THE BANKING LAW (BEING CHAPTER 37 OF THE GENERAL LAWS.)

ART. I. GENERAL PROVISIONS (§§ 1-33).

II. BANKS ($$ 40-92).

III. SAVINGS BANKS (§§ 100-135).

IV. TRUST COMPANIES ($8 150-163).

V. BUILDING AND MUTUAL LOAN CORPORATIONS (§§ 170-175).

VI. CO-OPERATIVE LOAN ASSOCIATIONS (§§ 180-191).

VII. MORTGAGE, LOAN, AND INVESTMENT CORPORATIONS (§§ 200-205). VIII. SAFE DEPOSIT COMPANIES (S$ 210-216).

[IX. ASSOCIATIONS FOR LOANING MONEY ON PERSONAL PROPERTY (L. 1895, c. 326).]

[Miscellaneous provisions not repealed by the Banking Law.]

ARTICLE I.

General Provisions.

1. Short Title.

2. Definitions.

3. The Banking Department; Superintendent. 4. Official Seal of Superintendent of Banks.

5. Deputy Clerks and Examiners of the Bank Department.

6. Rooms and Furniture.

7. Expenses, how Defrayed.

8. Powers of Superintendent.

9. Examination of Securities Deposited.

10. Unclaimed Balances.

11. Examiners.

12. Examination and Certificate as to Payment of Capital. 13. Affidavit to be Made before Commencing Business.

14. Deposit of Bonds or Mortgages with Superintendent. 15. Exchange of Securities.

16. Publication of Report of Examiners.

17. Impairment of Capital.

18. Proceedings against Delinquent Corporations.

19. Examination by Order of Court.

20. Reports.

21. Penalties for Failure to Report.

22. Publication of Reports.

23. Annual Report of Superintendent. ›

24. Reports Presumptive Evidence.

25. Restrictions.

26. Calculation of Profits.

27. Losses in Excess of Profits.

28. Publication of Unclaimed Dividends and Deposits.

29. Change of Location.

30. Approval and Certificate of Superintendent upon Incorporation.

31. Permission and Certificate of Superintendent in Case of Foreign Corporation. 32. Appointment of Superintendent as Attorney for Service of Process.

33. Appointment of Receiver.

1 Short title. This chapter shall be known as the banking law, and shall be applicable to all corporations and individuals specified in the next section. L. 1892, c. 689, § 1.

New.

2 Definitions. The term bank, when used in this chapter means any monied corporation authorized by law to issue bills, notes or other evidences of debt for circulation as money, or to receive deposits of money and commercial paper and to make loans thereon, and to discount bills, notes or other commercial paper, and to buy and sell gold and silver bullion or foreign coins or bills of exchange.

The term, individual banker, when so used, means a person who has complied with the requirements of law, and is authorized by the banking department to engage in the business of banking, and is subject to the supervision of the superintendent of banks and the banking law.

The term savings bank, when so used, means a corporation only authorized by the laws of this state to receive money on deposit and pay such rates of interest thereon, and to invest the same in such securities and obligations, as may be prescribed by law.

The term, trust company, when so used, means any domestic corporation formed for the purpose of taking, accepting and executing such trusts as may be lawfully committed to it and acting as trustee in the cases prescribed by law, and receiving deposits of moneys and other personal property, and issuing its obligations therefor, and of loaning money on real or personal securities.

The term, building and mutual loan corporations or associations, when so used, means a corporation formed for the purpose of accumulating a fund for the purchase of real property, the erection of buildings, or the making of other improvements on lands, or to pay off incumbrances thereon, or to aid its members in acquiring real property, making improvements thereon or removing incumbrances therefrom, or of accumulating a fund to be returned to its members in specified cases.

The term, co-operative loan association, when so used means a corporation formed for the purpose of encouraging industry, frugality, home-building and the saving of money by its members, the accumulation of savings, the loaning of such accumulations to its members, and the repayment to each member of his savings when they have accumulated to a certain sum, or at any time when he shall desire the same, or the association shall desire to repay the same.

The term, building and mutual loan corporations or associations, and, cooperative loan associations, shall include every corporation, company or association doing business in this state and having for a part of its title or name the words building association, building and loan association, savings and loan association, savings association or co-operative bank, and every corporation, company or association whose stock is wholly or in part payable by a cumulative fund in regular or periodical installments, or which is doing business in the form and of a character similar to that authorized by articles five and six of this chapter organized or incorporated in any state or country outside of this state.

The term, mortgage, loan or investment corporation, when so used, means any corporation other than an insurance corporation formed under the laws of this state or of any other state, and doing business in this state for the purpose of selling, offering for sale, or negotiating bonds or notes secured by deed of trust or mortgages on real property or choses in action, owned, issued, negotiated or guaranteed by it, or for the purpose of receiving any money or property, either from its own members or from other persons, and entering into any contract, engagement or undertaking with them for the withdrawal of such money or property at any time with any increase thereof, or for the payment to them or to any person of any sum of money at any time, either fixed or uncertain; and when applied to any foreign corporation doing business in this state shall include any association, co-partnership, joint-stock company, individuals or firms organized or existing under the laws of any other state or country, and engaged within this state in any such business.

The term, safe deposit company, when used in this chapter, means every domestic corporation formed for the purpose of taking and receiving upon deposit as bailee for safe-keeping and storage, jewelry, plate, money, specie, bullion, stocks, bonds, securities and valuable papers of any kind, and other valuable personal property, and guaranteeing their safety upon such terms and for such compensation as may be agreed upon by the company and the respective bailors thereof, and to rent vaults and safes and other receptacles for the purpose of such safe-keeping and storage. L. 1892, c. 689, § 2.

[Note. In large part new.]

3 The banking department; superintendent. There shall continue to be a banking department charged with the execution of the laws relating to the corporations and individuals to which this chapter is applicable.

The chief officer of such department shall continue to be the superintendent thereof, to be known as the superintendent of banks, who shall be appointed by the governor, by and with the advice and consent of the senate, and shall hold his office for the term of three years. He shall not either directly or indirectly be interested in any such corporation, or as an individual banker. He shall receive an annual salary of five thousand dollars, to be paid monthly in the first instance out of the treasury on the warrant of the comptroller.

He shall, within fifteen days from the time of notice of his appointment, take and subscribe the constitutional oath of office and file the same in the office of the secretary of state, and execute to the people of the state a bond in the penalty of fifty thousand dollars, with two sureties to be approved by the comptroller and treasurer of the state, conditioned for the faithful discharge of the duties of his office. Id., § 3.

[Note.- Revised from L. 1882, c. 409, §§ 1, 2. (See Birdseye's R. S., 1st ed., p. 170.) Name was formerly superintendent of banking department; salary formerly payable quarterly; otherwise without material change.]

4 Official seal of superintendent of banks. The secretary of state shall provide the superintendent of banks with an official seal. Every paper executed by him as such superintendent in pursuance of any authority conferred on him by law, and sealed with his seal of office, shall be received in evidence, and may be recorded in the proper recording offices in the same manner and with the like effect as a deed regularly acknowledged or proven. Id., § 4.

[Note.- Revised from L. 1882, c. 409, § 4, and L. 1883, c. 282. (See Birdseye's R. S., 1st ed., p. 171.) Without material change.]

5 Deputy, clerks, and examiners of the bank department. The superintendent of banks shall employ from time to time such clerks and examiners as he may need to discharge in a proper manner the duties imposed upon him by law. They shall perform such duties as he shall assign to them. He shall fix their compensation, which shall be paid monthly on his certificate and upon the warrant of the comptroller in the first instance out of the treasury. He shall appoint one of such clerks to be his deputy, who shall within fifteen days from the time of notice of his appointment take and subscribe the constitutional oath of office, and file the same in the office of the secretary of state.

In case of the absence or inability to act, or vacancy in the office of superintendent for thirty successive days, the deputy superintendent shall not thereafter act as superintendent until he shall have executed to the people of the state a bond in the penalty of fifty thousand dollars, with two sureties to be approved by the comptroller and treasurer of the state, conditioned for the faithful discharge of the duties of the office of superintendent while he acts as such superintendent. Id., § 5.

[Note. Revised from L. 1882, c. 409, §§ 2, 280. (See Birdseye's R. S., 1st ed., pp. 170, 225.) Without material change, except that the last paragraph appears to be new.] 6 Rooms and furniture. The trustees or other officers having by law the custody of the public buildings at the state capital, shall assign to the superintendent suitable rooms therein for conducting the business of the bank depart

ment.

The superintendent shall, from time to time, furnish the necessary furniture, stationery, fuel, lights and other proper conveniences for the transaction of such business, the expenses of which shall be paid on the certificate of the superintendent and the warrant of the comptroller in the first instance out of the treasury. Id., § 6.

[Note.- Revised from L. 1882, c. 409, § 5. (See Birdseye's R. S., 1st ed., p. 171.) Earlier law provided for rooms in state hall; otherwise without material change.]

7 Expenses; how defrayed. All the expenses incurred in and about the conduct of the business of the department, including the salary of the super

intendent and clerks, shall be charged to and paid by the corporations and individuals required to report to the superintendent under the provisions of this chapter in such proportions as the superintendent shall deem just and reasonable. The expenses incurred and services performed on account of any such corporation or individual shall be charged to and paid by the corporation or individual for whom they were incurred or performed. If any corporation or individual shall not, after due notice, pay any such charges, the superintendent may apply the proceeds of the sale of or the dividends on any stock or the interest on any bonds and mortgages in his hands deposited by such corporation or individual to the payment of such charges, with interest, at the rate of six per cent. The moneys so applied, and all moneys received by him in payment of such charges, shall be deposited and paid by him into the treasury of the state, to reimburse all sums advanced from the treasury for such expenses, except moneys received from any corporation or individual banker for expenses incurred or services performed on account of any such corporation or individual, which moneys shall be applied by the superintendent in payment of such expenses and a verified account thereof included in his annual report.

If any such corporation or individual shall fail to pay such charges as herein required, and there are no stocks, bonds or mortgages in the department, the dividends or interest on which can be applied in payment thereof, the superintendent shall report to the attorney-general the failure of any such corporation or individual to pay such charges, and the attorney-general shall thereupon bring an action in the name of the people for the recovery of such charges. L. 1892, c. 689, § 7.

66

[Note. Revised from L. 1882, c. 409, §§ 6, 74, 226, and L. 1889, c. 414, § 5. (See Birdseye's R. S., 1st ed., pp. 171, 185, 213, 238.) The words, the proceeds of sale of" in second paragraph new; also the words "the moneys so applied' at the beginning of paragraph 3; also the last five lines of paragraph 3, beginning with except moneys received." Under former law superintendent was to maintain action in his own name, in cases provided for in paragraph 4.]

8 Powers of superintendent. Every corporation and individual banker specified in section two of this chapter shall be subject to the inspection and supervision of the superintendent of banks. He shall, either personally or by some competent person or persons to be appointed by him, to be known as examiners, visit and examine every such corporation and individual banker, other than savings banks, at least once in each year, and savings banks once in two years. On every such examination inquiry shall be made as to the condition and resources of the corporation, the mode of conducting and managing its affairs, the action of its directors, the investment of its funds, the safety and prudence of its management, the security afforded to those by whom its engagements are held, and whether the requirements of its charter and of law have been complied with in the administration of its affairs; and as to such other matters as the superintendent may prescribe.

He shall have power in like manner to examine every corporation and individual banker specified in section two, whenever, in his judgment, its condition and management is such as to render an examination of its affairs necessary and expedient.

The superintendent and every such examiner shall have power to administer an oath to any person whose testimony may be required on any such examination, and to compel the appearance and attendance of any such person for the purpose of any such examination.

If the examination shall be made by the superintendent, or by one or more of the regular clerks in the department, no charge shall be made except for necessary traveling and other actual expenses.

The result of such examination of a savings bank shall be certified by the examiners, or one of them, upon the records of the corporation examined. Id., § 8.

[Note.- Revised from L. 1882, c. 409, §§ 3, 11-14, 221, 222, 277; L. 1875, c. 613, §§ 12, 13, and L. 1875, c. 564, §§ 3 and 4. (See Birdseye's R. S., 1st ed., pp. 171-173, 212, 224, 241, 346 and 347.) The various provisions formerly relating to savings banks, safe deposit companies, building loan companies, etc., have been generalized in this section and made to apply to all corporations and individuals that may be examined by

the superintendent of banks. As to some of these corporations the changes are material: as to others they are slight.]

54 N. Y. St. R. 64; 41 Hun, 52.

8a The appropriations made for the banking department in chapter six hundred and fifty-four of the laws of eighteen hundred and ninety-four, entitled "An act making appropriations for the support of the government," for carrying out the provisions of chapter six hundred and eighty-nine of the laws of eighteen hundred and ninety-two, for the supervision of mortgage companies, organized under the laws of other states, and concerning building, mutual loan and accumulating fund associations and foreign co-operative loan and building and similar associations, shall be assessed against and collected of said corporations in the manner, and as provided in sections seven and one hundred and ninety-four of the banking law, chapter six hundred and eighty-nine of the laws of eighteen hundred and ninety-two. L. 1895, c. 352, § 1.

9 Examination of securities deposited. The president or cashier of every such corporation, and every individual banker, shall once or more during each fiscal year, and at such time or times during ordinary business hours as he may select, examine and compare all securities deposited by such corporation or banker in the office of the superintendent with the books of the department, and, if found correct, execute to the superintendent a receipt stating the different kinds of such securities and the amounts thereof, and that they are in the custody and possession of the superintendent at the date of the receipt. Any individual banker unable to make such examination in person may, by written appointment, authorize an agent to make the same in his behalf, whose receipt shall have the same force and effect as if executed by the banker in person.

If any such corporation or individual banker shall refuse or neglect to make such examination during any fiscal year, the comptroller, secretary of state and superintendent shall appoint some suitable and discreet person as agent for such corporation or individual banker, who shall make such examination, and if the securities so held by the superintendent shall be found to agree with the books of the department, such agent shall execute the receipt before mentioned, and it shall be of like force and effect as if executed by the president or cashier of any such corporation, or by any such individual banker, or by an agent appointed by him. Such corporation or individual banker shall pay on demand to the person so appointed and making such examination and executing such receipt, such compensation for his services and expenses in making such examination as the superintendent shall certify to be just and reasonable. L. 1892, c. 689, $ 9.

[Note. Revised from L. 1882, c. 409, §§ 8, 9. (See Birdseye's R. S., 1st ed., p. 172.) Without material change.]

10 Unclaimed balances. The superintendent shall pay into the treasury of the state all balances of money remaining in his hands unclaimed for six years from the date of the deposit with him, to be applied to the current expenses of the banking department, except the moneys required by this chapter to be kept on deposit with him and the moneys deposited with him by receivers of insolvent savings banks. Id., § 10.

[Note.- Revised from L. 1882. c. 409, § 10. (See Birdseye's R. S., 1st ed., p. 172.) The last two lines beginning with the words, "except the moneys,' are new.] 11 Examiners. Every examiner appointed by the superintendent shall, before entering upon the duties of his appointment, take and file in the office of the clerk of the county where he resides, the constitutional oath of office; and he shall forthwith examine fully into the books, papers and affairs of the corporation or individual banker specified in his appointment, and report on oath. to the superintendent the result of such examination. No such examiner shall be appointed receiver of any corporation or individual banker whose books, papers and affairs he shall have examined pursuant to such appointment. Id., 8 11

[Note. Revised from L. 1882, c. 409, §§ 12, 13. (See Birdseye's R. S., 1st ed., pp. 172, 173.) Without material change.] 36 N. Y. St. R. 80; 66 Hun, 538; 50 Ñ. Y. St. R. 270.