Banks & Banking § 80. Where authority is given by the legislature to establish branches, the relation between the parent bank and the branch bank was that of principal and agent. Worth v. Bank of New Hanover, 122 N. C. 397, 29 S. E. 775.

256. Certificate of deposit, unlawful issuing of. It shall be unlawful for any bank to issue any certificate of deposit or other negotiable instrument of its indebtedness to the holder thereof except for lawful money of the United States, checks, drafts, or bills of exchange which are the actual equivalent of such money; nor shall such moneys, checks, drafts, or bills of exchange be the proceeds of any note given in payment of the purchase price of any stock. Any officer or employee of any bank violating the provisions of this section shall be guilty of a misdemeanor, and upon conviction thereof shall be fined or imprisoned, or both, in the discretion of the court.

1921, c. 4, s. 44.

257. Bank own stock, unlawful to loan on. It shall be unlawful for any bank to make any loan secured by the pledge of its own shares of stock, nor shall any bank be the holder as pledgee, or as purchaser, of any portion of its capital stock unless such stock is purchased or pledged to it to prevent loss upon a debt previously contracted in good faith.

1921, c. 4, s. 45.

Banks & Banking § 250. A stockholder in a national bank in the process of liquidation cannot set off his distributive share in the assets against his liabilities on his stock. First Nat. Bank v. Riggins, 124 N. C. 534, 32 S. E. 801.

Boyd v. Redd, 120 N. C. 335, 27 S. E. 35.

258. Deposits payable on demand. Any bank may receive deposits of funds subject to withdrawal or to be paid upon the checks of the depositor. All deposits in such banks shall be payable on demand, without notice, except when the contract of deposit shall otherwise provide.

1921, c. 4, s. 46.

Banks & Banking § 119. The relation of debtor and creditor subsists between a bank and its depositor. Reid v. Charlotte Nat. Bank, 159 N. C. 99, 74 S. E. 746.

Banks & Banking § 131. Where a wife directed her husband to deposit $800 of her money in a bank, to be used in a mutual business venture, and the husband fraudulently deposited the money in his own name and subsequently withdrew it, and the bank made the payment notwithstanding notification by the wife that the money was hers and that attachment papers were being prepared to recover it, the bank was liable to the wife. Miller v. Bank of Washington, 176 N. C. 152, 96 S. E. 977.

Banks & Banking § 134. A bank may apply a deposit standing in the

name of plaintiff's wife against a debt due it from her husband, where the deposit was made in the wife's name to defraud creditors. Moore v. Greenville Banking & Trust Co., 173 N. C. 180, 91 S. E. 793.

Banks & Banking § 134. A bank's right to apply a deposit in payment of a debt is referable to principles of equity, as well as statutory set-off provisions. Ibid.

Banks & Banking § 154. Where in action against depositor on note he pleaded deposit as counter-claim, bank held to have burden of showing payment of the deposit on proper orders of the depositor. Bank of Brunswick v. Thompson, 174 N. C. 349, 93 S. E. 849.

Banks & Banking § 154. The burden is on a bank, sued for a deposit by the depositor or his representative, to show excuse for failure to pay over. Churchwell v. Branch Banking & Trust Co., 181 N. C. 21, 105 S. E. 889.

Banks & Banking § 82. A bank depositor, on rumors of its insolvency, went to withdraw his deposits, but was informed by the vice president and director that the bank was perfectly solvent, and that "we have got all the money you want. You need never have any fears of this bank as long as I am in it." Such depositor, relying on such representations, permitted his deposits to remain. The bank was in fact insolvent when the representations were made. Held, that such vice president and director was personally liable to such depositor for the money lost by the failure of the bank. Townsend v. Williams, 117 N. C. 330, 23 S. E. 461.

Banks & Banking § 58. A single depositor may maintain in his own behalf alone an action against the directors of a bank for the loss of a deposit, caused by their fraud, neglect, and mismanagement. Tate v. Bates, 118 N. C. 287, 24 S. E. 482.

Banks & Banking § 58. An action can be brought by a depositor or other creditor of a bank, and even by a stockholder, against the president and directors for breach of duty, without having first applied to the corporation or its receiver to bring such action, and the request having been refused. Solomon v. Bates, 118 N. C. 311, 24 S. E. 478.

259. Deposits in savings banks. Any bank conducting a savings department may receive deposits on such terms as are authorized by its board of directors and agreed to by its depositors. The board of directors shall prescribe the terms upon which such deposits shall be received and paid out, and a passbook shall be issued to each depositor containing the rules and regulations adopted by the board of directors governing such deposits, in which shall be entered each deposit made, the interest allowed thereon, and each payment made to such depositor. By accepting such book the depositor assents and agrees to the rules and regulations therein contained.

1921, c. 4, s. 47.

260. Board of directors, banks controlled by. The corporate powers, business, and property of banks doing business under this act shall be exercised, conducted, and controlled by its board of directors, which shall meet at least quarterly. Such board shall consist of not less than five directors, to be chosen by the

stockholders, and shall hold office for one year, and until their successors are elected and qualified.

1921, c. 4, s. 48.

ART. 6. OFFICERS AND DIRECTORS.

261. Executive committee, directors shall appoint. The board of directors shall appoint an executive committee or committees, each of which shall be composed of at least three of its members with such duties and powers as are defined by the regulations or by laws, who shall serve until their successors are appointed. Such executive committee or committees shall meet as often as the board of directors may require, which shall not be less frequently than once each month, and approve or disapprove all loans and investments. All loans and investments shall be made under such rules and regulations as the board of directors may prescribe.

1921, c. 4, s. 49.

262. Minutes of directors and executive committee meetings. Minutes shall be kept of all meetings of the board of directors and of the executive committee or committees, and same shall be recorded in a book or books which shall be kept for that purpose: which book or books shall be kept on file in the bank. Such minutes shall show a record of the action taken by the board of directors and executive committee or committees, on all loans, discounts, and investments made, authorized or approved, and such further action as the board of directors and executive committee or committees shall make concerning the conduct, management, and welfare of the bank. The minutes of the executive committee or committees shall be submitted to the board of directors for approval at each meeting of the board.

1921, c. 4, s. 50.

263. Directors, qualifications of. Every director of a bank doing business under this act shall be the owner and holder of shares of stock in the bank having a par value of not less than five hundred dollars: Provided, such bank shall have a capital stock of more than fifteen thousand dollars, and not less than two hundred dollars if such bank shall have a capital stock of fifteen thousand dollars or less. And every such director shall hold such shares in his own name unpledged and unencumbered in any way. The office of any director at any time violating any of the provisions of this section shall immediately become vacant, and the remaining directors shall declare his office vacant and proceed to

fill such vacancy forthwith. Not less than three-fourths of the directors of every bank doing business under this act shall be residents of the state of North Carolina: Provided, that as to banks doing business before the ratification of this act the requirements as to amount of stock owned by a director shall not apply unless the corporation commission shall rule that such director is not bona fide discharging his duties.

1921, c. 4, s. 51.

264. Directors shall take oath. Every director shall, within thirty days after his election, take and subscribe, in duplicate, an oath that he will diligently and honestly perform his duties in such office; and that he is the owner in good faith of the shares of stock of the bank required to qualify him for such office, standing in his own name on its books, and one of such oaths shall forthwith be filed with the corporation commission, and the other shall be kept on file in the bank.

1921, c. 4, s. 52.

265. Directors, liability of. Any director of any bank who shall knowingly violate, or who shall knowingly permit to be violated by any officers, agents, or employees of such bank, any of the provisions of this act shall be held personally and individually liable for all damages which the bank, its stockholders or any other person shall have sustained in consequence of such violation. 1921, c. 4, s. 53.

Banks & Banking § 82. A bank depositor, on rumors of its insolvency, went to withdraw his deposits, but was informed by the vice president and director that the bank was perfectly solvent, and that we have got all the money you want. You need never have any fears of this bank as long as I am in it." Such depositor, relying on such representations, permitted his deposits to remain. The bank was in fact insolvent when the representations were made. Held, that such vice president and director was personally liable to such depositor for the money lost by the failure of the bank. Townsend v. Williams, 117 N. C. 330, 23 S. E. 461.

Banks & Banking § 82. Bank directors, who, by false and fraudulent statement to the state treasurer as to the condition of the bank, in order to conceal its insolvency, induce him not only to make new deposits of the state's money, but also to permit a portion of the money deposited by his predecessor to remain, are liable to such treasurer for any loss, either of the old or new deposits.-Tate v. Bates, 118 N. C. 287, 24 S. E. 482.

Banks & Banking § 54. It is the duty of the directors to know the condition of their bank, and to prevent publication of false statements of its condition, and by no private arrangement could they be excused from giving proper attention to such duties because they are nonresidents of the town wherein their bank is located. Houston v. Thornton, 122 N. C. 365,

29 S. E. 827.

Banks & Banking § 54. Where it appears that the affairs of a bank were left in the management of officers thereof, who, by gross frauds ex

tending through a period of several years, ruined the bank, and during which time false statements were published showing the bank to be in a good condition, the fact that the directors resided away from the town where the bank was located will not warrant the assumption that such directors could not, in the proper discharge of their duty, have ascertained that such statements were false.-Ibid.

Banks & Banking § 82. A complaint charging bank directors with fraud and deceit in making false statements of the bank's solvency need not allege that defendant knew or believed the bank to be insolvent, such knowledge being conclusively presumed.-Tate v. Bates, 118 N. C. 287, 24 S. E. 482.

Banks & Banking § 55. Where negligence of directors in permitting a false and fraudulent statement of the condition of a bank is the basis of an action against the directors, the plaintiff's right to recover should not be restricted to one instance of negligence, where there are many others in evidence.-Houston v. Thornton, 122 N. C. 365, 29 S. E. 827.

Banks & Banking § 112. Where a cashier of a bank discounts a note and converts parts of the proceeds to his own credit instead of the credit of the maker, the bank is liable. Phillips v. Hensley, 175 N. C 23, 94 S. E. 673.

266. Directors, examining committee of. A committee of at least three directors or stockholders shall be appointed annually to examine, or to superintend the examination of the assets and the liabilities of the bank, and to report to the board of directors the result of such examination. The committee, with the approval of the board of directors, may provide for such examination by a certified public accountant or clearing-house examiner in any city where such examination is provided for by the rules of such clearing-house association. A copy of such report of examination, which is herein required to be made, attested, and verified under oath by the signature of at least three members of such committee, shall forthwith be filed with the corporation commission. 1921, c. 4, s. 54.

267. Depositaries, designated by directors. By resolution of the board of directors, other banks organized under the laws of this state, or of another state, or of the National Banking Act of the United States, shall be designated as depositaries or reserve banks in which a part of such bank's reserve shall be deposited, subject to payment on demand. A copy of such resolution shall, upon its adoption, be forthwith certified to the corporation commission and the depositary so designated shall be subject to the approval of the corporation commission. For causes which it may deem adequate, the corporation commission shall have authority at any time to withdraw such approval.

1921, c. 4, s. 55.

268. Stockholders' book. The directors shall provide a book. in which shall be kept the name and resident address of each