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P. L. 166.
to be made on
13 May 1876 $ 16. which shall impair the capital thereof, such directors consenting thereto shall be
jointly and severally liable, in an action of debt or bill in equity, in their individual Individual liability capacities, to such corporation, for the amount of the stock so divided; and each
director present or otherwise when such dividend shall be made, shall be adjudged consenting thereto, unless he shall forth with enter his protest on the minutes of
the board and give public notice to the stockholders thereof.(y) Ibid. $ 17. 20. On each dividend day the cashier shall make a full, explicit and accurate
statement of the condition of the corporation as it shall be on each day previous to Sworn statements
the declaring of such dividend, to be verified on the oath of the president and dividend day. cashier, setting forth –
1. The amount of capital stock actually paid in, and then remaining as the actual capital stock of the corporation.
II. The balances and debts of every kind due to banks and bankers of this state or elsewhere.
III. The amount due to time and call depositors separately.
IV. The total amounts of debts and liabilities of every description, and the greatest amount since the last previous statement, specifying the time when the same occurred.
V. The amount on hand of bills, bonds, notes, and other evidence of debts discounted or purchased by the corporation, gold, silver coin, bullion, and cash on hand, the amount specifically and particularly of suspended debts, the amount considered doubtful, the amount considered bad, and the amount in suit or judgment.
VI. The value of the real and personal property held for the convenience of the corporation, specifying the amount of each, the amount of real estate taken for debts due the corporation, how taken, and still held.
VII. The amount of the undivided profits of the corporation.
VIII. The amount of the liabilities to the corporation by the directors or officers thereof, specifying the particular items and the gross amount thereof separately, as principal debtors, and as indorsers or sureties.
IX. The amount of liabilities to the corporation by the stockholders thereof, specifying the gross amount of such liabilities as principal debtors, and the gross amount as indorsers or sureties; which statement shall be entered at length in a book to be provided for that purpose.
18 May 1876 $ 18.
P. L. 167.
21. Before the cashier, teller, book-keeper, or other persons necessary for execut
ing the business of the corporation, shall enter upon their duties, they shall each Agreement to be
enter into articles of agreement with the corporation, for the proper discharge of signed by officers. his duty, in which it shall be provided, among other things, that he will give the
business of the corporation his care and attention, rendering trne accounts of all
any fession, occupation or calling, either directly or indirectly, than that of the duties gage in any other appertaining to the office of cashier; and if any cashier of such corporation shall
, occupation. directly or indirectly, engage in the purchase and sale of stocks, or in any other
profession or calling other than that of his duties as cashier, he shall be guilty of Penalty.
a misdemeanor, and upon conviction thereof in a court of criminal jurisdiction, he sentenced to pay a fine not exceeding five hundred dollars; nothing, however, in this section shall be construed as to prevent such cashier from managing his own real estate or private property as heretofore, if such private property be not vested
in mercantile, mechanical or manufacturing operations. Ibid. $ 19. 23. If any president, cashier, director, clerk, teller, agent, or any other officer
of any corporation under this act, shall fraudulently embezzle, abstract, or wilfully embezzlement. appropriate to his own use, or to the use of any other person or persons, or mis
apply any money or other property belonging to such corporation, or left with the same as a special deposit, or otherwise, he or they so offending, upon conviction thereof, shall be fined in any amount not less than the sum so appropriated or embezzled, and undergo an imprisonment at separate and solitary confinement
not exceeding five years : Provided, Such conviction shall not prevent any person 13 May 1976 $ 19. of persons aggrieved from pursuing their civil remedy against such person so con
P. L. 167.
P. L. 168.
Loans not to be
VII. General provisions. 24. The books, funds, papers and correspondence of the several corporations 18 May 1876 $ 20. under this act, shall
, at all times, be subject to the inspection of the directors, who shall keep fair and regular entries of their proceedings, in a book provided for Books to be open that purpose; and on any question, when two directors shall require it, the yeas to inspection. and navs shall be inserted on their minutes, which minutes shall at all times, on Minutes of prodemand, be produced to the stockholders, at a general meeting, and shall be sub- ceedings of ject, also, together with their other books and papers, to the inspection of any committee who shall be authorized by the legislature to require the same.
25. No director of any corporation under this act shall receive as a loan from Ibid. $ 21. such corporation an amount greater than ten per centum of the capital stock
Loans to directors, actually paid in; and the gross amount loaned to all the officers and directors of such corporations, and to the houses or firms in which they may be interested, directly or indirectly, shall not exceed, at any time, the sum of twenty-five per centum of the capital stock paid in. And no shareholder shall sell or transfer Lien on shares of any shares in the capital stock held in his own right, so long as he shall be liable, stock. either as principal debtor, surety or otherwise, to the corporation, for any debt, without the consent of a majority of the directors; nor shall such shareholder, when liable to the corporation for any debt that is overdue and unpaid, be entitled to receive
any dividend, interest or profit on such shares, as long as such liabilities shall so continue overdue; but all such dividends, interest and profits shall be retained by such corporation to discharge such liabilities.
26. It shall be the duty of the cashier of every corporation under this act, to Ibid. $ 22. publish once every six months, in two papers published in the county where such corporation is located, if so many are there published, if two are not published ments to be pubtherein, then in one paper therein, if none are published therein, then in one lished. published in one adjoining county, a statement of the condition of said corporation, which shall set forth the entire amount of its assets and every class of items therein, the entire amount of indebtedness and liabilities thereof, particularly specifying the same at the time of making such statement.
2. No corporation under this act shall take as security for any loan or discount, Ibid. § 23. a lien on any part of its capital stock, but the same surety, both in kind and amount, shall be required of persons, shareholders and not shareholders ;(a) and made on sticke no such corporation shall be the holder or purchaser of any portion of its capital, Not to hold their unless such purchase shall be necessary to prevent loss on a debt previously con- own stock. tracted in good faith, on surety which at the time was deemed adequate for the payment of such debt, without a lien upon such stock, or in case of forfeiture of Exceptions. such stock for the non-payment of instalments due thereon, as provided in this act; and the stock so purchased shall in no case be held by the corporation so purchasing, for a longer period than six monthis, if the same can be sold for what such stock cost the corporation.
28. No corporation under this act shall, during the time it shall continue its Ibid. $ 24. operations, withdraw or allow to be withdrawn, either in form of dividends, loans
Capital not to be to stockholders, or in any other manner, any portion of its capital stock, except as withdrawn. hereinbefore provided; and if any losses shall at any time have been sustained by such corporation equal to or exceeding its undivided profits then on hand, no No dividend to be dividend shall be made; and no dividends shall be made by any such corporation, declared in certain while in business operation, to an amount greater than its net profits then on hand, deducting therefrom losses, bad and suspended debts; and all debts due to Suspended debts. such corporation, on which interest is due and unpaid for six months, unless the same shall be well secured or in process of collection, shall be considered bad and suspended debts, within the meaning of this section.
29. Any corporation under this act may go into liquidation and be closed, by Ibid. $ 25. the vote of its shareholders, owning at least two-thirds of its stock; and whenever
When companies such vote shall be taken, it shall be the duty of the board of directors, to cause may go into liquinotice of this fact to be certified, under the seal of the corporation, to the auditor-dation. general, and publication thereof made for at least three months in two newspapers, if so many are published, if two are not published, then one, in the county in which such corporation is located, that it is closing up its affairs, and notifying the creditors thereof to present their claims for payment; and it shall be the duty of the said directors, in the name of the corporation, to collect all its assets, apply
(a) It has been decided, under the federal banking lien upon his stock. Ibid. But though forbidden to law, that a national bank can make no valid loan or make any loan on the pledge of its own stock, a nadiscount on the security of its own stock, mless neces- tional bank may make a valid by-law, that no 'stocksary to prevent a loss on a debt previously contracted holder who is indebted to the bank, shall be permitted in good faith; the placing by one bank of its funds on to make a transfer of his stock upon the books. permanent deposit with another, is a loan within the Knight v. Bank of Providence, 3 Cliff. 429; s. P. meaning of the statute. Bank v. Lanier, 11 Wall. Pendergast v. Bank of Stockton,' 2 Sawyer 108.
E. 38. A loan to a stockholder does not give the bank a parte Dunkerson, 4 Biss. 227.
P. L. 168.
13 May 1876 $ 25 the same, first to the payment of the debts thereof, and distribute the surplus, if
any, to and among the shareholders, in the proportion they hold the capital stock
thereof, Ibid. $ 30. 30. The banks chartered under the provisions of this act shall not pay interest
on call deposits; and any violation of this section shall work a forfeiture of the Not to pay interest on deposits.
charter of the bank so paying interest. Ibid. & 31. 31. The legislature reserves the power to revoke or annul the charters of all
corporations organized under this act whenever, in their opinion, it may be necessary for the public welfare, in such a manner, however, that no injustice shall be done to the stockholders; and such corporations shall be subject to all the laws of
this commonwealth regulating the taxation of banking corporations therein. Ibid. $ 32. 32. Any corporation now in existence, chartered under any of the laws of this Existing corpora
state, making application to come under any of the provisions of this act, shall do so, by coming under all the provisions of this act, and shall reorganize the said corporation to conform with this act.
Power to revoke charters.
P, L. 1ᏮᏭ . .
VIII. Insolvency. 13 May 1876 & 26 33. If any corporation under this act shall refuse, after lawful demand, at its
customary place of business, during usual business hours, to pay off its liabilities, Acts of insolvency. for a period of ten days after such liabilities are due and payable, holders or owners
thereof shall present, in writing, a written demand for the payment thereof, at the place of business of such corporation, during usual business hours; and if payment thereof is refused, because of the want of funds to pay the same, such
holders may cause such written demand to be protested for non-payment, by a Duties of auditor- notary-public, under his official seal, in the usual manner; and the auditor-general, general.
on receiving and filing in his office such protest, shall forthwith give notice in writing to such corporation, that if it omits to pay its liability, aforesaid, with legal interest thereon and cost of protest, for thirty days after such notice, he will
notify such corporation that it has committed an act of insolvency. Ibid. $ 27. 34. The auditor-general, after having notified such corporation that it has com
mitted an act of insolvency, shall forthwith, with the concurrence of the governor, Investigation of
appoint a special agent, at a compensation not exceeding ten dollars per day and necessary travelling expenses, who shall make immediate inquiry into the truth of such information, and make report thereon to the auditor-general; and if the said special agent shall report to the satisfaction of the auditor-general that such corporation has suspended payment of its liabilities, he shall forthwith apply to the court of common pleas of the proper county, if in session, or if in vacation, to
the president judge of the district in which such corporation is located, to appoint Appointment of a suitable receiver, who shall take immediate possession of the books, records,
money, bills, bonds, notes, other evidence of indebtedness, and all the property of such corporation of every description, and hold the same for the creditors of
the said corporation. Ibid. & 28. 35. The receiver appointed as provided for in the preceding section shall give
bond in such sum and with such sureties as the said court or judges shall deem sufficient, and shall proceed, under the direction of said court, to settle up the affairs of such corporation, shall convert all its assets of every kind and description, if possible, without delay, into money; the money so made shall be applied —
İ. To pay all the deposits of the corporation.
II. To the payment and discharge of all the remaining liabilities of such corporation.
III. The residue, if any, shall be distributed to the shareholders of the corpora
tion, in proportion to the stock by them respectively held. Ibid. $ 29. 36. If any corporation under this act against which the auditor-general shall
have instituted proceedings, on account of any supposed act of insolvency, as preproceedings. scribed in this act, such corporation may apply to any court of competent jurisdic
tion for an injunction on said auditor-general to suspend all further proceedings against such corporation for insolvency; and such court, after citing the auditor; general to appear and show cause why such writ should not be granted, the said court shall proceed to inquire if such corporation has actually suspended payment of its liabilities and continues such suspension, and for this purpose such court may direct an issue, if required by either party; and if, after such inquiry, such court shall discover such corporation has not suspended and does not continue to suspend payment of its liabilities, shall make an order enjoining the auditor-general from all further proceedings against such corporation, on account of the supposed act of insolvency on which such proceedings were instituted, and thereupon
all the property and assets of such corporation shall be restored to it. 18 May 1878 $ 1.
37. Whenever the estate and effects of any bank, or banking company, which has
become, or shall hereafter become, insolvent, have been, or shall hereafter be, comSurrender of secur- mitted to an assignee or assignees, receiver or receivers, it shall be in the discre
tion of the auditor-general of the commonwealth to deliver to said receiver or or assignees.
receivers, assignee or assignees, such bonds or evidences of debt, deposited with him to secure the circulation of said bank or banking company, upon the filing
Duties of receiver.
Power to traverse
P. L. 70.
ities to receivers
P. L. 70.
by the said receiver or receivers, assignee or assignees, in the auditor-general's 18 May 1878 $ 1.
I. BANKING DEPARTMENT.
V. RENEWAL OF CHARTERS. 1. Banking department established.
43. Acceptance of recharter to be filed. Effect of 2. Superintendent.
recharter. 3. Corporations subject to inspection.
44. Renewal of charters of state banks. 4. Duties of superintendent. Examiners.
45. Petition to governor. 5. Expenses of examinations. Fees.
46. Notice. 6. Examiner to be sworn. Perjury.
47. To be submitted to attorney-general. And sub7. Four reports each year. Report.
mitted to governor. Certificate of auditor-general. 8. Superintendent to make examination.
48. Objections to renewal. 9. May call for special reports.
49. Governor to issue patents. Issue of notes or bills. 10. When report shows capital below amount re- 50. Institutions not banks of issue. quired by law. Notice to attorney-general. Duty of 51. When certificate to issue. the court.
52. Banks without capital stock not to discount. 11. When court shall decree dissolution.
53. Discount limited to six per cent.
VI. ELECTION OF DIRECTORS.
54. Fundamental articles.
55. Affairs to be conducted by directors chosen by 14. When superintendent may take possession.
stockholders. Who may be directors. 15 Duties of auditor-general transferred.
56. Number of directors. 16. Visitorial powers.
57. Certain persons not to be directors or cashiers. 17. Annual report.
58. Justices of the peace to be eligible as directors. 18. Seal of office.
59. Election of directors. Certain persons to be 19. Books transferred.
ineligible. 20. Offices. Furniture.
60. Quo warranto may be issued against directors. 21. Repealing clause.
61. Judges of elections to be qualified.
62. Number of votes to which stockholders to be II. OF THE APPLICATION FOR THE CHARTER. entitled.
63. Who to be entitled to vote. Proxies not to be
VII. OF THE OFFICERS.
64. Directors to appoint officers. Officers to give 25. No fees or expenses to be allowed to officers of bond. Suits thereon regulated. Officers not to act as banks.
proxies. Cashiers not to engage in any other occupa26. All banks hereafter chartered or rechartered to tion. Penalty for so doing. be subject to revised act.
65. Amount of cashiers' bonds, how determined. 27. Bank charters may be altered or annulled. Limitation.
66. Cashiers not to be disqualified by coming into III. OF SUBSCRIPTIONS TO THE CAPITAL
possession of property invested in commerce, &c. STOCK.
67. Cashiers and solicitors to be elected in Phila28. Division of capital stock. Subscriptions, how delphia. Certain persons to be ineligible as solicitors taken.
68. Vice-president and assistant cashier may be 29. Payment on each share subscribed.
elected. Notice of election. 31). How vacancies in commissioners to be sup
69. No director, except the president, to receive plied.
compensation. 31. Payments, when and how made.
70. And the vice-president. 32. Reduction of capital. Not to affect liability of 71. Officers to be sworn. stockholders.
72. Punishment for otticial misconduct. 33. Meeting to be called. Notice.
73. Punishment of embezzlement. 34. Election to be held. 35. Ballots. Transferred shares and proxies. State- Directors to keep minutes of their proceedings. Min
74. Books to be subject to inspection of directors. ment to be furnished.
utes to be produced to stockholders at general meetings. 36. Returns to be filed with secretary of the com- 75. Discounts to directors regulated. monwealth, and certificate of reduction. Penalty for
76. Limitation. neglect. Certificate to be recorded, and certified to 77. Not to extend to actual business paper. auditor-general. Issue of new certificates. 37. How capital may be reduced. Liability of
VIII. OF CORPORATE MEETINGS. stockholders.
38. Companies having a fixed capital, partly paid, 78. Meetings of directors. How many to form a may decrease, and issue full paid certiticates. Limita
79. When and how general meetings of stockholders IV. OF THE ORGANIZATION.
may be called.
80. Amuual meetings of stockholders. 39. When letters-patent to issue. Corporate powers.
IX. OF THE TRANSFER OF STOCK, AND OF 40. Organization of banks.
DISCOUNTS AND DIVIDENDS. 41. Certificates of stock to be delivered.
42. Stock may be divided into shares of the par 81. Stock, how transferrible. value of $50.
82. Rate of discount.
83. Dividends, when and how declared. Directors XIV. OF THE TAX ON DIVIDENDS, AND ON to be responsible for impairing capital.
126. Tax on dividends.
127. Tax on stock of national banks. 84. Power to hold lands. Not to deal in stocks or
128. Appointment of assessors. Their duties. How merchandise, except in certain cases.
tax collected. Compensation. 85. May purchase notes of other states at a dis
129. Assessors to be appointed annually. count.
130. Exemption from other taxes. 86. Power to hold property taken for debts en
131. Assessment of shares of national banks. larged.
Appeals. 87. May improve, and derive rent from buildings.
132. Notice of appraisement. Entry of appeals. 88. Banks may negotiate loans to commonwealth
133. Duties of assessors. and purchase state stocks.
131. Taxes to be a lien. 89. Banks may subscribe for state loans.
135. Tax on bank shares. 90. Accounts may be opened with minors and
136. Taxation of shares of national banks. married women.
137. Rate of taxation on shares of national banks.
138. When shares to be exempt from taxation. XI. OF BANK-BILLS, AND BANK-NOTES.
XV. PROCEEDINGS ON REFUSAL TO REDEEM. 91. Bank-bills to be assignable by indorsement. And notes to be negotiable. Notes due in bank to be
139. Failure to redeem to cause forfeiture of charter. on the footing of foreign bills.
140. Cashier to give certificates of deposit. Interest 92. Punishment for issuing notes otherwise than
on failure to redeem. Time of presentment to be inpayable on demand.
dorsed. Penalty for neglect or refusal. 93. One, two and three dollar notes authorized.
141. One-fifth of notes to be redeemed in American 94. Notes of certain denominations not to be is gold coin. sued.
142. Proceedings in case of failure to redeem. Ci95. Nor notes of other banks. Nor any, except tation, how served. Court to decree assignment to be payable in specie on demand.
made. Assignment to be recorded. Assignees to be 96. Exception.
sworn, and give security. Duties of assignees. Cor97. Certificates of deposit not to be issued in simili- porate powers to remain for certain purposes. tude of bank-notes.
143. ‘Attachment to issue, if deemed necessary by 98. Suits not to be brought on bank-notes before the court. On neglect to assign, after attachment, demand.
rights and powers to vest in trustees by operation of 99. Specie and notes of specie-paying banks to be law. Who may be trustees. alone receivable by the state.
XVI. OF VOLUNTARY ASSIGNMENTS, AND XII. PENALTIES FOR UNAUTHORIZED ISSUE
WINDING UP OF BANKS.
144. When voluntary assignments may be made. 100. Penalty for issuing notes by any but incor
145. Trustees may be elected to wind up.
146. In case of forfeiture of charter. porated banks.
147. Powers and duties of trustees. 101. Mode of prosecution for violation.
148. Vacancies, how filled. 102. Penalty for second and subsequent violation. Competency of witnesses.
149. Proceedings against corporation, after election
of trustees. 103. Quo warranto may issue after two convictions remaining unpaid. Charter may be declared void. 104. Proceedings before justices, in case of second
XVII. OF THE INDIVIDUAL LIABILITY OF suit for violation of this act. Parties may appeal, but
STOCKHOLDERS. no certiorari to issue.
105. Suits may be maintained on notes so issued. 150. Stockholders to be individually liable for 106. Notes under five dollars of any kind not to be
notes. How enforced. issued as a circulating medium.
151. Assignees to issue process against stockholders.
How served. 107. Penalty for so doing. 108. Suits may be maintained thereon.
152. Court to render judgment and award execution. 109. Interest to be recovered thereon at the rate of 153. Proceedings against assignee of insolvent stock
holder. 20 per cent. i10. Any person who may have circulated the same
154. Persons owning stock in other names to be
liable. to be liable for interest. 111. When such notes shall be deemed to have been
155. Construction of term “stockholder." issued.
156. Individual liability of stockholders. 112. Issuing of notes under five dollars to be punishable by indictment.
XVIII. PROCEEDINGS IN CASE OF INSOL113. Not to purchase bank-notes at less than par.
VENCY. Penalty for so doing.
114. Acts punishing the circulation of certain notes, 157. Assignments under this act to be subject to suspended in certain counties.
act of 1836. Power of courts to compel settlement of
accounts. XIII. OF BANK STATEMENTS.
158. Order of payments by assignees.
159. When directors to be personally liable, 115. Auditor-general to require quarterly state- 160. When insolvency to be deemed fraudulent. ments and communicate the same to the legislature.
161. What to be deemed insolvency. Duties of 116. What such exhibits to contain.
directors after assignment. Statement of affairs of 117. Cashiers to return annually the marketable
bank to be filed. value of assets.
162. Court to appoint auditors. 118. Exhibits to be verified by oath.
163, Powers of auditors. 119. Weekly statements to be made in Philadel- 164. Court to examine report of auditors and decree phia, Pittsburgh and Allegheny. Penalty for omis- thereon. sion.
165. Jurisdiction of equity in case of fraudulent 120. Publication of bank statements.
insolvency. Forin of bill by assignee. 121. Restriction of liabilities.
166. Service of process, and hearing. 122. How estimated.
123. Auditor-general may require special returns. Charter to be forfeited in case of violation.
XIX. OF THE NOTES OF FOREIGN BANKS. 124. On forfeiture of charter, directors to execute
167. Penalty for circulating small notes of other assignment.
states. 125. Punishment of false swearing to statement. 108. To be punishable also by indictment.