as the surplus earned.' The act of 1866, taxing surplus, is conclusive proof that before that act there was no liability of savings banks to taxation. There are two fatal objections to this tax under the Laws of 1866. In the first place, the banks have invested in U. S. bonds an amount greater than the entire surplus earned. These bonds are free from taxation, and must be deducted before a surplus for the purpose of taxation is made up. In the second place the act of 1866 is repealed by the act of 1875 (chapter 371, Laws of 1875). Among the designated acts and parts of acts repealed, is enumerated section 7, chapter 751, Laws of 1866, and also ‘any other acts or parts of acts relating to savings banks or institutions for savings; the Law of 1875 is wholly silent as to taxation of savings banks, although it provides one rule for every savings bank, whether incorporated before the Act of 1875, or to be thereafter incorporated.

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Moreover, it gives the surplus to the depositors, reserving ten per cent. of the deposits for a surplus to cover depreciation of investments. The law exempting deposits on taxation is not repealed, except it be held repealed by the general words repealing any other act or parts of acts relating to savings banks or institutions for savings.' This question will be material only when depositors are taxed. That question is not presented by this return. My conclusion is, that the tax imposed by the assessors for the surplus earned is illegal, and must be set aside without cost."

§ 136. Must begin business within one year. Every such corporation which shall not organize and commence business within one year after the certificate of authorization has been filed, shall forfeit its rights and privileges as a corporation under this chapter. The superintendent of banks may, for satisfactory cause to him shown, by an order under his hand and official seal, extend the term within which such organization may be effected and such business commenced, for not more than one year. Such order shall be transmitted to the county clerk of the county in which such savings bank is to be located, who shall file the same, together with its certificate of incorporation and certificate of authorization.

(Former section 106; L. 1882, ch. 409, § 248.)

§ 137. Trustees and their powers. There shall be a board of not less than thirteen trustees of every such corporation, who shall have the entire management and control of all its affairs, and who shall elect from their number, or otherwise, a president and two vicepresidents, and such other officers as they may deem fit. The persons named in the certificate of authorization shall be the first trustees. A vacancy in the board shall be filled by the board, as soon as prac ticable, at a regular meeting after the vacancy occurs. Each trustee, whether named in the certificate of authorization or elected to fill a

vacancy, shall, when such certificate of authorization has been issued or when notified of such election, take an oath that he will, so far as it devolves on him, diligently and honestly administer the affairs of such corporation, and will not knowingly violate, or willingly permit to be violated any of the provisions of law applicable to such corporation. Such oath shall be subscribed by the trustee making it and certified by the officer before whom it is taken, and shall be immediately transmitted to the superintendent of banks and filed and preserved in his office. No person who is not a resident of this state or against whom a judgment for any sum of money shall have been recovered or shall hereafter be recovered and remain unsatisfied of record, or unsecured upon appeal, for a period of more than three months, or who hereafter takes the benefit of any law of bankruptcy or insolvency, or who makes a general assignment for the benefit of creditors, shall be a trustee of any savings bank, and the office of any such trustee is hereby vacated. It shall be lawful for the board of trustees of every such corporation by a resolution to be incorporated in its by-laws, a copy of which shall also be filed with the superintendent of banks, to reduce the number of trustees named in the original charter of such corporation to a number not less than the minimum named in this article. Such reduction shall be effected gradually by the occurrence of vacancies by death, resignation, or forfeiture, until the number is reduced to thirteen, or to such greater number as shall be designated in the aforesaid resolution; or the number of trustees may be increased to any number designated in a resolution for that purpose, where reasons therefor are shown to the satisfaction of the superintendent and his consent in writing is obtained thereto. It shall not be lawful for a majority of the board of trustees of any savings bank to belong to the board of directors of any one bank or national banking association. When any trustee of a savings bank shall, by becoming a director of a bank or national banking assocation,* cause a majority of the trustees of such savings bank to be directors of any one bank or national banking association, his term of office as trustee of the savings bank shall thereupon end. Any savings bank knowingly violating this provision shall forfeit all its rights, privileges and franchises. Such violation shall be de

* So in original.

termined in the same manner as a violation of subdivision six of section twenty-seven of article two of this chapter.

[Former section 107; L. 1895, ch. 415, 929; L. 1896, ch. 453; L. 1908, ch. 153.) See Penal Law, §§ 295–298.

1. A transaction entered upon the books of a savings bank, although made by the bank officers, is presumed to have been done with the knowledge and assent of the trustees, who are responsible for the acts of the officers whom they place and retain in position. Trustees are legally chargeable with notice of the acts of the officers, especially when those acts are entered upon the books of the bank. And if trustees desire to escape liability, they must desist from illegal or improvident actions and try to remove officers who do them. Paine, Receiver, v. Mead, 59 How. Pr. 318.

2. A bond deposited for safe-keeping with the cashier of a savings bank, who placed the bond in the bank's safe, held to be in the custody of the bank and not of the cashier personally, and that the bank was chargeable with notice of the owner's rights, 1879. Zuger v. Best, Receiver, 44 Super. Ct. (J. & S.) 393.

3. The superintendent of the banking department submitted to the attorneygeneral the question of the right of a savings bank chartered in 1871, but subject to the provisions of the General Savings Bank Law, passed in 1875, to increase, by a resolution of its board of trustees, duly adopted, the number of trustees of the bank to nine, the number provided for by their charter being seven, and in addition asks, “Are not savings banks, by said chapter 371 of the Laws of 1875, and amendatory acts, required to increase the number of trustees to at least the minimum therein provided for, viz., thirteen?" Also, the further question, "Can the superintendent of the banking department lawfully approve an increase of the members of a board of trustees of any savings bank, to a number less than the minimum fixed by the Law of 1875, to wit, thirteen?"

In an opinion by the attorney-general filed in the banking department May 3, 1880, that officer says he has " carefully examined the provisions of the General Savings Bank Act, and other statutes bearing upon the subject of inquiry, and is of opinion that section 16 (250) of that act, which fixes the minimum number of trustees at thirteen, has reference only to savings banks organized under the provisions of said act. The language of the section is: The business of every such corporation shall be managed and directed by a board of trustees of not less than thirteen.' The words 'such corporation' manifestly refer to the corporation which the preceding sections provide for organizing, namely, new savings banks. Section 50 (284) of the act in question applies to both classes of savings corporations, those previously organized and those organized under the Act of 1875, and provides that it shall be lawful for the board of trustees of any sav ings corporation . . . to reduce the number of trustees named in the original charter of such corporation to a number not less than the minimum named in this act ... or the number of trustees may be increased to any number designated in a resolution for that purpose, where reasons therefor are shown to the satisfaction of the superintendent, and his consent in writing obtained thereto." He further states: "It will be observed that while the right to decrease down to the minimum 'thirteen' is absolute, the right to increase to any number is subject to the condition that reasons therefor must be shown to the satisfaction

of the superintendent, and his consent in writing be obtained thereto. This seems to indicate very plainly that the legislature, in the Act of 1875 (ch. 371, ch. 10 of this revision), while fixing a minimum of thirteen for corporations organized under its provisions, also recognized the fact that other savings banks existed under charters previously granted, with a less number of trustees than thirteen, which it did not intend to disturb in this particular, and that it regarded it entirely safe and proper to leave the matter of the increase in the number of trustees of both classes of savings corporations to be regulated by the sound discretion of the superintendent.

"I am of opinion, therefore, that the said savings bank may lawfully increase the number of its trustees from seven to nine, subject to such approval and consent to the superintendent, and that he may lawfully approve of and consent to the same, if the reasons therefor appear to him satisfactory."

4. The attorney-general, in an opinion dated November 14, 1895, held that the trustee of a savings bank was not ineligible by reason of the fact that a money judgment had been obtained against him and remained unsatisfied of record for a period of more than three months as declared in chapter 415, Laws of 1895, provided he had been granted a full discharge in bankruptcy of his debts.

§ 138. By-laws. -The board of trustees of any such corporation. may from time to time make such by-laws, rules and regulations, not inconsistent with law, as they may think proper for the election of officers, for prescribing their respective powers and duties and the manner of discharging the same, for the appointment and duties of committees, and generally for transacting, managing and directing the affairs of the corporation; and a copy of the same shall be transmitted to the superintendent of banks, who shall also be notified of any amendment or change therein.

(Former section 108; R. S., 1566; L. 1882, ch. 409, § 251.) See General Corporation Law, § 11.

1. A by-law may be part valid and part void. Imposing same penalties for offenses, imposed by statute, does not make same void. Rogers v. Jones, etc., 1 Wend. 237, 19 Am. Dec. 493.

2. September 29, 1905, the attorney-general held as invalid a by-law of a savings institution which provided that all accounts upon which no deposits have been made and no draft drawn for ten years in succession shall be closed and cease to draw interest after the expiration of ten years from the time of the last deposit or draft, unless the board of trustees or executive committee shall otherwise direct.

3. The following by-law of a savings bank held to justify the disapproval of superintendent: "All payments made to persons producing the pass book of a depositor issued by this bank shall be valid payments to discharge the bank of all liability." Opinion Atty. Gen., April 8, 1908.

139. Meeting of trustees; quorum. -Regular meetings of the board of trustees shall be held as often as once a month for the pur

pose of receiving the reports of their officers and committees, and for the transaction of other business. A quorum at any regular or special or adjourned meeting shall consist of not less than seven, of whom the president shall be one, except when prevented from attending by sickness or other unavoidable detention, when he may be represented in forming a quorum by the vice-president, who, in case of his absence for like cause, may be represented by the second vice-president; but less than a quorum shall have power to adjourn from time to time or until the next regular meeting.

(Former section 109; R. S., 1566; L. 1882, ch. 409, § 252.)

In an opinion by the attorney-general, filed in the banking department under date of April 12, 1884, that officer holds that a by-law, stating the time of holding of the regular or annual meeting of the trustees of a savings bank is in itself sufficient notice to all parties. All proceedings, therefore, had at such a meeting (assuming that the meeting transacts only legitimate business, and is a fair and open meeting) are valid.

§ 140. Vacancies. Whenever a trustee of any savings bank shall become a trustee, officer, clerk or employee of any other savings bank, or when he shall borrow directly or indirectly, any of the funds of the savings bank in which he is trustee, or become a surety or guar antor for any money borrowed of or any loan made by such savings bank, or when he shall fail to attend the regular meetings of the board, or perform any of the duties devolved upon him as such trustee, for six successive months, without having been previously excused by the board for such failure, the office of such trustee shall thereupon immediately become vacant; but the trustee vacating his office by failure to attend meetings, or to discharge his duties, may, in the discretion of the board, be eligible to re-election.

(Former section 110; R. S., 1566; L. 1882, ch. 409, § 253.)

§ 141. Security may be required from employees and salaries fixed. -The trustees of any such corporation shall have power to require from the officers, clerks and agents of the corporation such security for their fidelity and the faithful performance of their duties as they shall deem necessary, and to fix the salaries of such officers and agents, subject to the provisions of this chapter.

Such security may be accepted from any company authorized to furnish fidelity bonds, doing business under authority of the New York insurance department, which may be approved by the superin