Whenever any bank or individual banker is required by law to make a deposit of securities with the superintendent of banks in trust for such bank or individual banker, such deposit shall consist of interest-bearing stock of the state of New York or of the United States.

(Former section 57; R. S., 1528; L. 1882, ch. 409.)

See section 14, ante.

The superintendent of the banking department was requested to execute a duplicate of an assignment of a mortgage executed by his predecessor in office in 1864, the original of which had been lost. The request was based on the fact, that certain entries in the books of the banking department showed that such an assignment had been executed and delivered at the date named, though the records of that department contained no copy of the assignment. The question of the right of the superintendent to execute the duplicate assignment was submitted to the attorney-general. That officer, in his reply filed in the banking department, October 7, 1882, says:

"I do not think you are authorized to do more than furnish an exemplified copy under your hand and seal of office of such entries in the books of your department. You certainly could not furnish a duplicate of an instrument, the terms and provisions of which you are ignorant."

§ 77. Prohibition against sale of business by individual banker.— No individual banker having circulating notes obtained under the laws of this state, shall sell or transfer the business of banking, upon the securities deposited by him, to any person or persons; and until such business shall be closed, by the return of the circulating notes. issued, and the delivery of the securities deposited, the same shall be conducted only in the name of the individual banker by whom the securities were deposited; and he shall continue individually liable for the payment of all circulating notes delivered to him. But any such individual banker may bequeath his business of banking upon the securities deposited by him to any person or persons, and such business may be continued after his death by his legatee or heir at law.

(Former section 58; R. S., 1528; L. 1882, ch. 409, §§ 64. 65.)

§ 78. Change from state to national bank. Any bank may become a corporation for the purpose of carrying on the business of banking within this state pursuant to the provisions of the act of congress "to provide a national currency secured by a pledge of United States stocks, and to provide for the circulation and redemption thereof," approved June third, eighteen hundred and sixty-four, and of title

fifty-two of the revised statutes of the United States, whenever stockholders owning two-thirds of the stock of such bank shall have voted to become such corporation, or have executed a written consent authorizing its directors to make the certificate required therefor by the laws of the United States, or whenever a majority of the directors of such bank having been authorized in their discretion to make the change, shall, by a vote of such majority, decide to become such corporation; and the cashier of such bank shall publish notice thereof for thirty days in such newspaper as the directors may select, and send a like printed notice by mail or otherwise to all nonvoting or dissenting stockholders, and notify the superintendent of banks of this state that such banks has decided to become a corporation under the laws of the United States.

(Former section 59; R. S., 1551; L. 1882, ch. 409, § 169.)

1. Where a State bank at the time of its change to a National bank held a continuing guaranty of loans made by it to one W., upon the strength of which it had made loans, and after the change further advances were made, Held, that an action was maintainable by the National bank upon the guaranty; and that the guarantor was liable for the loans made both before and after the change. City Natl. Bank of Poughkeepsie v. Phelps, 97 N. Y. 44, 49 Am. Rep. 513.

2. Change from State to National bank is not a closing of the business of the State bank within the meaning of the statute authorizing a closing bank to limit the time within which its notes shall be presented for redemption. Claggett v. Metropolitan Natl. Bank, 4 N. Y. Supp. 115.

§ 79. When deemed to have surrendered its charter. -Any such bank which shall become a corporation for carrying on the business of banking under the laws of the United States shall cease to be a corporation under the laws of this state, except that for the term of three years thereafter, its corporate existence shall be deemed to continue for the purpose of prosecuting and defending suits by and against it, and of enabling it to close its concerns, and to dispose of and convey its property. The members of the board of directors last in office, when such corporation shall have become a corporation under the laws of the United States, shall continue to be the board of directors of the new corporation, with power to take all necessary measures to carry out and perfect such organization by signing the articles of association and the organization certificate, and adopting such regulations as may be just and proper and not inconsistent with the acts of congress in relation thereto.

Such change from a state to a national bank corporation shall not release any such bank from its obligations to pay and discharge all the liabilities created by law or incurred by it before becoming a national bank corporation, or any tax imposed by the laws of this state up to the date of its becoming such national bank corporation, in proportion to the time which has elapsed since the next preceding payment therefor.

(Former section 60; R. S., 1551, 1552; L. 1882, ch. 409.)

1. The identity of a State bank is not so changed by becoming a National bank, as to terminate a guaranty made in favor of State bank. City National Bank v. Phelps, 22 Hun, 142, aff'd 86 N. Y. 484.

2. An appeal from a judgment by a State bank, subsequently merged in a National bank, is the defense of a suit within the meaning of this act; and if such appeal is taken within three years from its conversion to National bank, the State bank must be deemed to continue in existence, as to such appeal or defense of the suit, until the appeal is heard and determined. Claflin v. The F. & C. Bank of Long Island, 54 Barb. 228.

3. P. & K., a firm of which defendant was a partner, executed to a State bank a written undertaking to be responsible for the payment of any sum not to exceed $5,000, which W. might require of said bank "for legitimate business purposes." The said bank, after loans had been made to W. upon the faith of the guaranty, abandoned its State organization, and was reorganized as a National bank as authorized by the act of 1865 (chapter 97, Laws of 1865). A portion of said loans had not been paid, new notes having been given in renewal. Held, that for whatever sum the defendant was bound to the State bank, when it was reorganized, that indebtedness passed to plaintiff; and conceding that plaintiff could not renew without the assent of defendant, or make fresh advances and still hold him liable, it had the right to enforce the liability to the State bank. City National Bank v. Phelps, 86 N. Y. 484; S. C. 22 Hun, 142.

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§ 80. Reduction of capital stock in such cases. The directors of such new corporation may reduce the capital stock of the bank to value by dividing the surplus among its stockholders, or may retain such portion of such surplus as they may deem necessary; and in case of an increase of the capital stock under the provisions of the acts of congress, may charge the shares of such increased capital stock with a like amount, to place the whole of such capital stock on an equality; and may award such new stock, or such proportion or fractional parts thereof, to such persons as they shall determine are entitled thereto, and as are provided in their articles of association and in the acts of congress; but new directors may be chosen at such

time and in the manner provided in the articles of association and the acts of congress.

(Former section 61; R. S., 1551; L. 1882, ch. 409, § 172.)

When a National bank reduces its capital, each shareholder is entitled to a return of his proportional amount, and the bank cannot retain the funds as surplus, or for any other purpose; and having refused to permit shares thus retired to be transferred on its books, the bank is liable for the value of the shares to the holders. Seeley v. New York National Exchange Bank, 4 Abb. New Cases, 61.

§ 81. Certificate of change. When any such bank has decided to become a corporation under the laws of the United States, the directors shall immediately thereafter execute and transmit to the comptroller of the currency the proper certificate and other instruments for its conversion into a national bank corporation under the laws of the United States. When any such bank shall have become authorized to commence the business of banking under the laws of the United States, all the property of such bank shall immediately, by act of law, and without any conveyance or transfer, be vested in and become the property of the national bank corporation, into which such bank shall have been converted; and it shall be entitled, on returning the bills of such bank to the banking department of this state, to receive the stocks pledged to secure the redemption of the same, in the same manner as the bank issuing the same is now entitled by law; and shall be subjected to the same rules as state banks in respect to the final redemption of the circulating notes of such bank so converted into national bank corporations.

The plates and dies of any such bank, in the banking department of this state, shall be forthwith so obliterated as to prevent all future use of the same.

(Former section 62; R. S., 1551, 1552; L. 1882, ch. 409, §§ 173, 174.)

§ 82. National bank may become state bank. Whenever any banking corporation organized and doing business under the laws of the United States shall, under the provisions of any act of congress, be authorized to dissolve its organization as such national bank corporation, and shall have taken the action required to effect such dissolution, a majority of the directors of such dissolved corporation may, upon the authority in writing of the owners of two-thirds of its

capital stock, execute the certificate of incorporation required by section sixty of this chapter.

Upon the execution and proof or acknowledgment of such certificate, which shall also set forth the authority in writing of the stockholders as required by this section, and upon filing a copy thereof in the office of the superintendent of banks, with proof that the original is duly recorded in the office of the clerk of the county where any office of such corporation shall be located, such corporation shall be held and regarded as an incorporated bank under and in pursuance of the laws of this state, and shall be entitled to all the privileges and be subject to all the liabilities of banks so incorporated; and thereupon all the property of the dissolved national bank corporation shall immediately by act of law and without any conveyance or transfer be vested in and become the property of such state bank. The directors of the dissolved corporation at the time of such dissolution, shall be the directors of the bank created in pursuance hereof until the first annual election of directors thereafter, and shall have power to take all necessary measures to perfect its organization, and to adopt such regulations concerning its business and management as may be proper and just and not inconsistent with law.

(Former section 63; R. S., 1552; L. 1882, ch. 409, §§ 177, 178.)

83. Circulating notes; plates. - Any bank or individual banker may deposit with and transfer to the superintendent of banks any interest-bearing stocks or bonds of the United States or of the state of New York, or of any county or incorporated city of this state authorized to be issued by the legislature, or bonds and mortgages on improved, unincumbered real property of the state of New York worth seventy-five per centum more than the amount thereon loaned; but no such stock or bonds shall be received by the superintendent at a rate above their par value or above their current market value. The superintendent may thereupon issue to such bank circulating notes in the similitude of bank notes in blank, engraved and printed in the best manner to guard against counterfeiting, in denominations of one, two, five, ten, twenty, fifty, one hundred, five hundred and one thousand dollars, which shall be countersigned, numbered and registered in proper books to be provided and kept for that purpose