ART.

CHAPTER 14.

BANKS.

Section numbers to notes refer to Revised Statutes of 1901.

Sections omitted have not been construed since 1901.

ART.

1. OF DISCOUNT AND DEPOSIT. 2922-2934. 3. PRIVATE BANKS. 2994a-2994j. SAVINGS BANKS. 2958-2988.

2.

Liability of the directors of banks for losses occasioned by their negligence or mismanagement of the business of the bank. Coddington v. Canaday, 157 Ind. 243. 2927. Stock payments.

What may be received in payment for stock in a bank. Coddington v. Canaday, 157 Ind. 243.

2934. Transfers, when void.

If a bank, while solvent, procures a loan under an agreement to assign certain obligations as collateral security, such assignment may be made after the bank has become insolvent. Harris v. Randolph Co. Bank, 157 Ind. 120.

[Acts 1903, p. 211. In force March 7, 1903.]

2958. Investments.-19. It shall be lawful for the trustees of any savings bank to invest the money deposited therein only as follows, to wit: First, in the stocks or bonds or treasury notes of the United States; second, in the stocks or bonds of this State; third, in the orders or bonds of any county, city or town in this State, issued pursuant to the authority of law; fourth, in the stocks or bonds of any State in the Union that has, for five years previous to such investment being made, regularly paid the interest on its legal bonded debt in lawful money of the United States; fifth, in bonds or notes secured by mortgage or

unincumbered real estate situate in the county where the bank is located or in an adjoining county in Indiana, or in any adjoining county in an adjoining State (or in any other county in the State of Indiana) worth, exclusive of perishable improvements, at least twice the amount loaned thereon; sixth, in promissory notes or bills of exchange before their maturity, payable at some chartered bank within this State, and having not to exceed twelve months to run from the date of the loan or purchase, made or endorsed by two or more responsible freeholders, one of whom at least shall be a resident of the State of Indiana: Provided, That no such note or bill shall exceed the sum of ten thousand dollars, and that no more than ten thousand dollars shall be loaned on the same security; seventh, in real estate subject to the provisions of Section 24; eighth, in dealing in exchange, by purchasing and selling sight or time drafts payable out of this State: Provided, That no such draft shall be for a larger sum than ten thousand dollars, nor shall any time draft payable out of the State be so purchased which shall have, at time of such purchase, more than sixty (60) days to run until it matures : And provided, also, That not more than one draft shall be held by any such bank, at any one time, which is secured by the same endorsers, or by any of the same endorsers.

See sections 2940-2994, Burns' R. S. 1901.

This section amends section 2958, Burns' R. S. 1901.

[Acts 1903, p. 321. In force April 23, 1903.]

2961. Reserve, deposit.-22. The trustees may keep in reserve not exceeding twenty (20) per cent. of the total amount of deposits, without investment, or deposit the same on call, with or without interest, in any bank in this state, organized under the laws thereof, or under the laws of the United States, or in any National Bank in the United States.

This section amends section 2961, Burns' R. S. 1901.

[Acts 1903, p. 337. In force April 23, 1903.]

2988. Pay of officers.-49. It shall be lawful to pay trustees of savings banks, acting as officers or agents of the same, whose duties require and receive their regular and faithful attendance at the bank, such compensation as in the opinion of the majority of the board of trustees shall be just and reasonable; but such majority shall not include any trustee or trustees to whom such compensation shall be voted, and the vote fixing or altering the compensation of any officer or agent who is also a trustee, shall be transmitted to the auditor of state, with the names of the yeas and nays upon such vote, for his information; and when the deposits of any savings bank shall reach or exceed the sum of one hundred and fifty thousand dollars, the trustees may, with the written approval of the auditor of state, allow the president for his services a sum not exceeding one thousand dollars per annum, and with the like consent may allow each member of the finance committee not exceeding the rate of six hundred dollars per annum for their ser

vices, such committee, however, not to exceed three members; and when the deposits of any savings bank shall reach or exceed five hundred thousand dollars, the trustees may, with the written approval of the auditor of state, allow the president of such bank for his services a sum not exceeding fifteen hundred dollars per annum, and with the like consent may allow each member of the finance committee not exceeding the rate of seven hundred and fifty dollars per annum for their services; such committee, however, not to exceed three members. And when the deposits of any such savings bank shall exceed nine hundred thousand dollars, and with the like consent of the auditor of state, the trustees may allow the president a sum not exceeding five thousand dollars per annum for his services, and the members of such finance committee a sum not exceeding fifteen hundred dollars per annum each for their services: And provided, That the members of such finance committee in no event shall exceed three in number: Provided, further, That in the event the auditor of state finds that the compensation paid to the officers named herein is excessive he shall have power to revoke his approval of the same.

This act amends section 2988, Burns' R. S. 1901.

[Acts 1905, p. 182. In force April 15, 1905.]

2994a. Private banking.-1. That every partnership, firm or individual transacting a banking business within this state or using the word bank, banker or banking in connection with his or its business shall be subject to the provisions of this act.

2994b. Assets.-2. That from and after July 1st, 1905, it shall be unlawful for any partnership, firm or individual to transact a banking business in this state unless such partnership, firm or individual has property of the cash value of at least ten thousand dollars. Such property shall be in money, bank furniture and fixtures or real estate for the conduct of the business of such bank, all to be set apart and kept good and unimpaired for the security of the creditors of any such bank, and provided that the real estate, bank furniture and fixtures shall not constitute more than one-third in amount and value of the entire capital of such bank.

2994c. Statement to Auditor of State.-3. Every partnership, firm or individual now transacting or hereafter desiring to transact a banking business in this state, shall, under oath, file with the auditor of state, a full, complete detailed statement of

First. The name of the bank or proposed bank.

Second. A copy of the articles of copartnership and agreement if a copartnership under which the business of the bank is being or is to be conducted, which shall be executed and acknowledged by all the parties interested therein, and at least one of whom shall be at all times a resident of the State of Indiana. If a banking business is being or is to be transacted or carried on by an individual, such individual shall at all times, while in such banking business be a resident of the State of Indiana and the statement herein required shall so show.

Third. The county and city or town in which the bank is to be located and the business carried on.

Fourth. The amount of capital paid into the business, and to be kept and maintained at all times in the business.

Fifth. A statement that the responsibility and net worth of the individual members of such firm, partnership or individual is equal to an amount at least double the amount of capital paid into such bank as herein provided.

Sixth. If not disclosed in the partnership agreement, then the names of the officers, agents or employes in the active charge of and management of the business of the bank. Every partnership, firm or individual now doing a banking business in this state shall on or before July 1, 1905, file with the auditor of state a detailed statement as provided herein.

2994d. Oath as to capital paid in-Certificate.-4. Whenever, after the filing of the statement provided in section 3 of this act and the payment to the auditor of state, for the state, the sum of five dollars, and the filing with the auditor of state, the oath of some member of the partnership, firm or individual, that the capital has been paid in as provided for and in compliance with section 3 of this act, then the state auditor shall, without unnecessary delay, issue to such partnership, firm or individual, a certificate or charter, authorizing such partnership, firm or individual to transact a banking business.

2994e. Reports to auditor-Publication.-5. Every bank, partnership, firm or individual transacting a banking business under the provisions of this act shall make to the auditor of state not less than two reports each year, according to the form which may be described [prescribed] by the auditor of state, which report shall be verified by some member of the firm, partnership or the individual owner of such bank, and which said report shall be of the same general form and character as is required by the auditor of state of corporations organized and doing business under the general banking laws of the state, a copy of which said report shall be published in some newspaper printed and published in the town or city where such bank is located, and if no

paper is published in such town or city then in some newspaper of general circulation printed and published in the county seat of the county where such bank is located.

2994f. Posted list of owners-Changes-Notice.-6. There shall be posted in the room of every bank, doing business under the provisions of this act, and in plain view of its customers, a printed list of all the owners of, and parties interested in, such bank, and the statement that this is a private bank. Should the interest of any member of such partnership or firm, or of an individual doing a banking business under the provisions of this act, change either by death, devise, sale or otherwise, then and in that case the auditor of state shall be notified of such change and the notice printed in the room of any such bank as herein provided shall be changed accordingly.

2994g. Penalties.-7. Any person, firm, or copartnership violating any of the provisions of this act shall be fined in any sum not exceeding one thousand dollars, to which may be added for the second offense imprisonment in the state prison for any term not exceeding two years. 2994h. Property in trust-Instrument filed-Fee.-8. Should any bank organized under the provisions of this act, or any owner or owners thereof, hold any property in trust for another, the fact of such trust, the general nature and character thereof, the acceptance of the same and the amount so held shall be set forth in an instrument to be executed by the trustee and acknowledged by him before a notary public. Within forty-five days after the execution of such an instrument, it shall be filed with the auditor of state with a record fee of one dollar for the state.

29941. Depositors' lien.-9. The depositors in any such bank shall have a first lien on the assets of such bank, in case it is wound up, to the amount of their several deposits. And for any balance remaining unpaid, such depositors shall share in the general assets of the owner or owners, alike with general creditors.

2994j. Suits, service of process.-10. Any bank organized and doing business under the provisions of this act shall have the right to sue and be sued under the name under which such bank is authorized to transact its business. Service of summons or other process of court upon the officer or agent in charge of the business of such bank shall be good and sufficient service to give the court jurisdiction and any judgment obtained against such bank shall be valid and binding against all the persons interested therein.