fund for such stockholders. Stock transfers after day of reduction do not carry any interest in such fund. Jerome v. Cogswell, 204 U. S. 1. § 5144. [U. S. Comp. Stat. 1901, p. 3463.] In all elections of directors, and in deciding all questions at meetings of shareholders, each shareholder shall be entitled to one vote on each share of stock held by him. Shareholders may vote by proxies duly authorized in writing; but no officer, clerk, teller, or bookkeeper of such association shall act as proxy; and no shareholder whose liability is past due and unpaid shall be allowed to vote. Where, at a corporate election of directors, votes were cast by proxy, and were disregarded by the inspectors of election, and it was shown that neither the charter nor by-laws of the corporation provided for such manner of voting, Held, that in the absence of any such provision, corporate stockholders cannot vote by proxy. Commonwealth v. Bringhurst, 103 Pa. 134, 49 Am. Rep. 119. The word "liability," as used in this section, is limited to the shareholder's liability for unpaid subscriptions to or assessments upon stock. United States v. Barry 36 Fed. Rep. 246. § 5145. [U. S. Comp. Stat. 1901, p. 3463.] The affairs of each association shall be managed by not less than five directors, who shall be elected by the shareholders at a meeting to be held at any time before the association is authorized by the Comptroller of the Currency to commence the business of banking; and afterward at meetings to be held on such day in January of each year as is specified therefor in the articles of association. The directors shall hold office. for one year, and until their successors are elected and have qualified. 1. The provision of this section that directors shall hold office for one year and until their successors have been elected and qualified does not prohibit resignations within the year. Briggs v. Spaulding, 141 U. S. 132, 35 L. ed. 662, 11 Sup. Ct. Rep. 924. 2. A director does not immediately upon his election as such become respon. sible for the affairs of a national bank, and where there is nothing to excite suspicion, but the bank becomes bankrupt within ninety days after his election, he is not to be held individually liable because he did not compel an investigation or make a personal examination. Briggs v. Spaulding, supra. 3. When a director becomes seriously ill it is competent for the board to give him leave of absence for a year, and in his absence is not personally responsible for frauds committed on the bank without his knowledge. Briggs v. Spaulding, supra. 4. Directors of a national bank are not mere figureheads, they must exercise ordinary care and prudence in the administration of the affairs of a bank; and although they may commit the business to duly authorized officers, this does not absolve them from the duty of reasonable supervision, nor can they shield them selves from liability because of want of knowledge of wrong-doing, if their ignorance is the result of gross inattention. Briggs v. Spaulding, supra. § 5146. [U. S. Comp. Stat. 1901, p. 3463.] Every director must, during his whole term of service, be a citizen of the United States, and at least three-fourths of the directors must have resided in the State, Territory, or District in which the association is located for at least one year immediately preceding their election, and must be residents therein during their continuance in office. Every director must own, in his own right, at least ten shares of the capital stock of the association of which he is a director, unless the capital of the bank shall not exceed twenty-five thousand dollars, in which case he must own in his own right at least five shares of such capital stock. Any director who ceases to be the owner of the required number of shares of the stock, or who becomes in any other manner disqualified, shall thereby vacate his place. (As amended by Act February 28, 1905.) The meaning of this section is that every director must in his own right, during his whole term of service, at least ten shares of the stock; and that if he does not own such ten shares he cannot become or continue a director. Finn v. Brown, 142 U. S. 56, 35 L. ed. 936, 12 Sup. Ct. Rep. 136. § 5147. [U. S. Comp. Stat. 1901, p. 3464.] Each director, when appointed or elected, shall take an oath that he will, so far as the duty devolves on him, diligently and honestly administer the affairs of such association, and will not knowingly violate, or willingly permit to be violated, any of the provisions of this title, and that he is the owner in good faith, and in his own right, of the number of shares of stock required by this title, subscribed by him, or standing in his name on the books of the association, and that the same is not hypothecated, or in any way pledged, as security for any loan or debt. Such oath, subscribed by the director making it, and certified by the officer before whom it was taken, shall be immediately transmitted to the Comptroller of the Currency, and shall be filed and preserved in his office. § 5148. [U. S. Comp. Stat. 1901, p. 3464. ] Any vacancy in the board shall be filled by appointment by the remaining directors, and any director so appointed shall hold his place until the next election. § 5149. [U. S. Comp. Stat. 1901, p. 3464.] If, from any cause, an election of directors is not made at the time appointed, the asso ciation shall not for that cause be dissolved, but an election may be held on any subsequent day, thirty days' notice thereof in all cases having been given in a newspaper published in the city, town, or county in which the association is located; and if no newspaper is published in such city, town, or county, such notice shall be published in a newspaper published nearest thereto. If the articles of association do not fix the day on which the election shall be held, or if no election is held on the day fixed, the day for the election shall be designated by the board of directors in their by-laws, or otherwise; or if the directors fail to fix the day, shareholders representing twothirds of the shares may do so. § 5150. [U. S. Comp. Stat. 1901, p. 3465.] One of the directors, to be chosen by the board, shall be the president of the board. 1. A national bank president cannot by virtue of his office draw checks against his bank's account in another bank. Putnam v. U. S. 162 U. S. 687, 40 L. ed. 1118, 16 Sup. Ct. Rep. 923. 2. A president continues in office after suspension of bank pending examination and until appointment of a receiver. Amer. Surety Co. v. Pauly, 170 U. S. 168, 42 L. ed. 993, 18 Sup. Ct. Rep. 563. § 5151. [U. S. Comp. Stat. 1901, p. 3465.] The shareholders of every national banking association shall be held individually responsible, equally and ratably, and not one for another, for all contracts, debts and engagements of such association, to the extent of the amount of their stock therein, at the par value thereof, in addition to the amount invested in such shares; except that shareholders of any banking association now existing under State laws, having not less than five millions of dollars of capital actually paid in, and a surplus of twenty per centum on hand, both to be determined by the Comptroller of the Currency, shall be liable only to the amount invested in their shares; and such surplus of twenty per centum shall be kept undiminished, and be in addition to the surplus provided for in this title; and if at any time there is a deficiency in such surplus of twenty per centum, such association shall not pay any dividends to its shareholders until the deficiency is made good; and in case of such deficiency, the Comptroller of the Currency may compel the association to close its business and wind up its affairs under the provisions of chapter four of this title. For the purposes of construction, this section and section 5139, U. S. Comp. Stat. 1901, p. 3461, are to be considered together. (WAITE, C. J., Davis v. Stevens, 17 Blatchf. 259, Fed. Cas. No. 3,653. They originally formed part of the same section, viz., section 12 of the Act of June 3, 1864. See notes to sections 5139 and 5152. 1. The liability of the stockholders is several, not joint. The limit of their liability is the par of the stock held by each one. Kennedy v. Gibson, 8 Wall. 505, 19 L. ed. 478. 66 2. It was not intended to put the shareholders in the relation of guarantors or sureties, one for another," as to the amount which each might be required to pay. Hence the insolvency of one stockholder, or his being beyond the jurisdiction of the court, does not in any way affect the liability of another. United States v. Knox, 102 U. S. (12 Otto) 425, 26 L. ed. 216. 3. In fixing the liability of each shareholder, it is necessary to ascertain, first, the whole amount of the par value of the stock held by all the shareholders: second, the amount of the deficit to be paid after exhausting all the assets of the bank; third, then to apply the rule that each shareholder shall contribute such sum (not exceeding the par value of the amount of stock held by him) as will bear the same proportion to the whole amount of the deficit, as his stock bears to the whole amount of the capital stock of the bank at its par value. (SWAYNE, J.) Id. 4. When a person buys national bank stock, and to avoid a stockholder's responsibility causes it to be registered in the name of another who is pecuniarily irresponsible, the buyer, so long as he remains the actual owner, is a shareholder within the meaning of this section and section 5139, U. S. Comp. Stat. 1901, p. 3461. In such case, both the actual and registered owners are liable. Davis v. Stevens, 17 Blatchf. 259, Fed. Cas. No. 3,653; Bowden v. Johnson, 107 U. S. 251, 27 L. ed. 386, 2 Sup. Ct. Rep. 246. See, also, National Bank v. Case (99 U. S. 628, 25 L. ed. 448), where it was held that if a registered owner transferred his stock in a failing corporation to an irresponsible person, for the mere purpose of escaping liability, or if the transfer was colorable only, the transaction was void as against creditors. 5. The liability assumed by virtue of this section by a purchaser of stock in a national bank is not by contract, but wholly statutory. Hence it exists as an incident of the ownership of the stock, and attaches to all who are legally capable and become owners, without reference to any supposed voluntary assumption of the liability by express or implied contract. Hence, where national bank stock is held by a feme covert, either in her own right, or subject to the common-law marital rights of the husband, she alone is liable for the consequences of such ownership, and her individual liability may be enforced without joining the husband, as would be the case in the enforcement of any common-law liability against her. Keyser v. Hitz, 2 Mackey Sup. Ct. (D. C.) 473. But to the contrary of the proposition, that the liability assumed by virtue of this section by a shareholder in a national bank is wholly statutory, see Davis v. Weed (a case decided in the United States District Court for District of Connecticut, and reported in 44 Conn. 569, Fed. Cas. No. 3,658 (pp. 500, 501), in which case it was held (SHIPMAN, J.) that the liability of such shareholder to pay the assessments which may be ordered by the Comptroller was "a voluntary agreement, evidenced by his subscription or by his becoming a stockholder." That" it is not imposed by way of forfeiture or penalty." That "it is imposed by the statute, but it 6. In Laing v. Burley (101 Ill. 591), the court speaking of this section said: "It will be noted the liability is imposed upon the 'shareholder,' and it is a matter of no consequence that such shares may not have been transferred to such shareholder on the books of the association in exact conformity with its by-laws. It is sufficient if the ownership of the shares is in fact in the person holding the certificate, to constitute him a 'shareholder' in the association, and subject him to the liabilities imposed by the Banking Law under which such association may have been organized," citing Wheelock v. Kost, 77 Ill. 396. See Richmond v. Irons 121 U. S. 27, 30 L. ed. 864, 7 Sup. Ct. Rep. 788, post. 7. The statutory liability of a shareholder in a national bank for the debts of the corporation survive as against his personal representatives. Richmond v. Irons, 121 U. S. 27, 30 L. ed. 864, 7 Sup. Ct. Rep. 788. 8. Such a shareholder continues liable until his stock has been actually transferred on the books of the company, or until the certificate is delivered with power of attorney and request made for transfer on the book. But delivering to a president of a national bank as vendee not officially will not discharge the liability of the selling shareholder under the decision in Whitney v. Butler, 118 U. S. 655, 30 L. ed. 266, 7 Sup. Ct. Rep. 61, post; Richmond v. Irons, supra. 9. Creditors of a national bank, who after the bank's suspension accept bills receivable guaranteed by the bank through its president, cannot subsequently claim as creditors against stockholders. Such stockholders are not liable for the payment of such guaranteed bills issued after suspension, and can be made liable only by express agreement. Richmond v. Irons, supra. 10. A shareholder is liable for interest on claims against national banks not exceeding the amount to which the bank is liable, nor exceeding the maximum liability fixed by statute. Richmond v. Irons, supra. 11. The expenses of a receivership occasioned by a creditor's suit are not chargeable to stockholders, but to the creditors. Richmond v. Irons, supra. 12. Where A. sold national bank stock at auction and delivered the certificate of stock, with power of attorney executed in blank, and purchaser at auction acted only as agent for the president of the bank, who was acting for a bank customer who has deposited money therein for the purchase subsequently and before the transfer of the stock on the transfer book of the bank, the bank becomes insolvent. Held that A. was not liable under § 5205, U. S. Comp. Stat. 1901, p. 3495, inasmuch as his responsibility ceased upon his delivery of the certificate of stock to the bank, as that was intended to effect a transfer. Whitney v. Butler, supra, 118 U. S. 655, 30 L. ed. 266, 7 Sup. Ct. Rep. 61. 13. Plaintiff held thirty shares of stock in a national bank with a capital of $500,000, and right to increase it to $1,000,000. The directors voted to increase the capital stock to $1,000,000, and plaintiff subscribed for thirty additional |