tions. But certain implied limitations arise from the charter or general law. A national bank which is forbidden by law from loaning on the security of its own shares cannot create a lien in its own favor upon the shares of its stockholders. The same rule applies to state banks similarly restricted. The passage of such a law repeals a by-law creating the lien, although the by-law was legal when made.* The rules governing the relations of depositors to a savings bank as affected by the by-laws of the bank will be found discussed under a later chapter on Savings Banks.5 § 23. Proof of corporate existence. The corporate existence may come directly in question or indirectly. It comes directly in question when a suit is brought by the state to forfeit the charter. In such case, nothing being presumed against the state, the proof of the performance of every act required, whether by the special charter or general law, must be strictly made. None of the decisions which follow applies to such a case. But when the due incorporation of a bank comes collaterally in question a very different rule applies. As to a shareholder or officer of the corporation, or as to any one who has contracted with the corporation as such, the fact of due incorporation is conclusively presumed. Even in a criminal case the defendant could not urge the non-existence of the bank, where he had performed acts as president thereof. When collaterally attacked the existence of the corporation may be proved in favor of the corporation by the certificate of proper authority, and this certificate is conclusive. It may also be proved 1 See 1 Thompson on. Corp., secs. 935-1053. 2 Bullard v. Bank, 18 Wall. 589, overruling a number of cases. See $ 54, post. 1 Casey v. Galli, 94 U. S. 673, citing a number of cases. Indiana permits a bill in equity by a stockholder against the corporation, in order to test the due incorporation. 3 Nicollet Nat. Bank v. City Bank, Albert v. State, 65 Ind. 413. 38 Minn. 85. 2 In re Van Campen, 2 Ben. 419; 4 See Nicollet Nat. Bank v. City Fed. Cas. No. 16,835. Bank, supra. 5 See § 234, post. 3 Casey v. Galli, 94 U. S. 673; Keyser v. Hitz, 2 Mackey, 473; 8 either by the special charter or a general law authorizing the incorporation with proof of user under the charter.' Even if the charter is conditional, the proof of user is sufficient proof of the performance of the condition. If a double certificate is required, for instance, one by the county clerk and another by the secretary of state, proof of the first certificate with evidence of the transaction of business as a corporation is sufficient. Parol proof that the bank was actually in existence by doing acts of business, or was generally reputed to be a bank, has been held sufficient proof in favor of the bank. Where proof of due incorporation is made by a grant of a charter, it is not necessary to show that the bank commenced business. But it may be that the general law or the charter forbids the doing of business by the bank until some certain act or acts have been done. If proof were offered that such an act had not been performed, where the objection is made by a third party as against the bank, it would seem that the person who had contracted with the bank, or a shareholder or officer who had acted in the corporation, would nevertheless be held responsible to the association.10 But if the objection be made by the corporation 9 Thacker v. West River Bank, 19 Mich. 196. It seems to be intimated that if proof were made that the law did not authorize the granting of the certificate in such a case, the proof would not be sufficient, in Agnew v. Bank of Gettysburg, 2 Har. & G.478. On principle the certificate would be sufficient, even if obtained by fraud. 4 Henderson v. Union Bank, 6 Smedes & M. 314; Farmers', etc. Bank v. Jenks, 7 Met. (Mass.) 592; Bank of Manchester v. Allen, 11 Vt. 302. 5 Williams v. Union Bank, 21 Tenn. 339. 7 Way v. Butterworth, 106 Mass. 75; Farmers', etc. Bank v. Williamson, 61 Mo. 259; Yakima Nat. Bank v. Knipe, 6 Wash. 348. 8 State v. Fitzsimmons, 30 Mo. 236. Under a statute see the same case and Jennings v. People, 8 Mich. 81. Proof is sometimes dispensed with by statute, unless the incorporation be denied under oath. It seems that a different rule than that stated in the text was laid down in United States Bank v. Stearns, 15 Wend. 314, as to the United States Bank. 9 People v. Peabody, 25 Wend. 472. 10 Berkshire v. Evans, 4 Leigh, 223. 6 Leonardsville Bank v. Willard, And see § 32, post. 25 N. Y. 574. as against a third party, there is some confusion in the decisions. In the case of national banks it is settled that the proof would be good." This subject is, however, more properly a part of the discussion upon Unauthorized Banking.12 § 24. Power under charters as to branches.- If the law or the charter of a bank prohibits the establishment of branches, it of course cannot do so; but if the law of the state prohibits branches of a bank, whether of the state or a foreign bank, and the penalty provided is a forfeiture of the charter, it is inoperative as to foreign banks. If private banking is permitted, there is no reason, in the absence of legal prohibition, why a private bank should not have branches; but a corporation has only the powers granted it, and it cannot establish branches unless the power to do so is granted to it. If the law permits it and branches are established, whether the branch bank is a separate or the same corporation depends wholly upon the effect to be given to the provisions of the statute. A bank may do business anywhere unless prohibited, but it cannot change its place of location." 3 § 25. Conflict of national and state laws.- A corporation chartered as a bank by the national government cannot be controlled in any way by state laws in the exercise of the rights granted by congress.' It is wholly exempt from 11 McCormick v. Market Nat. Bank 165 U. S. 538; but in this case there was no proof of user or of doing business beyond the contract sued upon. 12 See § 33, post. 234; Trezevant v. Bank of Tennessee, 1 Rob. (La.) 465; Branch Bank v. Rhew, 37 Miss. 110; Bank v. Smith, 33 Mo. 364; Merchants' Bank v. Farmer, 43 Mo. 214; Bank v. Goddard, 5 Mason, 366; Fed. Cas. 1 Bowman v. Cecil Bank, 3 Grant No. 917; Mason v. Farmers' Bank, Cas. 33. 2 People v. Oakland Co. Bank, 1 Doug. 282. See Atterbury v. Knox, 4 B. Mon. 90. 3 State v. Ashley. 1 Ark. 513; Elliot v. Branch Bank, 4 Ark. 424; Bower v. State, 5 Ark. 234; Farmers' Bank v. Calk, 4 Ky. Law R. 617; Union Bank v. Denere, 17 La. 12 Leigh, 84. 4 Bank of Augusta v. Earle, 13 Pet. 588. Ex parte Schollenberger, 96 U. S. 369. A state statute as to service upon foreign corporations gives the same right of service to United States courts. 1 Farmers' Nat. Bank v. Dearing, state control or state taxation, except as to the taxing of its real estate or the shares of individual stockholders, or as such right is granted by congress.2 Congress may grant to the states the right to tax such banks. Congress has granted to the states the right to tax the shares of individ ual stockholders and the right to tax the real estate of the bank. The power granted is limited by the two restrictions, first, that the taxation shall not be at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens; and second, that the shares of non-residents shall be taxed in the city or town where the bank is located and not elsewhere. Under this law the bank may be required to pay the tax on its shares and charge the same against its stockholders, even though state banks are not required to do the same thing for their shareholders." A deduction allowed from some moneyed capital, but not apparently directed against national banks, is not an unlawful discrimination.' The release from taxation of certain kinds of moneyed capital in the hands of individual citizens is an unfair discrimination only when the particular kind of moneyed capital exempted comes into competition with that of national banks. A discrimination among national banks is permissible where the discrimination affects all banks, state and national alike, and is not directed against national banks as such." A state cannot tax the franchises or intan 91 U. S. 29; National Bank v. Com- 2 Cases cited in preceding note. 573. 4 Sec 5219, Rev. Stat. U. S. 5 Aberdeen Bank v. Chehalis Co., 166 U. S. 440; National Bank v. Commonwealth, 9 Wall. 353. 6 Merchants' Nat. Bank v. Pennsylvania, 167 U. S. 461. 7 First Nat. Bank v. Ayers, 160 U. S. 660. State banks were treated as were national banks. 8 Aberdeen Bank v. Chehalis Co., supra; Nat. Bank of Commerce v. Seattle, 166 U. S. 463. 9 Merchants' Nat. Bank v. Pennsylvania, supra. The meaning and purpose of the statute and the dis gible property of the national banks, and a tax upon the corporation or its property is not the legal equivalent of a tax on the shares of stock in the names of shareholders.10 crimination prohibited will be on a similar business and operafound clearly stated by Matthews, tions and investments of a like J., in Mercantile Bank v. New character." In other words, the York, 121 U. S. 138. The object of phrase "moneyed capital" in the the statute is stated to be the pre- statute by construction becomes vention of the state from levying "moneyed capital engaged in bank"a tax on such shares to create ing." and foster an unequal and unfriendly competition by favoring institutions or individuals carrying 10 Owensboro Bank v. Owensboro, 173 U. S. 636, reviewing former cases. |