Sec. 11911. Amount appropriated for expenses, statement of same to be filed with commissioner-penalty for failure. The amount that may be appropriated or expended by any such corporation, for expenses connected with its organization and in the disposition of its capital stock, shall not, for such combined purposes, exceed one per centum of the amount from time to time paid in upon the capital stock of such corporation, and no such expense shall be paid with money paid in upon said capital stock. The president or treasurer of each such corporation, or in case the certificate of incorporation shall not have been issued, then any three of the persons named in the articles of agreement as members of the board of directors, shall, when and as thereto required by the bank commissioner, furnish to and file with said bank commissioner a true and correct statement, under his or their oath stating in detail the amount of money expended and liabilities incurred from time to time, in connection with the above named purposes, and that no part thereof has been paid with money paid in upon said capital stock. In case any such officer, director or person named as director, as the case may be, shall refuse to furnish such sworn statement when and as so required by said bank commissioner, or shall authorize or consent to the expenditure of an amount for the combined purposes aforesaid in excess of one per centum of the amount from time to time paid in upon the capital stock, or shall willfully and corruptly make a false statement thereof, he shall be deemed guilty of a misdemeanor, and upon conviction thereof shall be punished by a fine not exceeding five hundred dollars, or by imprisonment in the county jail not less than one or more than twelve months, or by both such fine and imprisonment. It shall be the duty of the bank commissioner, after the issuance of the certificate of incorporation, and within sixty days from the date of his demand for any such statement, to report to the prosecuting attorney of the county or circuit attorney of the city in which each such corporation may be located, the name of each such corporation that shall have failed to file in the office of the bank commissioner within the prescribed time the statement by this section required; and it shall be the duty of each such prosecuting or circuit attorney to whom such report may be made immediate-. ly to institute proceedings for the enforcement of the penalties by this section provided, and as compensation for his services in that behalf he shall receive one-fourth of the amount of the penalty or penalties collected. The directors of each such corporation, who shall authorize or consent to the expenditure of an amount for the combined purposes aforesaid in excess of one per centum of the amount from time to time paid in upon its capital stock, shall be jointly and severally liable to such corporation for the amount of such excess, and the same may be recovered by civil suit in any

court of competent jurisdiction: Provided, that if any such director, having notice of but not authorizing or consenting to such excess payment shall object thereto and shall, within three days. after such notice, file a written certificate of his objection with the secretary of the corporation and a certified copy thereof with the bank commissioner, he shall be exempt from such liability. (Laws 1911, p. 101.)

Sec. 11912. Books-papers-records-open for inspection, when. All books, papers and records of the proceedings of each such corporation shall be kept open during reasonable office hours for the inspection of all stockholders of the corporation. (Laws 1911, p. 102.)

Sec. 11913. Who are liable.-No person holding stock in such corporation as executor, administrator, guardian or trustee, and no person holding such stock pledged as collateral security, shall be subject to any personal liability as stockholder in such corporation. The estate and funds in the hands of such executor, administrator, guardian or trustee shall be liable in like manner and to the same extent as the testator or intestate, or the ward or person interested in such trust fund, would have been if he had been living and competent to act and hold the stock in his own name; and the person pledging such stock shall be considered as the holder thereof, and shall be liable as stockholder accordingly. Every such executor, administrator, guardian or trustee shall represent the shares of stock so held by him at all meetings of the corporation, and may vote accordingly as a stockholder; and every person who shall pledge his stock as aforesaid may, nevertheless, represent the same at all such meetings and may vote accordingly as a stockholder. (Laws 1911, p. 102.)

Sec. 11914. Corporation may increase or decrease capital stock-how.-Every such corporation may increase or decrease its capital stock by complying with the provisions of this article, to any amount within the limits prescribed by section 11906 hereof: Provided, that no such decrease of capital stock shall be permitted that would reduce the same to less than ten per centum of the then outstanding notes and debentures of the corporation. (Laws 1911, p. 103.)

Sec. 11915. Directors to call meeting-when-notice, how given. Whenever the holders of ten per centum of the capital stock then issued and outstanding of any such corporation shall desire that the amount of its capital stock be increased or decreased, it shall be the duty of the board of directors, upon the written request of such stockholders, to call a meeting of the stockholders for such purpose, by publishing a notice signed by a majority of said directors, once a week for at least sixty days next

before such meeting shall be held, in a newspaper published in the county, if any shall be published therein, and by depositing a written or printed copy thereof in the post office, postage prepaid and addressed to each stockholder at his last known place of residence, at least sixty days before such meeting shall be held, therein specifying the object of the meeting, the time and place when and where the same shall be held, and the amount to which the capital stock is proposed to be increased or decreased. (Laws 1911, p. 103.)

Sec. 11916. Stockholders' meeting-amount of stock necessary to increase or decrease capital-vote, how taken—statement to be filed, where to contain what. The stockholders who shall appear in person or by proxy at the meeting provided for in the next preceding section, in number representing not less than a majority of all the shares of the capital stock then issued and outstanding, shall organize by choosing one of their number chairman of the meeting and a suitable person for secretary, and shall proceed to a vote of those present in person or by proxy; and if, on canvassing the same, it shall appear that the affirmative votes of the holders of a majority of all the shares of the capital stock then issued and outstanding have been cast in favor of increasing or decreasing the amount of the capital stock, as the case may be, a statement of the proceedings, showing a compliance with the provisions of this article, the amount of capital actually paid in, the whole amount of the assets and liabilities of the corporation, and the amount to which the capital stock shall be increased or decreased, shall be made out, signed and verified by the affidavit of the chairman and attested by the secretary. Such statement shall be acknowledged by the chairman and recorded as provided in section three of this article, and a certified copy of such recorded instrument shall be filed in the office of the bank commissioner who shall thereupon issue his certificate, under his hand and seal of office, stating that such corporation has complied with the requirements of the law for increasing or decreasing its capital stock, as the case may be, and the amount to which such capital stock has been increased or decreased; and such certificate, or a certified copy thereof, shall be taken by all the courts of this state as evidence of such increase or decrease of stock; and thereupon the capital stock of such corporation shall be increased or decreased, as the case may be, to the amount specified in such certificate, and such corporation shall thereafter continue entitled to the privileges and provisions and subject to the liabilities of this article. (Laws 1911, p. 103.)

Sec. 11917. Assessment. The shares of stock and property of every such corporation shall be assessed and taxed in the

same manner as now provided, by section 12775 of the Revised Statutes of Missouri, 1919, for assessing and taxing institutions or associations doing a banking business. (Laws 1911, p. 104.)

Sec. 11918. Powers and duties of bank commissioner.-The bank commissioner shall have and exercise the same supervision, authority and power over, and shall be charged with the same duties toward, all corporations organized under this article, as he now has and exercises and is charged with by law with reference to banks and trust companies, as far as the same may be applicable, and except as may be otherwise provided by this article; and all provisions of the laws of this state relating to fees to be paid to the bank commissioner by banks and trust companies, so far as the same may be applicable and not inconsistent with the provisions of this article, shall apply to corporations organized under this article: Provided, that the bank commissioner shall be allowed and paid, in addition to the fees hereinabove referred to, the sum of fifty cents for each one thousand dollars in par value, or fractional part thereof, of the notes and debentures certified by him under the provisions of section 11903 of this article. The fees collected under this section shall be paid directly into the state treasury by the bank commissioner and credited to the state banking department fund. (Laws 1911, p. 104.)

Citations of General Authorities Touching Banking Business.

A banking corporation cannot, by its articles of incorporation, limit the number of shares which one person may own. 13 A. 197.

When no restrictions appear in the charter, a bank can buy outright promissory notes, but not at a greater rate of discount than the rate of interest that it might lawfully charge for the loan of money. 116 Mo. 51. Money deposited in a bank

may be paid out on the oral order of a depositor, but when the bank acts on such order it does so in obedience to the order as the agent of the depositor and not as an agent of the payee of the order. 145 Mo. 142. To save itself from loss, a banking corporation may take an assignment of an account due a debtor of the corporation. 7 A. 570.

Banks can handle negotiable bonds, can sell or place them for their customers, and sureties on cashier's bond will be liable for his misappropriation of profitson such transactions. When cashier acts officially for the bank, he is estopped from denying his agency, and the profits of his transactions belong to the bank; if the action of the bank is ultra vires, it can only be taken advantage of by the state. 52 A. 244. If a cashier signs the name of his bank as surety to a bond in judicial proceedings by himself as cashier, while the bond does not bind the bank because ultra vries, it binds the cashier personally. 19 A. 542. See, also, 73 A. 135. When a bank obtains stock of another bank by purchase and not as collateral, its act is ultra tires, but such illegal purchase will be no defense to a suit to enforce its liability as a stockholder. 74 A. 365.

Relation of depositor with bank.-When a depositor's book has been balanced, and together with the cancelled checks returned to him, he must, in a reasonable time, notify bank of any errors in balancing such book, and also of forged checks, if the bank has paid any such. 74 A. 281. The ordinary relation between bank and depositor is that of debtor and creditor. fund may be applied on his debt to the bank. refuse payment of a depositor's check on the ground that it holds the depositor's acceptance, not yet due, which may be dishonored when due. 11 A. 292. Bank may confer authority on its officers by its customs ant usages.

675.

2 A. 563; 5 A. 342. Depositor's 62 A. 179. A bank has no right to

18 A. 665; 70 A.

When money is deposited in name of one as trustee, bank cannot pay it out on his individual check. 26 A 129. Bank receiving endorsed check from its customer, and giving credit for amount, becomes purchaser, and title to check vests in it. 59 A. 540. Liability of drawer for payment of checks upon forged endorsements. 71 A. 132.

Bank is liable for failure to present at proper time a check received for collection. 36 Mo. 475. It is also liable for negligence of its agent resulting in failure to collect checks. 38 Mo. 60; 59 A. 540; 118 A. 356. When bank receives check from depositor and gives credit therefor, it becomes the owner of such check. 79 Mo. 421; 80 Mo. 444. See, also, 120 A. 527. A bank, in undertaking to collect a draft in the absence of special contract, has no right to receive anything but cash in payment therefore. 109 A. 665.

One purchasing stock in a bank may rely upon the assurance of its officers as to the financial condition, and not subject himself to the imputation of negligence for failure to examine its books. 76 Mo. 439. Negligence of directors, whereby they failed to discover defalcation of bookkeeper, is no defense in a suit on a bond of such bookkeeper.

The directors of a bank in failing circumstances may make an assignment for benefit of creditors when there is nothing in the charter or general laws forbidding it. 86 Mo. 260. Unless a special meeting is called in the manner prescribed in the by-laws and notices given, the meeting possesses no validity.

It

119 Mo. 9. Liability of directors.-When, by reason of negligence of directors, losses occur, they are liable to the bank, while a going concern, to the assignee after assignment, or in equity, to the stockholders in the event assignee declines to bring suit. is gross negligence for directors to confer upon cashier the entire management of bank. 148 Mo. 380. The directors are not liable if they exercise ordinary business care in managing affairs of their bank. 188 Mo. 639.