18 May 1876 § 16. P. L. 166. Individual liability of directors. Ibid. § 17. 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 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 forthwith enter his protest on the minutes of the board and give public notice to the stockholders thereof. (y) 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 to be made on dividend day. 13 May 1876 § 18. P. L. 167. Agreement to be Bonds. cashier, setting forth -- I. 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. VI. Officers. 21. Before the cashier, teller, book-keeper, or other persons necessary for executing the business of the corporation, shall enter upon their duties, they shall each 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 true accounts of all his transactions, never to use the moneys of the corporation in his private transactions, nor to engage in private financial operations through his office, as one of the officers of said corporation. And they shall each also enter into a bond to the commonwealth of Pennsylvania in such amount as the board of directors may require, conditioned for the proper and faithful performance of his duties; the security of which bonds shall be approved by the court of common pleas of the county in which the corporation is located, and recorded within thirty days thereafter in the office for recording deeds in such county. Any person aggrieved and suffering injury by the failure of any officer or clerk of the corporation to comply with the conditions of his bond, may commence and prosecute an action on the same, in the manner provided for suing official bonds in the act approved June 14th, 1836, (*) entitled "An act relative to bonds with penalties, and official bonds." Suits thereon. Ibid. Cashier not to en occupation. Penalty. 22. No cashier of any corporation under this act shall engage in any other profession, 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, 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 a misdemeanor, and upon conviction thereof in a court of criminal jurisdiction, be 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. Punishment of embezzlement. 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 appropriate to his own use, or to the use of any other person or persons, or misapply 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 18 May 1876 § 19. or persons aggrieved from pursuing their civil remedy against such person so con victed. VII. General provisions. P. L. 167. 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 P. L. 168. 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 nays 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. directors. &c. Ibid. § 21. 25. No director of any corporation under this act shall receive as a loan from such corporation an amount greater than ten per centum of the capital stock actually paid in; and the gross amount loaned to all the officers and directors of Loans to directors, 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. Ibid. § 22. Semi-annual state 26. It shall be the duty of the cashier of every corporation under this act, to 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. Ibid. § 23. 27. No corporation under this act shall take as security for any loan or discount, a lien on any part of its capital stock, but the same surety, both in kind and Loans not to be amount, shall be required of persons, shareholders and not shareholders; (a) and made on stock. 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 months, if the same can be sold for what such stock cost the corporation. Ibid. § 24. Capital not to be 28. No corporation under this act shall, during the time it shall continue its operations, withdraw or allow to be withdrawn, either in form of dividends, loans 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. cases. Ibid. § 25. 29. Any corporation under this act may go into liquidation and be closed, by 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 law, that a national bank can make no valid loan or discount on the security of its own stock, unless necessary to prevent a loss on a debt previously contracted in good faith; the placing by one bank of its funds on permanent deposit with another, is a loan within the meaning of the statute. Bank v. Lanier, 11 Wall. 369. A loan to a stockholder does not give the bank a lien upon his stock. Ibid. But though forbidden to Ex 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 P. L. 168. Ibid. § 30. Not to pay interest on deposits. Ibid. § 31. Power to revoke charters. Ibid. § 32. Existing corporations. thereof. 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 charter of the bank so paying interest. 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. 32. Any corporation now in existence, chartered under any of the laws of this 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. VIII. Insolvency. 13 May 1876 § 26 33. If any corporation under this act shall refuse, after lawful demand, at its P. L. 169. 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, 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. general. Ibid. § 27. Investigation of affairs. Appointment of receiver. Ibid. § 28. Duties of receiver. Distribution. Ibid. § 29. Power to traverse proceedings. 18 May 1878 § 1. P. L. 70. 34. The auditor-general, after having notified such corporation that it has committed an act of insolvency, shall forthwith, with the concurrence of the governor, 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 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. 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 — I. 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 corporation, in proportion to the stock by them respectively held. 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 prescribed in this act, such corporation may apply to any court of competent jurisdiction for an injunction on said auditor-general to suspend all further proceedings against such corporation for insolvency; and such court, after citing the auditorgeneral 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. 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 discretion of the auditor-general of the commonwealth to deliver to said receiver or 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 ities to receivers or assignees. P. L. 70. by the said receiver or receivers, assignee or assignees, in the auditor-general's 18 May 1878 § 1. office, a certified copy of the assignment, or of the appointment of receiver or receivers, together with a certificate from the prothonotary of the county in which said bank or banking company is situated, that the said receiver or receivers, assignee or assignees, have given bond for the faithful execution of their trust. II. OF THE APPLICATION FOR THE CHARTER. 22. How notice of application to be given. 23. Information elicited by committees on banks to be recorded. 24. Punishment for false swearing before committees. 25. No fees or expenses to be allowed to officers of banks. 26. All banks hereafter chartered or rechartered to be subject to revised act. 27. Bank charters may be altered or annulled. III. OF SUBSCRIPTIONS TO THE CAPITAL STOCK. V. RENEWAL OF CHARTERS. 43. Acceptance of recharter to be filed. Effect of recharter. 44. Renewal of charters of state banks. 46. Notice. 47. To be submitted to attorney-general. And submitted to governor. Certificate of auditor-general. 48. Objections to renewal. 49. Governor to issue patents. Issue of notes or bills. 52. Banks without capital stock not to discount. VI. ELECTION OF DIRECTORS. 54. Fundamental articles. 55. Affairs to be conducted by directors chosen by stockholders. Who may be directors. 56. Number of directors. 57. Certain persons not to be directors or cashiers. 58. Justices of the peace to be eligible as directors. 59. Election of directors. Certain persons to be ineligible. 60. Quo warranto may be issued against directors. 61. Judges of elections to be qualified. 62. Number of votes to which stockholders to be entitled. 63. Who to be entitled to vote. Proxies not to be allowed, except in case of females. VII. OF THE OFFICERS. 64. Directors to appoint officers. Officers to give bond. Suits thereon regulated. Officers not to act as proxies. Cashiers not to engage in any other occupation. Penalty for so doing. 65. Amount of cashiers' bonds, how determined. Limitation. 66. Cashiers not to be disqualified by coming into possession of property invested in commerce, &c. 67. Cashiers and solicitors to be elected in Phila 28. Division of capital stock. Subscriptions, how delphia. Certain persons to be ineligible as solicitors taken. or directors. 68. Vice-president and assistant cashier may be elected. Notice of election. 69. No director, except the president, to receive compensation. 70. And the vice-president. 71. Officers to be sworn. 72. Punishment for official misconduct. 73. Punishment of embezzlement. 74. Books to be subject to inspection of directors. Directors to keep minutes of their proceedings. Minutes to be produced to stockholders at general meetings. 75. Discounts to directors regulated. 76. Limitation. 77. Not to extend to actual business paper. VIII. OF CORPORATE MEETINGS. 78. Meetings of directors. How many to form a quorum. 79. When and how general meetings of stockholders may be called. 80. Annual meetings of stockholders. IX. OF THE TRANSFER OF STOCK, AND OF 81. Stock, how transferrible. 83. Dividends, when and how declared. Directors XIV. OF THE TAX ON DIVIDENDS, AND ON to be responsible for impairing capital. XI. OF BANK-BILLS, AND BANK-NOTES. 91. Bank-bills to be assignable by indorsement. And notes to be negotiable. Notes due in bank to be on the footing of foreign bills. 92. Punishment for issuing notes otherwise than payable on demand. 93. One, two and three dollar notes authorized. 94. Notes of certain denominations not to be is sued. 95. Nor notes of other banks. Nor any, except payable in specie on demand. 96. Exception. CAPITAL STOCK. XV. PROCEEDINGS ON REFUSAL TO REDEEM. 139. Failure to redeem to cause forfeiture of charter. 140. Cashier to give certificates of deposit. Interest on failure to redeem. Time of presentment to be indorsed. Penalty for neglect or refusal. 141. One-fifth of notes to be redeemed in American gold coin. 142. Proceedings in case of failure to redeem. Citation, how served. Court to decree assignment to be made. Assignment to be recorded. Assignees to be sworn, and give security. Duties of assignees. Cor 97. Certificates of deposit not to be issued in simili- porate powers to remain for certain purposes. tude of bank-notes. 98. Suits not to be brought on bank-notes before demand. 99. Specie and notes of specie-paying banks to be alone receivable by the state. XII. PENALTIES FOR UNAUTHORIZED ISSUE 100. Penalty for issuing notes by any but incorporated banks. 101. Mode of prosecution for violation. 102. Penalty for second and subsequent violation. Competency of witnesses. 103. Quo warranto may issue after two convictions remaining unpaid. Charter may be declared void. 104. Proceedings before justices, in case of second suit for violation of this act. Parties may appeal, but no certiorari to issue. 105. Suits may be maintained on notes so issued. 106. Notes under five dollars of any kind not to be issued as a circulating medium. 107. Penalty for so doing. 108. Suits may be maintained thereon. 109. Interest to be recovered thereon at the rate of 20 per cent. 110. Any person who may have circulated the same to be liable for interest. 111. When such notes shall be deemed to have been issued. 112. Issuing of notes under five dollars to be punishable by indictment. 113. Not to purchase bank-notes at less than par. Penalty for so doing. 114. Acts punishing the circulation of certain notes, suspended in certain counties. 143. Attachment to issue, if deemed necessary by the court. On neglect to assign, after attachment, rights and powers to vest in trustees by operation of law. Who may be trustees. XVI. OF VOLUNTARY ASSIGNMENTS, AND 144. When voluntary assignments may be made. 149. Proceedings against corporation, after election of trustees. |
