and may pay regular depositors when requested by them by draft upon deposits to the credit of the bank in the city of New York, and charge current rates of exchange for such drafts. No savings bank shall borrow money or pledge or hypothecate any of its securities, except with the written approval of the superintendent of banks and in pursuance of a resolution adopted by vote of a majority of its board of trustees, duly entered upon their minutes, whereon shall be recorded the ayes and nays upon each vote. No savings bank shall make or issue any certificate of deposit payable either on demand or at a fixed day, or pay any interest except regular quarterly or semiannual dividends upon any deposits or balances, or pay any interest or deposit, or portion of a deposit, or any check drawn upon itself by a depositor unless the pass-book of the depositor be produced, and the proper entry be made therein at the time of the transaction. The board of trustees may, by their by-laws, provide for making payments in cases of loss of pass-book, or other exceptional cases where the pass-book can not be produced without loss or serious inconvenience to depositors, the right to make such payments to cease when so directed by the superintendent of banks, upon his being satisfied that such right is being improperly exercised by any savings bank; but payments may be made upon the judgment or order of a court or the power of attorney of a depositor. (Former section 122; R. S., 1570; L. 1882, ch. 409, § 266; L. 1908, ch. 154.) 1. Where a savings bank authorized a broker to sell on, Change stock owned by it at a fixed price for cash or for cash in sixty days "seller's option; " held, in action against the bank for damages for non-delivery, that it was not ultra vires. Sistare v. Best, Receiver, 88 N. Y. 527. 2. The opinion of the attorney-general was asked by the superintendent of the banking department, upon the proposition whether it is within the corporate powers of a savings bank to receive special deposits of valuables for hire, under the terms of statutes permitting the organization and governing the management of such institutions. That officer holds that savings banks have no power to receive special deposits of valuables, and in his opinion, filed in the banking department October 7, 1882, says: "They are corporations formed for a special and limited purpose, and cannot engage in the common and ordinary business which a banking institution may conduct. They may not directly or indirectly deal or trade in real estate, or in any goods, wares or merchandise, buy or sell or exchange gold or silver, collect or protest promissory notes or time bills, or issue certificates of deposit (§ 266, ch. 409, Laws 1882). Their business is to receive money on deposit, and to invest the same in particular ways which are carefully specified in the statutes." "It is a well-known rule that corporations created by statute can exercise no powers, and have no rights, except such as are expressly given or necessarily implied. Huntington v. Savings Bank, 6 Otto, 388, 24 (L. ed.) 777; First National Bank of Manhattan v. Citizens' Bank of Topeka, 21 Int. Rev. Rec. 382, Fed. Cas. No. 4,802. The power to receive such special deposits has not been given to such institutions by statute, and cannot be said to be one of those incidental powers which it is necessary or customary for them to exercise; in this respect they differ from corporations authorized to transact a general banking business. 80 N. Y. 98, 36 Am. Rep. 582. I am of the opinion, therefore, that the receiving of special deposits of valuables, for hire, by savings banks, is ultra vires and unauthorized." 3. In December, 1887, the superintendent of the banking department submitted the following question to the attorney-general: "May the trustees of a savings bank use the surplus for the purpose of paying dividends in excess of the amount actually earned during the period for which such dividend is declared, until such time as the surplus equals fifteen per cent. of its deposits? In reply thereto the following opinion was filed in the banking department January 3, 1888: "When the statute, section 266, chap. 409, Laws of 1882 (above), speaks of declaring a dividend, it means a dividend earned during one of the interest periods, or during the half or quarter year for which it is declared. The officers of the bank act for the depositors, who are entitled to all the earnings of their money during any proper interest period, less the authorized deductions for expenses and the surplus provided for in section 267. I find nothing in the statute which would authorize the trustees of a savings bank to withhold any earnings of one period, in order to add them to and increase the dividends of a subsequent period. This would work injustice to depositors, and result in depriving depositors who withdrew their deposits of the full amount of interest earned. They can only be withheld for the purpose of accumulating a surplus in the manner indicated in section 267. "Nor do I find any provision authorizing the use of the established surplus for the payment of dividends. The surplus, to the amount at least of fifteen per cent. of the deposits, is declared to be for the security of the depositors, and the statute contemplates its being kept intact for that purpose. There is an express provision for the disposition of the excess of surplus. Such excess of authorized surplus must be divided as a dividend, once in three years (§ 267, supra). "I am of the opinion, therefore, that it is the duty of the trustees of a savings bank to declare a dividend for each interest period, equal to the amount of earnings for that particular period, less the expenses and amount properly applicable to the accumulation of the authorized surplus, as aforesaid, and that they should not retain the earnings of one period for the mere purpose of increasing the dividend of a subsequent period, nor use the established surplus for the purpose of increasing the dividends, except when such surplus exceeds the amount authorized by statute, and, in that case, such excess of surplus should only be converted into dividends in accordance with the provisions of the statute above quoted." § 153. Rate of interest; extra dividends. The trustees of every such corporation shall regulate the rate of interest or dividends not to exceed five per centum per annum upon the deposits therewith, in such manner that depositors shall receive as nearly as may be, all the profits of such corporation, after deducting necessary expenses and providing in a manner approved by the superintendent of banks, for the amortization or gradual extinction of premiums or discounts on all securities owned by such corporation so as to bring them to par at maturity, and reserving such amounts as the trustees may deem expedient as a surplus fund for the security of the depositors, which to the amount of fifteen per centum of its deposits, the trustees of any such corporation may gradually accumulate and hold, to meet any contingency or loss in its business from the depreciation of its securities or otherwise. The trustees may classify their depositors according to the character, amount and duration of their dealings with the corporation, and regulate the interest or dividends allowed in such manner that each depositor shall receive the same ratable portion of interest or dividends as all others of his class. The trustees of any such corporation shall not declare or allow interest on any deposit for a longer period than the same has been deposited, except that deposits made not later than the tenth business day of the month, commencing any semi-annual interest period, or the third business day of any month, or withdrawn upon one of the last three business days of the month, ending any quarterly or semi-annual interest period, may have interest declared upon them for the whole of the period or month when so deposited or withdrawn. No dividends or interest shall be declared, credited or paid, except by the authority of a vote of the board of trustees duly entered upon their minutes, whereon shall be recorded the ayes and nays upon each vote; but accounts closed between dividend periods may be credited with interest at the rate of the last dividend, computing from the last dividend period to the date when closed, if the by-laws so provide. Whenever any interest or dividend shall be declared and credited in excess of the interest or profits earned and appearing to the credit of the corporation, after making the deduction for expenses and amortization aforesaid, the trustees voting for such dividend shall be jointly and severally liable to the corporation for the amount of such excess so declared and credited. The trustees of any such corporation whose surplus amounts to fifteen per centum of its deposits, at least once in three years, shall divide equitably the accumulation beyond such authorized surplus as an extra dividend to depositors, in excess of the regular dividends authorized. A notice posted conspicuously in a bank of a change in the rate of interest shall be equivalent to a personal notice. (Former section 122; R. S., 1570; L. 1882, ch. 409, § 267; L. 1884, ch. 48; L. 1908, ch. 124.) See Penal Law, § 297. 1. The provisions of said section, declaring the trustees of savings banks who vote for the declaring and crediting of any interest or dividend in excess of the interest or profits earned, personally liable to the corporation for the amount of the excess, does not limit the interest which may lawfully be voted for to net profits. If the trustee votes for a dividend less than the whole amount of interest or profits earned, without any deduction therefrom for expenses, although the earnings have not been actually received, he does not, in the absence of fraud or bad faith, overstep his statutory duty, and is not liable to the penalty. "He may inquire what interest has been earned, and does not incur this penalty in declaring a dividend on it as a basis, although it has not been actually received." Van Dyck, Receiver, v. McQuade, 86 N. Y. 54. 2. Whenever a dividend is declared and credited to a depositor, it becomes his property, to which he is entitled in preference to the creditors of the corporation. Same case, 52. 3. It seems that a trustee, in an action against him to recover the penalty, cannot avoid liability because the manner of voting and of recording the vote prescribed by the statute was not followed; he could waive the direction, for it was made for his safety, but he cannot take advantage of the omission. But only the trustee voting is liable, not one who is not present. Same case, 50. The Y. Savings Bank, of which defendant was a trustee, in pursuance of the requirements of its charter (§ 6, ch. 338, Laws of 1869), at the opening of its bank, posted notices of the rate of interest to be paid by it upon deposits, and thereafter paid interest at the rate stated up to January, 1877. In an action brought by plaintiff, who was appointed receiver of said bank in July, 1877, to recover the interest so paid, the referee found that the interest received from investments of the funds of depositors exceeded the interest paid them, but that its expenses exceeded its earnings and income. No fraud or other misconduct, or want of ordinary care and skill, was imputed to defendant. Held, that defendant was not liable; that the order of payment of the debts of the bank, and what portion of its profits the trustees might from time to time divide, related to its general business, which was left to the judgment of the trustees (§§ 4-7), and as long as it was exercised in good faith, and in due course of management, no common-law liability was incurred, nor was there any injury to the corporation, so that in the light of the common law there was no rule by which damages could be assessed; that no liability was imposed under the chapter of the Revised Statutes in reference to moneyed corporations (7 R. S., ch. 18) to which by said charter the bank was made subject “so far as applicable," as the prohibition in said chapter against paying dividends to stockholders save from "surplus profits" has no application, the interest payable to depositors of savings banks not being dividends within the meaning of the statute, and as said statute pre scribes the remedy for its violation; that if said chapter of the Revised Statutes ever had any force as applicable to savings banks, it became inoperative after the passage of the said act of 1875; also that no liability attached under the provision of the act last mentioned § 33 (267) declaring the trustees of a savings bank, who vote for a dividend in excess of the interest or profits earned, liable to the corporation for the amount of the excess, as the interest paid was not in excess of that earned. Same case. 4. For references to kindred cases, see 23 Moak's Eng. 39. 5. An opinion of the attorney-general, filed in the banking department July 3, 1878, contains his interpretation of a portion of this section: "In my opinion a savings bank can lawfully pay interest on deposits withdrawn on any of the last three days of a semi-annual interest or dividend period, for the length of time the money has actually been on deposit since the last For example, if the dividend period be January first and preceding dividend. July first, interest may be paid on deposits withdrawn on any of the last three days of June or December, if the deposits have been held the length of time In case of quarterly payment of required by section 33 of the act of 1875. dividends by a bank, I think the same rule does not apply, and that a withdrawal of the deposit before the end of the quartely interest period forfeits the right to interest. Section 33, before referred to, seems to contemplate only semiannual payments of interest, and its provisions in reference to the withdrawal of deposits on the last three days have reference solely to such semi-annual pay ments. "I am also of opinion that when deposits are withdrawn before the end of a quarterly dividend period, or more than three days before the end of a semiannual dividend, a savings bank cannot lawfully pay interest on such deposits. I think payment of interest in such cases is plainly and clearly prohibited by the statute, and that the prohibition is founded upon sound principles of banking. It is a necessary measure of protection to savings banks. They would be very much at the mercy of transient depositors, under a rule allowing interest on deposits withdrawn at any time." 6. An opinion by the attorney-general was filed in the banking department under date of June 24, 1884, in response to a request from the present superintendent of that department for an official interpretation of the above-mentioned chapter 48 of the Laws of 1884. The attorney-general, in his reply, says: "My construction of chapter 48 of the Laws of 1884, concerning which you ask my opinion, is that all savings banks which allow interest semi-annually on deposits may pay interest for the whole 'interest period,' provided the deposit upon which the interest is allowed is made any time within ten days from the commencement, or withdrawn on either of the last three days of the ending thereof. I find nothing in the act which makes the same exception in favor of banks which pay interest quarterly. If the ten days' provision could be extended by implication to banks paying interest quarterly, it could, with equal propriety, be extended to banks paying interest monthly, which would, in effect, abrogate by implication the express provision of the statute which declares that it shall be unlawful for the trustees of any savings bank to declare or allow interest on any deposit for a longer period than the same has been deposited.'". 7. A promissory statement by a savings bank that it will pay dividends at a |