2 Veazie Bank v. Fenno, 8 Wall. 533; U. S. Rev. Stat. §§ 5133-5243. 3 Farmers' etc. Nat. Bank v. Dearing, 91 U. S. 29; Rhoner v. First Nat. Bank, 14 Hun, 126.

4 Stetson v. City of Bangor, 56 Me. 274; Thomp. Nat. B'k Cas. 520. 5 See U. S. Rev. Stat. §§ 5154, 5155; State v. Phoenix Bank, 34 Coun, 205; Lockwood v. Mech. Nat. Bank, 9 R. I. 308.

6 Casey v. Galli, 94 U. S. 673; Thomp. Nat. B'k Cas. 142.

7 State v. Nat. Bank, 33 Md. 75.

8 U.S. Rev. Stat. § 5133.

9 See U. S. Rev. Stat. §§ 5133-5135. Compare Burrows v. Smith, 10 N. Y. 550.

10 Casey v. Galli, 94 U. S. 673; Thomp. Nat. B'k Cas. 142; and see Tapley v. Martin, 116 Mass. 275; Thomp. Nat. B'k Cas. 611; Thatcher v. West River Nat. Bank, 19 Mich. 196.

§ 231. Powers of national banks.-From the date of the execution of its organization certificate, a national banking association becomes a body corporate, and as such, it has power to adopt and use a corporate seal; to have succession for the period of twenty years, unless sooner dissolved; to make contracts; to sue and be sued; to elect or appoint directors, and by its board of directors to appoint a president and other officers; to prescribe by-laws; and to exercise all such incidental powers as shall be necessary to carry on the business of banking.1 It may buy the check of an individual drawn on another bank, whether payable to bearer or order; 2 and is authorized to purchase, at a discount, notes and bills of third persons which are perfect and available in the hands of the borrower, as well as the borrower's own paper.3 And, although national banks are impliedly prohibited from dealing in stocks, they may take stock in payment or compromise of a doubtful debt, if done in good faith, and with a view to convert the stock into money; and may take stock and bonds as collateral security for a loan. In the latter case, the bank assumes the position of an ordinary bailee. But the taking of special deposits, to keep merely for the accommodation of the depositor, is not within the authority of national banks; and the executive and ministerial officers of such a bank cannot bind the corporation by contract for

8

such a bailment. A national bank cannot acquire a lien on its own stock held by persons who are its debtors; 10 and a by-law which attempts to create such a lien is invalid. Such a bank has power to purchase, hold, and convey real estate for certain purposes. 12 It may take real estate security for a previous loan, 18 but not for a debt concurrently created, or for future advances.14 It may hold real estate actually purchased for security of a previous debt, although in excess thereof. 15 But cannot "hold the possession of any real estate under mortgage, or the title and possession of any real estate purchased to secure any debts due to it, for a longer period than five years. "16 A national bank may take chattels,17 or a mortgage of chattels, as security for a pre-existing debt; 18 and may sell any immovable it owns, and reserve a mortgage and vendor's privilege on it.19

1 U. S. Rev. Stat. § 5136; and see Shinkle v. First Nat. Bank, 22 Ohio St. 516; Shoemaker v. Nat. Mech. Bank, 2 Abb. U. S. 416; People's Bank v. Nat. Bauk, 101 U. S. 181.

2 First Nat. Bank of Rochester v. Harris, 108 Mass. 514.

3 Smith v. Exchange Bank of Pittsburg, 26 Ohio St. 141; but see Farmers' etc. Bank v. Baldwin, 23 Minn. 198; First Nat. Bank r. Pierson, 16 Alb. L. J. 319; Thomp. Nat. Bank Cas. 637; 24 Minn. 140; 31 Am. R. 341.

4 First Nat. Bank v. First Nat. Ex. Bank, 92 U. S. 122; and see Weckler v. First Nat. Bank, 42 Md. 581; First Nat. Bank v. Nat. Ex. Bank, 39 id. 600. Compare Van Leuven v. First Nat. Bank, 54 N. Y. 671; Thomp. Nat. Bank Cas. 724.

5 First Nat. Bank v. Nat. Ex. Bank, 92 U. S. 122.

6 Canfield v. State Nat. Bank, Thomp. Nat. Bank Cas. 312; 1 Northw. Rep. 173; Third Nat. Bank v. Boyd, 44 Md. 47; Shoemaker v. Nat. Mech. Bank, 2 Abb. U. S. 416.

7 Third Nat. Bank . Boyd, 44 Md. 47; Dearborn v. Union Nat. Bank, 61 Me. 369; and compare De Haven v. Kensington Nat. Bank, 81 Pa. st. 95; Thomp. Nat. Bank Cas. 882.

8 Wiley v. First Nat. Bank, 47 Vt. 546; Thomp. Nat. Bank Cas. 905; but see Pattison v. Syracuse Nat. Bank, 17 Hun, 419; S. C. 80 N. Y. 82; Lancaster Nat. Bank v. Smith, 62 Pa. St. 48.

9 First Nat. Bank v. Ocean Nat. Bank, 60 N. Y. 278; Wiley v. First Nat. Bank. 47 Vt. 546; but compare First Nat. Bank v. Graham, 79 Pa. St. 106; White r. Commonw. Nat. Bank, 4 Brewst. 234; Chattahoochee Nat. Bank v. Schley, 53 Ga. 369; Leach r. Hale. 31 Iowa. 69; Ray v. Bank of Ky. 10 Bush, 344; Cutting v. Marlon, 6 Abb. N. C. 388; 57 How. Pr. 56.

10 Bullard v. Bank, 18 Wall. 589; v. Second Nat. Bank, 45 N. Y. 655. Eq. 325; Re Dunkerson, 4 Biss. 237.

Bank v. Lanier, 11 id. 369; Conklin
Compare Young v. Vough, 23 N. J.

11 Evansville Nat. Bauk v. Metrop. Nat. Bank, 2 Biss. 527. 12 U. S. Rev. Stat. § 5137.

13 Woods v. People's Nat. Bank, 83 Pa. St. 57; Merch. Nat. Bank v. Mears, Thomp. Nat. Bank Cas. 353; Ornn v. Nat. Bank, 16 Kan. 341.

11 Allen v. First Nat. Bank, 23 Ohio St. 57; Matthews v. Skinker, 62 Mo. 320; Kansas Valley Nat. Bank v. Rowell, 2 Dill, 371; Crocker v. Waitney, 71 N. Y. lol. But it is now determined that a mortgage so ta..en is not void, but may be enforced, the penalty for violation of the statute being enforceable only by the government by a revocation of the bank's charter: Union Nat. Bank r. Matthews, 98 U. S. 621; reversing Matthew v. Skinker, 62 Mo. 329; National Bank v. Whitney, 103 U. S. 99; First Nat. Bank v. Elmore, 52 Iowa, 541; Wroten v. Armat, 31 Gratt 2.3; Thornton v. Nat. Exchange Bank, 71 Mo. 221.

15 Upton v. Nat. Bank, 120 Mass. 153.

16 U. S. Rev. Stat. §5137.

17 Pittsbarg etc. Works v. State Nat. B'k, Thomp. Nat. Bank. Cas. 315. 18 Spafford v. First Nat. Bank, 37 Iowa, 181.

19 New Orleans Nat. Bank v. Raymond, 29 La. An. 355.

§ 232. Liabilities of national banks.-Whether or not national banks have power to take special deposits for safe keeping.1 they are not liable for a loss of them unless they have been guilty of gross negligence. If the owner of merchandise intrusts it to the bank for shipment and sale, the bank is liable to him for the proceeds, although it is not within the general powers of national banks to sell produce on commission. So if a national bank engages to hold a deposit as collateral security for the faithful performance of a contract by the depositor with a third person, such third person may recover against the bank for the depositor's non-performance. 4 When a state bank reorganizes as a national bank, under the National Banking Law, it does not relieve itself from any former liabilities by the change.5 And where a state bank was robbed, and the cashier offered a reward for the detection of the thieves, and the bank afterward became a national bank, suit against it for the reward was sustained. National banks constitute no part of the government, and the fact that the comptroller of the currency has supervisory powers over them does not involve the federal government in any liability for their acts. An undertaking by an individual touching the organization of a national bank is not binding on the bank in its corporate capacity, unless it in some way adopts the contract, after organization.8

1 See $231, ante; Wiley v. First Nat. Bank, 47 Vt. 546; Pattison v. Syracuse Nat. Bank, 80 N. Y. 82.

2 Chattahoochee Nat. Bank v. Schley, 58 Ga. 369; De Haven v. Kensington Nat. Bank, 81 Pa. St. 95; Smith v. First Nat. Bank, 99 Mass. 605; Pattison v. Syracuse Nat. Bank, 17 Hun, 419; Pattison v. Syracuse Nat. Bank, 22 Alb. L. J. 506; First Nat. Bank v. Graham, 100 U. S. 699; Aff'g S. C. 79 Pa. St. 103; 21 Am. R. 49.

3 First Nat. Bank v. Priest, 50 Ill. 321; and see German Nat. Bank v, Meadowcroft, 95 id. 124; 35 Am. R. 137.

4 Bushnell v. Chautauqua Co. Nat. Bank, 10 Hun, 378; and see Yerkes v Nat. Bank, 60 N. Y. 383; 25 Am. R. 208. But compare First Nat. Bank v. Citizen's Bank, 21 Int. Rev. Rec. 382.

5 Coffey v. National Bank, 43 Mo. 140; 2 Am. R. 488; Thorp v. Wegeforth, 56 Pa. St. 82; and see Maynard v. Bank, 7 Phila. 6.

6 Kelsey v. Nat. Bank of Crawford, 63 Pa. St. 426; Thomp. Nat. Bank Cas. 147.

7 Branch v. United States, 12 Ct. of Cl. 281. Compare National Bank v. Commonw. 9 Wall. 353.

8 McDonough v. First Nat. Bank, 34 Tex. 309.

§ 233. Taxation. The provision of the National Bauking Act,1 relative to the taxation of national banks, does not curtail the power of the state legislatures to exempt certain kinds of property from taxation.2 The intention of the provision is to prevent unfriendly discrimination against national banks.3 In general, the capital of a bank is liable to taxation, unless specially exempted. But Congress has limited the states to taxation upon the shares in national banks, as distinguished from taxation of the banks, eo nomine, upon their property or capital. The shareholders in such a bank may be taxed by the states on stock or shares held by them, although all the capital of the bank be invested in federal securities; provided the taxation does not exceed the rate imposed upon the shares of state banks where the national bank is located. Every state within which a national bank is located has jurisdiction, for the purposes of taxation, of all the shareholders of the bank, whether resident or non-resident.8 And the tax must be levied at the place where the bank is located, without respect to the domicile of the shareholders. A state may lawfully enact that the tax upon shares of a national bank shall be paid by the bank; 10 in which case, the tax may be enforced by suit or by distress against the property of the bank, 11 But in the absence of such enactment, the

6

collector has no authority to enforce collection against the property of the bank, or of the shareholders, except that of the delinquent. 12 And the personal property of a national bank, such as safes, office furniture, etc., is not subject to taxation by the state. 13 A state statute which permits any debtor, assessed upon personal property, to deduct the amount of his debts from the valuation of all his personal property, including money capital, except bank shares,14 is unconstitutional and invalid as to national bank shares, 15 and affords no authority for making any assessment upon such shares.16 Such a statute is invalid, inasmuch as it operates to tax shares in national banks at a higher rate than other moneyed capital.17 Without authority conferred by a statute of the state, officers of a municipal corporation have no power to levy a tax on shares of stock in a national bank.18 And it has been held that the circulating notes of a national bank are not liable to state taxation. 19 A national bank holds a trust relation to the body of stockholders, 20 and it may maintain a suit in equity to restrain the enforcement of an illegal tax upon its shares.21 In order to determine the taxable value of shares of national banks, a state may authorize their appraisement at their current market value, at the place where the bank is located.22

1 See U. S. Rev. Stat. § 5219.

2 Adams v. Nashville, 95 U. S. 19; Thomp. Nat. Bank Cas. 148; 16 Alb. L. J. 416.

3 Adams v. Nashville, 95 U. S. 19; and see People v. Comm'rs, 4 Wall. 244; City of Richmond v. Scott, 48 Ind. 568; Frazer v. Siebern, 16 Ohio St. 614.

4 New Orleans v. People's Bank, 27 La. An. 646.

5 St. Louis Nat. Bank v. Papin, Thomp. Nat. Bank Cas. 326. Compare Frederick County v. Frederick Farmers' etc. Bank, 48 Md. 117; Collins v. Chicago, 4 Biss. 472; Nat. Com. Bank etc. v. Mayor etc. 62 Ala. 284; 34 Am. R. 15; Sumter County v. Nat. Bank, 62 AĨa. 464; 34 Am. R. 30.

6 National Bank v. Commonw. 9 Wall. 353.

7 National Bank v. Commonw. 9 Wall. 353; and see Stetson v. Bangor, 56 Me. 274; Collins v. Chicago, 4 Biss. 472; People v. Weaver, 100 U. S. 539.

8 Tappan v. Merch. Nat. Bank, 19 Wall. 490.

9 Baker v. First Nat. Bank, 67 Ill. 297; Union Nat. Bank v. Chicago,