attorney-G eneral,
there is an appeal to the courts, w ith final resort to th e C ourt of Appeals.
T he Law also provides th a t any person, partnership or corporation
having been served with any order of th e A ttorney General, or having
knowledge of th e issuance of said order and while said order remains
In effect, either as originally issued or as modified who shall execute
or carry on any scheme or device against which said order has been
issued, or wilfully a ttem p ts to do so, shall be guilty of a misdemeanor
and, upon conviction, shall be fined not more th an $10,000 or im pris­
oned not m ore th a n tw o years or be subject to both fine and im prison­
m ent, in th e discretion of th e C ourt.
'
C o lle c tio n s. Uniform, Bank Collection Code as recommended by
American Bankers Association, see com plete tex t back of Laws.
C o n tr a c ts . T he norm al condition of all persons is one in which
th ey are capable of m aking any contract. T he fourth and seventeenth
sections of th e S tatu te of F rauds are in force in M aryland. I t is no
longer necessary to show th a t th e consideration for a special promise
to answer for th e debt of another is in writing. A citizen can not
m ake a contract w ith an alien enemy during th e continuance of hos­
tilities, b u t aliens, not enemies, m ay contract and hold real property
as fully as citizens. T he later cases decide contract of infants to be
voidable and not void; and th ey are capable of ratification by infants
on arrival a t age of tw enty-one. T he contracts of infants for neces­
saries are binding upon them . T he contract of a lunatic is voidable
and n ot void. A m arried wom an m ay engage in business, contract,
sue and be sued upon contracts and to rts, as if unm arried. All
gam bling contracts are void.
C o n v e y an ces. N o estate in or title to any land lying w ithin this
State, for any period above seven years shall pass or ta k e effect unless
th e deed conveying th e sam e shall be executed, acknowledged and
recorded. Such deed shall be signed and sealed by th e grantor, and
atteste d by a t least one witness. Unless th e contrary intention
appears, every deed is construed to pass the whole estate of th e
grantor. Deeds of real estate should be recorded w ithin six m onths
From date in county, or in Baltim ore City,, where land lies. Where
there are tw o or more deeds conveying th e sam e lands, th e deed first
recorded shall be preferred if m ade bona fide and upon good and
valuable consideration A scroll with th e word “ se al” therein by
way of a seal, is sufficient, as “ (signed) John Doe (Seal).
The
D eed of a body corporate m ust be signed in th e corporate nam e by
the President or a Vice President, and th e official Corporate seal
Impressed on th e deed, th e seal to be atteste d by th e Secretary of th e
corporation.
C o rp o ra tio n s are organized under th e a u th o rity of Article 23 of
F lack’s Code wherein m ost liberal provisions are m ade for general
incorporation, including such features as stock w ithout par ,value,
issuance of stock for considerations other th a n cash, convertibility of
stock from one class to another class, cum ulative voting, stock fully
paid and non-assessable, convenient am endm ent and consolidation,
etc. E very dom estic corporation having capital stock, except build­
ing or hom estead associations, credit unions, and cooperative associa­
tions shall, a t or before th e tim e of incorporation, pay for th e use of
th e S tate a bonus tax a t th e following rates:— $20 for an authorized
capital stock of $100,000, or less, and, in addition, $1 for each $5,000,
or fractional p a rt thereof, of th e am ount of authorized capital stock in
excess of $100,000 and n o t in excess of $1,000,000.
$200 for an authorized capital stock of $1,000,000, and, in addition,
$10 for each $100,000, or fractional p a rt thereof, of th e am ount of
authorized capital stock in excess of $l,000,00d and n ot in excess of
$ 2 , 000 , 000.
$300 for an authorized cap ital stock of $2,000,000, and, in addition,
$15 for each $500,000, or fractional p a rt thereof, of th e am ount of
authorized capital stock in excess of $2,000,000 and n o t in excess of
$5,000,000.
$390 for an authorized capital stock of $5,000,000, and, in addition,
$20 for each $1,000,000, or fractional p a rt thereof, of th e am ount of
authorized capital stock in excess of $5,000.000.
F or th e purposes of th e above provisions as to bonus tax , shares
w ithout p ar value shall be treated as if th ey were of th e p ar value of
$20.00 each.
E very dom estic corporation except corporations th e shares of which
are subject to ordinary taxes, charitable and benevolent institutions,
building or hom estead associations, credit unions, and corporations
having no capital stock, pay annually for th e use of the S tate, in addi­
tion to any other ta x imposed b y Law, a ta x for its franchise to be a
corporation a t th e following rates:—1
$10 on a capital of $10,000 or less, and, in addition, $5 for each
$5,000, or fractional p a rt thereof, Of its capital in excess of $10,000
and n o t in excess of $50,000.
$50 on a capital of $50,000, and, in addition, $10 for each $25,000, or
fractional p a rt thereof, of its capital in excess of $50,000 an d n o t in
excess of $100,000.
$70 on a capital of $100,000, and, in addition, $15 for each $200,000;
or fractional p a rt thereof, of its capital in excess of $100,000 and n ot
in excess of $500,000.
$100 on a capital of $500,000, and, in addition, $20 for each $500,000,
or fractional p a rt thereof, of its capital in excess of $500,000, an d not
in excess of $10,000,000.
$480 on a capital of $10,000,000, and, in addition, $30 for each
$2,000,000, or fractional p a rt thereof, of its capital in excess of
$ 10, 000 ,000 .
,
For purposes of th e franchise tax on th e shares of dom estic cor­
porations, th e w ord capital m eans th e issued capital stock plus paidin or capital surplus.
t
E very foreign corporation subject to th e jurisdiction of th is State,
except insurance companies, national banks, building or homestead
associations, credit unions, and charitable and benevolent institutions,
m u st file an annual report w ith th e S tate T ax Commission of M ary ­
land and pay an annual filing fee of $25.00. .
,
E very foreign corporation doing interstate or foreign business in
th is S tate, except insurance companies, railroads, and national banks,
shall have a t least one resident agent in this S tate whose name and
address, as such, have been certified to th e S tate T ax Commission.
A foreign corporation before doing in tra state business in th is S tate
shall appoint a resident agent, file w ith th e S tate T ax Commission a
certified copy of its charter and pay to th e S tate T ax Commission a
qualification fee of $25.00. F ailure to qualify to do business in M aryland
does n ot affect th e validity or enforceability of any co n tract m ade
w ith a foreign corporation. However, th e corporation and its officers
and agents are subject to crim inal penalties for having failed /to
qualify and no suit m ay be m aintained by such foreign corporation
u n til certain penalties have been paid.

2026

BANKING AND COMMERCIAL LAWS—MARYLAND

N o corporation m ay interpose th e defense of usury in any action
a t Law or in E quity. M aryland corporations m ay hold stockholders
m eetings an d directors m eetings outside of this State.
C o u r ts . T he C ircuit C ourts of th e counties have common law
jurisdiction in all cases involving more th a n $50.00, and in all cases
Involving title to land; and equity jurisdiction in all cases involving
more th a n $20.00. T he C ircuit C ourt of Baltim ore C ity and th e Cir­
cuit C ourt No. 2 of Baltim ore C ity have exclusive equity jurisdiction
in th e city. T he Superior C ourt of Baltim ore C ity, th e C ourt of
Common Pleas of B altim ore C ity, and-the Baltim ore C ity C ourt have
concurrent common law jurisdiction in Baltim ore C ity in cases involv­
ing more th a n $100.00. All records pertaining to th e transfer of title
to land In Baltim ore C ity are in th e custody of th e Clerk of th e Superior
C ourt of Baltim ore C ity, and in th e counties, in th e custody of the
clerks of th e various C ircuit C ourts of th e counties. All such records
are open to th e public. T he O rphans' C ourt of Baltim ore C ity, and
th e O rphans’ C ourt of each county have exclusive probate jurisdiction.
In th e counties justices of the peace have common law jurisdiction
to th e am ount of $100.00 (concurrently with th e C ircuit C ourts from
$50.00 to $100.00). In Baltim ore C ity th e People’s C ourt has juris­
diction up to $100.00 and suits on sm all claims in Baltim ore C ity
are brought in this C ourt instead of before the individual justices of
th e peaces
\ D e p o s itio n s . W hen th e courts are satisfied, by affidavit or other­
wise, th a t there are m aterial and com petent witnesses residing w ith­
o ut th e S tate, th ey will direct th a t a commission be issued to take
th e testim ony of such witnesses. T he commissioners are selected by
,the court, and m ust qualify before some person authorized to adm in­
ister an oath in the sta te where th ey reside. The depositions, duly
certified by th e commissioners, shall be adm itted as evidence a t the
trial of th e cause, subject to th e sam e objections and exceptions as
th e sam e testim ony would be if th e witness had been personally present
in court an d there examined. P arties have th e right to be present
when th e testim ony is taken under th e commission, and m ust receive
reasonable notice of th e tim e and place. Interrogatories and crossinterrogatories m ay be annexed to th e commission or th e witness m ay
be examined by counsel. T he testim ony of non-resident witnesses or
parties to a cause m ay also be taken before a commissioner, notary
public or justice of th e peace upon giving notice of not less th an five
days to th e opposite p arty of the tim e and place, when and where the
testim ony of such non-resident witnesses is proposed to be taken, and
th e nam e of th e commissioner, n otary public or justice of the peace
before whom th e sam e is proposed to be taken, together with th e nam es
of th e witnesses proposed to be examined. Depositions shall be signed
by th e witnesses, and signed and sealed by the officer taking the same
and returned to th e C ourt in which th e case is pending.
D e s c e n t a n d D is tr ib u tio n of P ro p e rty . As to descent, see
Code 1939, A rt. 46, and as to distribution. Code 1939, Art. 93. The
B uie in Shelley’s case has been abolished by Ch. 144, Acts 1912,
Code 1939, A rt. 93, sec. 348.
D ow er. T he common-law right of dower exists In M aryland, and
extends to equitable estates. By act 1898, th e husband’s dower
was created; an estate of th e husband in his wife’s estates of inherit­
ance, exactly equivalent to th e wife’s dower in her husband’s estate.
A devise or bequest of real or personal p roperty to th e wife or husband
shall be construed to be In lieu of dower in lands or share of personal
estate, respectively, unless otherwise expressed in th e will. I f the
widow or widower renounces form ally In writing, however, such pro­
vision m ade for her or him by th e will within th irty days after th e
expiration of th e six m onth notice to creditors on th e estate of th e
deceased husband or wife, th e dower rig h t and th e share of personal
property rem ain undisturbed. (See M arried Women.)
E x e c u tio n s m ay issue and judgm ents m ay be renewed or revived
by scire facias a t any tim e w ithin twelve years frpm date of judgm ent.
In th e circuit courts for th e counties there is a sta y until th e first T hurs­
day of th e term succeeding th e rendition of th e judgm ent, provided the
judgm ent is obtained a t th e second term after th e defendant is sum ­
moned. T here is no sta y upon judgm ents rendered in th e courts of
Baltim ore C ity or by justices of th e peace in th e city or counties, b u t
execution m ay issue forthw ith. The defendant m ay sta y th e execution
by superseding with sureties for six m onths. Certified copy of docket
entries of judgm ent when recorded in another county m akes th e
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 k ep t for sale) and $100 of money, land or goods, and $500
payable to th e debtor as life, health, or accident insurance are exempt
from execution, except (1) on judgm ents for breach of promise to
m arry or seduction and (2) aggregate exemptions n ot to exceed $500
and (3) n o t applicable to any b u t actual bona fide residents of this
S tate.
F o re ig n C o rp o ra tio n s . (See Corporations.)
F o re ig n J u d g m e n ts . Judgm ents of th e courts qf other states
certified under the Act of Congress, are proper causes of action against
any person subject to th e process of th e courts of this S tate.
F r a u d . W hen any false representation is m ade by one to another
with th e in ten t to defraud, and the defrauded p arty , thinking the
alleged fraud to be true, acts upon it, any contract thus m ade can
not be enforced. B ut if the injured p arty knows such representations
to be false it can not be said to have influenced his conduct. For
general doctrine in this S tate see McAleer vs. Horsey 35 M d. 439.
Giving checks or drafts w ithout provision for acceptance is prim a
facie evidence of in ten t to defraud, and is punishable as a crime
unless'such provision is m ade within ten days. E very person buying
merchandise in bulk shall dem and and receive from the vendor a
w ritten statem ent under oath containing th e names and addresses
of all creditors with am ount of indebtedness a t least ten days before
th e sale is consum m ated. The vendee a t least ten days before con­
sum m ating such sale shall notify all of said creditors either personally
or by registered m ail of such proposed purchase and is required to
see th a t th e purchase money is applied to the paym ent of th e vendors
debts shown on said statem ent. A sale or transfer of goods In bulk
w ithout such notice shall as to all subsisting creditors of th e vendors
be void.
Special provisions of crim inal law apply to th e m aking of false
financial statem ents.
G a r n is h m e n ts . (See A ttachm ents.)
H o lid ay s. S aturdays after twelve o’clock noon (except in B alti­
more C ounty (not C ity), Caroline, Howard and T albot C ounties);
Sundays: Ja n u ary 1 (New Y ear’s D ay); F ebruary 22 (W ashington’s
birthday) ; M arch 25 (M aryland D a y ); Good F riday; M ay 30 (Decora­
tion D a y ); Ju ly 4 (Independence D a y ); th e first M onday in Septem ber
(Labor D a y ); Septem ber 12 (Defenders’ D a y ); October 12 (Columbus
D a y ); N ovem ber 11 (Armistice D a y ); December 25 (Christm as D a y );
all d ay s of general and congressional elections throughout th e State.
W hen an y of these days except M arch 25 falls on Sunday th e ensuing
M onday is a legal holiday. AH special days th a t m ay be appointed
or recom m ended by th e Governor of this S tate or th e President of
th e U nited States, as days of thanksgiving or. fasting and prayer, or
other religious observance, or for the generalcessation of business, shall
also be regarded as legal holidays. All bills, drafts, checks and notes
presented for paym ent or acceptance on these said days shall be
deem ed to be presented for acceptance or paym ent on th e secular or
business days next succeeding such holiday.
H u s b a n d a n d W ife.
(See Dower, and M arried Women.) In
th is S tate th e husband is not liable for wife’s ante-nuptial debts
or contracts. H usband is liable for necessaries of wife. H usband
has sam e interest in wife’s estate as wife has in husband's estate.
M arried women are expressly authorized to become partners and to
contract w ith husband. E ither can relinquish interest in other’s
real estate by joint or separate deed, or by agent or attorney properly
constituted. T he wife’s property is protected by th e C onstitution
from th e debts of th e husband.


https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

I n t e r e s t . T he legal rate of Interest Is 6 per cent per annum . A
person proved guilty of usury forfeits the excess over th e aggregate
of th e real sum lent and.6% interest thereon. Judgm ents bear interest
from th e date of th e verdict. A corporation cannot plead usury.
Licensed loan brokers m ay charge 3
per m onth on loans u p to
$300.00
J u d g m e n ts are liens for twelve years from the d ate of rendition
on any interest of the defendant in real or leasehold property w ithin
th e county where rendered. T hey can be transferred from one county
to another by sending a certified copy of th e docket entries to th e clerk
for record. T he lien commences from th e date of th e en try of th e
docket entries by th e clerk. Judgm ents are n ot liens on m ortgages or
other personal property u ntil execution has issued an d th e w rit is in
th e hands of th e sheriff. s
L ie n s. (See Judgm ents.) M echanics’ Liens. E very building
erected, repaired, rebuilt, or Improved to th e extent of one-fourth
of its value is subject to a lien for work done or m aterials furnished
for or about th e same, except th a t there are no liens for m aterials
furnished in Baltim ore C ity. E very machine, 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 m aterials fur­
nished or work done in building, repairing, or equipping th e same.
Garages are given lien for storage and accessories. To secure th e
lien and lay foundation for enforcing it, th e m aterial m an m ust within
six m onths after th e last work has been furnished, file a claim in th e
circuit court for th e county, or in th e C ircuit C ourt for Baltim ore C ity,
as th e case m ay be. T he liens are enforced by scire facias or b y bill
In equity.
L im ita tio n s of S u its . Accounts and notes are barred after three
years, sealed Instrum ents after twelve years; judgm ents twelve years
except against foreign corporations (no lim itations). A verbal promise
or acknowledgment will revive a debt barred by th e sta tu te .
M a rr ie d W o m e n . M arried women m ay hold and dispose of their
property lawfully as if unm arried, b u t husband m ust join in convey­
ances or real estate to release his dower interest. M arried women m ay
engage in business, contract, sue, and be sued upon contracts and for
torts, as if unm arried. M arried woman is alone liable for ante-nuptial
debts and contracts. H usband is still liable for necessaries. W here
husband or wife is adjudged a lunatic upon inquisition, and th e finding
rem ains in force, other spouse m ay convey after acquired property by
separate deed, as if unm arried. Surviving spouse is also allowed ahead
of creditors $75 if no m inor children, $150 if children. Surviving spouse
is entitled to (a) one-third of n et personal estate if there are children or
one-half thereof if there are no children b u t a surviving parent, or
$2,000.00 and one-half of th e residue if there are neither children nor
parents b u t a brother or sister or descendant of a b rother or sister
surviving, and (b) th e sam e share in net real estate or a t option of
surviving spouse in lieu of share of real estate surviving spouse, either
husband or wife, m ay elect to take dower rights which are one-third
of real estate for life ahead of creditors unless dower rights have been
specifically waived dr waived by joining in deeds. (See H usband
and Wife, and Dower).
M o rtg a g e s are executed, acknowledged, and recorded th e sam e as
deeds, and are not valid against creditors unless recorded within six
m onths after date. T here m u st,b e an affidavit m ade by th e m ort­
gagee or his agent a t any tim e before recording, th a t th e consideration
is tru e and bona fide. If m ade by agent, he m ust, in addition, m ake
oath th a t he is th e agent of the m ortgagee. A like affidavit is required
to chattel m ortgages, and absolute bills of sale, both of which m ust be
recorded w ithin tw enty days. T he lien of a m ortgage m ay be barred by
ceasing to pay interest or any installm ent of th e principal for tw enty
years. T hey m ay be foreclosed a t any tim e after th e d eb t becomes
due and before th e lien is barred.
N e g o tia b le I n s t r u m e n t s . T he Uniform Negotiable Instrum ents
Act adopted. (See com plete tex t following “ Digest o f Banking and
Commercial Laws.)
N o te s a n d B ills of E x c h a n g e . Negotiable Instrum ents are
defined by Article 13 of F lack’s 1939 Code, which repeals all laws,
inconsistent therew ith. Section 20 provides as follows: “An in­
stru m en t to be negotiable m ust conform to the following require­
m ents: 1. I t m u st be in w riting and signed by th e m aker or drawer.
2. I t m ust contain an unconditional prom ise or order to p ay a sum
certain in money. 3. M ust be payable on dem and, or a t a fixed
or determ inable fu tu re tim e. 4. M ust be payable to order or to
bearer; and 5. W here th e instrum ent is addressed to a drawee he
m u st be nam ed or otherwise indicated therein w ith reasonable cer­
tainty."- I ts negotiability is n ot affected by a seal, or by a provision
which authorizes the sale of collateral securities in case th e instru­
m ent be n ot paid a t m atu rity , or authorizes a confession of judg­
m ent if th e instrum ent be not paid a t m atu rity ; or waives th e bene­
fit of any law intended for th e advantage or th e protection of the
obligor; or gives th e holder an election to require som ething to be
done in lieu of paym ent of m oney. I t is not necessary th a t paper
should be m ade payable a t a bank or any fixed place. To charge
indorser, notice of non-paym ent and of protest m ust a t once be given to
him. T he tim e of m atu rity is regulated by Art. 13 of th e Code aS fol­
lows : "Section 104: Tim e of M a tu rity . E very negotiable instrum ent, is
payable a t th e tim e fixed therein w ithout grace. When th e day of
m atu rity falls upon Sunday, or a holiday, th e instrum ent is payable
on th e next succeeding business day. Instrum ents falling due on
S aturday are to be presented for paym ent on th e next succeeding
business day, except th a t instrum ents payable on dem and m ay, a t the
option of the holder, be presented for paym ent before 12 o'clock noon,
on S aturday, when th a t entire day is not a holiday.” Legal holidays.
(See Holidays.) I t is law ful for banks and bankers to close their
doors for business a t 12 o’clock noon, on each and every S aturday in
th e year, and every S aturday in th e year, after 12 o’clock noon, is a
egal half-holiday, so far as regards th e presenting for paym ent or accept­
ance, and th e protesting and giving notice of th e dishonor, of bills of
exchange and other negotiable paper, and for these purposes shall be
considered as th e first day of th e week, or Sunday, and all negotiable
paper shall be deemed to be presentable on th e secular day next suc­
ceeding.
P o w er of A tto rn e y . E very power of attorney authorizing an
agent or attorney to sell and convey any real estate, shall be attested
and acknowledged in th e sam e m anner as a deed, an d recorded prior
to or w ith the deed executed in pursuance of such power of attorney.
A corporation shall have power to appoint an attorn ey for th e same
purpose, under its corporate seal. Such power of atto rn ey shall be
deemed to be revoked when the Instrum ent containing th e revocation
is recorded in th e office in which th e deed should properly be recorded.
P ro b a te L aw . (See A dm inistration of E states and Wills.)
P r o te s t Is usually m ade by notary public. N o tary m ust Keep
register of protests. A protest of notary public is prim a facie evidence
of non-acceptance or non-paym ent, and of th e presentm ent of said
note for paym ent, or of said bill for acceptance or paym ent, a t the
tim e and in the m anner stated in the protest, and th e p rotest shall also
be prim a facie evidence th a t such notice has been sent or delivered in
th e m anner therein stated. (See N otes and Bills of Exchange.)
R e p le v in is a rem edy to recover specific goods an d chattels to the
possession of which th e plaintiff is entitled. Also th e proper rem edy to
recover possession of goods distrained unlawfully. Bond m ust be given
to th e S tate of M aryland, and any p a rty having an interest in the
property, m ay, upon breach of any covenant in bond, m aintain an
action in th e nam e of th e S tate for his or her use.
S ales a n d N o tices. Acts 1910, Ch. 346, adopts th e Uniform
Sales Act. (Art. 83, secs. 19 to 96 incl.)
T axes. T he county commissioners of th e several counties of the
State, and the M ayor and C ity Council of Baltim ore C ity are directed
to levy a tax annually upon real and personal property situ ated within
th e S tate. T he C ounty and/or C ity tax on Banks located and in
business anywhere in M aryland is uniform ly 1 per cen t of th e value of

BANKING AND COMMERCIAL LAWS—MASSACHUSETTS
its capital stock. The property of religious, charitable, benevolent,
and educational in stitutions, and cem etery companies is exem pt from
taxation. On tim ely application exemption m ay be had for m anufac­
tu re r’s tools and m achinery in actual use from M unicipal taxation in
Baltim ore C ity and in some of th e Counties. Collectors m ay sell
property to compel paym ent of overdue taxes, upon giving due notice
of sale, and complying with other requisites of sta tu te, and any person
interested in property m ay redeem within twelve calendar m onths
from date, and in default of 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). Five or more persons
citizens of th e U nited States, and a m ajority of them citizens of this
S tate, m ay form a corporation to be known as a tru s t company. The
capital stock of such corporation m u st be a t least seven hundred
and fifty thousand dollars; provided, however, th a t a corporation
with a capital of n o t less th a n two hundred thousand dollars m ay be
organized in a city containing more th an one hundred thousand and
less th an tw o hundred fifty thousand inhabitants, and a corporation
m ay be organized w ith a capital of n ot less th an one hundred and
fifty thousand dollars in a city containing more th an twenty-five
thousand inhab itan ts and less th an one hundred thousand inhabitants,
and w ith a capital of a t least one hundred thousand dollars in a city
or town the population of which does not exceed twenty-five thousand
inhabitants, th e num ber of inhabitants in each case to be ascertained
or determ ined by th e last Federal or S tate enum eration, and no tru st
com pany shall sta rt business u ntil all of th e capital stock provided
for in its charter an d an additional sum equal to 20% thereof as a
surplus, shall have been paid for in full in money and no paym ent
shall be regarded as m ade by th e delivery of any note, security or
property of any kind as a su b stitu te for money, except as otherwise
provided by law.
In th e event th a t any tru s t com pany hereafter establishes a branch
or branches outside of the city, tow n or village in which it is now
located, it shall add for each branch established, to its paid-in-capital
th e following sum s and tw enty per cent (20%) thereof as additional
surplus; th e sum of twenty-five thousand dollars in towns or villages
having less th an fifteen thousand (15,000) inhabitants; seventy-five
thousand dollars in towns, villages or cities having more than fifteen
thousand (15,000) and up to fifty thousand (50,000), inhabitants, and
not less th an one hundred thousand dollars in towns or cities having
more th an fifty thousand and less th an one hundred and fifty thou­
sand in h abitants; and not less th an five hundred thousand.dollar's in
cities having more th a n one hundred and fifty thousand; th e num ber
of inhabitants in each case to be ascertained or determ ined by the last
Federal or S tate enum erations; unless the surplus and paid-in capital
of such tru st com pany is already sufficient under the present conditions
of th e law to provide th e surplus and capital required by a tru st com>any hereunder doing business in the city, town or village in which
t m ay be located, and for branches in cities, towns or villages in which
it proposes to establish branches; provided, however, th a t no branch
shall hereafter be established by any tru s t company, in th e city, town
or village where said tr u s t company is now located and engaged in
business, u n til said tru s t com pany conforms to the requirem ents
herein provided as to the m inim um am ount of surplus and capital
stock for a tr u s t com pany in said city, town or village.
U n ifo rm S t a t e L aw s. Intended for adoption by all th e States
and adopted by M aryland: 1. Absent persons; 2. Acknowledgments;
3. Aeronautics; 4. Air Licensing; 5. Bank Collection Code: 6. Bills of
Lading; 7. Cold Storage; 8. Crim inal E xtradition; 9. D eclaratory
Judgm ents; 10. E xtradition of Persons of Unsound M ind; 11. Federal
Tax Lien R egistration; 12. Fiduciaries; 13. Flag; 14. Foreign Acknowl­
edgm ents; 15. Foreign Depositions; 16. Foreign Executed Wills;
17. F raudulent Conveyance; 18. Fresh P ursuit; 19. In terp arty
Agreement; 20. Jo in t T o rt Feasors; 21. Judicial Notice of Foreign
Law; 22. Lim ited P artnership; 23. M achine Gun; 24. N arcotic
D rugs; 25. Negotiable Instrum ents; 26. Partnership; 27. Proof of
S tatutes; 28. Sales; 29. Simultaneous D eath; 30. Stock T ransfer;
31. To secure th e A ttendance of W itnesses from w ithout a S tate in
Crim inal Proceedings; 32. T ru st Receipts; 33. V eterans G uardian­
ship; 34. W arehouse Receipts.
W ills of land or personal property, and any codicil thereto, m ust
be in writing, signed by th e testator, or some one else for him, in his
presence, a t his request, and witnessed b y two or more credible w it­
nesses, as and for last will and testam ent of the testator, in th e presence
of all th e witnesses thereto. N uncupative wills invalid except in
case of disposition of personal property by soldiers in actual m ilitary
service or m ariners a t sea. E very will or other testam entary instru­
m ent executed w ithout this S tate in th e mode prescribed by law,
either of th e place where executed or of the testa to r’s domicile, or
according to th e forms required by th e law of this S tate shall be
deemed to be legally executed, and shall be of the sam e force and effect
as if executed in th e mode prescribed by th e law of this S tate, pro­
vided, said last will and testam ent is in writing and subscribed by
th e testato r; and if th e testato r was originally domiciled in M aryland,
although a t th e tim e of m aking th e will or a t the tim e of his death
he m ay be domiciled elsewhere, th e said last will or testam entary
Instrum ent so executed shall be adm itted to probate in any orphans’
court of th is S tate; and when so adm itted shall be governed by and
construed and interpreted according to the law of M aryland, w ithout
regard to th e lex domicilii, unless th e testa to r shall expressly declare
a contrary intention in said will or testam entary instrum ent. N o
will, testam ent, codicil, or other testam entary paper shall be subject
to caveat or other objection to its validity after the expiration of one
year from its probate.

i

SYNOPSIS OF

THE LAWS OF MASSACHUSETTS
RELATING TO

BANKING AND COMMERCIAL USAGES
Revised by V a l m o r e O. C o t e , A ttorney,
412-414 Kim bell Building,
N orth Adams, Mass.
(See C ard in A ttorney’s List)
A ccord a n d S a tis f a c tio n . An accord is an agreem ent whereby
one of th e parties undertakes to give or perform, and th e other to
accept In satisfaction of a claim, liquidated or in dispute, and arising
either from contract or from to rt, something other th an or different
from w hat he is or considers himself entitled to; and a satisfaction is
th e execution of such agreement.
Where th e claim is undisputed, and is settled only In p art, sucm
part paym ent is w ithout consideration and th e balance can be collected.
This, however, can be remedied by taking a release under seal which
purports a consideration in full settlem ent of th e entire claim . I n


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2027

order to take advantage of a suit pending in court because of accord
and satisfaction, it m ust be specially pleaded in th e defendant's answer.
However, in case of a disputed claim, th e acceptance of a smaller
sum in lieu of the entire claim is a valid consideration and therefore
is a full release on th e entire claim.
A c co u n ts. Ex parte affidavit on claims and accounts Is of no
value. They m ust be established by evidence produced in court
after suit brought either by testim ony, deposition, or other m aterial
evidence.
A ck n o w led g m en ts a n d D eed s. Acknowledgments m ay be m ade
before any justice of the peace, notary public or special commissioner
in the S tate; when the acknowledgm ent is m ade by any person w ith­
out this S tate apd w ithin any other state, territo ry or district of the
United States, it m ay be m ade before any officer of such state, te rri­
tory or district authorized by th e laws thereof to take the proof and
acknowledgment of deeds, and when so taken there shall be attached
to the certificate of acknowledgm ent a Certificate of the Secretary of
the sta te or territo ry in which such officer resides, under the seal of the
sta te or territory, or a certificate of the clerk of a court of record of such
state, territory or district, in the county in which such officer resides,
under seal of said court, certifying as to the authority, of such officer
to take acknowledgments and as to the genuineness of his signature.
In deeds where there is more th an one grantor, the acknowledgment
of one of them is sufficient. Official taking acknowledgment on in­
strum ents relating to real property and to be recorded, must, sta te
date of expiration of his commission before it can be accepted for
recording.
N o separate acknowledgm ent of wife joining in a release of dower
necessary. Conveyances of land are m ade by deed under seal executed
by th e grantor or attorney having authority therefor. Original
power of atto rn ey to execute sealed instrum ent m ust be sealed; to
sign deed or instrum ent requiring acknowledgm ent power of a t­
torney m u st aiso be acknowledged and recorded w ith th e deed or
instrum ent. A conveyance in fee, for life or a lease for a term ex­
ceeding seven years, shall n ot be valid, except aS against th e grantor
and persons having actual notice of it. unless recorded in th e county
registry district in which th e real estate is situated. Recording of
m ere notice of lease w ith nam es of parties, location an d d ates of
expiration or options is sufficient under recent sta tu te. Deeds should
be under seal. N o subscribing witness is necessary. Release of dower,
hom estead and other interests m ust be explicitly stated in deed,
body of deed m ust sta te th a t p arty releasing is th e wife or husband of
grantor„for identification as such, wife’s or husband’s joining in deed
m erely, being insufficient. H usband and wife ma,y m ake convey­
ances of real estate to each other except by way of m ortgage, as if
unm arried, b u t no such conveyance shall have any effect, either in
passing title or otherwise, until the deed describing th e property to be
transferred is duly acknowledged and recorded in the registry of
deeds for the district where th e land lies. Any interest in real estate
m ay be transferred by a person to him self jointly with another per­
son or persons in the sam e m anner in which it m ight be transferred
by him to another person, except a conveyance to him self and his
wife as tenants by th e entirety. No interest in land except an estate
a t will can be created except by instrum ent in writing and acknowledged
or by operation of law.
A ctio n s. T here are three classes of actions: contract, to rt, and
replevin. Actions a t law are begun by w rits issued in blank form by
the clerks of the several courts. No declaration need be inserted in
the writ, except In cases of arre st on m esne process or of an a tta c h ­
m ent of a vessel. Suits in equity are begun by filing a bill of com plaint
with th e Clerk of th e Superior C ourt upon which a subpoena or order
of notice is issued by th e clerk of the court, or by original w rit as a t
law where no im m ediate relief by restraining or m andatory order or
injunction is sought. Actions begun by trustee process m ust be
brought in the country or district in which th e trustees or one of them
resides or has his usual place of business. (See T rustee Process, infra.)
A d m in is tr a tio n of E s ta te s . A dm inistration or probate is to be
tak en out in county where deceased last resided. Executors or adm in­
istrators are required to give a bond of th e value of the personal estate.
An executor will be exem pt from giving sureties if testa to r so directs.
An adm inistrator will be exem pt if all persons interested in th is S tate
except creditors, consent. In case a non-resident is appointed ex­
ecutor or adm inistrator, he m u st appoint a resident agent. T here are
public adm inistrators in each county to whom adm inistration is
granted upon estates of persons who die in testate leaving property,
and not having any husband, widow, or heir in this S tate. Ancillary
adm inistration m ay be granted upon th e estate of a non-resident who
dies leaving property in this S tate. E very adm inistrator and executor
shall file an inventory w ithin three m onths. N otice of a d ebt, and
dem and for its paym ent should be given to an executor or adm inis­
tra to r w ithin six m onths after his appointm ent and the deb t should
be paid after six m onths and w ithin one year of the appointm ent.
No su it can be brought by a creditor against an executor or adm inis­
tra to r w ithin six m onths after his giving bond, except on a claim not
affected by th e insolvency of th e estate. No su it can be brought
against an executor or adm inistrator after one year from tim e of his
giving bond, unless he has received new assets after the expiration of
th e one year, or unless furth er tim e is allowed by court, and in either
event, unless th e estate is still open and th e executor or adm inistrator
has not been discharged. A creditor whose claim does not accrue
w ithin th e one year m ay cause assets to be reserved to answer to his
claim. W hen the estate is insufficient to pay all claims, th e executor
or adm inistrator shall represent th e estate insolvent and commissioner
will be appointed to receive proof of claims, or the C ourt m ay receive
and act upon the claims. Claims for funeral expenses, last sickness,
and charges of adm inistration, are priority claims in insolvent estates.
E xecutors and adm inistrators shall render an account a t least once
a year. Com pensation executors an d adm inistrators m ay now be
apportioned by C ourt betw een principal and income (1941).
A liens have th e sam e rights and liabilities a s . citizens d o ,. only
so, during the continuance of peace betw een th e country of th e alien
and our own country. W hen w ar exists between th e respective
nations, th e alien cannot sue but m ay be sued by a citizen of this
country. Ordinarily contract rights are suspended during th e oper­
ation of war unless th e alien is w ithin our territory, th en he m ay be
sued as above stated.
A rre s t. R ight of arrest exists irrespective of domicile of either
party. T he debtor m ay be arrested and imprisoned on execution
after th e sam e is obtained, if th e 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 of his
property and his ability to pay money in reference to the deb t owed
by him, after th e creditor has cited him in th e D istrict C ourt where
Supplem entary Process is had, and after th e exam ination by the
creditor or his attorney it is found th a t he has money or property and
won’t pay, then th e Judge m ay order weekly paym ents or place th e
debtor in jail for contem pt of court by reason of his failure to obey
th e court orders generally. If no assets are discovered th e debtor will
be discharged and the proceedings dismissed. T he creditor may,
one year from date thereof, cite th e debtor into court once again and
examine him anew as to his assets, property, and ability to pay on th e
debt.
A s sig n m e n ts for benefit, of creditors. A voluntary assignm ent to
trustees for benefit of creditors can not be avoided by creditors who
assent thereto, except by proceedings in bankruptcy begun within
four m onths or by proof of fraud. I f there is property in excess of
the claims of creditors who have assented, the excess in hands of the
trustee can be reached by trustee process. As a m atter of procedure
th e assignee usually waits th e full four m onths from date of assign­
m ent before m aking distribution am ongst assenting creditors.
Where Claims Are Assigned.
T he assignee, a t common law. by
virtue of th e assignm ent could sue on th e contract, b u t only so in
.th e nam e of his assignor where no w ritten assignm ent appeared.
B y Statute. If th e assignm ent is evidenced by a w ritten docu­
m ent, th en by virtue of th e sta tu te nereon, th e assignee has an election

2028

BANKING AND COMMERCIAL LAWS—MASSACHUSETTS

of remedies, to wit, sue in his own nam e, or in the nam e of his assignor,
on th e contract so assigned.
Ân assignm ent is considered a legal chose in action, and th e assignee
m ay prove a claim in bankruptcy in his own right and nam e, provided
th e assignm ent is m ade prior to th e institution of bankruptcy proceed­
ings, subject, however, to all defences and to all rights of counter-claim ,
recoupm ent, or set-off to which the debtor wOuld have been entitled
if th e action had been brought by th e assignor. T he assignee’s
rights and liabilities are those of th e assignor purely, and it should be
rem em bered th a t th e assignee is not considered as a holder in due course
of trade, as a holder of a negotiable instrum ent. T he assignee steps
into th e shoes of th e assignor and all personal defences available against
th e assignor are good äs against th e assignee.
Where Wages Are Assigned.
By virtue of S tatu te, future wages
of a person m ay be assigned for a period of two years from th e date
of th e assignm ent only, and it shall be valid to all intents and pur­
poses, if th e docum ent is form ally executed, th e consideration shown
in a p t words, rate of interest, signed by th e parties thereto, and a copy
delivered to th e assignor by th e assignee. T hree-fourths of th e weekly
wages of th e assignor shall be exem pt from assignm ent and no assign­
m ent shall be valid which does not so sta te on its face. No such
assignm ent shall be valid when m ade by a m arried m an unless th e
w ritten consent of his wife is attached thereto. Assignment not valid
unless copy thereof is delivered to assignor by assignee a t the d a te of
execution of same. A standard form of assignm ent m ay be found in
Chap. 154 of the General Laws. Assignment m ust be in standard
form: N o t valid unless accepted in writing by th e em ployer of
assignor.
Future Earned Wages m ay be assigned for a period of only one
year, where th e assignm ent is given as security for a loan xof money
less th an $300 in am ount. T he employer m ust accept the order of
th e assignm ent by a w riting attached to th e assignm ent and recorded.
If th e assignor is m arried, th en it is necessary to a valid assignm ent
of his wages th a t th e wife by w ritten consent agrees to th e assignm ent
and such w ritten consent m ust be attached to th e assignm ent. Ten
dollars of th e assigned wages m ust be exem pt and m ust b e so sta te d on
th e face of th e assignm ent when recorded in order to be valid.
Notice to Third Persons or Creditors When.
U ntil th e assign­
m ent is placed on record a t th e C ity Hall, m th e office of th e C ity
Clerk or Town Clerk, in th e place where th e assignor lives, or If he is
a non-resident of th e S tate, then in th e city or tow n where he is em­
ployed. to be effective against attaching creditors.
N o assignm ent of future earnings sh a ll be valid against a trustee
process unless before service of th é w rit on th e alleged trustee, the
assignm ent has been duly placed on record where the assignor resides
a t th e tim e of such record.
A tta c h m e n t. All real estate, goods, and chattels not exem pt,
may be taken in attachm ent on th e original w rit and held as security
for judgm ent, except th a t lands and tenem ents can not be attached
in suits involving less then $20, exclusive of interest and costs. A t­
tachm ents m ay be m ade in suits by or against non-residents as well
as in suits by or against residents. A fter attachm en t of property of
a non-resident on an original writ, if service cannot be m ade on
defendant, affidavit m ust be m ade of th a t fact to court : court then issues
order of notice for service on non-resident by publication. No bond
is required to m ake an attachm ent. E xcept th a t attaching officer m ay
require plaintiff to give him a bond to protect him in an. attachm ent
of personal. property. Shares of stock in corporations cannot be
attached except by bill in equity. A ttachm ent of shares of stock
is not valid against a bona fide transfer although n o t recorded in book
or corporation. D ebtor m ay dissolve attachm ent by furnishing bond
w ith sureties to pay judgm ent obtained or value of property attached
determ ined by appraisal. This is so in all except cases of attachm ent
in cases in rem. D ebtor against whom judgm ent is rendered m ay be
subjected to sworn exam ination touching this property under the
Supplem entary Process S tatute. An attachm ent is dissolved by
death of th e defendant if adm inistration is granted upon his estate
upon application m ade within one year after his death. Levy m ust
be m ade on execution obtained bÿ attachm ent on real estate within
30 days from date of judgm ent. I f n ot levied upon w ithin th a t
tim e, new seizure m ust be m ade on the execution, interest seized to be
as of d ate of new seizure, subject' to intervening encum brances or
attachm ents.
A ttachm ent of m otor vehicle registered in M assachusetts on
mesne process in contract action m u st be consented to by endorse­
m ent on w rit, by justice of court where action is commenced.
Keeper of attach ed personal property can be appointed only by
permission of C ourt issuing w rit, perm ission to be endorsed on writ.
I f seizure is m ade on an execution, officer m ay appoint keeper w ith­
o u t permission of court, b u t costs of keeper discretionary w ith court
if point is raised.
B a n k s. The banking business is extensively regulated by sta tu te.
In general, savings banks, co-operative- banks, tru s t companies, or
other corporations or persons doing banking business in M assachusetts
are subject to supervision of commissioner of banks. (General Laws,
ch. 167, ch. 168, ch. 169, ch. 170, ch. 172) and am ended by C hapter 349
of th e Acts and Resolves of th e Commonwealth year 1934. No foreign
banking association or corporation shall tran sact business in M assa­
chusetts u n til it has received certificate from board of bank incor­
poration. For extensive provisions relative to Savings Banks, see
Gen. Laws, ch. 168, 1932 T . E d. and its num erous am endm ents
since 1932.
Savings banks m ay ta k e m ortgages for tim e loans up to 60% of
value of real estate for periods of from A to 20 years, if quarterly p ay ­
m ents on principal, am ounting annually to 2 % of th e original loan, are
required. Up to 70% of value if quarterly principals are required to
3% ann u ally of original loan, n o t to exceed $25,000. E xtended to
D ec. 31, 1945.
Savings b anks m ay loan u p to $500. on an y one parcel of real estate
on which it holds m ortgage, on unsecured note of owner, b u t only for
repair, alteration or rehabilitation of p roperty; m u st provide for re­
pay m en t in th ree years m axim um term in equal m onthly installm ents
to begin one m onth from d ate. T his A ct (1941) passed to save ex­
pense of sm all m ortgage loans where equity is adeq uate above first
m ortgage. T o ta l of such loans cannot exceed 1% of deposits of bank.
Emergency Law, passed M arch 24, 1939, m akes ineligible for sav­
ings banks, and savings departm ents of other banks, bonds or other
securities of railroad companies which, as shown by its reports to th e
I. C. G. has failed to earn a n e t income as defined by th e Commission
for 3 of th e 5 fiscal years nex t preceding d a te of investm ent. Bank
m ay how consent to settlem ent, modification or readjustm ent of any
investm ent and accept sub stitu tes p u rsu an t to reorganization or
otherwise.
N o dividend to, be declared on savings deposits where incom e of
b ank for period is less th a n 1% n e t after required am ount se t a p a rt
for guarantee fund.
T he tru s t com pany is the prevailing form of banking institution.
Fifteen or more persons associating by w ritten agreem ent m ay, upon
compliance w ith sta tu te, become a trust-com pany. Agreement of
association m ust se t forth Corporate nam e, purpose, city or town in
M assachusetts where business is to be transacted, am ount and classes
of its capital stock and num ber of shares into which it or any class is
to be divided. Notice of intention to form tr u s t com pany shall be
given to board of bank incorporation, and such notice m u st be pub­
lished. U nless th e board issues a certificate th a t public convenience
and advantage will be prom oted by establishm ent of such a tru st
com pany, no fu rth er raroceedings shall be had, b u t after one year the
application m ay be renewed. A fter th e first m eeting of th e sub­
scribers th e clerk and m ajority of board of directors execute in dupli­
cate articles setting forth copy of agreem ent of association, nam es of
subscribers and nam es and residences of officers, date of first m eeting


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and successive adjournm ents thereof, if any. When th e whole capital
stock has been issued, a new list of the stockholders, w ith th e name,
residence and post-office address of each, and the num ber in each class
of shares held by each shall be filed with the Board of Bank incorpora­
tions, which list shall be verified by th e Clerk of the Corporation. The
articles are filed with the secretary of state, with filing fee of one twen­
tieth of 1 per cent of capital stock, and certificate of incorporation
issues. Before business can be commenced a certificate authorizing
such m ust be obtained from board of bank incorporation.. (Gen.
Laws, ch. 172, section 11). A director of tru s t com pany m ust hold
a t least capital stock of a par value in the aggregate of n ot less than
$1,000, th e sam e to be unpledged, and m ajority of directors m u st be
citizens of and resident in M assachusetts. Except in sm aller munic­
ipalities capital stock of tru st company m ust be not less th an $200,000;
shares par value of $100 each. E ntire capital stock m u st be paid in
in cash. The form er double liability of th e common stockholders of
tru s t companies has been elim inated. Commissioner of banks has
extensive power to require retu rn s and to supervise an d examine.
Savings departm ents m ay be established, and are governed by laws
as strictly as savings banks. T he kinds of business which m ay be
done are prescribed by sta tu te w ith considerable detail. By Act of
1939, Ch. 244, requirem ents for establishm ent of tr u s t Company
branches have been lightened. R equirem ents also lightened for bank
taking over a tr u s t com pany as a branch.
Banks m ay pay to a m inor funds deposited in his nam e, unless in
violation of w ritten agreem ent to which bank is a party.
Employees or officers of a bank are liable to fine or im prisonm ent
if they receive a deposit knowing th a t such bank is insolvent.
In 1932, th e Legislature incorporated th e C entral C redit Union
Fund, Inc. to assist such C redit Unions as become m em bers thereof,
when th ey are tem porarily in need of cash or hold investm ents which
cannot be readily liquidated, by m aking loans to them or any of them ,
and it has th e rights and powers and is subject to th e duties and
obligations provided in Sections 2 to 7 of C hapter 216 of th e Acts of
1932. By-laws of credit unions m ay under certain conditions provide
for release of endorser on death of borrower in personal loans. Fund,
Inc. m ay become m em ber and invest in shares of Mass. C redit Unions.
C redit Unions m ay use up to 10% of a contingent fund in an y year
to cancel loans of deceased mem bers, where no estate even when
endorsed.
An Emergency Law was enacted and approved M arch 2, 1932,
creating T he Co-operative C entral Bank, m aking all T he Co-operative
Banks now established under th e laws of th e Commonwealth and
subject to th e provisions of C hapter 170 of th e General Laws, member
banks thereof as provided in C hapter 45, Sections 1 to 11.
Co-operative banks m ay borrow from any source for specific purpose
of seem ing funds to m ake real estate loans. Requires vote of threefifths of all directors an d consent of B ank Commissioner. C onstitutes
priority debt upon assets of bank. R ate of interest on real estate
loans m ay now be fixed by its directors on loans by Co-operative
Banks.
T he purpose of th e central bank was to prom ote th e elasticity and
flexibility of th e resources of the co-operative banks of th e common­
wealth by centralizing their reserve fuDds; C entral B ank establishes
fund for insurance of shares of m em ber cooperative banks. Central
B ank m ay loan to any m em ber bank up to 10% of m em ber b ank’s
assets.
T he deposits by th e member banks, together w ith any surplus
which m ay hereafter be accum ulated by th e central bank, shall
constitute its capital structure.
T he central bank shall be exempt from all S tate and local taxation,
except in respect to any real estate owned and, or used by it for its
corporate purposes.
An Em ergency Law was passed and approved M arch 2, 1932,
creating T he M utual Savings F und Inc. for th e purpose of pro­
tecting deposits in Savings Banks, as provided in C hapter 44, Sec­
tions 1 to 9 of th e 1932 Acts and Resolves of M assachusetts. The
enactm ent of this law will enable th e C orporation to assist such
member hanks when they are tem porarily In need of cash or hold
Investm ents which cannot readily be liquidated, by m aking loans to
them or any of them secured by th e pledge of m ortgages or other
securities legally held by such m em ber banks. Any savings bank
hereafter established during said term under th e au th o rity of said
C hapter 168 shall upon its organization become a m em ber bank.
Fund, Inc. now has executive officer and q uarters a t Boston and Bank
Commissioner m ay furnish Fund, Inc. inform ation relating to any
m em ber bank and advise with Fund, Inc. directors.
Banking corporations and M orris plan banks doing business under
special banking certificate granted by a u th o rity of Ch. 172A added
by Act of 1935, are under supervision of commissioner of banks.
Such banking companies m u st fulfill requirem ents of special a c t as
to capital and as to population of place where business place is located;
law gives such banking com panies broad banking powers. Loans by
commercial departm ents of tru s t companies for term of more than
3 years, m ust provide for 2 % annual repaym ent of principal, to com­
mence n ot less th an 2 years after date of note.
B ills a n d N o tes. T he law of negotiable instrum ents is governed
by the Negotiable Instrum ents Law, as am ended, where applicable;
in other cases by the law m erchant. A person becoming a party
to a non-negotiable prom issiory note payable on tm e, by signature
in blank on the back thereof, is entitled to notice of non-paym ent
same as an indorser. A depositary of funds, subject to withdrawal by
check or dem and d raft m ay pay a check or dem and d raft drawn on
It by a depositor having funds on deposit to pay same, notw ithstanding
his death, upon presentation w ithin ten days after its date. If waiver
of dem and, presentm ent p rotest and dishonor is intended by endorser,
this m ust appear above his endorsem ent. Recent Supreme Court
decision holds th a t if such waiver by more th a n one endorser, words
m ust appear and be repeated over th e signature of each endorser or
words above first endorsem ent m ust clearly sta te th a t each of th e en­
dorsers so waives.
P rotest of bill, note or order duly certified by no tary public under
his hand and official seal is prim a facie evidence of facts, stated in
such D ro te st and of giving notice to draw er or indorser.
T here are various sta tu to ry provisions bearing upon th e validity
of the notes of m unicipalities of this Commonwealth. W here a nego­
tiable Instrum ent is not payable on dem and, presentm ent m ust be
made on the day it falls due. W here it Is payable on dem and present­
m ent m ust be m ade within a reasonable tim e after its issue.
An accom m odation p arty to a negotiable instrum ent is liable thereon
to a holder in due course notw ithstanding such holder a t the tim e of
taking the instrum ent knew him to be only an accommodation party.
When the day, or the last day, for the perform ance of any act, includ­
ing the making of any paym ent or tender of paym ent, authorized or
required by sta tu te or by contract falls on Sunday or on a legal holi­
day, th e 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 a t the tim e fixed therein
without grace, except th a t three days of grace shall be allowed upon a
d raft or bill of exchange m ade payable w ithin M assachusetts a t sight
unless there is an express stipulation to the contrary. Where the day,
of m aturity falls upon Saturday, Sunday, or a holiday, instrum ent is
payable on next succeeding business day which is not a Saturday:
Instrum ents payable on dem and may, a t option of holder, be presented
for paym ent before twelve o’clock noon on Saturday when th a t entire
day is n ot a holiday; provided however th a t no person receiving any
check, draft, bill of exchange or promissory note payable on demand,
shall be charged w ith any neglect or omissipn of d u ty or incur any
liability, for not presenting for paym ent or acceptance or collection
sueh!check, dfaft, bill of exchange, or promissory note on a Saturday;
provided also th a t the same shall be duly presented for paym ent,
acceptance, or collection on the next succeeding business day.

BANKING AND COMMERCIAL LAWS—MASSACHUSETTS
U nder certain circum stances the original nam ed payee of order
paper m ay be a holder in due course.
Law allows only tw o days for “m aking good” bad checks after
receipt of notice. Failure to pay Within th a t tim e is prim a facie
evidence of in ten t to steal or defraud.
No bank shall be liable to a depositor, or to the drawer of a bill of
exchange upon the bank, for an am ount charged to or collected from
him on account of paym ent by such bank of a negotiable instrum ent
upon which the signature of any p arty is forged, or which is m ade,
drawn, accepted or indorsed w ithout authority, or which is m aterially
altered or th e am ount of which is raised; unless within one year after
return of such negotiable instrum ent to such depositor or drawer,
he shall notify th e bank in writing th at, as the case m ay be, the instru­
m ent was m ade, drawn accepted or indorsed without authority, th a t
signature of a p arty to instrum ent is forged, or th a t instrum ent has
been m aterially altered, or th a t the am ount has been raised.
B ills o f L a d in g . The so-called Uniform Bills of Lading Act is In
force, and has been held constitutional by the Supreme Judicial
C ourt. A bill in which it Is stated th a t the goods are consigned or
destined to a specified person is a non-negotiable or straight bill. A
bill in which it is stated th a t the goods are consigned or destined to
the order of any person nam ed in such bill is a negotiable or order bill.
A non-negotiable bill cannot be negotiated, and indorsement of such
a bill gives transferee no additional right. A negotiable bill m ay be
negotiated by indorsem ent of person to whose order goods are deliv­
erable by tenor of bill. Such indorsem ent m ay be in blank or to a
specified person. I f indorsed to a specified person it m ay be nego­
tiated again by the indorsem ent of sucn person in blank or to another
specified person. Subsequent negotiation m ay be m ade in like m an­
ner. A negotiable bill m ay be negotiated by any person in possession
of same, however such possession m ay have been acquired if, by the
term s of th e bill, the carrier undertakes to deliver the goods to the
order of such person, or if a t tim e of negotiation bill is in such form
th a t it m ay be negotiated by delivery. Indorsem ent of bill does not
m ake indorser liable for any failure on p art of carrier or previous in­
dorsers of th e bill to fulfill their respective obligations. Any pro­
vision in an order bill th a t it is non-negotiable shall be void.
B ills o f S ale. A bill of sale of personal property intended for
security m ust be recorded, the recording provisions as to mortgages of
personal property being applicable. See C hattel Mortgages. Ch. 255
of General Laws.
B lu e S ky L aw . Acts of 1921, ch. 499. approved M ay 27, 1921,
entitled Prom otion and Sale of Securities. Act does not apply to con­
tracts valid and effective before act became effective. C ertain secur­
ities are exem pted. Act defines a t length w hat is m eant by security
and sale,. Persons dealing in securities within operation of act m ust
be registered and inform ation specified m ust be furnished Public
U tilities Commission. C ertain classes of sales and certain securities
are exem pted from operation of Act. Annual license fee for broker,
$50, for salesm an, $2. Act does not lim it any sta tu to ry Or common
law rig h t of an y person to sue civilly or right of sta te to punish for
violation of an y law. Commission has power of inquiry, of summon­
ing witnesses and of suspending certain sales. Act has im m unity
provisions.; Violation of act punishable by fine of not more th an
$5,000 or im prisonm ent n o t more th an two and one-half years or
both.
Scope of law extended by Acts 1924, ch. 487, which should be
consulted.
C h a ttel M ortgages. C hattel mortgages m ust be recorded in the
records of th e city of town where th e mortgagor resides when the
mortgage is m ade, and in the city in which he then transacts business,
every mortgage, m ust be recorded within fifteen days of the date,
until recorded th e m ortgage is not valid except between the parties
and record subsequent to tim e lim ited is void. If m ortgagor resides
in own city or tow n and m ortgaged personal property, is located or
kep t in another, record m ust also be m ade in city or town where prop­
erty then is.
If record in tw o places is required, and m ortgage
is recorded in one place w ithin fifteen days, it m ay be recorded in
other place w ithin ten days a fter date of first record. The m ortgage
shall n ot be valid as against a person other th an the parties thereto
u n til so recorded.
A m ortgage of after-acquired property is good as against an attach ­
ing creditor where possession of th e after-acquired property is obtained
before attach m en t thereof is m ade and subsequently retained by the
mortgagee. A m ortgage is good, however, between the parties,
thereto, although unrecorded and no actual or constructive delivery
of th e p roperty takes place. M ortgage does not cover after-acquired
personal p roperty unless m ortgage has adequate provision, including
after-acquired p ro perty.”
A C h attel M ortgage m ay be foreclosed by notice delivered per­
sonally or by publication, and notice with proof thereof m ust be
recorded where th e m ortgage was recorded. After sixty days, the
foreclosure becomes com plete if th e condition is not performed.
C h attel M ortgages m ay be assigned. Assignment should bh recorded.
U pon perform ance of th e Conditions therein contained th e m ort­
gagor is entitled to a release.
W here th e m ortgagor defaults, then th e m ortgagee m ay sell th e
goods a t public auction by giving notice, in accordance with th e tim e
as specified in th e m ortgage, or advertising sale for three successive
weeks in a local newspaper in said C ity or Town. T he proceeds of
th e sale are applied to repay all sum s secured by the m ortgage and
all costs and expenses Incurred by reason of th e sale. T he surplus,
if any. shall be forthw ith paid to th e mortgagor.
C o n d itio n a l S ales of personal property are valid in this juris­
diction an d th e vendor m ay retain title for th e unpaid purchase, price
therefor. I t is usually a w ritten form al docum ent. I t need not be
recorded and will be good generally as against an attachm ent of the
property in th e hands of th e conditional vendee, except by special
sta tu te. Lien notes, and conditional sales contracts providing the
paym ents already m ade shall be forfeited or considered as rental of
property, are void in M assachusetts.
W here th e sale of personalty consists of household furniture, or
other household property, th en if title still remains in the vendor till
th e last paym ent has been m ade, th e vendee m ust be given th irty
days notice in w riting by th e vendor as to th e breach of condition of
■ale before th e goods or furniture can be repossessed, and also attached
thereto by th e vendor to said w ritten notice m ust be an item ized
statem en t showing am ount due. I f fifty per cent of the purchase
price has been paid on th e contract when th e vendee so requests,
th e vendor m ust sell th e goods a t public auction and th e proceeds
■hall pay th e vendor his balance due, and any surplus over and above
th is shall forthw ith be paid to th e vendee.
T o be valid, copy of conditional sale contract of furniture or house­
hold p roperty m u st be delivered by vendor to conditional vendee a t
th e tim e of th e sale.
Acts of 1937, ch. 112 require recording of notice of conditional
sale of elevator ap p aratus or m achinery for validity as against m ort­
gagees, purchasers or grantees of real estate. This includes heating
ap p aratu s or other apparatus which the vendor wishes to keep separate
from th e realty. Vendor m ust also (Acts 1937, ch. 245) record date
of final paym ent,w ithin 90 days and a sworn statem ent of the account
and nam e of second owner of the real estate.
Acts of 1937, ch. 315 require vendor of household furniture,
jewelry, etc.,' on conditional sale, to embody all articles sold in a single
w ritten contract. Requires such vendor to note all paym ents with
rem aining balances, on th e note, contract or receipts. Requires all
finance charges to be .Inserted in advertisem ents offering conditional
sales. P enalty, fine $100 to $500.
C o n d itio n a l S ales C on tracts of personal property simplified and
additional safeguarding of interests of vendors, see Ch. 509, A cts of
1939, too lengthy to be sum m arized. T his A ct m akes void certain
contracts which do n o t com ply w ith new law and fu rth er 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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2029

fied, it is m ade clear and in some respects m akes im portant changes
too num erous to be set o u t here. Consult counsel.
C o rp o ra tio n s. By special act o f 1903, chapter 437, th e law of
business corporations was revised and as am ended, and now codified
in General Laws, applies to all corporations organized in this common­
wealth for the purpose of carrying on business w ithin th e common­
wealth for profit, except the following: Banks, savings banks, co­
operative banks, tru st companies, surety or indem nity companies,
safe deposit companies, insurance companies, railroad or street railway
companies, telegraph or telephone companies, gas of electric light,
heat or power companies, canal, aqueduct or w ater companies, ceme­
tery, or crem atory companies, or any corporation which now have or
m ay hereafter have the right to take or condemn land, or to exercise
franchise in public ways, provided th a t corporations, formed for
purpose of .dealing in real estate shall sta te the term of th e duration
of the corporation, such term not to exceed fifty years.
Three or more persons m ay associate together and form a corporation
for carrying on any lawful business not included in the above provisions
Such a corporation m ust have a capital of not less than $1,000, if
having shares only w ith par value. Shares w ith par value m u st be
of par value of a t least $1.00. T here is no m axim um lim it. Business
corporations m ay create shares of stock w ith or w ithout p ar value,
and corporations w ith stock w ith p ar value m ay, l>y ■appropriate
proceedings, change such stock to stock w ithout par value. The
stock m ay be divided into tw o or more classes w ith such preferences,
voting power restrictions and qualifications as m ay be fixed by th e
agreem ent of association. U pon due organization of th e associ­
ates and filing a copy of th e agreem ent of th e association and articles
of organization w ith th e commissioner of corporations and on
paym ent of a fee of one-tw entieth of 1 per cent of to tal am ount of
authorized capital stock w ith p ar value, and five cents per share
for all authorized shares w ithout p ar value, b u t in no case less th an
$50, a certificate of incorporation is issued by th e secretary of state.
T he capital stock m ay be issued for cash, property, tangible or in­
tangible services or expenses, b u t n ot for notes, The am ount of
capital stock m ay be increased from tim e to tim e. T he corporation
m ust have not less th a n three directors, president, clerk an d treasurer.
T he directors, treasurer, and clerk are elected by the stockholders.
T he president is chosen by and from th e board of directors. T he clerk
m ust be a resident of the com m onwealth. M eetings of stockholders
m ust be held within the commonwealth, b ut directors m ay meet
within or w ithout the commonwealth. Voting by proxy is per­
m itted, b u t no proxy dated more th an six m onths before the
meeting nam ed is valid. Any corporation m ay hold, purchase, con­
vey mortgage or lease such real or personal property as th e purposes
of th e business m ay require. One stockholder holding 1/10 interest
can compel calling of special m eeting of stockholders of business
corporation. I f proper corporate officer refuses to call meeting,
three or more stockholders holding in th e aggregate 1-10 th e interest
m ay apply to justice of th e peace to issue w arrant to one of appli­
cants to call such a special or other legal m eeting.
E very such corporation is required to file an annual rep o rt of its
condition, and if its capital stock is over $100,000, shares w ithout par
value being taken as of $100 in value, to file a w ritten statem ent
under oath by an auditor. I t is also required to m ake an annual
return to the tax commissioner.
E very foreign corporation which has a usual place of business
here, or is engaged here perm anently or tem porarily in th e construc­
tion, erection, alteration or repair of a building, bridge, railroad, rail­
way or structure of any kind, shall before domg business here appoint
the commissioner of corporations, its attorney for the service of proc­
ess, such authority to continue as long as any liability rem ains out­
standing against it in this commonwealth, and shall file w ith the
commissioner of corporations a copy of its charter, articles or certifi­
cate of incorporation, by-laws, and a certificate setting forth its
name, location of principal office, nam es and addresses of its officers,
date of its annual m eeting, am ount of its capital stock authorized and
issued, the num ber and par Value of its shares, th e am ount paid
thereon, and details o f any paym ent thereof n ot m ade In money.
Such corporations are required to file annual statem ents with the
commissioner of corporations showing their condition. If It fails to
file a copy of th e charter, by-laws, etc., as above,dt cannot m aintain
any action sta rted by it in any court in this S tate. This has to be
pleaded by a Plea in A batem ent, or m ay be otherwise specifically
pleaded, in each action, b y the defendant, if he, or it wishes to set up
such a defense against th e action or su it brought by such a corporation*.
C o u rts . Term s and Jurisdiction. T rial justices m ay severally
hold courts within the counties for which they are appointed, and
shall have original jurisdiction, exclusive of the superior court, of all
actions of contract, to rt, or replevin, where th e debt or dam ages
dem anded or value of the property alleged to be detained does not
exceed $100, and concurrent jurisdiction w ith th e superior court of
such actions where such am ount exceeds $100 and is less th an $300.
D istrict courts m ay in their respective counties have original juris­
diction, exclusive of th e Superior C ourt, of actions of contract, to rt
or replevin, in which th e debt or dam ages dem anded or th e value of
th e property alleged to be detained does not exceed $100 an d have
original and concurrent jurisdiction w ith the Suprem e C ourt of actions
of contract, to r t replevin in which th e debt or dam ages dem anded or
th e value of th e p roperty alleged to be detained is more th a n $100.
T he form er lim itation upon th e jurisdiction of district court (of cases
under $3p00) has been rem oved and th e district courts now have con­
current jurisdiction w ith th e superior court over all actions of contract
or to rt, w ith no m axim um or lim itation in am ount. T he suprem e
judical court has original jurisdiction in equity m atters and m ay on
appeal hear all m atters of law determ ined by th e probate court, and
determ ine questions arising under wills. Superior court has juris­
diction where th e am ount claimed exceeds $20. M unicipal court of
th e C ity of Boston has jurisdiction concurrently w ith superior court
in th e county of Suffolk, in actions where th e debt does n o t exceed
$5,000 provided one or more of th e defendants resides or has his
usual place of business in th e county of Suffolk. T he L and C ourt has
exclusive original jurisdiction for registering titles to real estate under
th e Torrens system , and foreclosing tax and m unicipal lien titles under
sta tu to ry provisions. P robate C ourt decree as well as L and C ourt
can vest title in cases involving title to real estate owned b y deceased
person and in pases where jurisdiction is in P robate C ourt, th a t C o u rt
can m ake declaratory decrees affecting title to real estate.
The P robate C ourts have jurisdiction over adm inistration of estates
of deceased persons, m atters of adoption, guardianship, conserva­
torship, trusts under wills and w ritten instrum ents, petitions for
separate support, and of p artition of land, and divorce. T here is a
P robate C ourt and Registry of P robate in each county. I t has juris­
diction of insolvency cases under sta tu te. In L and R egistration Cases,
L and C ourt m ay fix fees of guardian ad litem where m inors involved.
E quity jurisdiction is lodged in the Superior C ourt and in Supreme
Judicial C ourt. By sta tu te P robate C ourts have jurisdiction in equity
In certain special m atters connected w ith estates and petitions before
th e sam e court.
Small Claim s Procedure. General Laws of M assachusetts, C h ap ­
ter 218, Section 21, provides for a simple, inform al and inexpensive
procedure, for th e determ ination, according to th e rules of substantive
law. of claims in th e n atu re of contract or to rt, other th a n slander
and libel, in which th e plaintiff does n ot claim as debt or dam ages
more th a n $50. and for a review of judgm ents upon such claims when
justice so requires. Small Claim s C ourt m ay now defer paym ent or
order paym ent of judgm ent in installm ents and to enforce by contem pt
proceedings. T he procedure is n ot exclusive, b u t is altern ativ e to
th e form al procedure for causes begun by w rit. T he m ethod of pro­
cedure is very sim ple and does aw ay w ith th e requirem ent of attorneys
and enables th e creditor to file his own papers in court a t a minimum
cost. Service is m ade by registered le tte r sent o ut by th e Clerk of
the D istrict C ourt. T he expense is about $1.25 for each claim .

2030

BANKING AND COMMERCIAL LAWS—MASSACHUSETTS

D e a th . W here a person Is absent and unheard from for a period
or seven years, said person is presum ed to be dead in legal theory.
T he estate of such an absentee is adm inistered and held by a receiver
appointed by th e P robate C ourt of th e county where he was last
domiciled.
D e p o sitio n s. Taking of such Is governed by sta tu te and rules of
courts. T he commission issued to take depositions contains full
instructions to m agistrate how to proceed.
D e s c e n t a n d D is tr ib u tio n of P ro p e rty of D e c e d e n ts. After
deducting widow’s allowance and allowances for m inor children,
and paym ent of debts and expenses of adm inistration, the remaining
personal and real estate is distributed as follows: If deceased leaves
no issue, surviving husband or widow shall take $5,000 and one-half
of rem aining real and personal property. The xreal estate m ay be
sold to pay th e surviving spouse th e $5,000, if necessary. If deceased
leaves issue, surviving husband or widow shall tak e one-third of re­
m aining real and personal property. I f deceased leaves no kindred,
surviving husband or widow shall take whole of rem aining real and
personal property.
A husband on death of wife shall hold for his life one-third of all
land owned by her a t any tim e during coverture, estate known as
tenancy by curtesy. Wife is entitled to dower a t common law. B ut
in th e event of testa te estates, in order to be entitled to such curtesy
or dower election and claim therefor m ust be filed in registry of probate
w ithin six m onths of approval of bond of iexecutor or adm inistrator,
and such election is a w aiver of th e interests on real property above
m entioned. P robate C ourt assigns dower or curtesy. R ights of
curtesy which exist on F ebruary 1, 1919, m ay be claimed as above
provided, b u t in such case husband shall tak e no other interest in real
or personal property of wife, and except as above preserved curtesy
a t common law is abolished.
Subject to all the above, the rest and residue of Intestate property
Is distributed as follows: i . In equal shares to children and issue of
•n y deceased child by right of representation; if there is no surviving
child, th en to the other lineal descendants if all are in same degree of
kindred, otherwise by right of representation. 2. If intestate leaves
no issue, then in equal shares to fath er and m other. 3. I f no issue
nor m other, then to father. 4. If 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 of deceased brothers or sisters by right of representation; If
no surviving brother or sister, then to issue of such equally if all in
same degree of kindred to intestate, otherwise by right of represen­
tation. 6. I f he leaves no issue, no father, m other, brother or sister
or issue of deceased brother or sister, then to next of kin in equal
degree, b u t if there are two or more collateral kindred in equal degree
claiming through different ancestors, those claiming through nearest
ancestor are preferred. If intestate leaves no kindred, husband or
widow, estate escheats to commonwealth.
E x e c u tio n s can not issue until tw enty-four hours after judgm ent
rendered, and an original execution m ust be issued within one year
after plaintiff is entitled to sue out th e same. Original executions in
all courts are returnable within tw enty years; when satisfied In full,
within ten days of d a te of satisfaction of sam e in full.
E x e m p tio n s ^ Hom estead,' if recorded, to th e value of $4,000 is
exem pted. Necessary wearing apparel of fam ily, certain specified
articles of household furniture, and $300 w orth m addition thereto,
library, $50; tools and im plem ents, $100; stock, $100; boats and
fishing tackle, etc., $100; one cow, six sheep, one swine, and tw o tons
of hay, sewing machine, pew in church, etc. M aterials and stock
designed and necessary for carrying on his trad e and intended to be
used or w rought therein, n ot exceeding $100 in value. Shares In
co-operative associations n ot exceeding $20 In Value, funds of railroad
relief societies, assessment insurance benefits, uniforms, arm s, and
equipm ents o f m ilitia officers.
F a c to r ’s A ct. A factor or other agent in tru sted with possession
of m erchandise or of bill of lading consigning m erchandise to him with
au th o rity to sell the sam e shall be deemed th e tru e owner of such
m erchandise, so far as to give validity to any ,bona fide contract of
sale m ade by him. Bona fide consignees from shippers in lawful
possession have liens for advances or securities to shipper. Bona fide
pledges from consignees or factors are also protected.
F ra u d s , S t a t u t e of. N o action can be brought to charge an
executor or adm inistrator as such on a special promise, to charge any
person upon a special promise to answer for debt, default or misdoing
of another, upon an agreem ent m ade on consideration of m arriage,
upon a contract for sale of any interest in land, upon an agreem ent not
to be perform ed within a year, to charge a discharged debtor, unless the
promise, contract or agreem ent or some m em orandum thereof is
signed by th e p arty or by his authorized agent. No agreem ent to
m ake a will, or to devise or to give a legacy Is binding unless In writing.
N o contract of sale of personal property of $500 or over is actionable
unless th ere is p a rt paym ent, acceptance and receipt of p a rt of the
goods, or some m em orandum in writing signed by p arty to be charged
or his agent.
G ifts b e tw e e n H u s b a n d a n d W ife. Gifts of personal property
and conveyances of real estate, other th a n m ortgages, between nusband
an d wife shall be valid to sam e extent as if they were sole.
G u a r d ia n s . P robate C ourt m ay now authorize investm ent of funds
of w ard in life insurance endowm ents or an n u ity contracts. Com­
pensation of g uardian m ay now be apportioned by C ourt between
principal an d income (1941).
H o lid a y s. T he legal holidays are: Sundays; Ja n u ary 1 (New Y ear’s
D ay ); F ebruary 22 (W ashington’s b irthday); April 19 (P a trio t’s
Day)T M ay 30 (M emorial D ay); Ju ly 4 (Independence D ay); first
M onday in Septem ber (Labor D a y ); October 12 (Colum bus D a y );
N ovem ber 11 (Armistice D ay); T hanksgiving D ay (Last T hursday in
Novem ber in M assachusetts). B u t as to Thanksgiving special inquiry
should be m ade in view of likely change from year to year, w ith little
or no notice. December 25 (Christm as D a y );. or th e d ay following
when an y such dates (except L abor D ay) falls on Sunday. A cts of
1941, C hapter 91 m akes M arch 17 (Evocution Day) and Ju n e 17
(Bunker H ill D ay) as to Suffolk C ounty only, legal holidays.
I n f a n t s . Age of m ajority, m ale and female, is tw enty-one. In fan t
Is liable for his to rts and on contracts for necessaries. H e m ay
repudiate or ratify all contracts after reaching m ajority. During
m inority, he m ay sue by next friend, often called prochain ami.
In so lv e n c y . Insolvency law suspended by N ational B ankruptcy
Act. A cts of B ankruptcy: (1) F raudulent conveyance in order to
hinder, delay, or defraud his creditors; (2) W here insolvent has tran s­
ferred his property to one or more of his creditors w ith in ten t 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 a t least 5 days before sale or other disposition
of th e property affected; (4) M ade general assingm ent for benefit of
creditors; (5) Being insolvent applied for a receiver or tru stee of his
property, or because of insolvency, a receiver or trustee p u t in charge
of his property; (6) A dm itted in w riting his inability to pay his debts
an d a willingness to be adjudged a b a n k ru p t; (7) W hile insolvent per­
m itted attach m ent, lien, etc., on his property and has n ot vacated the
sam e w ithin th irty days therefrom . (1927 and 1928 am endm ents.)
I n t e r e s t . Legal rate is 6 per cent. Loans of less th a n one thou­
sand dollars, Interest shall not be charged exceeding eighteen per cent.
Small loan business ($300.00 or less) m axim um ra te 3% per m onth
on u npaid balances. N o t more th an seven per cent can be charged
on bonds issued by corporations. I t shall be lawful to pay, reserve,
co n tract for an y ra te of interest or of discount except as above.
J u d g m e n ts . A judgm ent or decree of a court of record of the
United S tates or of any sta te thereof shall be presum ed to be paid
an d satisfied a t th e expiration of tw enty years after it was rendered.
L eases. In leases of real estate for term of seven years or more,
no longer necessary to record entire lease “disclosing” private term s to
tn e public. C h ap ter 85 of A cts of 1941 provides for recording of
m ere “notice” of lease only. C onsult th e Act for modified require­
m ents.


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L im ita tio n o f S u its . C ontract express or Implied and n ot under
seal and not otherwise lim ited, six years; real actions, those upon an
attested note, if suit is brought by original payee or his executor or
adm inistrator, and personal actions on contracts not lim ited, tw enty
years. Absence from the S tate prevents the running of th e sta tu te
of lim itations as to a defendant until he comes into the State. If
the person entitled to bring an action is a m inor or is insane or im pris­
oned when the right to bring such action first accrues, such action
m ay be commenced within the tim e hereinbefore lim ited after th e
disability is rem oved. The sta tu te does not run against those residing
out of th e S tate, b u t if the S tate in which debtor resides has a sta tu te
of lim itations, sam é would run against this debt as for an action on
said debt where the debtor resides. See also A dm inistration of
E states.
M a rrie d W o m e n . T he real and personal estate of a m arried
woman, acquired a t any tim e, rem ains her sole and separate property,
not subject to the control of her husband, nor liable for his debts.
M arried women m ay carry on trade or business, m ake contracts, sue
and be sued, in all m atters relating to their separate property, and
such contracts- are not binding upon the husband. Wife carrying
on business on own account m ust record certificate w ith city or town
clerk; neglect to do this renders her property so employed liable for
husband’s debts, and renders husband liable for her debts thus con­
tracted.
M a rrie d W o m e n . A m arried woman is also liable jointly with
her husband for debts due to th e am ount of $100 in each particular
case for necessaries furnished with th e knowledge or consent to her­
self and her fam ily where she is possessed with property valued a t
$2.000 or more.
W ork and labor perform ed by a m arried woman for a th ird person
other th a n her husband and children shall be deemed, in th e absence
of any agreem ent in writing to th e 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. Subject covered by sta tu te . General Laws
Gb. 254.
M o rtg a g e s of R e al E s ta te . Power of sale m ortgage is univer­
sally used. Foreclosure is regulated by sta tu te, 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 th an 21 days from date of Sale by Public Auction, and sale bars
redem ption. Because of requirem ents of Soldiers an d Sailors Relief
A ct of 1940, S tate Legislature has prescribed simplified procedure for
foreclosure a u th o rity under th e Federal Act, in S tate C ourts. M o rt­
gages m ay also be foreclosed by en try an d peaceable possession for
th ree years.
P robate C ourt has jurisdiction in equity to issue injunction restrain­
ing foreclosure if it will binder proper adm inistration of an estate;
to issue on petition of executor, etc. of th e estate.
Upon paym ent or perform ance of condition, mortgagee liable in
to r t for all dam ages caused by his neglect or refusal to discharge
m ortgage within seven days from d ate of request therefor. Gen.
Laws, O. 183, S. S. “ 55.”
N e g o tia b le I n s t r u m e n t s . T he Uniform Negotiable In strum ents
Act adopted. (See com plete tex t following “ Digest of Banking and
Comm ercial L aw s.”)
R e a l E s ta te ; F r a u d u l e n t C o n v e y an ces are a ground for civil
arrest generally. An equitable action lies to recover property th at
has been so conveyed fraudulently. Special attach m en t on original
w rit or by order of court m ay be m ade of realty which has been
fraudulently conveyed by a debtor in fraud of his creditors.
Agreement for sale of real estate m ust be acknowledged. Good for
ninety days only after deed delivery date unless su it brought m ean­
while to enforce agreem ent.
R e p le v in A ctio n s are th e forms of actions a t law by which a p arty
can obtain possession of specific goods or chattels unlawfully taken
or wrongfully detained from th e rightful owner or person who is
entitled to its possession. Before th e replevin writ can be served,
a bond for double the value of th e property to be replevied m ust be
delivered to the officer before he will proceed to act under th e writ.
S ales of P e rs o n a l P ro p e rty . Uniform Sales Act adopted in
1908, is now Gen. Laws ch. 106. T here is a Bills of Lading sta tu te,
(Gen. Laws ch. 108), and Gen. Laws ch. 105 relates to warehouse
receipts. As to sales of $500 or over, see F rauds, S tatu te of. Sales
of m erchandise in bulk are fraudulent unless the provisions of Gen.
Laws ch. 106, sec. 1, are complied with. Delivery of a bill of sale is n ot
constructive delivery of the goods. Delivery of possession of goods
sold is essential as to th ird persons w ithout notice who purchase sam e
goods for value, or as to attaching creditors w ithout notice. Vendor’s
retention of possession after sale is prim a facie evidence of frau d .
As to conditional sales, see th a t topic supra.
S ta t u t e s . General revision and consolidation of statu tes, effective
Ja n u ary -1 , 1921 under title of G eneral Laws. E xcept such as are
declared to be em ergency laws, s ta tu te s tak e effect 90 days after
passing, under A m endm ent to A rticle X L V III of M assachusetts
C onstitution, 1941.
S to c k T ra n s fe r. T his subject is covered by Stock T ransfer Act
as codified in General Laws.
S u its . Civil actions in general, except those concerning land (If
one of the parties lives in the State), m ust be brought in th e county
where one of them lives or has his usual place of business. B u t in
lower courts venue depends on residence or place of business of defen­
dant. This is so in all cases except those cases involving damages
arising out of operation of a m otor vehicle on th e highways of M assa­
chusetts; as to these, original jurisdiction of such cases is in D istrict
Courts, b u t either p a rty m ay rem ove to Superior C ourt. W here
all parties are non-resident, action m ay be brought in an y county.
A ttachm ent of p roperty owned by defendants residing o u t of S tate
m ay be m ade sufficient to give jurisdiction for a special judgm ent
in suit after notice published by order of court. Such notice to be
given w ithin one year from th e entry of th e suit. Persons comm orant in S tate m ay also be arrested on mense process and held to
bail. This, however, can be done only upon special order of 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
Actions, supra.
Civil process cannot be served on th e Lord’s D ay, except such
process as m ay be served by publication, in which event sam e m ay be
puplished in a newspaper published on L ord's Day.
T axes assessed udod land shall w ith all Incidental charges and fees
be a lien thereon from Jan u ary 1st, in th e year of assessment. Such
lien shall term inate a t the expiration of two years from October 1st
in said year, if th e estate has in th e m eantim e been alienated and th e
instrum ent alienating th e sam e has been recorded, otherwise it shall
continue u n til a recorded alienation thereof; b u t if while such lien is
in force a ta x sale or taking has been m ade and th e deed or in strum ent
of taking has been duly recorded w ithin sixty days, b u t th e sale or
taking is invalid by reason of any error or irregularity in th e proceed­
ings subsequent to th e assessment, th e lien shall continue for ninety
days after a release, notice or disclaimer, has been duly recorded, or
for ninety days after th e sale or taking has been finally adjudged
invalid by a court of com petent jurisdiction. T here shall be no lien
for taxes reassessed if th e property is alienated before th e reassess­
m ent. Said taxes if unpaid for fourteen days after dem and therefor,
m ay, w ith,said charges and fees, be levied by sale or taking of th e'
real estate I f the lien thereon has not term inated. By recent Act, city or
tow n m ay acquire tax title by mere taking (this was enacted to relieve
heavy expense of tax sales of sm all lots and land of little value).
U pon certification by S tate T ax Commissioner, these lands are of low
value. T aking to be recorded a t R egistry of Deeds, costs $1.00.

BANKING AND COMMERCIAL LAWS—MICHIGAN
Owner of tax title has benefit of all covenants running w ith th e land
subject to an d together w ith assessments and restrictions then existing.
E xcept where lands have been certified as of lands of low value, owner
of th e tax title does n o t acquire absolute title until tax title foreclosed
in L and C ourt; petition to foreclose can be brought two years after
sale or taking, n o t before.
M ortgagee m ay a t any tim e pay overdue taxes and have sam e
added to m ortgage debt. In terest on overdue taxes now 4% .
P etitio n for ab atem ent of taxes m ust be filed w ith assessors not
later th a n October 1 of year in which they are assessed
The m atter of enforcing the paym ent or collection of taxes is one
concerning which there is a considerable body of sta tu te law which
cannot be briefly summarized.
T ru s te e s . Investm ents. See Guardians, supra.
T ru s te e P ro c ess. All personal actions except replevin, and actions
of to rt for malicious prosecution, slander, libel, or assault and b attery
may be begun by trustee process and goods, effects, or credits of
defendant in hand of a th ird person m ay be attached and held to
satisfy final judgm ent. B u t certain actions w ith ad dam num of
more th an $1,000, can be commenced by trustee process only upon
th e filing of bond w ith sureties to indem nify defendant for costs and
damages by reason of tru stee attachm ent, bond to be approved by a
justice of th e C ourt. Bond prem ium taxable as costs. This new
Act should be consulted in cases where ad dam num over $1,000 in
trustee process.
In tru stee process* if attach m en t of wages is desired, permission
endorsed in w riting on th e w rit m ust be obtained from a justice of
th e court where action commenced. See also Actions, supra.
W a re h o u s e m a n a n d W a re h o u se R e c e ip ts. The Warehouse
Recipts Act as codified into Gen. Laws is in force. Chap. 105.
W ills. E very person of full age and sound mind including married
women m ay m ake a w ill. Will m ust be signed by testator, or by some
person in his behalf, by his express direction, and be attested and
subscribed by three or more com petent witnesses in his presence. A
will executed in mode prescribed by the law either of place where
will is executed or of place of te sta to r’s domicil, shall be deemed
legally executed and shall be of same force and effect as if executed
in mode prescribed by laws of M assachusetts provided will is in writing
and subscribed by testato r. As to waiver of provisions of will by
husband or wife, see D escent and D istribution, supra, also General
Laws ch. 190, section 15.
A will m ay be revoked in the identical m anner in which the sta tu te
requires a will to be revoked. Will m ay be revoked by destruction
such as burning, tearing, cancelling, or by obliterating it w ith a
m anifest Intention to revoke th e same, and it m ay be revoked by a
formal w ritten instrum ent by a later will or by a codicil.
Ordinarily m arriage operates by sta tu te as a revocation of a will
unless th e will was m ade in contem plation of the coming marriage'.
W itn e sse s. Any person, although a party, m ay testify in any
proceedings, except th a t neither husband nor wife m ay be compelled
to testify to p rivate conversations w ith each other, or be compelled to
testify in a crim inal proceeding against the other. The defendant in
a crim inal proceeding m ay testify, a t his own request and not other­
wise, and once he takes the witness stand in a criminal proceeding or
m atter, he waives all his privileges even where the desired testim ony
tends to incrim inate him, and the privilege not to give testim ony has
been waived.
T he neglect or deliberate refusal of a defendant to take the stand
and testify in his own behalf shall not be a presum ption or be even
considered against him, and the prosecution shall not comment to the
jury upon th e defendant’s failure to take the stand.
However, where th e wife is necessary to explain certain acts, or
omissions in a crim inal m atter against her husband, if she refuses to
take th e stan d in his defence, the district attorney is not barred from
commenting to th e ju ry as to why she failed to testify for and behalf
of her husband.
The com m unications of a client to his attorney as a legal adviser
are privileged and is a personal privilege belonging to th e client. The
attorney over th e objection of his client cannot take th e stand and
testify as to p rivate conversations disclosed to him as an authority
on th e laws of th e Commonwealth. However, if the client takes the
stand he m ay be Interrogated as to w hat he told his law yer, pro­
vided such evidence is otherwise admissible under th e rules of evidence
generally.

SYNOPSIS OF

THE LAWS OF MICHIGAN
RELATING TO

BACKING AND COMMERCIAL USAGES
Revised b y B e n n M . C o b w in , (Corwin, M cD onald & Livingston),
418 Federal Square Building, G rand Rapids, M ichigan.
(See Card in A ttorneys’ List.)
A c k n o w le d g m e n ts of real estate instrum ents m ay be before one
of th e following officers: 1. W ithin this State: Any judge, clerk
or commissioner of any court of record, notary public, justice of the
peace or m aster in chancery. T he official should certify th a t On
this day before me personally appeared.. . . . . . . . . . . to me known
to be the person or persons who executed the foregoing Instrum ent
and acknowledged th a t he (of they) executed the same as his (or
their) free act and deed.” N o tary ’s certificate m ust show d ate of
expiration commission. Such Instrum ents m ust have two subscribing
witnesses. 2. In any other state, territory, or district of the U nited
States: Same officials as described above or any officer authorized
by the laws of such state, territory, or district, or before a com­
missioner appointed by the Governor or this State for th a t purpose.
Any such instrum ent m av be executed according to the laws of any
such other sta te or territory. If officer has no seal,-certificate or the
Clerk of th e county or district, or of the Secretary of State within
which taken shall be attached. 3. In any foreign country: notary
public, or m inister plenipotentiary, m inister extraordinary, im nister
resident, charge d ’affairs, or commissioner or consul of the United
States, appointed to reside therein. T he nam e of the officer m ust be
typ ed or p rinted under signature. (See Deeds).
A d m in is tr a tio n o f E s ta te s : I n P ro b a te C o u r t o f E a c h C o u n ty .
Claims are passed on by judge of probate or referees. H earing on
sam e to be, n o t less th an tw o m onths nor more th an four m onths
after first publication of order for same. Order im m ediately on
approval bond. On application of creditor within eighteen m onths
of tim e originally fixed, judge m ay allow one m onth additional, a u
claims barred if n o t dem anded w ithin two years after time^ set for
paym ent same. I f no proceedings, all claims barred within six years
Claim s m u st be sworn to and filed in th e P robate C ourt, and copy
of claim served upon fiduciary by th e claim ant; such service should
be 20 days before hearing date.
A dm instration of estates is granted: F irst to widow or husband
or next of kin, or grantee of one of them , or such person as above
m ay request. I f above incom petent or neglect apply w ithin th irty


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2031

days, judge m ay appoint whom deems proper, or public adm inistrator,
b u t m ay n ot appoint creditor or one whose interest adverse to estate.
Creditors, however, m ay p e titio n , for appointm ent of some other
person. N on-resiaent adm inistrators and executors appointed in
other states, territories, or foreign countries cannot sue as such In
this S tate w ithout procuring adm inistration in this S tate.
A ffidavits m ay be taken by any judge, m aster in chancery, clerk
of court, justice of the peace, police m agistrate, notary public,; or
circuit court commissioner. Any oath authorized, or required to be
m ade, w ithout the S tate for use in judicial proceedings here, m ust be
authenticated by judge of a court having a seal, and the genuineness
of such judge’s signature, existence of the court, and th a t such judge
is a m em ber thereof, certified Dy the clerk of the court under the seal
thereof. If In any other sta te or territory, m ay be taken before a
commissioner appointed by th e governor of this S tate, or any notary
public or justice of the peace authorized by the laws of any such state
or territory to adm inister oaths therein.
In actions a t law affidavits of am ount due on open and stated
accounts, attached to and served with process as comm encem ent of
suit m ake a prim a facie case, unless denied by the defendant's affidavit
filed and served with plea.
A lien s. M ay inherit or purchase and hold and convey personal
and real estate.
A rre s t. By writ of capias In personal actions In to rt and in actions
for money coilected by any public officer; also by w arrant allowed
by any justice of th e peace or judge of a court of record, under th e
fraudulent debtor’s act, when th e creditor has commenced su it or
obtained judgm ent and th e debtor has disposed of or concealed, or is
about to dispose of or conceal property liable to execution or the
debt was fraudulently contracted.
A s sig n m e n ts for the benefit of creditors are void unless made
without preferences; m ust comprise all of assignor’s property not
exem pt from execution. T he circuit court in chancery has super­
visory jurisdiction of such assignments.
A tta c h m e n ts . W rits m ay be issued from justice and circuit courts
on affidavit showing: debt due on express or implied contract, and
either th a t the debtor has absconded or is about to abscond from
the S tate or has assigned or disposed of or is about to assign and
dispose of his property w ith in ten t to defraud his creditors; or is a
non-resident of the state, or a foreign corporation. M ay issue from
the circuit court for debt not due b ut to become due, upon satis­
factory showing to the circuit judge, b u t in such cases judgm ent can­
not be taken until debt is due. M ay issue in actions of to rt against
non-residents in certain cases.
B a n k C o lle c tio n C ode. 1931. P ub. Act. 240. p. 414. Om its
§19. Effective A ugust 27, 1931. Given directly following Laws.
B a n k s . 1: Incorporation of:
Banks. K inds of Banks Permitted. Commercial, Savings
Industrial, T ru st Com panies; Safety and C ollateral D eposit Com­
panies, C redit Unions, C ooperative Savings Associations, Building
and Loan Associations, Finance Companies, Small Loan Business,
T ontine, Bond, Certificate and Investm ent Companies. ■
Supervising Authority is vested in th e Banking D epartm ent, th e
head of which Is th e Commissioner.
D uties: A—Exam ine each bank annually, and as m any tim es
as requested by the bank. B— In case of an im pairm ent of the
capital, levy a stock assessm ent. C— M ake an annual report to th e
Governor of th e financial sta tu s of active and closed banks. JJ— ±teceive liquidation, incorporation, consolidation proceedings, etc.
E —W ith th e A ttorney General apply for appointm ent of receivers.
Officers and Directors. D irectors: N o t less th a n five nor m ore th an
fifteen, elected by stockholders u ntil successors appointed. A ppoint
officers, prescribe tar-laws, and exercize general banking b