The procedure to incorporate is regulated by the banking act - national or state.
The steps requisite to incorporation are determined by the state or national act under which incorporation is attempted. These statutes provide the amount which is requisite to be subscribed, the amount necessary to be paid in, the number and qualifications of directors, the filing of the statement of incorporation, etc. It is impossible to go extensively in these provisions here.
Under the National Banking Act, an existing state bank may, by following the requisite procedure, become a National Bank.
Banks cannot be formed under general corporation laws.
The charter of a bank consists in the certificate filed or issued under the banking act, in which is to be read the entire statutory law.
The certificate filed or issued under the banking law and passed upon by the proper officials as in accordance with law is the bank's "charter." The entire bank Act is to be considered a part of this charter. Amendments of the charter must be made in conformity with the statutory provisions.
The By-Laws are for the purpose of internal government; are enacted by the stockholders or directors and can be changed at pleasure.
By-laws are enacted by the stockholders if no statute governs; but the Federal Banking Act puts the power to enact by-laws in the directors; as do various state laws. The comptroller requires a copy of the by-laws to be filed with him. He also requires certain provisions to be included, as for the meeting of the board of directors at least once a month.
(b) Stock and Stockholders.
The National Bank Act, and usually the state acts, require a certain capitalization as an essential element in corporate existence.
The National Bank Act provides the following in reference to requisite capitalization:
"No association shall be organized with a less capital than $100,000, except that banks with a capital of not less than $50,000 may, with the approval of the Secretary of the Treasury, be organized in any place, the population of which does not exceed 6,000 inhabitants; and except that banks with a capital stock of not less than $25,000 may, with the sanction of the Secretary of the Treasury, be organized in any place the population of which does not exceed 3,000 inhabitants. No association shall be organized in a city the population of which exceeds 50,000 persons with a capital of less than $200,000."
This stock must be one-half paid in; the remainder to be paid in installments of at least ten per cent on the whole amount of the capital at the end of each succeeding month after authorization to commence business.
State laws have like provisions.
The subscriber's obligation to the bank is to pay the amount agreed upon in the subscription contract.
Subscriptions to unissued stock of banks are enforceable as contracts. The amount of the subscription being paid, the liability has been executed, and further assessments or calls cannot be made except in case of insolvency as shown hereafter.
A National Bank has no lien on unpaid stock; unless state law forbids, a lien may be provided for; but by common law, none exists.
By the common law there is no lien on unpaid stock. Under the National Bank Act, there is no lien.152 Banks organized under state laws may provide for such a lien.
152. Bank v. Lanier, 11 Wall. (U. S.) 369.
The National Bank Act, and generally the state bank acts create a liability of stockholders for benefit of creditors, in addition to the express liability to the corporation contained in the subscription.
(1) Statutory liability.
The National Bank Act provides that shareholders shall be individually liable "equally and ratably and not for one another" for the indebtedness of the bank, to the extent of the amount of their stock, at the par value thereof, in addition to the amount invested therein. State laws have similar provisions in case of state banks. This is a peculiarity of banking laws that does not obtain in case of corporations generally. The subscriber's liability to the bank on his subscription is fulfilled when he has paid the amount of his subscription. The provision now under consideration provides a further liability for benefit of creditors. It is a liability of a statutory, not contractual nature.153
(2) Who liable.
Under the National Bank Act, the real owner is liable, and so is any one who has permitted himself to be held out as the real owner. One who appears on the books to be a stockholder will be regarded as the real owner154 in the absence of evidence to the effect that
153. Christopher v. Norvell, 201 U. S. 216. (Held, in this case that a married woman, residing in Florida under whose laws she had no contractual power, is liable upon an assessment by the comptroller upon stock inherited by her.)
154. Richmond v. Irons, 121 U. S. 27. (In this case the stockholder had sold his stock several months before failure, but the transfer was not made on the books. He was held liable.) he is not the real owner, and it would be an injustice to so hold him, he not being responsible for the condition of the books showing him to be such holder.155
A pledgee in accordance with these principles, is not liable if he does not have himself registered as the real owner, or in case he takes out new certificates, has himself described as pledgee.156
In any event, no matter what the books show, the real owner can be assessed.
(3) When liability ceases.
The liability for the benefit of creditors ceases when the stockholder makes a bona fide transfer while bank is still solvent. If the transfer is made (1) to avoid pending insolvency, (2) after insolvency, the transferror is liable. But in such a case the transferror is liable for existing debts only, not those subsequently arising.157
(4) How liability enforced.
The liability of the stockholder under the double liability provision is enforced by assessment in a proceeding to liquidate the affairs of the bank; in the case of National Banks when the receiver, at the direction of the comptroller, directs an assessment.
155. Whitney v. Butler, 118 U. S. 655. (In this case the stock and power of attorney to make the transfer had been handed to the president of the bank, but the transfer had not actually been made. The seller had no reason to suppose it had not been made and it was held it would be inequitable to hold him.)
156. National Bank v. Case, 99 U. S. 628. (Pledgee liable when appearing upon the books as the owner.)
157. McDonald v. Dewey, 202 U. S. 510.