of natural persons, not less than five, who shall enter into articles of association and make an organization certificate, in form as prescribed, both of which shall be forwarded to the comptroller of the currency, who shall preserve them in his office.15 The association thereupon becomes a body corporate with the powers enumerated, but it is not authorized to transact any business, except such as is incidental and preliminary to its organization, until it has been authorized by the comptroller to begin the business of banking.16 At least 50 per cent. of the capital stock must be paid in before the association may be authorized to commence business.17 When the certificate is transmitted, the comptroller is required to ascertain whether the association has complied with the requirements of the act, and upon being satisfied thereof shall issue a certificate that the association has so complied and is authorized to commence the business of banking, and the association shall cause the certificate to be published.18 The comptroller has jurisdiction to determine as to the completeness of the organization, and his certificate is not open to collateral attack, and is conclusive for purposes of litigation.1

15 Rev. St. U. S. §§ 5133-5135 (U. S. Comp. St. 1901, pp. 3454, 3455). For change of name or location, see Act May 1, 1886, c. 73, §§ 2-4, 24 Stat. 18 (U. S. Comp. St. 1901, p. 3456); ante, p. 270.

16 Rev. St. U. S. § 5136 (U. S. Comp. St. 1901, p. 3455).

A lease by a bank, before receiving such authorization, of a bank building, is ultra vires, and will not support an action for rent, or for anything beyond the value of what the bank actually received and enjoyed. McCormick v. Market Nat. Bank, 165 U. S. 538, 17 Sup. Ct. 433, 41 L. Ed. 817. See "Banks and Banking," Dec. Dig. (Key No.) 259; Cent. Dig. §§ 884, 996.

17 Rev. St. U. S. § 5140 (U. S. Comp. St. 1901, p. 3461).

18 Rev. St. U. S. §§ 5168-5170 (U. S. Comp. St. 1901, p. 3474).

19 Casey v. Galli, 94 U. S. 673, 24 L. Ed. 168. See, also, Mix V. National Bank of Bloomington, 91 Ill. 20, 33 Am. Rep. 44; Washington County Nat. Bank v. Lee, 112 Mass. 521; Citizens' Nat. Bank v. Great Western Elevator Co., 13 S. D. 1, 82 N. W. 186; National Bank of Commerce v. Galland, 14 Wash. 502, 45 Pac. 35.

A certificate under the seal of the office of the comptroller, given

Organization of State Banks as National Banks

Any state bank, whether incorporated under a special or a general law, may become a national association, in the manner prescribed by the National Bank Act. In such case the articles of association and the organization certificate may be executed by a majority of the directors, who thereafter may do whatever is necessary to perfect the organization, and the certificate shall declare that the owners of two-thirds of the capital stock have authorized the change. The shares may continue for the same amount as before, and the directors may continue to be such until others are elected or appointed. When the comptroller has issued a certificate that the provisions of law have been complied with and that the association is authorized to commence the business of banking, its organization as a national bank is complete.20

No authority from the state is necessary to enable a state bank to become a national bank.21 The change of a state bank into a national bank "does not destroy its identity or corporate existence, but simply results in a continuation of the same body, with the same officers and stockholders, the same property, assets, and banking business, under a changed jurisdiction." 22 The obligations of the old bank continue binding

by a deputy as "acting" comptroller, is sufficient. Keyser v. Hitz, 133 U. S. 138, 10 Sup. Ct. 290, 33 L. Ed. 531. See "Banks and Banking," Dec. Dig. (Key No.) § 236; Cent. Dig. §§ 888-892.

20 Rev. St. U. S. § 5154 (U. S. Comp. St. 1901, p. 3466).

The comptroller's certificate is conclusive. Casey v. Galli, 94 U. S. 673, 24 L. Ed. 168.

A savings bank organized in the District of Columbia may become a national bank. Keyser v. Hitz, 133 U. S. 138, 10 Sup. Ct. 290, 33 L. Ed. 531. See "Banks and Banking," Dec. Dig. (Key No.) § 237; Cent. Dig. §§ 894-897.

21 Casey v. Galli, 94 U. S. 673, 24 L. Ed. 168. Cf. State v. National Bank of Baltimore, 33 Md. 75; Thomas v. President, etc., of Farmers' Bank of Maryland, 46 Md. 43. See "Banks and Banking," Dec. Dig. (Key No.) § 237; Cent. Dig. §§ 894-897.

22 Metropolitan Nat. Bank v. Claggett, 141 U. S. 520, 12 Sup. Ct. 60, 35 L. Ed. 841. See, also, City Nat. Bank of Poughkeepsie v.

upon the new,23 and the new bank succeeds to the right to enforce all demands existing in favor of the old.24 Conversely, state statutes sometimes make provision for the organization of national banks into state banks; the state bank retaining the identity of the national bank, and succeeding to its assets and liabilities.25

Continuance and Extension of Corporate Existence

A national bank, upon its due organization, has succession for 20 years, unless it is sooner dissolved according to the provisions of its articles, or by the act of the shareholders owning two-thirds of its stock, or unless its franchise becomes forfeited by some violation of law.26

A later act 27 provides that any association, within the two

Phelps, 97 N. Y. 44, 49 Am. Rep. 513; People's Nat. Bank v. Board of Com'rs of Kingfisher County (Okl.) 103 Pac. 682. See "Banks and Banking," Dec. Dig. (Key No.) § 237; Cent. Dig. §§ 894-897.

23 Coffey v. National Bank of Missouri, 46 Mo. 140, 2 Am. Rep. 488; Kelsey v. National Bank of Crawford County, 69 Pa. 426.

The conversion of a state bank into a national bank is not a "closing of its business," within the meaning of the New York statute of 1859 (Laws 1859, c. 236), providing for the redemption of a state bank's circulation, and releasing it from liability on such notes as are not presented within six years after the giving of the prescribed notice, and any notes not so presented constitute a valid claim against the national bank. Metropolitan Nat. Bank v. Claggett, 141 U. S. 520, 12 Sup. Ct. 60, 35 L. Ed. 841. See "Banks and Banking," Dec. Dig. (Key No.) § 237; Cent. Dig. §§ 894-897.

24 Atlantic Nat. Bank v. Harris, 118 Mass. 147. See "Banks and Banking," Dec. Dig. (Key No.) § 237; Cent. Dig. §§ 894-897.

25 First Commercial Bank of Pontiac v. Talbert, 103 Mich. 625, 61 N. W. 888, 50 Am. St. Rep. 385. See "Banks and Banking," Dec. Dig. (Key No.) § 282; Cent. Dig. § 1080.

26 Rev. St. U. S. § 5136 (U. S. Comp. St. 1901, p. 3455); post, p. 410 et seq.

27 Act July 12, 1882, c. 290, 22 Stat. 162 (U. S. Comp. St. 1901, p. 3457). See, also, Act April 12, 1902, c. 503, 32 Stat. 102 (U. S. Comp. St. Supp. 1909, p. 1318).

As to presumption of acceptance of troller extending corporate existence.

benefit of certificate of comp

Clement v. United States, 149

Fed. 305, 79 C. C. A. 243. See "Banks and Banking," Dec. Dig. (Key No.) 236; Cent. Dig. §§ 888, 889.

years next previous to the date of the expiration of its corporate existence, with the consent of stockholders owning not less than two-thirds of the capital stock, and with the approval of the comptroller of the currency, may extend its period of succession by amending its articles for a term of not more than twenty years. A shareholder not assenting may withdraw from the association and may receive the appraised value of his shares.28 The association continues to be the identical association, with the same rights and liabilities.29 Associations whose corporate existence has expired or is about to expire, and which do not desire to extend their existence must take the steps required of an association whose shareholders vote to go into liquidation, and the franchises cf such association are extended, for the sole purpose of liquidating their affairs, until such affairs are finally closed.3°

CAPITAL STOCK-AMOUNT

95. The amount of the capital stock must be stated in the articles, and may not be less than the amount which the act prescribes and which varies according to the population of the place in which the bank is organized. The capital may be increased or decreased, and any impairment thereof must be made good, in the manner prescribed by the act.

28 A shareholder ceases to be such on giving notice of his withdrawal within the required time. Kimball v. Apsey, 164 Fed. 830, 90 C. C. A. 634. See, also, Aspey v. Whittemore, 199 Mass. 65, 85 N. E. 91. See "Banks and Banking," Dec. Dig. (Key No.) §§ 248, 285; Cent. Dig. § 915.

29 See People v. Backus, 117 N. Y. 196, 22 N. E. 759. See "Banks and Banking," Dec. Dig. (Key No.) § 236; Cent. Dig. §§ 888-892.

30 Act July 12, 1882, c. 290, 22 Stat. 162 (U. S. Comp. St. 1901, p. 3457); post, p. 411.

In such case it may sue and be sued. Cogswell v. Second Nat. Bank, 76 Conn. 252, 56 Atl. 574. It may continue to elect officers and directors. Richards v. Attleborough Nat. Bank, 148 Mass. 187,

Capital Stock-in General

The act prescribes the minimum amount of capital, which varies according to the population of the place in which the bank is organized.31 The capital stock, the amount of which must be stated in the articles, must be divided into shares of $100 each, is to be deemed personal property, and is transferable on the books of the association in such manner as may be prescribed by the by-laws or articles.32 At least 50 per cent. of the capital stock must be paid in before the bank shall be authorized to commence business, and the remainder shall be paid in installments as provided by the act. If a shareholder fails to pay any installment, the directors may sell his stock, and if there be no bidder the amount previously paid shall be forfeited, and the stock sold, or, if not sold, shall be canceled and deducted from the capital stock; but if the capital is thereby reduced below the minimum, it must be increased to the required amount.34

Increase

33

By Rev. St. U. S. § 5142, any association may by its articles of association provide for an increase of its capital from time to time, but the maximum of such increase must be determined by the comptroller of the currency, and no increase is valid until the whole amount is paid in, and notice thereof transmitted to the comptroller, and his certificate is obtained, specifying the amount, with his approval, and that it has been paid in. The above section was modified in 1886 by an act which provides that any association may, with the approval of the comptroller by vote of the shareholders owning two-thirds of the stock, increase its capital, in accordance with existing laws, to

.19 N. E. 353, 1 L. R. A. 781. See “Banks and Banking,” Dec. Dig. (Key No.) § 236; Cent. Dig. §§ 888–892.

31 Rev. St. U. S. § 5138, as amended by Act March 14, 1900, c. 41, 10, 31 Stat. 48 (U. S. Comp. St. 1901, p. 3461).

32 Rev. St. U. S. §§ 5134, 5139 (U. S. Comp. St. 1901, pp. 3454, 3461).

13 Rev. St. U. S. § 5140 (U. S. Comp. St. 1901, p. 3461).

34 Rev. St. U. S. § 5141 (U. S. Comp. St. 1901, p. 3462).

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