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BANKS AND BANKING 616. Bank, how incorporated—What articles 655. Penalty for receipt of deposits after of incorporation shall contain.

authority revoked. 617. Articles of incorporation must be signed 656. Bank may hold real estate, when-Time by at least three stockholders-Sec

of holding real estate in certain retary of state to issue certificate

instances limited. Examiner to authorize commence- 657. Shares of stock deemed personal propment of business.

erty. 618. Statement filed with bank examiner. 658. Bank's stock not security for its own 619. Business in which bank may engage.

loans unless previously contracted. 620. May transact trust company business, 659. Forms for reports provided by bank When,

examiner. 621. Savings bank business, when-Funds of 660. False swearing punished as perjury.

savings bank, how invested-Restrie- 661. Circulation of false reports regarding tions.

solvency of bank a misdemeanor. 622. Pass-book, regulations concerning. 662. License for banking must be obtained623. Minimum capital, $25,000.

Classes of license. 624. Capital stock may be increased 663. Certain advertising regarding capital diminished.

stock prohibited. 625. Directors, officers, qualifications, liabil- 664. State banking board-Meetings-Comity, meetings.

pensation. 626. Bank closed when officers violate law. 665. Appointment of bank examiner, salary627. Stockholders individually liable.

Deputies-Seal. 628. Bank not to engage in trade.

666. Powers and duties of bank examiner. 629. Available funds-Per cent must be on C67. Clearing-house, how established and hand-When bank deemed insolvent.

conducted. 630. Borrower's liability restricted.

668. Bank examiner may take charge of 631. False statement, how punished.

bank--Bank may resume, when. 632. No proprietor, officer or employee to

669. Duties of examiner in regard to liquida: indorse loans.

tion -- Assistants Expenses--Legal 633. No director, officer or employee to bor

advice.
row without approval of majority of 670. Assistants to give bonds.
board.

671. Notice to creditors of closed bank to be 634. Insolvent bank must not receive depos

advertised and mailed. its-Directors and officers individu- 672. Inventory of closed bank to be filed ally responsible.

with board. 635. Penalties--Misdemeanor, when-Felony, 673. Expenses to be paid from funds of when.

closed bank-Collections deposited in 636. Bank to report quarterly or oftener

solvent banks. Sworn report to be published-Special 674. Dividends of closed banks, how paid. reports, when.

675. Closed bank may apply to recover con637. Penalties for failure to report–Suit for

trol from examiner. fines, when.

676. Closing liquidation, how accomplished. 638. Bank may close voluntarily, how. 677. Examiner to report semiannually on 639. Voluntary liquidation, method of.

closed banks. 640. Bank insolvent, when.

678. Voluntary liquidation, proceedings under. 641. Dividends declared, when.

679. How bank may resume business. 642. Losses, how charged.

680. Bond of bank examiner, $100,000. 613. Capital not to be withdrawn.

681. Bond of deputies, $50,000. 644. Interest on time deposits no more than 682. Every bank examined twice each year. 4 per cent-Penalty.

683. Expenses of examiner and deputies. 645. Officers guilty of felony, when.

684. Salaries paid from state funds. 646. Bank examiner to offer rewards, when. 685. Penalties for misconduct of banking 647. Unlawful to certify check without funds.

board, bank examiner and deputies. 648. Penalties for various acts.

686. District attorneys to act when notified 649. Overdrafts not permitted.

of violation of this act. 650. No preference allowed creditors- 687. Charters of banks made to conform to Pledges when borrowing money tem

this act-Legality of investments not porarily—Exception.

affected-Future transactions must 651. Impaired capital stock to be made good

conform to this act. within sixty days, or capital stock 688. Each section of this act declared indemay be reduced-Lien on stock of

pendent. stockholders for assessment.

689. General penalty prescribed. 652. National bank may incorporate as state 690. Terms and words used defined. bank, how.

691. General corporation act adopted. 653. List of stockholders for public inspec- 692. Repeal of conflicting acts.

tion--List sent to bank examiner. 693. Appropriation. 654. Penalty for refusal to allow examina- 694. Section 79 declared unconstitutional.

tion.

An Act to regulate banking and other matters relating thereto.

Approved March 22, 1911, 291 616. Bank, how incorporated—What articles shall contain.

SECTION 1. Any three or more persons, a majority of whom shall be residents of this state, may execute articles of incorporation and be incorporated as a banking corporation in the manner hereinafter provided. Said articles of incorporation shall contain:

First-The corporate name adopted by the corporation, which shall not be the same name used by any corporation previously organized, or any imitation of such name.

Second-The place where its business is to be conducted.
Third–The purpose for which it is formed.

Fourth-The amount of its capital stock, which shall be divided into shares of the par value of one hundred dollars each, and which shall not be less than $25.000.

Fifth-The name and place of residence of, and the number of shares subscribed by each stockholder.

Sixth-The names of the stockholders selected to act as the first board of directors, each of whom shall be a bona fide holder of at least one thousand dollars of the stock of said bank, fully paid and not hypothecated, and a majority of whom shall be residents of the same or an adjoining county or counties to that where its business is to be conducted.

Seventh-The length of time the corporation is to exist, which shall not exceed fifty years.

Eighth-And such other matters not inconsistent with law, as the incorporators may deem proper. 617. Articles of incorporation must be signed by at least three stock

holders-Secretary of state to issue certificate-Bank examiner to

authorize commencement of business. SEC. 2. Said articles of incorporation shall be subscribed to by at least three of the stockholders of the proposed banking corporation, and be acknowledged by them before some person competent to take an acknowledgment of deeds, and filed in the office of the clerk of the county in which the principal place of business of the corporation is intended to be located, and one copy thereof, duly certified by the clerk of said county, shall be filed in the office of the secretary of state, and another copy thereof, in like manner, shall be filed in the office of the state banking board. The secretary of state shall issue a certificate in the form provided by law for other corporations, and the existence of such bank as a corporation shall date from the issuance of the certificate by the secretary of state, from which time it shall have and may exercise the powers conferred by law upon corporations generally, except as limited or modified by this act; provided, that such bank shall transact no business except the election of officers and the taking and approving of their official bonds, and the receipt of payments on account of the subscriptions of the capital stock, and such other business as is incidental to its organization, until it shall have been authorized by the bank examiner to commence the business of banking as hereinafter provided.

In Jarymont v. State Banking Board, 33 See annotation under sec, 623. Ver. --- (111 P. 295), it was held that the The banking business can be regulated, but banking business is a lawful one in which the not prohibited, and it is not only the legislacitizen cannot be denied the right to engage by ture's power, but its duty, to regulate the an act of the legislature.

business so as to reduce failures to a minimum. Ex Parte Pittman, 31 Nev. 43.

Ex Parte l'ittman, 31 Vev. 43. 618. Statement to be filed with bank examiner.

SEC. 3. When the capital stock of any bank shall have been paid up, in cash, the president or cashier thereof shall transmit to the bank examiner a verified statement showing the names and places of residence of the stockholders, the amount of stock subscribed and the amount paid in by each, and the bank examiner shall thereupon have the same power to examine into the conditions and affairs of such bank as if it had been before that time engaged in the banking business, and if the bank examiner is satisfied that such bank has been organized as prescribed by law, and that its capital is fully paid in cash, and that it has in all respects complied with the law, he shall issue to such bank, under his hand and seal, a certificate showing that it has been organized and its capital fully paid up as required by law, and is authorized to transact a general banking business, upon payment of the license prescribed by this act; provided, that in the reorganization of any banking corporation, the assets may be accepted in lieu of cash at their actual value. 619. Business in which bank may engage.

SEC. 4. A banking corporation organized under the provisions of this act shall be permitted to receive money on deposit, to buy and sell exchange, gold, silver, coin, bullion, uncurrent money and bonds, to loan money on chattel and personal security, or on real estate secured by mortgage; to own a suitable building, furniture, and fixtures, for the transaction of its business, the value of which shall not exceed one-third of the capital and surplus of said bank, fully paid; provided, that nothing in this section shall prohibit such bank from holding or disposing of such real estate as it may acquire through the collection of debts due it; and provided further, that all banking institutions and trust companies now organized as corporations doing business in this state are hereby permitted to continue said business as at present incorporated, but in all other respects, their business, and the manner of conducting the same, and the operation of said bank or trust company, shall be carried on, subject to the provisions of this act and in accordance therewith; and provided further, that no bank or trust company, except those that have complied with the provisions of this act, shall engage in any other business than is authorized by this act.

A receipt of a deposit by the receiving teller private property. Ex Parte Rickey, 31 Veri S. of a private bank is the receipt by the private A deposit received by an incorporated bank banker, because he is the principal and the is the property of the corporation. teller the agent, and the deposit is the banker's

Banks may be appointed resident agents of corporations, sec. 1119. 620. May transact trust company business, when.

SEC. 5. Any corporation organized under this act may state in its articles of incorporation that it will carry on a trust company business, either exclusively or in connection with the banking business, and such corporation shall thereupon have power, in addition to the powers conferred upon banks, to act as trustee under any mortgage or bond of any person, firm or corporation, or of any municipality or body politic; and accept and execute any municipal or corporate or individual trust not inconsistent with the laws of this state; to act under the order or appointment of any court as guardian, administrator, receiver or trustee; to act as executor or trustee under any will; and when appointed as such guardian, administrator, receiver, trustee or executor it may, by order of the court having jurisdiction in the premises, be relieved from giving any security bond required by law; to act as fiscal or transfer agent of any state, municipality, body politic or corporation and in such capacity to receive and disburse money and register, transfer and countersign certificates of stock, bonds and other evidences of indebtedness: to act as local or resident agent of foreign corporations, and as agent for insurance companies. 621. Savings bank business, when-Funds of savings bank, how invested

-Restrictions. SEC. 6. Any banking corporation designating its business as that of a

Idem, S.

savings bank shall have power to carry on a savings bank business as prescribed and limited in this act. Any savings bank may receive deposits, and such deposits shall be repaid to the depositors or their lawful representatives at such time and with such interest and under such regulations, assented to by the depositors, as shall be prescribed by said bank and approved by the state banking board, which regulations shall be printed and conspicuously posted in some place accessible and visible to all persons in the business office of said bank. The funds of any savings bank, except the reserve provided for in this act, shall be invested in bonds of the United States, or of any state of the United States, or in the public debt or bonds of any city, county, township, village or school district of any state of the United States which shall have been lawfully issued; or may be loaned on negotiable paper secured by any of the above-mentioned classes of security; or upon notes or bonds secured by mortgage lien upon unincumbered real estate; provided, that second mortgage loans may be made upon improved farm lands but no loans shall be made upon such lands or other real estate which, including the aggregate amount of all incumbrances shall exceed fifty per cent of the cash value thereof; or upon notes secured by collateral security of known marketable value; or shall be deposited in good solvent banks or held as cash; provided, also, that chattel mortgages shall not be deemed collateral security and savings banks are prohibited from investing their funds in them. 622. Pass-book, regulations concerning.

SEC. 7. A pass-book shall be issued to each depositor in a savings bank for all money deposited on open account. Such pass-book shall contain the rules and regulations adopted by such savings bank governing such deposits and shall be accepted by the depositor and thereupon shall be deemed agreed to by him. In such pass-book shall be entered each deposit made by and each

payment made to such depositor; provided, that nothing in this act shall prohibit a savings bank from issuing time certificates for deposits. When any deposit is made in a savings bank by a minor the said bank may pay to such depositor such sums as may be due him or her, and the receipt of such minor to such savings bank shall be valid. 623. Minimum capital, $25,000.

SEC. 8. That hereafter no bank or trust company shall be organized, and no bank or banker shall be permitted to carry on business with a less capital than twenty-five thousand dollars, and the full amount of the capital stock of any bank or trust company must be paid in cash before it shall be authorized to commence business, or any individual banker be permitted to be in or continue business. No bank in this state shall hereafter open or maintain any branch bank or office. All of the provisions of this act shall be applicable as far as may be to individuals, firms or associations, as well as to corporations.

The provision in sec. 2 of the banking act as not being in conflict with the federal conof March 24, 1909 (Stats. 1908–09, p. 191 ) stitution, the Oklahoma, Nebraska and Kansas denying to individuals the right to engage in acts requiring the payment by all banks in the banking business was held to be in con- those states of a percentage to a guaranty fund fiict with the state constitution, article 1, sec- to meet the indebtedness of any bank which tion 1, which assures to the citizen rights to may become insolvent, and it was held that lileriy, property and happiness, with article the federal constitution does not deny the 1. Suction & guaranteeing due process of law, state the right to regulate the banking busiand with article 1, section 20, which saves to ness to prohibition, except upon such condithe people rights not enumerated and pos- tions as it may prescribe, and that objections *****rd by them. It was held that the business under the state constitution were not open for 4sf banking is a lawful one in which every citi- consideration by that court. Noble State Bank Z n may engage. Marymont v. State Banking v. Haskell and following cases, opinions of the Divard. :33 Ver. -- (111 P. 29.5).

'. S. Supreme Court, advance sheets, FebruIn decisions filed January 3, 1911, the ary 1, 1911. Supreme Court of the United States sustained, 621. Capital stock may be increased or diminished. SEC. 9. The capital stock of any banking corporation doing business under the laws of this state may be increased or decreased at any time by a resolution adopted by two-thirds of its stockholders, at any regular meeting or at a special meeting called for that purpose, of which all stockholders shall have due notice, in the manner provided by the by-laws of such corporation. A certificate must be filed with the bank examiner by the officers of the meeting, and by a majority of the directors, showing the compliance with the provisions of this section, the amount to which the capital stock has been increased or decreased, the amount of capital stock represented at the meeting, and the vote upon the question to increase or decrease the capital stock. No such changes in the capital stock of any such corporation shall be valid or binding until the same shall have been approved by the bank examiner. No increase of the capital stock shall be approved by the bank examiner until the amount thereof shall have been paid in cash; provided, however, that such increased capital may, when authorized by two-thirds of the stockholders of said bank, be paid in whole or in part from its surplus or undivided profits. Whenever the capital stock of any bank shall be decreased, as provided in this section, each stockholder, owner, or holder of any stock certificate shall surrender the same for cancelation, and shall be entitled to receive a new certificate for his proportion of the new stock. No decrease in the capital stock of any bank shall be approved, unless such bank with reduced capital shall be entirely solvent, and no reduction in capital shall be approved to an amount less than is authorized by this act. Whenever the capital stock of any bank shall be increased or decreased as provided in this section, and the same shall have been approved by the bank examiner, a certificate signed by the president and cashier of the bank, setting forth the amount of stock held by such shareholder shall be filed with the secretary of state, with the county clerk and with the banking board. 625. Director's Officers-Qualifications-Liability-Meetings.

SEC. 10. The affairs and business of any banking corporation organized under the laws of this state shall be managed or controlled by a board of directors, of not less than three in number, who shall be selected from the stockholders in January of each year, and in such manner as may be provided by the by-laws of the corporation. No person shall be eligible to serve as a director of any bank, organized or existing under the laws of this state, unless he shall be a bona fide owner of one thousand dollars of the stock of such bank, fully paid and not hypothecated. A majority of the board of directors of every bank shall reside in the county where its business is to be conducted or in an adjoining county or counties. Any director, officer, or other person, who shall participate in any violation of the laws of this state, relative to banks, shall be liable for all damages which the said bank, its stockholders, depositors or creditors, shall, in consequence of such violation, sustain. Such director, when appointed shall take, in addition to the usual oath, an oath that he will, so far as the duty devolves upon him, diligently and honestly administer the affairs of such bank, and will not knowingly violate, or willingly permit to be violated, any of the provisions of this act, and that he is the owner, in good faith and in his own right of the number of shares of stock required by this act, subscribed by him and standing in his name on the books of the corporation; that the same is not hypothecated or in any way pledged as security for any loan or debt. Such oath subscribed by the director making it and certified by the notary public before whom it was taken shall be immediately transmitted to the bank examiner, and shall be filed and preserved in his office. The directors shall elect from their number, president, vice-president or vice-presidents, and shall appoint a cashier, who shall be ex officio secretary, and such other officers as may be provided for in the by-laws. Such officers shall hold their offices for the term of one year and

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