by the statute of limitations in equity as at law." The statute begins to run from the accrual of the liability, and whenever the creditor's debt against the bank is barred, his claim upon the stockholders is also barred.' Interest on the liability in national bank cases runs from the order of assessment, and in cases under state laws runs either from the commencement of the action or from the date of the decree.10 § 72. Dividends. It is not our purpose to examine the whole subject of dividends upon stock, but merely the decisions in bank cases thereon. The power to declare dividends belongs to the board of directors. Their discretion in regard thereto will not be interfered with unless clearly abused.' For an abuse of the power, a civil as well as in some cases a criminal responsibility rests upon them. But there can be no doubt that bank directors have the right to collect a surplus before declaring dividends. In some cases they are directed to do so by statute. But a dividend that has been obtained by a decrease of stock cannot be retained by the bank as surplus. The bank, whatever may be its power to hold a lien upon its stock, may hold a stockholder's dividend upon an indebtedness of the stockholder to the bank." 5 Carrol v. Green, 92 U. S. 509. 6 Godfrey v. Terry, 97 U. S. 171; Thompson v. German Ins. Co., 77 Fed. R. 258; Baker v. Atlas Bank, 9 Met. 182; Long v. Bank of Yanceyville, 90 N. C. 405; Amer v. Armstrong, 6 Pa. Co. Ct. R. 392. The rule is the same as to unpaid subscriptions for capital stock. 7 Fleischer v. Rentchler, 17 Ill. App. 402. 8 If made under an order of a court, from the date of the order; or if made by the comptroller, from the date of his order. Casey v. Galli, 94 U. S. 673; Bowden v. John son, 107 U. S. 251. 9 Barnes v. Arnold, 51 N. Y. Supp. f109. 10 Palmer v. Bank of Zumbrota, 75 N. W. R. 380. 1 Ely v. Sprague, Clarke Ch. 359; Hiscock v. Lacey, 30 N. Y. Supp. 860. 2 See § 93, note 14, infra, and see last case in preceding note. 3 Reynolds v. Bank of Mt. Vernon, 39 N. Y. Supp. 623. 4 Seley v. Exch. Nat. Bank, 78 N. Y. 608. 5 Hagar v. Union Nat. Bank, 63 Me. 509; First Nat. Bank v. De Morse, 26 S. W. R. 417. Compare Brent v. Bank of Washington, 2 Cranch C. C. 517. CHAPTER V. OFFICERS AND AGENTS. ARTICLE I.-DUTIES AND LIABILITIES. § 73. In general. A corporation can act only by means of agents. All its officers and employees are agents to do certain acts. A private banker or a partnership or jointstock company has in practice the same kinds of officers and agents that a corporation has, with the exception of a board of directors and officers of the board. Some private banks have the same machinery for making loans or discounts that a corporation has. Where a private bank has officers such as an incorporated bank, the powers and duties of those officers, and the rules of law governing them, must be precisely the same.1 § 74. Appointment of agents.— A corporation and a private person may appoint an agent to do anything that the principal can do.' In the case of a corporation the powers of the corporation are in the first instance lodged in a board of directors, who exercise the corporate powers. Certain portions of these powers are in practice delegated to agents, whose appointment need not be under seal, and the fact of agency, just as in the case of a private person as principal, may arise from the fact of acting as such agent with knowledge on the part of the principal or of those who represent it.3 § 75. Corporate officers. The officers of a corporation must be elected in the manner provided by its charter or in 1 Austin v. Daniels, 4 Denio, 299; Bidwell v. Madison, 10 Minn. 13. 1 Bates v. State Bank, 2 Ala. 451. 2 Savings Bank v. Davis, 8 Conn. 191; Union Bank v. Ridgley, 1 H. & G. 324; Townson v. Havre de Grace Bank, 6 Har. & J. 47. 3 Bradstreet v. Bank of Royalton, 42 Vt. 123. a manner consonant thereto. In practice the officers other than directors are generally elected or appointed by the board of directors, but the method pointed out by the charter must be followed. Yet as to third parties, de facto officers, that is to say officers who are publicly acting as such, but without proper appointment, election or qualification, will be held, certainly as to third persons, to be proper officers. Should vacancies occur, they must be filled as provided in the charter. The general officers of a bank usually hold until removed as provided by the charter or law, or until a successor is appointed and qualified. But a suspension of an officer does not take effect until the fact is brought to his knowledge." § 76. Bonds of officers.- Where a bond is taken from an officer for the due performance of his duties, and every corporation has such a right (Bank v. Cresson, 12 Serg. & R. 306), the general principles of law governing such instruments are applicable. The bond, of course, covers only the office as to which it is given.' It need not conform to the terms of the law, but will take effect as a common-law bond.2 1 State v. Thompson, 27 Mo. 365. A stockholder in debt to the corporation on his original subscription cannot vote for directors. United States v. Barry, 36 Fed. R. 246. 2 Booker v. Young, 12 Grat. 303. But as against the direct attack upon a director's title he must show a valid election and qualification. It is therefore held that one who obtains shares by transfer after expiration of a national banking charter is ineligible. Richards v. Attleborough Nat. Bank, 148 Mass. 187. This decision is wrong because it was in fact a case of collateral attack. 3 Baird v. Bank of Washington, 11 S. & R. 411; Cooker v. Curtis, 30 Me. 488; Milliken v. Steiner, 58 Ga. 251; but see Bartholomew v. Bentley, 1 Ohio St. 37. 4 Bank of Virginia v. Robinson, 5 Grat. 174. A general law is, of course, if applicable, part of the charter. 5 So held as to a cashier, but the rule is general. Union Bank v. Ridgely, 1 Har. & G. 324; Dedham Bank v. Chickering, 3 Pick. 335; Sparks v. Farmers' Bank, 3 Del. Ch. 274. A by-law cannot make the cashier of a national bank an annual officer. Westervelt v. Mohrenstecker, 76 Fed. R. 118. 6 Bank of U. S. v. Magill, 12 Wheat. 511. 1 Northw. Nat. Bank v. Keen, 14 Phila. 7. 2 Grocers' Bank v. Kingman, 16 The principal in the bond need not sign it, nor does a misnomer destroy its efficacy. The bond will be binding whether executed before or after the officer enters upon the performance of the duties of his office. An acceptance of the bond by the corporation will be presumed, whether the acceptance be in the form required by law or not. The bond holds good until it is released by the terms of the law or by proper authority. Whether a bond is required from the officer or not cannot affect in any way the lawfulness of his acts while he is permitted to act. в § 77. Salaries.- If an officer is not a director his salary is generally fixed by the board of directors, unless the law forbids it. If such an officer or an agent is permitted to draw a salary larger than the amount originally fixed, which fact is reported to the board of directors and no objection is made by it, there will be inferred an agreement implied as a fact to pay the additional amount. But since the directors themselves wield the corporate powers, their salary, if one can be lawfully drawn by them, must be agreed upon prior to their election. The board of directors cannot vote salaries to themselves after election, nor can they vote a salary to one of their number as an officer, where the particular director's vote is necessary to the order, or where he is present and takes part in the meeting. But this principle Gray, 473; State Bank v. Lock, 4 3 Bank of North Liberties v. Cresson, 12 S. & R. 306. Mobile Branch Bank v. Collins, 7 Ala. 95. 2 San Joaquin Valley Bank v. Bowers, 65 Cal. 247. See Blue v. 4 Pendleton v. Bank of Kentucky, Cap. Nat. Bank, 145 Ind. 518. 1 T. B. Mon. 171. 3 Wickersham v. Crittenden, Bank of U. S. v. Brent, 2 Cranch, 93 Cal. 17. C. C. 696. 6 Bank of U. S. v. Dandridge, 12 Wheat. 64; Pryse v. Farmers' Bank, 33 S. W. R. 532. And see two first cases cited in note 5 to last section. 7 State Treas. v. Mann, 34 Vt. 371; Pendleton v. Bank of Ky., 1 T. B. Mon. 171. 4 Wickersham v. Crittenden, supra. 5 Wickersham v. Crittenden, supra, uses this language, but the case is wrong if it means to say that any action taken by the board of directors as to a contract with one of the board is vitiated by the fact does not prevent a director from receiving pay for services which he has rendered to the bank as an agent outside of the duties of his office of director. Neither a director nor an officer who is one of the board can require pay for services which he has rendered as director or president, nor can such officer recover on a quantum meruit; but if the services rendered are extraordinary or outside of the duties of the office, he can recover, according to some decisions. The fair rule is that where services are rendered which a director or an officer who is one of the board could not be called upon to perform, and there is nothing to show that the services were gratuitous, he ought to be permitted to recover. Yet owing to the fact that abuses might arise, the weight of authority is that services rendered are gratuitous, unless expressly made otherwise. As to any other officer, the general rule applies that whatever he does for the corporation is covered by his salary. $78. Board of directors.- The directors act as a board at meetings either specially called or fixed by the by-laws or general law or charter. Unless it be otherwise provided a notice need not be given of fixed and stated meetings. The rule has been carried so far as to apply to a special meeting.* But unless the articles of agreement or by-laws, or a statute, provides otherwise, the notice need not state the object of the meeting unless business out of the usual nature is transacted. It is not necessary for the board to keep a written that such director takes part, although a majority of the board without the interested director vote for the proposition. 6 Chandler v. Monmouth Bank, 13 N. J. Law, 255. 7 Holland v. Lewiston Falls Bank, 52 Me. 564; Sawyer v. Pawners Bank, 88 Mass. 207; Penn v. First Nat. Bank, 130 Mass. 391; Blue v. Cap. Nat. Bank, 145 Ind. 518. 8 See cases cited in preceding note; but compare Leavitt v. Beers, Hill & D. Supp. 221, which holds otherwise. 1 See the case cited in the next note. 2 If it is the custom to hold directors' meetings, where a sufficient number is present no notice is required, unless the statute or a by-law requires it. Am. Ex. Nat. Bank v. First Nat. Bank, 82 Fed. R. 961. 3 Savings Bank v. Davis, 8 Conn. 191. |