Imágenes de páginas
PDF
EPUB

nected any sum of money without the consent and approval of a majority of the board of directors thereof. Every person violating this provision shall, for each offense, forfeit to the people of the state twice the amount which he shall have borrowed.

8. No corporation to which this chapter is applicable except a building and mutual loan corporation or co-operative savings and loan association, shall make any loan or discount on the security of the shares of its own capital stock nor be the purchaser or holder of any such shares unless such security or purchase shall be necessary to prevent loss upon a debt previously contracted in good faith; and stock so purchased or acquired shall, within six months from the time. of its purchase, be sold or disposed of at public or private sale. Every person or corporation violating the provisions of this subdivision shall forfeit to the people of the state twice the nominal amount of such

stock.

9. No corporation to which this chapter is applicable shall hereafter make a loan, secured by the stock of another moneyed corpora,tion, if by the making of such loan the total stock of such other moneyed corporation held by it as collateral will exceed in the aggregate ten per centum of the capital stock of such other moneyed corporation.

10. The directors of any bank may semi-annually or quarterly declare a dividend of so much of the net profits of the corporation of which they are directors as they shall judge expedient, but each such corporation shall, before the declaration of a dividend, carry one-tenth part of its net profits earned since its last preceding dividend to its surplus fund until the same shall amount to twenty per centum of its capital. Any surplus fund already accumulated by any such corporation may be counted as part of said twenty per centum. Each corporation shall report to the superintendent of banks within ten days after declaring a dividend the amount of such dividend, and the amount of net earnings in excess of such dividend, and the amount carried to the surplus fund. Such report shall be attested by the oath of the president or cashier of the corporation. If the directors of any such corporation shall knowingly violate, or knowingly permit any of the officers, agents or servants of the corporation to violate any of the provisions of this subdivision, all the rights, privileges and franchises of the corporation shall

thereby be forfeited. Such violation shall, however, be determined and adjudged by the supreme court of the state in a suit brought for that purpose by the superintendent of banks in his own name before the corporation shall be declared dissolved.

11. No savings bank hereafter incorporated shall do business or be located in the same room or in any room communicating with any bank, or national banking association.

(Former section 25; R. S., 1553, 1555; amended by L. 1893, ch. 696, § 1; L. 1895, ch. 929, § 1; L. 1896, ch. 452, § 2; L. 1905, ch. 456, § 1; L. 1906, ch. 572, § 1, and L. 1908, ch. 169, § 1. Subd. 9, amended by ch. 240, L. 1909; in effect April 22, 1909. Subd. 3, amended by ch. 410, L. 1909; in effect May 20, 1909. Subd. 4, amended by ch. 402, L. 1909; in effect May 20, 1909.)

See Penal Law, §§ 290-295, 297–300.

66

1. The object of the legislature, as appears from the title of the act, was for the special purpose of securing the capital stock to the creditors of the company, instead of allowing it to be divided among the stockholders, and no reason can be shown why it should not be extended to free banks as well as to other moneyed corporations."

"This is a beneficial statute and should not be defeated by a narrow construction." Gillett, Receiver, v. Moody, 3 N. Y. 487.

2. When a bank makes loans and discounts to its directors, or upon paper upon which they are responsible, to an amount exceeding in the aggregate one-third its capital, it is such a violation of the statute as will authorize the court of chancery to grant an injunction, and appoint a receiver to wind up the affairs of the corporation. Loans and discounts will be presumed to be made by the authority of the board of directors, unless it is shown that such funds were misapplied by the officers of a bank, so as to render them, or any of them, liable for fraud or embezzlement. And where an officer is so guilty of fraud by violating the law, if the directors neglect to remove such officer and continue to trust him with the funds of the bank, they will be considered as sanctioning his fraudulent act. The neglect of officers or directors to keep themselves informed of the amounts of loans and discounts made to or upon the security of directors, will not excuse a violation of law on the subject. Where the board authorizes the president or other officer of a bank to make loans and discounts in his discretion, the corporation is liable for the violation of any law binding on it. A loan or discount made for the benefit of a director of a bank, or of a firm with which he is connected in interest, or is a copartner, it is to such a director within the intent and meaning of the statute limiting the amount of loans and discounts to directors. It is a violation of duty for directors to give any officer unlimited discretion to discount paper, or make loans without the sanction of the board. Bank Commissioners v. Bank of Buffalo, 6 Paige, 497.

3. Dividends improperly declared may be recovered by creditors only, and cannot be recovered by the receiver for benefit of stockholders. Butterworth v. O'Brien, 39 Barb. 192.

4. Banking associations organized under the general banking law are within the provisions of the Revised Statutes to prevent insolvency of moneyed corporations. Mabey v. Adams, 9 Bosw. 355.

5. The attorney-general, in an opinion dated December 20, 1890, replied as follows to the question whether or not it would be proper for a savings bank to loan moneys to a corporation, a stockholder or director of which was also a trustee of the savings bank:

"I beg to inform you that a similar question was submitted to the attorneygeneral in 1887, and his opinion given, in which it was substantially held that the banking law did not prohibit savings banks from having transactions with banking, insurance, or title guaranty companies, in which the trustees of such savings banks were stockholders. It is my judgment that that opinion was sound, and would apply as well to other corporations as to insurance companies. "Of course this opinion is given upon the representation that the transaction between the savings bank and the corporation is made honestly and in good faith." 6. The same officer, in an opinion dated June 16, 1896, held that a lease for twenty-one years, with the privilege of two renewals of twenty-one years each, of a building in the city of New York, is not an incumbrance within the meaning of subdivision 6 of section 116 of the banking law, such as would preclude a savings bank from investing its money upon a bond and mortgage thereon.

7. A note by the teller of a bank, for a loan made to him by the bank without the approval of the directors, is not void. People's Trust Co. v. Pabst, 113 App. Div. 375,

8. A municipal corporation is included in the term "corporation" as used in this section. Opinion Atty.-Gen., July 2, 1907.

9. When a director is an accommodation endorser, surety, or guarantor, to the bank, and the maker receives the loan, such transaction is not a loan "directly or indirectly" to a director. Opinion Atty.-Gen., June 11, 1909.

10. The defense of ultra vires is not available after a contract has been performed by the other party to it. Whitney Hones Co. v. Barlow, 63 N. Y. 62; Linkhauf v. Lombard, 137 N. Y. 417.

11. As to liability of directors and officers for loss from unauthorized loans, see 17th Ward Bank v. Smith, 51 App. Div. 259; Dunn v. O'Connor, 25 App. Div. 73.

[ocr errors]

§ 28. Calculation of profits. Interest unpaid, although due or accrued on debts owing to the corporation or banker, shall not be included in the calculation of its profits previous to a dividend, unless such interest be accrued upon loans secured by collaterals as provided by section twenty-seven of this chapter. The surplus profits, from which alone a dividend can be made, shall be ascertained by charging in the account of profit and loss and deducting from the actual profits:

1. All expenses paid or incurred, both ordinary and extraordinary, attending the management of its affairs and the transaction of its business.

2. The interest paid, or then due and accrued, on debts owing by it.

3. All losses sustained by it. In the computation of such losses,

all debts owing to it shall be included which shall have remained due, without prosecution, and upon which no interest shall have been paid for more than one year, or on which judgment shall have been recovered that shall have remained for more than two years unsatisfied, and on which no interest shall have been paid during that period.

(Former section 26; R. S., 1554; L. 1882, ch. 409, §§ 180, 181; L. 1893, ch. 696.)

See Penal Law, § 664.

1. All surplus funds are liable for debts, and must be used in payment thereof, before breaking into the capital. Scott v. Eagle Fire Company, 7 Paige, 198.

2. Directors may be compelled to divide the actual surplus profits among the stockholders from time to time, if they neglect to do so without cause. But if they abuse their power, and divide all the surplus, leaving nothing but the capital to satisfy probable losses from risks assumed by the company, it seems they will be personally liable to the creditors if the company becomes insolvent. Scott v. Eagle Fire Ins. Co., 7 Paige, 199.

3. The excess of property of a corporation above the amount limited by its charter is to be regarded as surplus profits from which a dividend may be declared. Williams v. Western Union Tel. Co., 93 N. Y. 162.

4. Stock dividends not diminishing or interfering with the property of a corporation are not within the class of dividends referred to in the section. Such a dividend does not distribute property, but simply dilutes the shares as they existed before. Ib.

5. The declaration of a dividend is within the discretionary powers of the directors or trustees, and will not be controlled by the courts. Beveredge v. N. Y. E. R. Co., 112 N. Y. 1, 2 L. R. A. 648, 19 N. E. 489.

6. Where a married woman is the owner of stock of a bank located in a State other than that in which she and her husband are domiciled, the effect of payment, by the bank to her husband, of dividends declared upon her shares of stocks, is to be determined by the law of the place where the bank is located, and not by the law of the owner's domicile. Graham v. First National Bank of Norfolk, 84 N. Y. 393, 38 Am. Rep. 528.

7. Directors failing to obey requirements of section 28 of banking law to determine surplus for payment of dividends are liable, under section 23 of the stock corporation law, which is in the nature of an indemnity, and not a penalty such as section 27 of banking law. Dykman v. Keeney, 10 App. Div. 610, 42 N. Y. Supp. 488.

[ocr errors]

8 29. Losses in excess of profits. All losses sustained by any corporation or banker subject to this chapter, in excess of its undivided profits then realized and possessed, shall be charged as a reduction of its capital stock, and no dividend shall thereafter be made on its shares of stock until the deficit of capital so created shall be made

good, either by the recovery of the moneys charged as lost or from the subsequently accruing profits of the corporation.

(Former section 27; R. S., 1554; L. 1882, ch. 409.)

§30. Publication of unclaimed dividends and deposits.

Every

bank and individual banker doing business under any law of the state shall annually, on or before September first, cause to be published for six successive weeks in one newspaper of the county in which such bank or individual banker is located, and in a paper at Albany in which notices by state officers are required by law to be published, a true and accurate statement, verified by the oath of the cashier, treasurer or president, of all deposits made with such bank or individual banker, and of all dividends and interest declared upon any of the stock, bonds or other evidences of indebtedness of such bank or banker, which at the date of such statement shall amount to fifty dollars or over and have remained unclaimed by any person or persons authorized to receive the same for five years then next preceding. The expenses of such advertising shall be deducted from the sums unclaimed in proportion to the amount of each respectively. Such statement shall set forth the date of the deposit, its amount, the name and residence, if known, of the person making it, the name of the person in whose favor and the time when the dividend may have been declared, or interest accrued, its amount, and upon what number of shares, and on what amount of stock, bonds or other evidences of indebtedness, of any such bank or banker, it was declared or accrued.

Every savings bank or institution for savings now existing or which hereafter may be organized under and by virtue of any law of this state, shall on or before the first day of June in each year, make a report in writing to the superintendent of banks, verified by the oath of the two principal officers of the institution, concerning such accounts of depositors of amounts of five dollars or more, as have been dormant for twenty-two years and upwards, from the first day of May preceding; that is, accounts which have not been increased or diminished by deposits or withdrawals, exclusive of interest credits. The accounts of depositors whose pass-books have been presented at the bank for the entry of interest earned, within the period

« AnteriorContinuar »