16 17 California, Connecticut, Iowa, 18 Maine, 19 Mississippi,20 Missouri,21 New Hampshire,22 New Jersey, 23 Rhode Island,24 United States.25 The power to prescribe by-laws of a national bank is vested in its board of directors; but a national bank cannot, even by provisions framed with the direct view to that effect, in its articles of association, or by a direct by-law, acquire a lien on its own shares of stock held by persons who are its debtors.2 § 44. Failure to make by-laws. 26 Where the statute by expressed terms confers the power upon the corporation to adopt by-laws, it is held that the failure to exercise the power will not render void any of the acts of the corporation which would otherwise be valid.27 § 45. Reasonable by-law. A by-law is held to be reasonable which requires a depositor in a savings bank to present his book for entry of the amount, which may be withdrawn; but in case of loss of such book, and proof thereof duly furnished the bank of such loss, the bank cannot refuse to pay. The possession of a pass-book is not always proof of ownership; and a by-law, which states that a deposit will not be paid unless the pass-book is presented, is subject to criticism. A by-law printed in the pass-book, if reasonable, and signed by the party who accepts the same, will bind him and likewise the bank; and the bank cannot revoke nor amend such a by-law 16 Jennings v. Bank of California, 79 Cal. 323, 21 Pac. 852, 12 Am. St. Rep. 145, 5 L. R. A. 233; People v. Crockett, 9 Cal. 113. 17 Vansands v. Middlesex County Bank. 26 Conn. 144. 18 Farmers', etc., Bank v. Wasson, 48 Iowa, 336. 30 Am. Rep. 398. 19 Bath Sav. Inst. v. Sagadahoc Nat. Bank, 89 Me. 500, 36 Atl. 996. 20 Holly Springs Bank v. Pinson, 58 Miss. 421, 38 Am. Rep. 330. 21 Spurlock v. Pacific R. Co.. 61 Mo. 319; Mechanics' Bank v. Merchants' Bank, 45 Mo. 513, 100 Am. Dec. 388. 22 Costella v. Portsmouth Brewing Co., 69 N. H. 405, 43 Atl. 640; by-law reserving lien on shares for shareholder's indebtednes to the corporation not within the prohibition of a statute forbidding restraints upon the free sale of shares. Hill v. Pine River Bank, 45 N. H. 300. 23 Young . Vough, 23 N. J. Eq. 325. 24 Lockwood v. Mechanics' Nat. Bank, 9 R. I. 308, 11 Am. Rep. 253. 25 Knight v. Old Nat. Bank, 14 Fed. Cas. No. 7,885, 3 Cliff, 429; Pendergast v. Stockton Bank, 19 Fed. Cas. No. 10.918, 2 Sawy. 108. 26 Bullard v. Bank, 18 Wall. 589. 27 Steger v. Davis, 8 Tex. Civ. App. 23, 27 S. W. 1068. so as to affect the rights of such depositor. It is held that such a by-law becomes a part of the contract of deposit.28 § 46. Defining duties of officers. The officers of a banking corporation have, by law, certain implied power; and in the absence of a by-law specifically defining their powers, they have the implied power to manage and conduct the business of the corporation, and perform all the necessary acts other than those which are imposed by the statute to be performed by the board of directors. The by-laws may prescribe in detail the business and acts to be performed by the various officers and agents of the bank. When the duties and acts to be performed are defined by the by-laws, and they contain a restrictive provision, in effect stat ing that all acts other than those mentioned are prohibited, an officer or agent of the bank has no additional power or authority by implication. Where the statute of a State prescribes the mode of employment or election of an officer or agent of a corporation, it must be strictly complied with. For example: Where the statute says that the officer must be elected by the board of directors, and it prescribes that such election must be by ballot, an officer of the corporation cannot be appointed by a vivi voce vote, or by a resolution. Also where the statute prescribes that at the time of his election he must be a bona fide director of the corporation, the directors cannot legalize the position or office, unless he was at the time a director. § 47. Amending by-laws. The power to amend a by-law is vested in the persons who are empowered to make a by-law. Where the statute of a State prescribes how a by-law may be amended or repealed, it must be strictly followed. Where a provision of the charter is made a part of the bylaw, such a provision cannot be amended by amending the by-law. A provision inserted in a charter cannot be amended without amending the articles of incorporation. 28 Heath V. Portsmouth Sav. Bank, 46 N. H. 78; Levy v. Franklin Sav. Bank, 117 Mass. 448; Kummel v. Germania Sav. Bank, 127 N. Y. 488. Directors of a corporation frequently attempt to amend the by-laws, or the provisions which are a part of the articles of association; but as stated, this cannot be done only by amending the articles. § 48. Provisions and form of by-laws. Banking corporations incorporated under the laws of a State, in adopting and preparing a form of by-laws, should be very careful in the preparation of the same; as a by-law cannot be adopted; or enacted, which is in violation of a law of the State; and all of its provisions must be reasonable. For form of by-laws for a national bank, as recommended by the Comptroller of the Currency, see Appendix. § 49. Statute prescribing time in which by-laws are to be adopted. The certificate from the Secretary of the State, which is a certification implying the due incorporation of a bank, in itself does not put the corporation into action or life. Where a bank or other corporation is required by the statute to enact a code of by-laws within a certain number of days after filing the articles of incorporation with the proper officer of the county, where required to be filed, such a statute is not mandatory but directory.29 The failure to adopt a code of by-laws within such period of time, though a statutory provision, will not prevent the corporation, after the adoption of by-laws, from thereafter doing business within the State. But if the act of adopting a code of by-laws, as provided by the statute, is made a part of the organization of the corporation, the organization cannot be complete until all the requirements of the law are complied with; and contracts made during organization are held to be invalid. An agreement made by a cashier of a national bank, prior to its organization, does not bind the bank unless such agreement is ratified after the organization is perfected under the National Banking Act.3 30 29 Davies v. Smith, 58 N. H. 16, and cases cited. 30 McDonough v. First National Bank of Houston, 34 Tex. 309. CHAPTER VII. STOCKHOLDERS' RIGHTS AND LIABILITIES. § 50. Who may be a subscriber. Any person, male or female, other than a minor (whose contracts may be revoked) may be a subscriber for shares of stock in a corporation; provided, however, that the laws of the State in which the party resides and the contract is made, and to be executed, does not interfere. A married woman may become a stockholder under the law of the State where the contract is made, if not prohibited, and she will be subject to all the liabilities as such.1 A married woman in the District of Columbia may become a holder of stock in a national banking association, and assume all the liabilities of such a shareholder, although the consideration may have proceeded wholly from the husband. The coverture of a married woman who is a shareholder in a bank will not prevent the receiver of an insolvent bank from recovering judgment against her for the amount of an assessment levied upon the shareholders equally and ratably under the statute.2 In the case of Witters v. Sowles, 38 Fed. Rep. 700, the court, in discussing the contractual character of the relation and the liability, says: "Doubtless it would be competent for the Legislature to declare that any married woman who might acquire shares in a corporation should be regarded as a stockholder, and should be liable as such, notwithstanding her shares might be the absolute property of the husband at his option; but in the absence of language to that effect, a statute which makes shareholders liable for the debts of the corporation must be presumed to include only persons, belonging to the class who can contract that relation toward the corporation and its creditors. "The relation is a contractual one and the liability is 1 Bundy v. Cocke, 128 U. S. 185. 2 Keyser v. Hitz, 133 U. S. 138. mounded on the presumed assent of the shareholder to be bound by the terms of the organic law of the corporation." This is well stated by Allen, J., in Lowry v. Inman, 46 N. Y. 125: "A personal liability of stockholders for the debts of a corporation, in virtue of the charter, is not in the nature of a penalty or forfeiture, and does not exist solely as a liability imposed by statute. It is not enforced simply as a statutory obligation, but is regarded as voluntarily assumed by the act of becoming a stockholder. By such act he assents to be bound, or that his property shall be charged, with the debts of the corporation, to the extent and in the manner prescribed by the act of incorporation." The Code of North Carolina, § 1826, enacted in 1871, provides that no woman during coverture shall be capable of making any contract to affect her real and personal estate without the written consent of her husband. The court, in Robinson v. Turrentine et al., 59 Fed. Rep. 554, in discussing this provision of the Code, and the question of liability and the rights of a married woman purchasing stock in a corporation, without the written consent of her husband, says: "M. B. Turrentine is a married woman. After her marriage and after the passage of the Act of 1871 of North Carolina (Code, § 1826), the stock in question was transferred to and acquired by her, to use the language of her answer. Her husband, the other defendant, never gave his written consent to the purchase. Mrs. Turrentine is not a 'free trader' under Code, §§ 1828, 1831, 1832." The court then proceeds to discuss the question of liability of a stockholder as created by section 5151, Revised Statutes, United States, imposing individual responsibility to the amount of the par value of the shares upon stockholders in national banks, which law, he says, makes no exceptions in favor of married women. The court further says that: "To hold that a State law, were there such a law, could except certain shares from the liability, would enable States to defeat the policy of the Federal Government in establishing the national banking system. That the Congress has power |