UC-NRLF $C 3D QMS GIFT OF GENERAL LAWS OF THE State of Vermont RELATING TO BANKS PUBLISHED BY AUTHORITY. CHAPTER 26— TITLE 2 7.— Public Statutes. IN FORCE AUGUST 1, 1907. Concord, N. H. Rumfokd Printing Company. 1907 CHAPTER 26. BANK COMMISSIONER. 1906, No. 203, § i. Sec. 397. Appointment; term. A bank commissioner who 1904, No. 20, S -. i ii , > . i i i i co • , , v. s. § 291. shall not be a stockholder or officer in a savings bank, trust com- 1874,' No 2 °8T, § 4. P an . v or Jo;m ;ul ^ '" Vl ' sl ""' nl company, shall be bienially ap- ?860 No? 5$' § 18. I H ' nit( ' 11 °y tne governor, with the advice and consent of the senate and shall hold his office until his successor is so appointed and qualified, v. s. s 292. Sec. 398. State treasurer's accounts. Said commissioner G. s. 8, § 66. shall assist the auditor of accounts in his annual examination of i860. No. 53, § is. t j le department of the state treasurer and shall examine minutely the state treasurer's accounts in order to ascertain the correctness of his reports and whether the accounts are properly kept, v. s. § 293. Sec. 399. Auditor's books, etc. Said commissioner shall G. s" s. i°66 annually examine the books and papers of the auditor of ac- 1860, No. 53, § IS. eoun tS. v. s. § 294. Sec. 400. Examinations of banks. If the treasurer of a ' * °" ' 5 ' saving's , bank, savings' institution or trust company fails to report as required by law, said commissioner shall forthwith examine the affairs of such corporation and make a statement of its condition, which shall be embodied in his report. 1902, No. 72, §§ 4, Sec. 401. Loan, investment and trust companies. Said v. s. § 295. commissioner shall perform the duties imposed upon him by law 1890, No. 4. in relation to loan, investment and trust companies. v. s. § 296. Sec. 402. Report. Said commissioner shall biennially report is7s\ No" i.' § 2. 1" the general assembly the result of his examination of the de- i'si;u, n,, § 53,' 5 is. partment of the state treasurer, and of the books and papers of the auditor of accounts. He shall also report the condition of, and any violations of law by savings banks, trust companies and loan and investment companies, which shall embody the reports of such corporations made to him during the preceding two years and a statement of his action relative thereto, and any other pertinent information or suggestions. i9oo, No. n. § i. Sec. 403. Distribution of report. Said commissioner shall V S $ * > 97 ri. l'. s 211! annually cause.to be published For general distribution, not more 3878, No. 1, § 2. th.an fifteen hundred copies, of the reports made to him during the pr'efc'efftng yc.a!F,' , : : TITLE 27. BANKS. Chapter 197. — Savings banks, savings institutions and trust- companies. Chapter 198. — Trust companies may act in fiduciary capacities. Chapter 199. — Loan and investment companies. Chapter 200. — Cooperative savings and loan associations. Chapter 201. — Foreign building and loan associations. CHAPTER 197. SAVINGS BANKS, SAVINGS INSTITUTIONS AND TRUST COMPANIES. Sections 4615-4617.— Officers. Section' 461S. — Members. Sections 4619,4620. — Meetings and b y _1 3^ no m Sections 4621-4625.— Trustees. Ow.)«/4 Sections 4626-4628. — Treasurer's bond. Section 4629. — Security from officers. 892 MEMBERS. [Title 21 Sections 4630, 4631— Reports to bank commissioner. Sections 4632-4642.— Deposits. Sections 4643-4646.— List of depositors. Section 4647.— Examination of deposit books. Sections 4648-4661.— Investments and loans. Sections 4662-4668.— Dividends and surplus. Sections 4669-4672.— Reducing deposits in an insolvent insti- tution. Sections 4673, 4674. — Inspection. Sections 4675-4679. — Closing up affairs for breach of law. Sections 46S0, 4681.— Safe deposit boxes. Sections 4682-4686.— Miscellaneous. 1906, No. 1ST. 1000, No. 52, V. S. § 40G6. 1884, No. 41. R. L. § 3558. 1878, No. 1. § 1872, No. 22. G. S. 86, § 37. 1857, No. 42, 74 Vt. 246. § I. § 1. § 1. § 1. V. S. S 4067. 1884, No. 41, Hi. 1882, No. 73. R. L. § 3559. 1878, No. 1, § V. S. S 4i ills. 1884, No. 4U. V. S. § 4069. 1884, No 41, § 3. It. 1,. 8 3560. 1S7S. No. I, S 8. Officers. Sec. 4615. Number; disqualifications. The officers of a saving's bank or savings institution shall be a president, one or more vice-presidents, a board of trustees of not less than seven nor more than eleven, a treasurer who shall also be clerk,- and such other officers as are necessary for the management of its affairs. The president, vice-president and trustees shall be elected from the members of the corporation; and no person shall hold office in two such corporations at the same time; and no president, vice-president, treasurer or assistant treasurer of such corporation shall, at the same time, hold office as president, vice-president, cashier or assistant cashier in a national bank of discount, or a trust company within this state; nor shall a major- ity of the trustees of any such corporation be directors in the same national bank or trust company. Sec. 4616. Election; appointment. The officers of a sav- "'ings bank, savings institution or trust company shall be sworn before entering upon the duties of their respective offices, and shall hold office until their successors are elected and qualified, and, except the treasurer, assistant treasurer .and clerks, shall be chosen at the annual meetings of such corporation, holden pursu- ant to the by-laws. The treasurer, assistant treasurer and clerks shall be appointed by the trustees and shall hold office during their pleasure. The trustees may fill vacancies until the nexl nual meeting; and if a person elected or appointed to an offie< does not qualify within twenty days thereafter, his office shall be vacant. Sec. 4617. Record certified by president, etc. "When the treasurer of a savings bank, savings institution or trust company holds the office of secretary or clerk, the records of such corpora- tion shall be countersigned and attested by the president, or a director or trustee appointed for that purpose. Members. Ski. 4618. Election; withdrawal. A savin or sa^ ings institution may. at a legal meeting, eleel >>.\ ballol any citi zen of this state to be a member thereof; but the numbei m bers of such corporation shall not exceed fifty. A person may, at an annual meeting, withdraw from membership by filing a Chap. 197.] TRUSTEES. 893 written notice of his intention so to do, with the treasurer, three months at least before such meeting. No person shall continue to be a member after removing from the state. Meetings and By-Laws. Sec. 4619. Meetings. Such savings bank or savings insti- v. s. s 4070. tution may, at any time, hold special corporators' meetings by r. i,; 1*3561' * 4 ' order of the board of trustees; and the treasurer shall notify 1S7S ' No - *• $ '■ special meetings upon the written request of ten members of the corporation. Six days' notice of meetings shall be given by publication in a newspaper of the county where the corporation is located or by written or printed notice mailed to each member of such corporation. Sec. 4620. By-laws. Savings banks and savings institu-v. s. § 4071. tions may adopt by-laws for their government, not inconsistent r. l' g 3562' § 5 ' with law. 1878 > No - *• 4 Trustees. Sec. 4621. General duties; committees. The trustees shall v. s. § 4072. have the general management of the affairs of the corporation ; r S8 l| g^oex § G ' but they may act through committees of investment, examination 1S7S ' *"■ 1 - § °- and audit, subject to their general supervision and control. Sec. 4622. Meetings ; quorum. A regular meeting of the v. s. § 4117:: board of trustees of a savings bank or savings institution shall }i. s t. suir.r.V * be held at least once in three months to receive the report of its 1S7S - No - *■ * ■' treasurer and for the transaction of other business. A majority of the trustees shall constitute a quorum, but a less number may adjourn from time to time, or until the next regular meeting. Sec. 4623. Treasurer's statement; report of auditors. Atv S. s 4074. least once a month, and at each regular meeting, the treasurer k. l! s°3564] s shall prepare a statement showing the condition of the corpora- tion, in the form of a trial balance, which shall be recorded in a book kept for that purpose, and shall, at all times, be open to the inspection of the trustees and the bank commissioner. A record shall be made at each meeting of the transactions of the board and the names of the trustees present. The trustees shall cause a thorough examination and report in detail of the assets and liabilities of such corporation to be made to them, at least once in six months, by a committee or board of auditors of not less than three of their number, and the same shall be recorded in the book containing the record of such trial balances. Sec. 4624. Compensation of officers. The trustees shall v. s. § 4075. fix the compensation of other officers of the corporation, and shall J 88 /,! f 3565! 5 receive such compensation for their services as is fixed by the 1S78, No - *• § 9 - corporation at a legal meeting. Sec. 4625. Officers not to borrow or use funds of bank. v. s. 8 4076. A trustee or officer of a savings bank or savings institution shall r. l! i 3566'. not, directly or indirectly, either for himself or as the partner 1878, Xo ' *' § 9 ' of others, borrow or use its funds or deposits, or sign any note, as surety, upon which any of such deposits are loaned. 894 REPORTS TO BANK COMMISSIONER. [Title 27. Treasurer's Bond. lssl; No 40 !!,' § n Sec - 4626 - Requirements. The treasurer of a savings 1878' L^ 5 i 7 '§ 10 bank ' savings institution or trust company, before entering upon g. s.' s<£'§ bo.^ ' the duties of his office, shall execute to such corporation a bond with sufficient sureties to be approved in writing upon such bond, by a majority of the trustees or directors, conditioned for the faithful discharge of his duties. Such bond shall not be less than ten thousand dollars; and, when the deposits of such cor- poration, including its capital, if any, exceed the sum of one hundred thousand dollars, the penal sum of such bond shall be increased two thousand dollars for each additional sum of one hundred thousand dollars, or fractional part thereof, but shall not exceed one hundred thousand dollars, lssf; No 40 li,' § 12. Sec> 4627 - Bank commissioner to keep. The bond of a fsso x,; ;r 'i''i 5 3 treasum ' of a savings bank, savings institution or trust company shall, within twenty days after his election or appointment, be deposited with the bank commissioner. y. s. S 4079. Sec. 4628. Bank commissioner to examine; new bonds. ISM. No. -41, S 10. rm ii • i ii n r._l. s 3569 J- he bank commissioner shall annually examine the bonds of the ' 1 - * 10 - treasurers of the several savings banks, savings institutions and trust companies, and shall inquire into and certify to the suffi- ciency thereof, and, when he deems a bond insufficient, shall order a new bond to be filed within a reasonable time limited by him ; and, if a new bond is not furnished to his satisfaction within such time, the office shall be vacant, and a new treasurer shall be appointed. Security from Officers. mt no 4 °« s n Sec. 4629. Trustees may demand. The trustees of such R. l! § 357o'. " ^ ' corporation may require from any other officer, clerk or agent thereof, such security for the faithful performance of his duties as they deem necessary. Reports to Bank Commissioner. ioaS' v°- SS 1 I lb Sec - 46 30. Treasurer's report. The treasurer of every i;to_, r\o. jo, § f2. ■,-.... v v. s. §4081. _ savings bank, savings institution and trust company shall annu- k. l! s 3571. " ally, on or before the tenth day of July, make a report to the a 87 !.' 86° V'l's l bank commissioner, showing accurately the condition thereof as is3i, No. so. |i. it was a t the close of business on the thirtieth day of June pre- ceding; and such report shall embrace the following particulars: name of corporation; place where located; amount of deposits; amount of individual deposits in excess of two thousand dollars ; total number of depositors; number of depositors resident in this state and the total amount of their deposits ; number of depositors not resident in this state and the total amount of their deposits; amount of capital, if any; amount of each item of other liability ; public funds, including United States, state, county, town and other municipal bonds, stating each particular kind, the par value, estimated market value and amount invested in each ; bank stock, stating name and location of bank, number of shares, par value, estimated market value and amount invested in each; loans on Chap. 197.] DEPOSITS. 895 bank stock, slating amount on each; railroad bonds, stating name of railroad, par value, estimated market value and amount in- vested in each; loans on railroad bonds, stating amount on each; other stocks, stating the amount of each; estimated value of real estate and amount invested therein; loans on mortgages of real estate, stating amount in this state and amount elsewhere; loans to cities, towns, villages or school districts; loans on personal security; loans on collateral security other than those above men- tioned, describing such securities and the amount loaned on them severally; cash on deposit in banks or trust companies, with the name thereof and the amount deposited in each; cash on hand; the rate and amount of each semi-annual or extra dividend for 1he past year; the amount of the treasurer's bond; the amount of taxes paid during the past year to the United States and to this state; the salary of the treasurer; and other expenses for the past year; all of which shall be certified and sworn to by the treasurer. Sec. 4631. Same; penalty for not making; examination, v. s. § 4082. If the treasurer of a savings bank, savings institution or trust r 88 l: j" 3572! § 1G ' company fails to report to said commissioner as heretofore pro- q 87 |; |e° - ^J :: vided, he shall forfeit for each offense the sum of one thousand 1 ^ 31 . x °- 5 'J. § 2. dollars, to be recovered in an action on the ease in the name of the state founded on this statute; and said commissioner shall annually, on or before the twenty-fifth day of July, upon the neg- lect of said treasurer, examine the affairs of such corporation and make a statement of the condition thereof in respect to the par- ticulars specified in the preceding section, to be embodied in his reports. Deposits. Sec. 4632. Limit ; interest. A savings bank or savings in- v. s. § 4083. stitution may receive on deposit, for the use and benefit of depos- j^t. fV-k § 17 ' itors. sums of money offered for that purpose, but shall not ffivt^zie' § "' receive from the same depositor, directly or indirectly, over two thousand dollars; and no interest or dividend shall be paid to any one depositor for an amount of deposit over such sum, except for deposits by widows, orphans, administrators, executors, guardians, charitable or religious institutions, and as trust funds by order of court. The trustees may refuse a deposit in their discretion, and may also, at any time, return all or part of a deposit. Sec. 4633. Regulations as to withdrawal. The sum so de- v. s. § 4084. posited, with the dividends or interest credited thereto, may be r 88 , 4 ,; j ^'. § 18 ' withdrawn by such depositors or their legal representatives, ^ TS .- t ^g 1 - § "• under such regulations as to time, manner and previous notice as the board of trustees prescribes ; and such regulations shall be posted conspicuously in the room where the business of such cor- poration is transacted and be printed in the passbooks or other evidences of deposit furnished by the corporation, and shall be evidence between the corporation and the depositors holding the same of the terms upon which the deposits therein acknowledged are made. 896 DEPOSITS. [Title 27. 1904, No. 100, 1904, No. 100, § 1004, No. 100, § 1898, No. 53, V. S. § 4085. 1894, No. 02. V. S. § 40SG. 3 884, No. 41, § 19. R. L. § 3575. 1878, No. 1, S 12. V. S. $ 4087. 1884, No. 41. 5 20. R. I.. § 3576. G. S. 86, § 38. 1858, No. 26, § 1. Sec. 4634. Loss of deposit book. When the deposit book of a depositor in a savings banks, savings institution or trust company, is lost or destroyed and the depositor desires to obtain a new book, he shall, if the bank so requires, advertise the loss or destruction, giving the date and number of the book, in two news- papers, one published in the vicinity of the residence of the de- positor and the other in the vicinity of the place of business of the savings bank, savings institution or trust company, at least three weeks successively ; and a notice of the loss, with a descrip- tion of the book, shall be posted in the office of the savings bank, savings institution or trust company for the same length of time. Sec. 4635. Same; new book. If no other person makes claim to the book or to the deposit within three months after such publication and notice, the savings bank, savings institution or trust company shall issue to the depositor a new book, which shall contain a complete statement of the depositor's account, and shall state that it is issued in lieu of the one lost or destroyed ; and the savings bank, savings institution or trust company shall not be liable thereafter on account of the original book. Sec. 4636. Proceedings in chancery when book is lost or bank refuses to issue new book. If a person claims such book, deposit or any interest therein by virtue of such original book before a new one is issued, or if the savings bank, savings insti- tution or trust company refuses to issue a new book, a person in- terested may petition the court of chancery for relief; and such court may, upon notice and hearing, in a summary manner, make such order in the premises as the case requires. Sec. 4637. May be paid to foreign administrator. "When a deposit is made in a savings bank, savings institution or trust company by a person residing in another state or country, the deposit, or any part thereof, with the dividends or interest thereon, may be paid to the administrator or executor appointed in the state or country where the depositor resided at the time of death, provided no administrator or executor has been ap- pointed in this state at the time of such payment. Sec. 4638. Trust deposits; payment if trustee dies. When a deposit is made in a savings bank, savings institution or trust company by a person in trust for another, the name and residence of the person for whom the deposit is made shall be disclosed, and the deposit shall be credited to the depositor as trustee for such person ; and when no other notice of the existence and terms of a legal trust is given in writing to the corporation, at the death of the trustee, the deposit, or any part thereof, with the dividends or interest thereon, may be paid to the person for whom the de- posit was made. Sec. 4639. Payment to minors. The trustees of a savings bank, savings institution or trust company may, in their dis- cretion, pay to a minor such sum as is deposited to the credit of such person, and is due, as if such minor were of age; and the check and receipt or acquittance of such minor shall be a full discharge for the amount for which it is given. Chap. 197.] LIST OF DEPOSITORS. 897 Sec 4640. Minor's deposits exempt from trustee process, v. s. § 4088. . • ,-, .- j. i li i 1884, No. 41, § 21. No savings bank, savings institution or trust company snail be r. l. §3577. chargeable as trustee on account of funds deposited to the credit fg 3 |; ff^ s 2 f, 9 '| 2. of a minor, provided such funds are earned by or belong to such minor. Sec. 4641. Provisions when title to deposit is litigated.]: tooe, §4543. Io actions a^amst a savings bank, savings institution or trust ism, xo. 41, s -2-2. company by a husband to recover for moneys deposited by his i'ki4'. No. l, § 13. wife in her name or as her money, the wife may be a witness as 68 N ' 494 - if she were an unmarried woman. And in actions against such corporation to recover for moneys on deposit, if there is a person, whether married or not, claiming the same fund, who is not a party to the action, the court, on the petition of such corporation and on such notice as it considers proper to the plaintiff and such claimant, may order the proceedings to be amended by making such claimant a party defendant; and the court shall thereupon hear and determine the rights and interests of the parties to such action in and to such fund. Sec. 4642. Same; deposit may be paid into court; costs, v. S. § 4000. The deposits which are the subject of such action may remain r. l! s 3578'. with such corporation, upon the same interest as other deposits of like amount, until final judgment therein; and the same shall be paid by such corporation in accordance with the order of the court ; or the deposits may be paid into court to await the final determination of the action ; and, when so paid into court, the corporation shall no longer be a party to such action, and its liability for such deposits shall cease. The costs in such action shall be in the discretion of the court, and may be charged upon the fund affected thereby. List of Depositors. Sec. 4643. Depositors not changing deposits for ten v. s. § 4091 years; publication. The treasurer of each savings bank, sav- 1892J No. 70, § 1. ings institution and trust company shall, on or before the fif- teenth day of February, nineteen hundred and twelve, and every sixth year thereafter, return to the bank commissioner, under oath, a list of depositors who have not made a deposit therein or withdrawn any part of their deposits or of the interest thereon, for a period of ten years next preceding; and the treas- urer of such an institution shall further give notice by publishing a list of such depositors in one or more newspapers published in or near the town where such institution is located, three weeks successively. Sec. 4644. Same; exception. The preceding section shall v s. § 4092. not apply to deposits which, with the accumulation, shall be less lh than twenty-five dollars, or to a deposit made by or in the name of any person known by the officers of the bank to be living. Sec. 4645. Report by bank commissioner. The bank com- v. s. 5 1003 tnissioner shall incorporate such list in his next biennial report. I892, '"' * Sec. 4646. Neglect of treasurer; penalty. If said treasurer v. s. 5 1094 neglects to comply with a provision of the third preceding section. 1892, N,> " '"' * 4 ' 898 INVESTMENTS AND LOANS. [Title ±1 he shall be fined not more than one hundred dollars nor less than twenty dollars, one-half to go to the complainant and one-half to the state. Examination of Deposit Books. v. s. g 4U0.-, Sec. 4647. Every fifth year. In the year nineteen hundred 1892| No. 7i. and eight, and every fifth year thereafter, at such time in the year as the bank commissioner shall designate, the trustees of savings banks, savings institutions and trust companies shall call in the deposit books for examination and verification, and cause the same to be examined and verified by some person, other than the treasurer or his clerks, employed for that purpose and approved by said commissioner. Investments and Loans. 1904, No. 98, i l. Sec. 4648. Mortgages ; limited. No investment of deposits 188V, No. is.' and surplus by savings banks, savings institutions and trust com- r 88 l! §§°3579 S ::5sb. P ames shall be made upon mortgages of real estate, except upon 1878, No. i, § n. fj rs t mortgages of unencumbered real estate ; and the amount of such investments shall not exceed three-fifths of the cash value of the property mortgaged. Not less than one-sixth of the amount of such mortgages shall be upon real estate in this state, and not more than eighty per cent of the amount of the assets shall be invested in mortgages of real estate; provided that not exceeding sixty per cent of the amount of such assets may be invested in mortgages of real estate outside of this state. If the investment is on mortgages of unimproved or unproductive real estate, the amount of such investment shall not be more than forty per cent of the value thereof ; and no mortgage investment shall be made by such corporation except upon the written ap- proval of at least three trustees of their board of investment. 1896, No. so, § i. Sec. 4649. Capital. The capital of trust companies and of savings bank and trust companies shall be subject to the same laws of investment as are applicable to their surplus and deposits, v. s. § 4097. Sec. 4650. Insurance on buildings. When buildings are it 88 r 4 ! § 358i'. § 2i ' included in the valuation of real estate upon which an invest- 1878, No. l. § 14. m ent i s made, they shall be insured by the mortgagor in such company as the trustees or board of investment direct, and the policies of insurance shall be duly assigned, or the loss made payable to such savings bank, savings institution or trust com- pany; and such savings bank, savings institution or trust com- pany may renew such policy of insurance in the same or in an- other company, as said trustees or board of investment elect, from year to year, or for a longer or shorter period, if the mortgagor neglects so to do; and, when necessary, the treasurer may sign premium notes, and may charge the amount paid for such insurance to the mortgagor. v. s. § 4098. Sec. 4651. Same; renewal charges paid by mortgagor; 1884, No.^1, § -4. jj en ^ ,pj ie necessar y charges and expenses of such renewal shall 1878, No. l, § 14. ] )e p a i(j hy suc ]i mortgagor to such savings bank, savings insti- tution or trust company, and shall be a lien upon the property so mortgaged, recoverable with interest semi-annually from the Chap. 197.] INVESTMENTS AND LOANS. 899 time of payment, as part of the moneys secured by such mort- gage. Sec. 4652. Personal security; limitation. No loans or in- 1906, x . 128, § l. vestments on personal security shall be made except upon at iss'i, No. a', § 25. least two approved names, not less than two of whom reside in \% 7 l $] n . 1, § 14. this state or within fifty miles of the institution making such 7S vt 1G9 - investment, or upon notes or accepted drafts given by individ- uals, firms or corporations residing without the state for goods manufactured within the state and payable to individuals, firms or corporations located within the state ; and such personal loans or investments shall not be for a longer time than one year ; and not more than one-third of the assets of the savings bank, sav- ings institution or trust company shall be invested in personal securities. Sec. 4653. Lot and building for business of corporation, v s. g 1 Five per cent of the deposits of a savings bank, savings insti- isst! No! «.,' | 26. tution or trust company may be invested in the purchase of a f 87 g - no^ 5 i, 3 's 14. suitable building for the convenient transaction of its business, or a site therefor and the erection or repairs of a building thereon, from portions of which, not required for its use, a revenue may be derived. Sec. 4654. Surplus and deposits of savings institutions, v. s. 5 4101. With the foregoing exceptions, the moneys deposited in 1 ss.il No! 12! savings banks, savings institutions and trust companies. ]. 8S l; |§°3584,'3585, and the income therefrom, shall be invested only as fol- 18 |S 8 No 35 i2i si lows: in the public funds of the United States, or public isso! No! 122! §§ i, funds for the payment of principal and interest of which theisms, No. 1, § 14. faith of the United States is pledged; in the bonds or notes of the counties, towns, cities, villages and school districts of the New England states, New York, Pennsylvania, Ohio, Michigan, Indiana, Illinois and Iowa; in the stock of any national bank in the New England states, New York and the cities of Detroit, Chicago, St. Paul and Minneapolis ; in the stock of any banking association or trust company incorporated under the authority of and located in this state; in the municipal bonds, not issued in aid of railroads, of counties, towns and cities of five thousand or more inhabitants in the states of New Jersey, Wisconsin, Minnesota and Missouri, and in counties, towns and cities of ten thousand or more inhabitants in the states of Kansas, Nebraska, North Dakota, South Dakota, Oregon and Washington, but no investment shall be made in any of the counties, towns or cities in the states above named, except in cities of fifty thousand or more inhabitants, where the municipal indebtedness of such county, town or city exceeds five per cent of its assessed valua- tion, and when not issued in aid of railroads ; in the school bonds and independent school district bonds of New Jersey, Wiscon- sin, Minnesota and Missouri; and in the school bonds and inde- pendent school district bonds of school districts of two thousand or more inhabitants in the states of Kansas, Nebraska, North Dakota, South Dakota, Oregon and Washington, where the amount of such bonds issued does not exceed five per cent of the assessed valuation of the respective towns, cities and school dis- 900 INVESTMENTS AND LOANS. [Title -27. tricts; in the public funds of any of the states named in this section ; in notes with a pledge of any of the aforesaid securities, including deposit books or deposit receipts, issued by a savings bank, savings institution or trust company, or banking asso- ciation located in this state, as collateral, such notes not to exceed the par or market value of such security; but no savings bank, savings institution or trust company shall hold, by way of invest- ment or as security for loans, more than ten per cent of the capi- tal stock of any one bank, nor invest more than ten per cent of its deposits, nor more than thirty-five thousand dollars in the capital stock of any one bank; and no such investments shall be made in the capital stock of any such banks owned or loaned upon, to exceed in the aggregate one-fourth of the deposits of any savings bank, savings institution or trust company. 11 xo. 53, § i. Sec. 4655. Limit of loans on personal security. No sav- 1SS4! KcJtt,' § 28. m gs bank, savings institution or trust company shall loan to any one person, firm or corporation, or the individual members thereof, more than five per cent of its deposits, nor more than thirty thousand dollars; nor shall such loans on personal se- curity exceed ten thousand dollars, until its deposits amount to one million dollars, after which the sums so loaned may lie in- creased one per cent of the deposits in excess of the one million dollars; but this section shall not apply to United States bonds or municipal bonds, or notes with such bonds as collateral. 1904, No. 99, 8 i. Sec. 4656. Loans to officers, directors or employes; con- 1884; xo 41 4i.' § -:>. ditions. No loan shall be made to an officer, director or em- ploye of any trust company, without the written consent of a majority of the directors; and such loan shall not, at any one time, directly or indirectly, exceed five per cent of the capital stock actually paid in, but the discount of bona fide bills of ex- change drawn against existing values, and the discount of com- mercial or business paper actually owned by such director, officer or employe negotiating the same to an amount not exceeding ten thousand dollars, or a loan upon the pledge of any of the securi- ties named in sections four thousand six hundred and forty- eight and four thousand six hundred and fifty-four, and subject to the restrictions thereof, to an amount not exceeding the same sum, shall not be prohibited by this section. No loan shall be made by such corporation upon its own stock as col- lateral, v. s. 5 4104. Sec. 4657. Stockholders' liability. The stockholders of a j : ss , 4 ; j ,0 3 6 oa'. § ""' trust company shall be held individually responsible, equally and ratably, and not one for another, for all contracts, debts and en- gagements of such trust company, to the extent of the amount of their capital stock therein at the par value thereof, in addi- tion to the amount invested in such stock, v. s s U05. Sec. 4658. Officer not to receive fee from borrower. No 1884. No. 41, § 31. jg cerj trustee, director or employe of a savings bank, savings institution or trust company shall receive any fee, present, benefit or commission, dii fly or indirectly, from a borrower or applicant for a loan, or from any one negotiating securities at the institution or company of which he is an officer, trustee, di- R. L. S 33UC. 1S78, No. 1, § 57 Vt. 33L\ Chap. 197.] DIVIDENDS AND SURPLUS. 901 rector or employe; nor shall he receive any fee, present, benefit or commission, directly or indirectly, for a loan made or securi- ties bought or sold by such institution or company, except the benefit or profit he may derive in common with other depositors or stockholders, and the compensation allowed by such institu- tion or company, for services and expenses. Sec. 4659. "Trust company" defined; deposits on call, woo, No. ^54, s l. The words "trust company," as used in this chapter, shall beisssl No. ll ^ ^ construed to include savings bank and trust companies. A sav- ]; s Y. s°3588. ings bank, savings institution or trust company may deposit on ^| 7 |' t N ^ e J- * 14 call in banks, banking associations or trust companies in this state or in the cities of New York, Boston, Chicago, Albany, Philadelphia, or Concord, New Hampshire, or in any other legal. designated depository under the laws of the United States, or in national banks in the cities of St. Paul, Minneapolis and Kan- sas City, with or without interest, as may be agreed upon, sums not exceeding in the aggregate twenty per cent of the assets of such savings bank, savings institution or trust company. Sec. 4660. Real estate, acquiring and disposing of. A 1900, No. 55, § l. savings bank, savings institution or trust company may hold isnX No._4i,' . 33. real estate acquired by the foreclosure of a mortgage thereon, 5' s7 s. no.°i, § is. owned by or pledged to such corporation, or by purchase at sales made under the provisions of such mortgage, or upon judgments for debts due, or in settlements effected to secure such debts; and such real estate shall be sold by such corporation as soon as a reasonable price can be obtained therefor and within five years after the same is vested in such corporation, except when a majority of the trustees or directors of such corporation shall make application in writing to the hank commissioner, stating that, in their opinion, the interests of such corporation require that such real estate be held for a longer period than five years ; in which event, said commissioner may extend the time of hold- ing such real estate not to exceed three years; and said commis- sioner may, at any time, by a written order, directed and deliv- ered to the treasurer of such corporation at least ninety days prior to the time limited, order the sale of any such real estate as he may designate. Sec. 4661. Rate of interest on loans. Savings banks, sav- v. s. § 4ios , . . l i i ii i 1S84, No. 41, § 34. nigs institutions or trust companies incorporated under the Uwsr, L ; § •;.-,•„, of this state may demand and receive interest on their loans at Jg 5 |; N0..V7?' the rate of six per cent per annum, payable semi-annually. Dividends and Surplus. Sec. 4662. Surplus fund. A savings bank or savings insti-v. s. 8 4ioo. tution shall, at the time of making each semi-annual dividend, E . L ; 13591. ' reserve from the net profits accumulated during the six months ls,s - N then next preceding, not less than one-eighth nor more than one- fourth of one per cent of the amount of deposits as a surplus fund, until such fund amounts to five per cent of the amount of deposits and other liabilities, except surplus ; and such fund 1900, No. 56, 8 1. 1896, No. 81, § l. V. S. S 4110. l.sss, No. 13, § 1. ISM. No. 41, 8 ;;.-. R. L. § 3391. 902 DIVIDENDS AND SURPLUS. [Title 27. shall be thereafter maintained and held to meet losses in its business from depreciation of its securities or otherwise. Sec. 4663. Rate of interest and dividends. The trustees of a savings bank or savings institution shall regulate the rate of interest or dividends, not to exceed one and three-fourths per cent semi-annually upon the deposits therewith, in such manner that depositors shall receive, as nearly as may be, the profits of such corporation, after deducting necessary expenses, and re- serving such amounts as the trustees deem expedient as a surplus fund for the security of depositors, which, to the amount of ten per cent of its deposits, the trustees of such corporation may gradually accumulate and hold to meet any contingency or loss in its business from the depreciation of its securities or other- wise; but the trustees may classify the depositors according to the character, amount and duration of their dealings with the corporation, and regulate the interest or dividends allowed, so that each depositor shall receive the same ratable proportion of interest or dividends as others of his class. v. s. § 4iii. Sec. 4664. Interest on deposits. The trustees shall not R 88 i 4 ! 1*3591. S 3 ' declare or allow interest or dividends on a deposit for a longer period than the same has been deposited, except that deposits made not later than the tenth day of the month commencing a semi-annual interest period, or than the fifth day of other months, may, in the discretion of the trustees, have interest or dividends declared upon them from the first day of the month when so deposited, v. s. § 4112. Sec. 4665. Semi-annual dividends. After the accumula- r 8S l! §"3391'. S 3 °" tion of a surplus fund of ten per cent of their deposits, which, or the accumulation towards which, before it amounts to such ten per cent, shall not be reduced by dividends or interest paid or credited, but shall be thereafter maintained and held to meet losses in its business from any cause, the trustees may declare and pay such semi-annual dividends or interest as, in their judg- ment, the earnings and resources of the corporation, above such surplus fund, warrant, v. s. § 4113. Sec. 4666. No dividends unless earned. No dividends or r 88 i 4 '. § °359i. S 33- interest shall be declared, credited or paid until the trustees cause an examination to be made, and find that the amount thereof has been actually earned and stands to the credit of the corporation, nor except by the authority of a vote of the board <>f trustees entered upon their records, with the yeas and nays upon such vote. Semi-annual dividends shall be declared as of the first of January and the first of July, v. s. s 41U. Sec. 4667. Division of net profits. Savings banks and sav- 1892. Nn 6$; 5 1. ing' s institutions shall triennially, if the net profits above the 1888. No. 13, § ten p er cen t surplus, consisting of the reserve fund and other accumulations, amount to one per cent of the deposits which have remained in such savings banks and savings institutions for one year then next preceding, divide the same among the deposi- tors whose deposits have remained therein for one year at least then next preceding, in proportion to the amount of dividends Chap. 197.] INSPECTION. 903 which have been declared on their deposits during the three years next preceding. Sec. 4668. Determination of surplus. In determining the vs. § 4115. . . . . 1SS4, NO. 41, § •■».. per cent of surplus held by a savings hank or savings institution, k.l. §3592. its interest or dividend paying stocks and bonds shall not be esti- 1 mated above their market value, its notes and mortgages shall be estimated at their face and accrued interest, and its real estate at not above cost. The bank commissioner shall have power to revise the valuation of such investments, and may change the same from time to time. Reducing Deposits in an Insolvent Institution. Sec. 4669. Chancellor may order examination. When a v. s. § 4110. ( savings bank or savings institution is insolvent by reason of loss r. i,'. § 3598. ' or depreciation in the value of its assets, without fault of the trustees, a chancellor shall, on petition in writing of a majority of the trustees and the bank commissioner, setting forth such facts, appoint a time for the examination of the affairs of such corporation and cause notice thereof to be given to parties in- terested, in such manner as he prescribes. Sec. 4670. Division of losses among depositors. If, upon v^s. S^ 41 *?- g? such examination as he makes or causes to be made of its assets r. l! § 359s'. ' and liabilities, and from other evidence, he is satisfied of the facts set forth in such petition, and that the corporation has not exceeded its powers nor failed to comply with the rules, restric- tions and conditions provided by law, he may, if he deems it for the interest of the depositors and the public, reduce the deposit account of each depositor, so as to divide such loss proportion- ately among the depositors, thereby rendering the corporation solvent, so that its further proceedings will not be hazardous to the public, or those having or placing funds in its custody. Sec. 4671. Dividend to depositors. In such case, a de- v. s. s 4118. .'„.,» , , .1 1SS4, No. 41, § ::7. positor shall not draw from such corporation a larger sum than r. l. § 359s. the amount thus fixed by the chancellor, but the treasurer shall keep an account of sums received for such assets of the corpora- tion as were held by it at the time of filing such petition; and if a larger sum is realized than the value estimated by the chan- cellor, as aforesaid, he shall, at such time as the chancellor pre- scribes, render an account thereof, and thereupon the chancellor, after due notice to parties interested, shall declare a dividend of such excess among the depositors at the time of filing the petition. Sec. 4672. Deposits not to be paid or received pending v. s. § 4119. -xt j -i. 1 11 1 -l -li l ss -t- No- 41, s ;:t. petition; injunction. Ao deposit shall be paid or received by r. l. § 3598. such corporation after the filing of the petition, until the decree of the chancellor reducing the deposits as provided in the second preceding section. If the petition is denied, the bank commis- sioner shall apply for an injunction against such corporation and proceed to wind up its affairs. Inspection. Sec. 4673. Bank commissioner to inspect annually. The v. s. § 4120. , , • , ,, „ .., . • .• • -4.1884, No. 41, § 38. bank commissioner shall annually, without previous notice, visit r. l. § 3599. 904 CLOSING UP AFFAIRS. [Title -27. 1S74, No. ST. ss i, and inspect the condition and affairs of every savings bank. G. S. 86, ss 30, ::.".. savings institution and trust company, and ofteuer if he believes 1851, No. 59, Si* o, j-jjg j n t eres t; anc { safety of the depositors and creditors require. He may examine, upon oath, the officers, agents and servants of such savings bank, savings institution or trust company, or any other person, in relation to the affairs and condition of such institution, and may administer oaths for that purpose. v. s. s n.i Sec. 4674. Same; when treasurer or cashier is officer in i: S 7.'. f* 359& * national bank. When the treasurer or cashier of a trust com- 1874, No. 87, §§ l, p anv j s an officer of a national bank or banking association, or Pi.?- s *}' s i| 0, .f 5 -, the business of a savings bank, savings institution or trust cora- 1851, No. .•'.'. S3 3, ° ...... . 7. pany is carried on in the same office or building with a national banking association, said commissioner shall, at least once in each year, visit and inspect the condition of such savings bank, sav- ings institution or trust company, at the same time that the United States bank examiner visits and examines such national banking association. Closing up Affairs for Breach of Law. v. s. 5 4122 Sec. 4675. Provisions applicable to savings banks and r 88 l. §"3600. S 39 ' institutions. The provisions of law regulating the proceedings against insolvent banking associations shall apply, so far as ap- plicable, to savings banks and savings institutions, except that the assets of savings banks and savings institutions, after the costs of the proceedings are paid, shall be distributed equally among all the creditors, v. s. 5 4123. Sec. 4676. Provisions applicable to trust companies. The it 8 i,'. i°seoi. ' provisions of law applicable to insolvent banking associations 71 vt - 34G - shall regulate proceedings against insolvent trust companies, and the final distribution of their assets. v. s. § 4124. Sec. 4677. Report of receiver to bank commissioner. The 1884, No. 41, § 41. • e 1 , • , , . ... r. l! § 8602. receiver or an insolvent savings bank, savings institution or trust ?) 88 s.' 8fi°' §'':! 1 company shall annually, on or before the tenth day of July, and 1859, No. 29, a £ Sllen other time as may be required by the bank commissioner, so long as the receivership is continued, make and transmit to said commissioner a full statement of the affairs of such insol- vent institution showing the nature and amount of the assets and liabilities, also a true account of the expenses incurred and not previously reported, giving the items thereof; and such re- port shall be printed with and as a part of the annual report of said commissioner. v. s. s 4UT, Sec. 4678. Duties of commissioner in case of bank's mis- conduct. Whenever it appears to said commissioner from an examination made by him or from any report made to him, that a savings bank, savings institution or trust company has com- mitted a violation of its charter or of law, or is conducting its business and affairs in an unsafe or unauthorized manner, or has failed to comply with all the rules, restrictions and condi- tions provided by law, he shall, by a written order delivered to the treasurer of such .corporation, direct such corporation to dis- Chap. 197.] SAFE DEPOSIT BOXES. 905 continue such illegal, unsafe or unauthorized practices, and to proceed in strict conformity with the requirements of law. Sec. 4679. Proceedings if corporation neglects to com- v. g S. ^4126. § ^ ply with order of commissioner. If such corporation refuses or neglects to comply with such order, or if it appears to said com- missioner that it is unsafe or inexpedient for such corporation to continue to transact business, he shall proceed against it as pro- vided in case of insolvent savings banks and trust companies. The court of chancery before which such proceedings are insti- tuted, before the appointment of a receiver, shall have power to allow such corporation to continue to transact business in con- formity with the requirements of law, subject to such orders, conditions or restrictions as the evidence in the case, and the sit- uation of the parties and the interests involved shall require Safe Deposit Boxes. Sec. 4680. Notice upon failure to pay rent. If the amount ioog, No. 129, § 1. due for the use of any safe or box in the vaults of a safe deposit company, bank or banking institution is not paid for three years, such company, bank or institution may, at the expiration thereof, cause to lie sent to the person in whose name such safe or box stands on its books, a notice in writing in a securely closed post- paid registered letter, directed to such person at his post-office address as recorded upon the books of such company or corpora- tion, and at his last known address, notifying such person that if the amount then due for the use of such safe or box is not paid within sixty days from the date of such notice, the safe deposit company, bank or banking institution will then cause such safe or box to be opened in the presence of its president, or cashier, or secretary, or treasurer, and of a notary public not an officer or in the employ of the safe deposit company, bank or banking institution, and the contents thereof, if any, will be sealed up by said notary in a package, upon which said notary will distinctly mark the uame and address of the person in whose name such safe or box stands upon the books of such company, bank or in- stitution, and the estimated value thereof; and the package so sealed and addressed, when marked for identification by said notary, will be placed by said notary in one of the general safes or boxes of such company or corporation. Sec. 4681. Opening and removal of contents. Upon the ioog, No. 120, 5 1. expiration of sixty days from the date of mailing such notice as provided in the preceding section, and the failure of the person in whose name such safe or box stands on the books of such com- pany or corporation to pay the amount due for the use thereof in full up to the date of such notice, the president of such com- pany or corporation may, in the presence of a notary public not an officer or in the employ of such company o» corporation, and of the cashier, or secretary, or treasurer, of such company or corporation, cause such safe or box to be opened, and the con- tents thereof, if any, removed and sealed up by said notary in a package, upon which said notary shall distinctly mark the name 906 MISCELLANEOUS. [Title 27. of the person in whose name such safe or box stood on the books of the company or corporation and the estimated value thereof ; and when such package has been marked for identification by said notary, it shall, in the presence of the president, or cashier, or secretary, or treasurer, of such company or corporation, be placed by said notary in one of the general safes or boxes of the company or corporation ; and the proceedings of said notary shall be fully set forth by him in his own handwriting and under his official seal, in a book to be kept by the company or corporation for that purpose. Miscellaneous. v. s. i 4127. Sec. 4682. Misnomer in deed, etc. The misnomer of a r 8S l: ? seos*. S 43 ' savings bank or savings institution in a deed, grant, conveyance, I878i No. l, | id. contra et or other instrument shall not impair the same, if such corporation is sufficiently described therein to ascertain the in- tention of the parties. v. s. § 4128. Sec. 4683. Charters subject to this chapter. The powers, r 8S l,: i^eoi. § *"' privileges, duties and restrictions conferred and imposed upon 1878, No. i. § 2i. a sav j ngs ua nk, savings institution or trust company by its char- ter are hereby abridged or enlarged so as to conform to the pro- visions of this chapter, and to such amendments as may be made thereto ; and each corporation shall possess the powers, rights and privileges, and be subject to the duties, restrictions and liabili- ties, conferred and imposed by this chapter, anything in their respective charters to the contrary, notwithstanding. v. s. § 4129. Sec. 4684. This chapter not to affect prior transactions. r 88 l. * O 3604. § 44 ' Nothing in this chapter shall affect the legality of investments 1878, No. i, § 21. h el . e t, f ore made, or of transactions heretofore had, pursuant to the law in force when such investments were made or transac- tions had, nor to require the change of investments for those named in this chapter, except as the same can be done grad- ually by the sale or redemption of the securities so invested, in such manner as to prevent loss or embarrassment in the business of such corporation, or unnecessary loss or injury to the borrow- ers upon such securities. v. s. 8 4130. Sec. 4685. Penalties for violating this chapter. A trus- i! 88 L. s'mod. § 4 °' tee or other officer of a savings bank, savings institution or trust 1878, No. l, § 22. company, who intentionally violates a provision of this chapter, shall be imprisoned not more than ten years nor less than one year or fined not more than ten thousand dollars nor less than one hundred dollars, or both; and the state's attorney for the county in which such corporation is located shall prosecute such violation on complaint thereof by the bank commissioner, v. s. S 4131. Sec. 4686. Institutions holding money in trust; applica- 1886, No. 102. t j Qn Q £ j awSi Every moneyed institution in this state, soliciting or receiving money in a trust capacity and paying interest thereon, shall be subject to the laws regulating savings banks and trust companies. Chap. 198.] TRUST COMPANIES. 907 CHAPTER 198. TRUST COMPANIES MAY ACT IN FIDUCIARY CAPACITIES. Sec. 4687. Appointed executors or guardians. A trust 1002, No. 72, § l. company incorporated under the laws of this state may be ap- pointed and act as executor of a will, codicil or writing testa- mentary, as administrator with the will annexed, as adminis- trator of a person deceased, as receiver, assignee, trustee or guardian of a person subject to guardianship, under the same circumstances, in the same manner and subject to the same con- trol by the court having jurisdiction, as a natural person legally qualified. Sec. 4688. Security. The capital stock and surplus of a 1002, No. 72, § 2. trust company thus appointed, together with the liabilities of the stockholders of such trust company, shall be held as security for the faithful discharge of the duties undertaken by virtue of this chapter; and no surety shall be required upon bonds filed by such company, unless required by the court. Sec. 4689. Powers and duties of officers. In proceedings 1002, No. 72, § 2. in the probate court or elsewhere, connected with authority exer- cised under this chapter, all accounts, returns and other papers may be signed and sworn to in behalf of such a trust company by any officer thereof duly authorized by it ; and the answers and examinations of such officer, under oath, shall be received as the answers and examinations of such company. The court may or- der and compel any and all officers of such company to answer and attend such examinations, in the same manner as if they, personally, were parties to the proceeding or inquiry. No such company shall be required to receive or hold any property or money or to execute any trust contrary to its own desire. Sec. 4690. Money held in fiduciary capacity to be kept 1902. No. 72, § 3. separate. All moneys, property or securities received or held by such a trust company under the provisions of this chapter shall be kept separate and distinct from its general business, and shall not be mingled with the investments of its capital stock or other moneys or property belonging to such company, or be liable for the debts or obligations thereof. Sec. 4691. When authorized by bank commissioner. No 1002, No. 72, § -». trust company shall exercise the powers and duties provided in this chapter, until it has applied for and received the written authority of the bank commissioner so to do ; and said commis- sioner may grant or decline to grant such authority, after such investigation of the affairs of the company as he may deem ex- pedient. Sec. 4692. Examination of companies by commissioner. 1002, No. 72. § 5. In addition to such examinations required ^0 be made by law, said commissioner may make such further examinations of every company exercising the powers granted in this chapter as he may deem necessary, and shall make such examinations when ordered so to do by a court of competent jurisdiction. Said commis- 908 LOAN AND INVESTMENT COMPANIES. [Title 27. sioner may cause an examination of such a company to be made by an expert under his direction, but at the expense of such company. CHAPTER 199. LOAN AND INVESTMENT COMPANIES. Section 4693. — Domestic corporations. Sections 4G94-4702. — Foreign corporations. Sections 4703, 4704. — Miscellaneous. V. S. S 4132. 1S00. No. 4, | 1. v. s. § 1890, N 73 Vt. 4133. o. 4. | to. V. S. § 1890, N 4134. 0. 4. § v. s. 5 1S0O. N 413; 0. 4. « 4. Domestic Corporations. Sec. 4693. Supervision by bank commissioner. Every corporation organized under the laws of this state, for the pur- pose of selling its own choses in action, or of selling, guaran- teeing or negotiating those of other persons or corporations, as investments or as a business, shall be under the supervision of the bank commissioner and subject to all laws relating to the examination and report of savings banks and trust companies. Said commissioner shall, in his annual report of such corpora- tions, clearly describe the various classes of assets and liabilities of each, and state any special provision made for the payment of such liabilities. Foreign Corporations. Sec. 4694. Bond; examination. No person shall act in this state as the agent or representative of such a corporation, organ- ized under the laws of another state, or sell, offer for sale or nego- tiate choses in action owned, issued, negotiated or guaranteed by it, unless such corporation has filed with said commissioner a bond to the state for such an amount as he may require, not more than ten thousand dollars and not less than five hundred dollars, with such sureties or security as he may approve, conditioned for the making of such returns as may be required, and the payment of all taxes that may be assessed against it, and in all things to com- ply with the laws of this state, and has submitted itself and its financial condition to examination by said commissioner, in such manner as to enable him to make a report thereof as specified in this chapter; and such report shall be made at the same time and in the same manner as in case of like corporations in this state. Sec. 4695. Violating this chapter ; penalty. Said com- missioner shall promptly notify the state's attorney of violations of this chapter that come to his knowledge. A person who vio- lates a provision of this chapter shall be fined not more than one thousand dollars nor less than fifty dollars. Sec. 4696. License; list of agents. When it appears to said commissioner from an examination made, and the report submitted by such a corporation, that it is conducting its affairs in a safe and authorized manner, and has filed the bond required by this chapter, he shall issue to such corporation a license per- mitting it to transact business in this state until the first day of January following. Every such corporation shall . within thirty Chap. 199.] MISCELLANEOUS. 909 days from the date of such license, file in the office of said com- missioner its certificate stating the name and business address of every person, association, corporation or others who act or pro- pose to act in this state as its agents or representatives ; and, in case of any change, an amended certificate shall be filed forth- with. Sec. 4697. Commissioner to be appointed attorney for v. s. § 4136. service of process. Such a corporation shall, before being au- thorized to transact business within this state, by an instrument in writing, appoint said commissioner its true and lawful attor- ney, upon whom process may be served, with the same effect as if such corporation existed in this state. Such certificate of appointment, duly authenticated, shall be filed in the office of said commissioner, and copies certified by him shall be deemed sufficient evidence thereof. Sec. 4698. Commissioner to forward copy of process;!?. 1906, §4598. fee. When process against such a corporation is served upon isob', No. i, § 3. said commissioner, he shall forward a copy of such process by mail, prepaid, directed to the president or secretary of the cor- poration. For each copy of such process said commissioner shall collect one dollar from the plaintiff or moving party at the time of service, to be allowed him as taxable costs. The word "process," as used in this chapter, shall include any writ, sum- mons, petition or order whereby a suit, action or proceeding shall be commenced by a resident of this state. Sec. 4699. Licensee to file reports semi-annually. Li- h. 1906, 54599. censees under this chapter shall file semi-annual reports in the iso'o! is". ■»'. S ,: office of said commissioner, within twenty days after the first day of January and July ; and, upon failure so to do, or other- wise to comply with this chapter, said commissioner shall revoke such license. Sec. 4700. Commissioner to order unsafe business discon- 1:. 1906, s 4600. tinued. If such licensee conducts its business in an unsafe or iso'o*. No. 4, § 7. unauthorized manner, said commissioner shall, by his written order, direct such licensee to discontinue such unsafe and un- authorized business and to conform to its charter and law, and at once to provide for the safety and security of all such business transactions. Sec. 4701. Revocation of license. If such licensee fails r. 1906, 5 4601. to comply with such order or to make report whenever requested isob', No. 4, « 7 by said commissioner, or if it appears to said commissioner that it is unsafe or inexpedient for such licensee to continue business, he shall forthwith revoke the license by sending a copy of the revocation to such corporation at its principal place of business ; and a copy of such revocation shall be sent to each agent and representative of such licensee in this state. Sec. 470S. Publication of order of revocation. Said com- v. s. s 4141 missioner may publish such order with sxfeh additional facts as he deems proper, in any newspaper published in this state. Miscellaneous. Sec. 4703. Examination by deputy; expense. Said com- v. s. § 4142. , ., . ,. . , . ,, • , , 1S90, No, 4. § 8. missioner may make the examinations required m this chapter 910 SAVINGS AND LOAN ASSOCIATIONS. [Title 27. by deputy. All services rendered and expenses incurred under this chapter shall be approved by the auditor of accounts and paid by the corporations that are licensed, and the same shall be equitably apportioned among such corporations by said com- missioner. v. s. § 4i43. Sec. 4704. Building and loan associations. Building and 1890, No. 4, § o. loaQ assoe i at i ons doing business in the state shall be subject to the provisions of this chapter. CHAPTER 200. COOPERATIVE SAVINGS AND LOAN ASSOCIATIONS. Section 4705. — Formation. Section 470G. — Object. Section 4707. — Organization. Section 470S. — Officers; meetings. Section 4709.— Capital stock. Section 4710.— Dues. Sections 4711, 4712. — Cancellation of unpledged shares. Section 4713.— Matured shares. Sections 4711-4719. — Loans. Section 4720. — Real estate. Section 4721.— Profits and losses. Section 4722.— Transfer of shares. Section 4723.— By-laws; attorney. Section 4724. — Members. Section 4725.— Exemptions. Sections 472G, 4727.— Reports. Sections 4728, 4729.— Examination. Formation. v. s. § 4144. Sec. 4705. Incorporators; name. Fifteen or more persons 1894! No. 98, § i. of age> res i(jents of this state, may form an association as pro- vided in this chapter. Associations formed under the provisions of this chapter shall be known as cooperative savings and loan associations ; and the name of every association, so formed, shall contain as a part thereof, the words "cooperative savings and loan association." „ Object. v. s. § 4i4.j. Sec. 4706. In general. The object and purpose of such as- 1894, no. 9S, § 2. soeiat j ons s hall be to encourage industry, frugality, home build- ing and savings among its members ; the accumulation of savings, the loaning of such accumulation to its members, and the repay- ment to each member of his savings when they have accumulated to a certain sum, or at any time when he shall desire the same or the association shall desire to repay the same. Organization. v s § 4146. Sec. 4707. Certificate. Such association shall become in- L894, No. 98, 5 3. corporate d by sa id fifteen or more persons making and signing Chap. 200.] CAPITAL STOCK. 911 a certificate stating the name of such association; that the asso- ciation is formed under and for the purposes prescribed in this chapter; the town, city or village where the association is located within this state, and the limit of the number of shares outstand- ing at any one time. Such certificate shall be filed and recorded in the office of the secretary of state; and upon being so filed and recorded, the secretary of state shall issue his certificate, declaring the facts contained in such original certificate, and the filing and recording thereof in his office, which shall thereupon be recorded in the town clerk's office of the town where such as- sociation is located ; and, upon being so recorded and published at length in a newspaper circulating in such town, the persons named in the original certificate, their associates and successors shall become a corporate body. Officers; Meetings. Sec. 4708. Election and term of officers; stated and V- s. I 4147. „_ . ..... . , 1S0-1, No. 98, I 4. special meetings. The officers of such association shall consist of a president, vice-president, treasurer and secretary, who shall be ex-officio members of the board of directors, which shall con- sist of five members, exclusive of such ex-officio members. Other officers may be authorized by the by-laws. The duties, compen- sation, term of office, time of election of officers, and the time of periodical meetings of the officers and shareholders shall be de- termined by the by-laws ; except that the board of directors shall annually determine the compensation of the secretary and treas- urer. Special meetings of the officers and shareholders shall be called and held as provided by the by-laws. Each shareholder shall be entitled to one vote, at all meetings of the shareholders, for each share owned by him or held by him as trustee, not in arrears for dues. All officers shall hold office until their succes- sors arc duly elected and assume the duties of their office. No association shall expire from neglect on its part to elect officers at the time prescribed by the by-laws. Capital Stock. Sec. 4709. Shares; limitation. The capital of such asso-v. s. § -ins. ciation shall consist of the accumulated savings of its members, which it holds, and shall not exceed at any one time one million dollars, and shall be divided into shares of the matured value of two hundred dollars each. The total number of shares outstand- ing at any time shall not exceed ten thousand. The shares shall be issued in annual and semi-annual series, in such amounts in each series and at such times as shall be determined by the by- laws of the association. No shares of a prior series shall be issued after the issuing of shares in a new series. Shares which have not been pledged as collateral security for the repayment of a loan shall be called unpledged shares. Shares that have been so pledged shall be called pledged shares. No person shall hold more than twenty-five shares in any one such corporation. 912 CANCELLATION OF UNPLEDGED SHARES. [Title 27. Dues. v. s. § 4140. Sec. 4710. Payment; fines; entrance fee. Savings paid to such association upon shares shall be called dues. At or before each stated monthly or semi-monthly meeting of the board of directors, each shareholder shall pay to such board, or a commit- tee thereof, one dollar dues upon each share of stock held by him until the share reaches the value of two hundred dollars, or is withdrawn, cancelled or forfeited. Payment of dues on shares of each series shall commence from their issue. The association shall have power to impose and collect a fine, not exceeding two per cent for each month in arrears, for every dollar of dues or interest which a shareholder shall refuse or neglect to pay at the time it is due. It shall also have power to charge an entrance fee of not exceeding twenty-five cents on each share of stock issued by the association. Cancellation of Unpledged Shares. v. s. § 4150. Sec. 4711. By shareholders. The accumulations upon un- pledged shares may be withdrawn, and the shares cancelled after one month's written notice of such intention filed with the secre- tary at or before a stated monthly meeting of the board of di- rectors. If filed before such meeting, the one month's notice shall not be deemed to have commenced until the first regular meeting after such filing. The withdrawing shareholder shall be paid the amount of the withdrawal value of his accumulations as determined under the by-laws, at the last distribution of prof- its before the notice of withdrawal, together with all dues paid since such distribution, and such interest on the value of the shares at the time of the last distribution and on the dues there- after paid, as the by-laws shall determine, less any fines unpaid and a proportionate share of any unadjusted loss; provided that at no time shall more than one-half the receipts of the associa- tion, and when the association is indebted upon matured shares, not more than one-third, be applicable to the payment of with- drawing shareholders, without the consent of the board of direc- tors ; and when the demands of withdrawing shareholders exceed the moneys applicable to their payment, they shall be paid in the order in which their notices of withdrawal were filed with the secretary. v. s. s 4150. Sec. 4712. By the board of directors. The board of direc- 1894, No, 98, s 7. j. Qrg mav> j n their discretion, under rules made by them, retire the unpledged shares of any series at any time after four years from the date of their issue, by enforcing withdrawals of the same; provided that the shareholders whose shares are to lie re- tired shall lie determined by lot, and that they shall be paid the full value of their shares, less all fines and proportionate part of unadjusted loss; provided also that shares pledged for share loans shall be treated as unpledged shares. Chap. 200.] LOANS. 913 Matured Shares. Sec. 4713. Payment. When each unpledged share of a v. s §,4151. given series reaches the value of two hundred dollars, all pay- ment of dues thereon shall cease, and the holder thereof shall be paid out of the funds of the association two hundred dollars therefor, with such rate of interest as shall be determined by the by-laws, from the time the board of directors shall declare such share to have matured until paid ; but at no time shall more than one-third of the receipts of the association be applicable to the payment of matured shares, without the consent of the board of directors. The order of payment of the matured shares shall be determined by the board of directors. Before paying matured shares all arrears and fines shall be deducted therefrom. Loans. Sec. 4714. Limit; allotment. At each monthly stated v. s. §4152. meeting, immediately following the receipt of dues and interest, the board of directors shall offer to members of the association, desiring to borrow, all accumulations applicable to that purpose. The same shall be loaned in sums of two hundred dollars, or a multiple thereof, or the fractional parts of one-fourth or one-half thereof. If there shall be more than one member desiring to borrow, their right to a loan shall be determined by an open bid- ding of a premium per share ; the member bidding the highest premium shall be entitled to the. loan, upon giving proper se- curity. From the sum loaned shall be deducted, at the time of loaning, the amount of the premium bid. The receiving of such premium or interest paid on the loan shall not be deemed a vio- lation of the usury laws. No member shall borrow a larger sum than shall be equal to the matured value of the shares held by him. Sec. 4715. Interest. A borrowing member, for each share v. s. s 4152. or fractional part thereof borrowed upon, shall, in addition to 1894 ' No ' 98, 5 9 ' the dues on his shares, pay monthly interest on his loan at the rate of six per cent per annum, or such lower rate as the by-laws shall name, until the shares borrowed upon reach the matured value of two hundred dollars each, or the loan is repaid; and. when such matured value is reached, the share shall cancel the loan upon it, and the proper surrenders and acquittances be made. Sec. 4716. Security. For every loan made, a first mort-v. s. § 4ir>3. gage upon real estate shall be given, accompanied by a transfer 1 * 94, No 98, § 10 " and pledge to the association of the shares borrowed upon, and all accumulations that have accrued or shall accrue thereon, as collateral security for the repayment of the loan ; or, in lieu of the mortgage, the borrower, or another, may transfer and pledge to the association, for the payment of the.loan, unpledged shares, the withdrawal value of which under the by-laws, at the time of such borrowing, shall exceed the amount borrowed and interest thereon for six months. If the borrower neglects to offer se- curity satisfactory to the board of directors within the time pro- 58 914 PROFITS AND LOSSES. [Title 27. v. s 1S94 5 4154. No. 98, vided by the by-laws, his right to the loan shall be forfeited, and he shall be charged with one month's interest, and all necessary expenses incurred, if any, under the by-laws, in reference to his proposed loan. All mortgages given to the association shall be deemed conditioned upon the performance of the provisions of this chapter relating to the repayment of loans and interest thereon, and the by-laws of the association, although the same may not be fully expressed therein, v. s. 5 4153. Sec. 4717. Payment. A -borrower may repay a loan and 1894; No. 98, § io. all arrears £ interest and fines thereon, or one share thereof, that is, the sum of two hundred dollars, at any stated monthly meeting, or at any other time; but when not made at a stated meeting, he shall pay interest up to the first monthly meeting after such payment. He may repay his loan in full, thereby re- lieving his shares from liability upon the pledge thereof made to the association, or he may, by a proper notice and direction as to the application, have the withdrawal value of the shares bor- rowed upon applied in payment or part payment of his loan. Sec. 4718. Dues in arrears ; notice ; forfeiture. Whenever s 1L a member shall be six months in arrears in the payment of his dues upon unpledged shares, the secretary shall give him notice thereof in writing and a statement of his arrearages, by mailing the same to him at the last post-office address given by him to the association ; and, if he shall not pay the same at the next or second stated monthly meeting thereafter, the board of directors may, at its option, declare his shares forfeited; and, at the time of such forfeiture, the withdrawal value thereof shall be deter- mined and stated, and the defaulting member shall be entitled to withdraw the same without interest, within one year, upon such notice as shall be required of a withdrawing shareholder. Sec. 4719. Interest in arrears; effect; proceedings. When § 12 - a borrowing member shall be six months in arrears in the pay- ment of his dues and interest, or either, the whole loan shall be- come due at the option of the board of directors ; and it may pro- ceed to enforce collection upon the securities held by the asso- ciation. The withdrawal value, at the. time of the commence- ment of the action, of all shares pledged as collateral security for the loan, shall be applied upon the loan and arrearages of inter- est and fines thereon, and the shares deemed surrendered to the association. Real Estate. Sec. 4720. Purchase ; sale. Such association may purchase at a sale, public or private, real estate upon which it has a mort- gage, judgment, lien or other encumbrance, or in which it has an interest, and may sell, convey, lease or mortgage the same at pleasure to any person or persons. Profits and Losses. v . s . s 4157, Sec. 4721. Distribution; guaranty fund. Profits and losses 1894] No. 98,' § 14. ghall be distributed at least annually, and always before issuing a new series of stock to the shares then outstanding. Profits V. S. § 4135 1894, No. 98, V, S. § 4156. 1894, No. 98, § 13 Chap. 200.] EXEMPTIONS. 915 and losses shall be distributed to all shares, in all series outstand- ing at the time of such distribution, in proportion to their hold- ing value, as distinguished from their withdrawing value, except that in addition thereto a distribution of not exceeding the amount of the entrance fee, in the discretion of the board of di- rectors, may be made to each share outstanding in the last series issued prior to the distribution. At each periodical distribution of profits, the board of directors may reserve and carry as undis- tributed profits in the nature of a guaranty fund, any sum from the net profits that, in its discretion, seems wise, not exceeding five per cent thereof, to be applied upon any future losses that may occur from any cause whatsoever. Transfer of Shares. Sec. 4722. Regulations ; fees. No transfers of shares shall v. s. § 4i58. be binding upon the association until the same have been made 1894 ' No ' 98, s 15, upon the books of the association ; and the transferee thereof shall take the same charged with all the liabilities and conditions attaching thereto in the hands of the one transferring the same. The association may require a transfer fee of not exceeding twenty-five cents per share. By-Laws ; Attorney. Sec. 4723. Scope of by-laws ; appointment and removal v. s. § 4ioo. of attorney. Such association, as soon as duly incorporated, 3894, N shall possess power to adopt by-laws, not inconsistent with the provisions of this chapter, regulating the conduct of the business of the association, defining the duties of officers and committees, times of meeting, mode of determining and declaring the with- drawing value of shares, and in relation to all other matters having reference to the conduct of the business, although not specifically mentioned in this chapter. The board of directors shall have power to appoint and remove at pleasure an attorney for the association. Members. Sec. 4724. Qualifications; notice. Any person of age and v. s. § 4160. sound mind may become a member of such association by taking 1894, N 98, 8 1? " one or more shares therein, and subscribing to the by-laws, and annexing to his signature his post-office address ; and whenever he desires his post-office address changed, he shall give written notice thereof to the secretary of the association ; and for the pur- pose of giving a member notice by mail, the last post-office ad- dress given by him shall be deemed the proper one. A minor may hold shares in the name of a parent, guardian or next friend as trustee for him. Exemptions. Sec. 4725. Attachment, etc. ; corporation tax. All accu- v. s. § 4160. mulations upon shares in such association held by any person 1894 ' No ' 98, 5 17- shall be exempt from attachment, levy and trustee process, to 916 EXAMINATION. [Title 27. the amount of five hundred dollars; and the association itself shall be deemed an institution for savings and not taxable under any corporation tax law which shall exempt savings banks, or institutions for savings, from taxation. Reports. v. s. | 4161. Sec. 4726. To bank commissioner; contents. An associa- tion organized under the provisions of this chapter shall an- nually make a full report in writing of the affairs and condition of such association on the first day of January, to the bank com- missioner, in such form and by such officers of the association as said commissioner may designate. Such report shall be veri- fied by the oath of the officer making the same. An associa- tion shall make such further report as said commissioner may re- quire, and in such form, and as to such matters relating to the condition and conducting of the business of the association, as • said commissioner may designate. Any wilful false swearing in making and verifying such reports shall be deemed perjury. r. 1906, § 4G2T. Sec. 4727. Failure to furnish; penalty. If such an asso- 1894! No 41 !!,' § 19. ciation fails to furnish said commissioner a report required by this chapter, at the time so required, it shall forfeit the sum of ten dollars a day for every day such report is delayed or with- held; and said commissioner may maintain an action on this statute, in his name, to recover such penalty ; and the same shall be paid into the treasury of the state. Examination. v. s. s 4163. Sec. 4728. By bank commissioner, etc. An association or- 1894, No. 9S, § 20. ganized un( } er the provisions of this chapter shall be subject to the visitation and examination of the bank commissioner, his deputies or duly appointed agents, at all times or upon the application of three or more members of such association. v. s. 8 4163. Sec. 4729. Discontinuance of unsafe practices; proceed- 1894, No. 98, § so. j ngg j£ j t a p pears i sa [^ commissioner, from the report of such association, or from an examination made by him, his deputies or duly appointed agents, that such an association is violating the provisions of this chapter, or is conducting its business in an unsafe or unauthorized manner, he shall, by an order under his hand and seal addressed to such association, direct the discon- tinuance of such illegal and unsafe practices ; and whenever such association neglects or refuses to comply with such order, or make reports as required, he shall communicate such facts to the auditor of accounts, who shall thereupon direct such proceed- ings to be instituted against such association as are provided by law in the case of an insolvent corporation, or such other pro- ceeding as the nature of the case may require. Chap. 201.] BUILDING AND LOAN ASSOCIATIONS. 917 CHAPTER 201. FOREIGN BUILDING AND LOAN ASSOCIATIONS. Sections 4730-4736. — Requirements for entering and doing business in the state. Section 4737. — Securities held by treasurer. Sections 473S-4741. — Duties of bank commissioner. Section 4742. — Reciprocal provisions. Requirements for Entering and Doing Business in the State. Sec. 4730. Compliance with law ; license. No foreign isog, xo. 82, •. l. building and loan association shall do business in this state until it has complied with the provisions of the six following sections and received a license from the bank commissioner. Sec. 4731. Charter, constitution and by-laws to be filed. 1896, No. 82, j i. A certified copy of the charter, constitution and by-laws of such association showing its manner of doing business shall be filed with said commissioner. Sec. 4732. Bank commissioner to be attorney for service 1S96, No. 82, § l. of process. Such association shall, in writing, appoint said com- missioner its true and lawful attorney upon whom service of legal process in any action or proceeding against it may be made with the same force and validity as if made upon such associa- tion; and such appointment shall continue in force so long as any liability against such association remains outstanding in this state. Such power of attorney shall be deposited with said com- missioner, and a copy thereof duly certified by him shall be evi- dence in any court. Sec. 4733. Semi-annual reports. Such association shall isoo, xo. 82, $ i. semi-annually, on or before the first day of February and August, file with said commissioner a statement signed and sworn to by its president and secretary, or by three directors, before a notary public, showing its business standing and financial condition on the last days of December and June preceding; and such state- ment shall show that it possesses actual paid in, unimpaired and well invested assets of at least three hundred thousand dollars, and a fully paid up cash guaranty fund of twenty-five thousand dollars. Sec. 4734. Fees. Such association shall annually pay to tsoc.xo. 82, $ l. said commissioner, for the purpose of paying the expense of filing papers and compensation for making examinations, as pro- vided in this chapter, the following fees : for the first one hun- dred thousand dollars or less of assets, a fee of fifty dollars ; and for each additional one hundred thousand dollars of assets, or the major portion thereof, an additional fee of five dollars; but in no event shall such compensation exceed one hundred dollars per year; and shall also pay to said commissioner his actual neces- sary expenses while engaged in making such examinations. Sec. 4735. Deposit of securities. Such association shall isog, no. 82, s i. deposit with the state treasurer first mortgage securities to the amount of twenty-five thousand dollars, approved by said com- 918 DUTIES OF BANK COMMISSIONER. [Title 27. missioner ; and such deposit shall be held in trust by said treas- urer for the protection and indemnity of the residents of this state with whom such association has or may transact business. 1896, No. 82, § i. Sec. 4736. Bond. Such association shall file with said com- missioner a bond to the state in such sum as he may require, not more than ten thousand dollars nor less than five hundred dol- lars, with such sureties or securities as he approves, conditioned for the making of reports and returns required by this chapter and the payment of all taxes assessed against it and in all cas"es to comply with the laws of this state. Securities Held by Treasurer. 1896, No. 82, § 2. Sec. 4737. Collection of interest, premiums and dues; surrender of mortgages. All interest, premiums and dues which may accrue on the mortgages held by the state treasurer as provided in the second preceding section may be collected and retained by the association depositing the same so long as such association remains solvent and faithfully performs all contracts with its members; and when a mortgage is fully paid to such association, it may be surrendered to it, after such association or corporation has deposited with the state treasurer other first mortgage securities approved by said commissioner, to the amount of those withdrawn. Duties of Bank Commissioner. 1896, No. 82, § 3. Sec. 4738. Filing of papers; examination of reports. The bank commissioner shall file all papers required by this chapter, and thoroughly examine the annual reports submitted by foreign building and loan associations. 1896, No. S2, § 3. Sec. 4739. Licenses. If said commissioner, after examina- tion, becomes satisfied that a foreign building and loan associa- tion desiring to do business in this state is solvent and conducts its business according to law, and has complied with the provi- sions of this chapter, he may issue a license to such association until the first day of January following. If such association is found insolvent, or is being illegally conducted, said commis- sioner shall refuse to issue such license. In case of the refusal of said commissioner to grant a license to an association applying therefor, that has complied with the provisions of this chapter, such association may appeal to the court of chancery for the county of Washington, which shall have jurisdiction. 1896, No. 82, § 4. Sec. 4740. Annual examinations. Said commissioner shall annually, by himself or his deputy, make an examination of the securities, records, books and accounts of every foreign building and loan association doing business in this state, and file a report of such examination in his office. 189G, No. 82, § 4. Sec. 4741. Order for discontinuance. of unsafe practices; suspension of license. If it appears to said commissioner that a foreign building and loan association licensed to do business in this state has violated a provision of its charter, or is conduct- Chap. 201.] DUTIES OF BANK COMMISSIONER. 919 ing its business in an unsafe or unauthorized manner, he shall, by an order under his hand, addressed to such association, direct a discontinuance of such illegal and unsafe practices. When- ever it appears to said commissioner that it is unsafe or inex- pedient for such association to continue doing business in this state, he may suspend the license granted to such association, and apply to the court of chancery in any county for an in- junction restraining such association from doing business in this state ; and such court shall have power to grant or refuse such injunction according to the usual proceeding in equity, after reasonable notice to such association of such proceedings. Reciprocal Provisions. Sec. 4742. Application. When, by the laws of another 1896, No. 82, § 5. state or nation, any taxes, fines, penalties, licenses, fees, deposits of money or securities or other obligations or prohibitions are imposed upon building and loan associations of this state, or upon their agents, doing business in such other state or nation, the same obligations and prohibitions of whatever kind shall be imposed on building and loan associations of such other state or nation, and upon their agents, doing business in this state, so long as such laws continue in force. *■■ Gaylord Bros. Makers Syracuse, N. Y. PAT. JAN. 21, 1908 3*2L<32-74- UNIVERSITY OF CALIFORNIA LIBRARY