CHAPTER 6.-BANKS.

Secs. 291 to 306. "An act to require corporations, firms, and individuals transacting a banking business to make report of their resources and liabilities to the auditor of public accounts, and to provide for the examination of the affairs of such banking institutions, and to fix a minimum capital for the transaction of a banking business; punish the receiving of deposits by insolvent banking institutions and to provide for winding up their affairs." 1889, p. 388. In force June 30. Repeals secs. 1 to 3, ch. 8, Comp. Stats. 1887.

291. [Capital required.]—It shall be unlawful for any corporation, firm, or individual to transact a banking business by receiving money on deposit, buying and selling exchange and the like, unless such corporation, firm, or individual shall have property of cash value as follows: In cities, villages, and communities having a population of less than one thousand (1,000) inhabitants, five thousand (5,000) dollars; in cities, and villages, having a population of more than one thousand (1,000) and less than fifteen hundred (1,500) inhabitants, ten thousand (10,000) dollars; in cities and villages having a population of less than two thousand (2,000) and more than fifteen hundred (1,500) inhabitants, fifteen thousand (15,000) dollars; in cities having a population of less than three thousand (3,000) and more than two thousand (2,000) inhabitants, twenty thousand (20,000) dollars; in cities having a population of less than five thousand (5,000) and more than three thousand (3,000) inhabitants, twenty-five thousand (25,000) dollars; in cities having a population of less than ten thousand (10,000) and more then five thousand (5,000) inhabitants thirty thousand (30,000) dollars; in cities having a population of more than ten thousand (10,000) inhabitants, fifty thousand (50,000) dollars. Such property shall be in money or in money's commercial paper, bank furniture, and the necessary bank buildings with the lot or lots on which the same are built, and of the cash value aforesaid, above all incumbrances thereon and in excess of all liabilities owing by such corporation, firm, or individual; Provided, That real estate, furniture, and fixtures shall not constitute more than one-third (3) of capital.

292. Every bank, or corporation, firm, or individual transacting a banking business shall, at least ten (10) days before commencing such business, transmit to the auditor of public accounts a report of the character set forth in section four (4) of this act [294]; Provided, That every bank, or corporation, firm, or individual, transacting a banking business at the time this act takes effect, shall transmit such report within ten (10) days from such time.

293. Every bank and every corporation, firm, or individual transacting a banking business, shall make to the auditor of public accounts not less than three (3) reports during each year according to the form which may be prescribed by him, which report shall be verified in the case of incorporated banking companies by the oath or affirmation of the president or cashier, and in other cases by the oath or affirmation of a partner, member, or business manager. But the officer administering the oath or affirmation to the person verifying such report shall be in no way interested in such bank as a stockholder, member, partner, bank officer.

294. Such report shall state the amount loaned upon bond and mortgage, the par value and actual market value of all stock or bond investments, designating each particular kind and the amount invested in each; the amount loaned upon notes, bills of exchange, over-drafts, and other personal securities, with the actual market value of such securities; the amount of rediscounts and of commercial paper past due; the amount invested in real estate, giving the cost of the same; the amount of cash on hand and on deposit in banks or trust companies, with their

names and the amount deposited in each; the amount of all other assets not enumerated above, and such other information as the auditor of public accounts, state treasurer, and attorney general, or any two of them, may require; Provided, That commercial paper, not in process of collection, six (6) months past due with interest unpaid, shall not be included in the report of the assets of such corporation, firm, or individual. Each report shall state such resources and liabilities at the close of business on any past day by the auditor of public accounts specified, and shall be transmitted to him within five (5) days after the receipt of a request or requisition therefor from him. And a summary of such report in the form prescribed by the auditor of public accounts, state treasurer, and attorney general shall be published in a newspaper published in the place where such banking business is transacted, or if there is no newspaper in the place, then in one published nearest thereto in the same county, at the expense of such bank, corporation, firm, or individual; and proof of such publication shall be transmitted to the auditor of public

accounts.

295. The auditor of public accounts, state treasurer, and attorney general, or any two of them, shall have power to call for special reports from any particular bank, corporation, firm, or individual transacting a banking business whenever in their judgment the same are necessary in order to a full and complete knowledge of his or its condition.

296. [Examiners.]-The auditor of public accounts, state treasurer, and attorney general, or any two of them, shall appoint a suitable person to perform the clerical work necessary to carry out the provisions of this act. They shall also appoint a suitable person or persons having practical knowledge of banking to make an examination of the affairs of every bank, and every corporation, firm, or individual transacting a banking business, as often as shall be deemed necessary and proper, and at least once in every year. But no person shall be appointed to examine the affairs of any bank, or corporation, firm, or individual transacting a banking business who is an officer, stockholder, member, partner, or clerk in any banking institution of this state. The auditor of public accounts, state treasurer, and attorney general, or any two of them, may at any time remove any person so appointed by them.

297. The person or persons so appointed shall have power to make a thorough examination into all the books, papers, and affairs of the bank, or corporation, firm, or individual transacting a banking business, and, in so doing, to administer oaths and affirmations, and to examine on oath or affirmation any individual banker and the officers, agents, partners, and clerks of such bank, corporation, firm, or individual touching the matters he or they shall be directed or may desire to inquire into; and to summon, and by attachment compel, the attendance of any inhabitant of the state, to testify under oath before him or them in relation to the affairs of such corporation, firm, or individual. The person or persons making such examination shall make a full and detailed report of the condition of such corporation, firm, or individual to the auditor of public accounts.

298. Every person appointed to examine the affairs of any bank, corporation, firm, or individual transacting a banking business shall receive compensation for such examination at the rate of ten dollars ($10) for each day by him employed in such examination, which shall be paid to him by the bank, corporation, firm, or individual whose affairs are examined; Provided, That the fees paid by any such corporation, firm, or individual for any such single examination shall not be less than ten dollars ($10) nor more than twenty dollars ($20), and that no such corporation, firm, or individual shall be required to pay for more than one such examina

tion in any one year; And provided further, That all fees collected by any such examiner in excess of the sum of two thousand dollars ($2,000) per annum and all his necessary traveling expenses shall be paid into the state treasury for the benefit of the general fund. Every person appointed as such examiner shall make at the end of every year to the auditor of public accounts, state treasurer, and attorney general a detailed report of all fees collected by him under this act, and of all his necessary traveling expenses in the performance of his duties as such examiner; and shall give a bond in the sum of ten thousand dollars ($10,000), executed by himself, with two sufficient sureties to be approved by the governor, conditioned for the faithful performance of his duties as such examiner.

299. Every bank, corporation, firm, or individual who shall fail or neglect to make any report required by the provisions of this act shall be subject to a penalty of fifty dollars ($50) for each day after the periods respectively therein mentioned that he or it delays to make and transmit such report, to be recovered by and for the state in a civil action; and every person who shall willfully and knowingly subscribe or make, or cause to be made, any false statement or false entries in the books of any bank, corporation, firm, or individual transacting a banking business, or shall knowingly subscribe or exhibit false papers with the intent to deceive any person or persons authorized to examine into the affairs of said bank, corporation, firm, or individual, or shall make, state, or publish any false statement of the amount of the capital assets, surplus, or undivided profits of any such corporation, firm, or individual, shall be deemed guilty of a felony, and upon conviction thereof shall be fined not exceeding ten thousand dollars ($10,000) and be imprisoned in the state penitentiary not less than one (1) nor more than five (5) years.

300. Every bank shall at all times have on hand as a reserve in available funds an amount equal to at least fifteen (15) per centum of the aggregate amount of its deposits and immediate liabilities, which said reserve shall be twenty (20) per centum in banks located in cities having a population of twenty-five thousand (25,000) or over; Provided, That savings banks, doing an exclusive savings bank business, shall have on hand, at all times, as a reserve, in available funds an amount equal to at least five (5) per cent of its deposits and immediate liabilities. The available funds shall consist of cash on hand and balances due the corporation, firm, or individual from good solvent banks. Immediate liabilities shall include all claims against the corporation payable on demand. Cash shall include specie, legal tender notes, bills of solvent banks, and exchange for any clearing house association. Whenever the available funds of any bank shall fall below the reserve herein required, such bank shall not increase its liabilities by making any new loans or discounts otherwise than by discounting or purchasing bills of exchange payable at sight; nor shall such bank make any dividends of its profits until it has on hand the available funds required by this act. The auditor of public accounts may notify any such bank, in case its reserve shall fall below the amount required, to make good such reserve without delay, and any failure for the period of thirty (30) days by such corporation, firm, or individual to make good any deficiency in the amount of his or its deposits required to be kept on hand, shall be cause for the appointment of a receiver as provided by section fourteen (14) of this act [304].

301. The total liabilities of any corporation, firm, or individual to any bank or corporation, firm or individual transacting a banking business, for money borrowed, including in the liabilities of a corporation or firm the liabilities of the several members thereof, shall at no time exceed twenty (20) per centum of the capital of the banking corporation, or firm or individual banker, and in no case shall the total liabilities of the stockholders of any bank or corporation transacting

a banking business, to said bank or corporation, exceed fifty (50) per cent of the paid up capital of said bank or corporation. But the discount of bills of exchange drawn in good faith against actually existing values, and the discount of commercial paper actually owned by the person negotiating the same, shall not be considered as money borrowed.

302. No bank, corporation, firm, or individual engaged in the banking, broker, exchange, or deposit business shall accept or receive on deposit, with or without interest, any money, bank bills, or notes, or United States treasury notes or currency, or other notes, bills, or drafts, circulating as money or currency, when such bank or corporation, firm, or individual is insolvent.

303. [Penalty.]-If any such bank, corporation, firm, or individual shall receive or accept on deposit any such deposits as aforesaid when insolvent, any officer, director, cashier, manager, member, party, or managing party thereof who shall knowingly receive or accept, be accessory or permit, or connive at the receiving or accepting on deposit therein or thereby any such deposits as aforesaid, shall be guilty of a felony, and upon conviction thereof shall be punished by a fine not exceeding ten thousand dollars ($10,000), or by imprisonment in the penitentiary not exceeding five (5) years, or by both fine and imprisonment as aforesaid.

304. Whenever it shall appear to the auditor of public accounts, state treasurer, and attorney general, or any two (2) of them, from any examination or report provided for by this act, that any corporation, firm, or individual transacting a banking business is the owner of property of the kind required by this act, of the cash value of less than the amount herein required, above all incumbrances thereon, and in excess of all liabilities due from said corporation, firm, or individual, or is conducting his or its business in an unsafe and unauthorized manner and is jeopardizing the interests of his or its depositors, and that it is unsafe and inexpedient for any such corporation, firm, or individual to continue to transact a banking business, they shall communicate the facts to the attorney general, who shall thereupon apply to the supreme court or the district court of the county where such corporation, firm, or individual has his or its banking office, or to a judge of either, for the appointment of a receiver to take charge of and wind up such banking business. It shall be sufficient to authorize the appointment of a receiver, on the application of the attorney general, that the facts set forth in this section shall be made to appear.

Supreme court may appoint a receiver to wind up a bank. 28, 682 (44 N. W., 998). 305. This act does not apply to banks organized under the national banking act of the United States.

306. Savings banks shall not be subject to the provisions of section one (1) of this act [291], but no savings bank shall carry on business in this state with a paid up capital of less than twelve thousand ($12,000) dollars, nor shall any savings bank receive deposits to an amount exceeding ten (10) times the aggregate of its paid up capital stock and surplus. Under the term savings bank as named in this act shall be included only such banks as do a savings bank business exclusively, paying out money only on presentation of pass books and certificates of deposit, discounting and buying no commercial paper, and reserving the right to demand notice before paying deposits.

Secs. 307 to 315.

CHAPTER 7.-CHATTEL MORTGAGES.

"An act relating to the sale and transfer of personal property under mortgage." 1867 (Ter.), p. 9. In force February 18.

307. Every mortgage of personal property containing and giving to the mortgagee or any other person a power to sell the property described therein, upon default being made in any condition of such mortgage, may be foreclosed in the cases and in the manner hereinafter specified.

Need not be in writing. 8, 3. Mortgage must be filed in the county where the sale is to take place. 21, 399 (32 N. W., 205). To render chattel mortgage fraudulent, fraud must have been known to, or participated in, by mortgagee. 11, 291 (9 N. W., 48). Mortgagee entitled to possession upon default, but liable to account to mortgagee for surplus, and action for accounting not barred by a judgment in replevin against mortgagor. 29, 455 (45 N. W., 617). Whole instrument shall be construed together. Mortgagee cannot at any time declare himself unsafe and insecure unless some act is done to impair his security. 22, 720 (36 N. W., 155). Mortgagee cannot withdraw original from files, and foreclose. 24, 596 (39 N. W., 615). Though the property may be sold, yet the proceeds cannot be applied in payment of note until note becomes due. 21, 401 (32 N. W., 205). A certified copy of a mortgage filed is sufficient authority for taking possession. 25, 360 (41 N. W., 192).

308. To entitle any person to foreclose a chattel mortgage as hereinafter prescribed, it shall be requisite-1. That some default in a condition of such mortgage shall have occurred, by which the power to sell became operative. 2. That if no suit or proceeding shall have been instituted at law to recover the debt then remaining secured by such mortgage or any part thereof, or if any suit or proceeding has been instituted that the same has been discontinued, or that an execution upon the judgment rendered thereon has been returned unsatisfied, in whole or in part, and 3. That such mortgage containing the power of sale has been duly recorded.

309. Notice that such mortgage will be foreclosed by a sale of the mortgaged property, or some part thereof, shall be given as follows: By advertisement published in some newspaper printed in the county in which such sale is to take place, or in case no newspapers are printed therein, by posting up notices in at least five public places in said county, two of which shall be in the precinct where the mortgaged property is to be offered for sale, and such notices shall be given at least twenty days prior to the day of sale.

16, 461 (20 N. W., 632).

310. Every such notice shall specify-1. The date of the mortgage and where recorded. 2. The names of the mortgagor and mortgagee, and the assignee of the mortgagee, if any. 3. The amount claimed to be due thereon at the time of the first publication or posting of such notice. 4. A description of the mortgaged property, conforming substantially with that contained in the mortgage. 5. The time and place of sale.

311. Such sale may be postponed from time to time by inserting a notice of such postponement, as soon as practicable, in the newspaper in which the original advertisement was published, and continuing such publication until the time to which the sale shall be postponed; or, in case no newspaper is published in the county in which such sale is to be had, by posting a notice of such adjournment in some conspicuous place, at the place designated in the original notice posted for such sale to be had.

312. Such sale shall be at public auction, in the day time, between the hours of 10 A. M. and 4 P. M., in the county where the mortgage was first recorded, or in any county where the property may have been removed by consent of parties, and in which the mortgage was duly recorded, and in view of said property.