In an action against a national bank upon a contract, each party
relied on section 5136 of the Revised Statutes, by which a national
bank, upon filing its articles of association and organization
certificate with the Comptroller of the Currency, becomes a
corporation, with power "to make contracts" and other corporate
powers, but is prohibited to
"transact any business, except such as is incidental and
necessarily preliminary to its organization, until it has been
authorized by the Comptroller of the Currency to commence the
business of banking."
The defendant relied on the prohibition. The plaintiff relied on
the exception to the prohibition, and also contended that, under
the general power to make contracts, the contract sued on was valid
as between the parties, even if contrary to the prohibition.
Held that a judgment for the defendant in the highest
court of the state might be reviewed by this Court on writ of
error. By section 5136 of the Revised Statutes, a contract of lease
at a large rent of an office to be occupied "as a banking office,
and for no other purpose" for the term of five years, determinable
at the end of any year by either party, executed by a national bank
as lessee, after having duly filed its articles of association and
organization certificate with the Comptroller of the Currency, but
not having been authorized by him to commence
Page 165 U. S. 539
the business of banking, is void, cannot be made good by
estoppel,
and will not support an action against the bank to recover
anything beyond the value of what it has actually received and
enjoyed.
This was an action brought July 17, 1895, by McCormick against
the Market National Bank of Chicago, Illinois, in the Superior
Court of Cook County, in the State of Illinois, and was submitted
by the parties, waiving a trial by jury, to that court upon an
agreed statement of facts, in substance as follows:
On January 31, 1893, articles of association were signed, and an
organization certificate was signed and acknowledged, by nine
citizens of Illinois, before a notary public, and both were
transmitted to the Comptroller of the Currency, as required by
Title 62 of the Revised Statutes of the United States (the material
parts of which are copied in the margin
*), for the
purpose of making them a national banking association at Chicago by
the aforesaid name, and were on
Page 165 U. S. 540
February 3, 1893, recorded, and afterwards carefully preserved,
in the Comptroller's office.
On January 31, 1893 at a meeting of the directors of the bank,
chosen by the stockholders and named in the articles of
association, a president and a cashier were duly elected, and the
directors caused a seal to be made for the bank. On February 9,
1893, the president, pursuant to a resolution of the directors,
signed and sealed with the corporate seal a lease in writing from
the plaintiff to the bank of certain offices in Chicago, "to be
used and occupied by said Market National Bank as a banking office,
and for no other purpose," for the term of five years from May 1,
1893 at a yearly rent of $13,000, payable in equal monthly
installments. By an agreement made part of the lease, the plaintiff
was to make certain alterations
Page 165 U. S. 541
and repairs at his own expense; either party might cancel the
lease on May 1 of any year by giving ninety days' notice in
writing, and no rent was to be charged until the bank took
possession. On April 12, 1893, the parties made a supplemental
agreement, by which the plaintiff was to make further alterations,
the bank paying half the cost thereof. All the alterations and
repairs were made by the plaintiff as agreed, the cost, paid by
him, of the alterations made under the agreement of April 12, 1893,
being $2,475.
Upon the completion of the alterations, on June 22, 1893, the
president and cashier, in the name of the bank, took possession of
the demised premises and put in the fixtures and furniture, blank
books and stationery, necessary to carry on a banking business, and
they were not removed until April 30, 1895.
Page 165 U. S. 542
Of the whole capital stock of $1,000,000 provided for in the
articles of association, no more than the sum of $331,594 was ever
paid in, and the bank was never authorized by the Comptroller of
the Currency to commence, and never did commence, the business of
banking.
The officers of the bank, from time to time, corresponded with
the plaintiff, using letterheads with the name, location, and place
of business of the bank and the names of its officers printed
thereon, and signing in their official capacity.
The plaintiff at the times of the negotiations for the lease and
of its execution and of the taking possession of the demised
premises by the officers of the bank, understood and believed that
it was legally organized as a national bank, and as such was ready
to do banking business, and had the power to enter into the lease
and agreements aforesaid, and had no knowledge or information to
the contrary until August 15, 1893, when the officers of the bank
informed him that the bank had never been authorized by the
Comptroller of the Currency to commence the business of banking,
and had no power to enter into the lease, and had abandoned all
further proceedings for carrying on the banking business, and
offered to surrender the lease, but he refused to accept the
surrender. On September 20, 1893, the president of the bank caused
the key of the office to be left on the desk of the plaintiff's
agent, he refusing to accept it.
On July 15, 1893, the nine persons who had signed the aforesaid
articles of association and organization certificate signed and
transmitted to the Comptroller of the Currency a certificate
revoking them, and he placed it on file in his office. On the same
day, five of those persons and seven others signed and
acknowledged, and forwarded to the Comptroller, other articles of
association and organization certificate for the purpose of making
them a national bank by the same name, with a capital of $500,000,
and they were forthwith recorded in the Comptroller's office. On
July 25, 1893, the persons signing the latter articles of
association and organization certificate abandoned all further
proceedings with regard to the organization of the bank as
therein
Page 165 U. S. 543
provided, and with regard to its commencing the business of
banking.
On October 4, 1893, the parties agreed in writing that, without
prejudice to the rights of either, the plaintiff should take
possession of the premises, and endeavor to lease them and to
collect the rent thereof. The plaintiff made every effort to obtain
a tenant accordingly, but was unable to do so.
On January 3, 1895, the plaintiff gave written notice to the
president of the bank of his intention to terminate the lease on
May 1, 1895, in accordance with its terms.
The cashier paid the rent, according to the lease, until July
22, 1893. But the bank refused to pay any rent subsequently
accruing, and never paid its half of the cost of the alterations
made under the agreement of April 12, 1893.
If, upon the facts stated, without regard to the form of the
pleadings, the court should be of opinion that the plaintiff was
entitled to recover, judgment was to be rendered for him for such
sum as he was entitled to, with costs; otherwise judgment for the
defendant, with costs.
The plaintiff asked the court to find, as matter of law, the
following propositions:
"1st. That the execution of the lease in question by the
defendant was incidental and necessarily preliminary to its
organization, and to its entering upon a banking business."
"2d. That the execution of the lease in question was a proper
exercise of the powers possessed by such defendant to make
contracts under paragraph 3 of section 5136 of the Revised Statutes
of the United States."
"3d. That the limitation or last clause of paragraph 7 of said
section does not apply to the powers conferred by paragraphs 1 to 6
in said section; that the Market National Bank of Chicago had the
power to enter into said lease, and to legally bind itself
thereby."
"4th. That there was no want of power on the part of said
defendant to execute said lease, but merely a defective
organization, and said bank cannot plead such defective
organization to defeat a recovery."
"5th. That said contract of lease has been fully executed. "
Page 165 U. S. 544
"6th. That the said plaintiff was not bound to ascertain whether
or not the said defendant was properly and legally organized, and
that if the plaintiff relied upon the representations and
statements of the proper officers of said defendant that the bank
was properly and legally organized and empowered to make and enter
into said lease, he is entitled to recover the stipulated rental
named therein, and the defendant is estopped to deny its
liability."
"7th. That the said defendant, by its acts, conduct, and
declarations, as shown by the agreed statement of facts in this
case, is estopped from alleging that it was not fully organized as
a banking corporation under the laws of the United States, and from
alleging that it did not have the power to execute the lease in
question."
"8th. That the plaintiff, under the facts in this case as agreed
upon, is entitled to recover judgment at the rate agreed upon in
said lease, from July 22, 1893, up to May 1, 1895, and also to
recover one-half of the expenses of repairing and changing the said
premises, according to the stipulation, with interest upon each
installment as it became due at the rate of five percent per
annum."
The court refused to find the foregoing propositions of law, or
any of them, and the plaintiff duly excepted to the refusal.
The court found for the plaintiff, and gave judgment in his
favor for the rent from July 22 to August 15, 1893, and for half
the cost of the alterations made by the plaintiff under the
agreement of April 12, 1893, with interest, amounting in all to the
sum of $2,548.85.
The judgment was affirmed, on successive appeals of the
plaintiff, by the appellate court and by the Supreme Court of
Illinois. 61 Ill.App. 33, 162 Ill. 100. The plaintiff thereupon
sued out this writ of error. The assignments of error upon each
appeal, as well as upon the writ of error, were based upon the
propositions of law above stated.
Page 165 U. S. 545
MR. JUSTICE GRAY, after stating the case, delivered the opinion
of the Court.
By the National Bank Act, a national banking association, "upon
duly making and filing articles of association, and an organization
certificate" with the Comptroller of the Currency
"shall become, as from the date of the execution of its
organization certificate, a body corporate, and as such, and in the
name designated in the organization certificate, shall have power .
. . to adopt and use a corporate seal, . . . to have succession for
the period of twenty years from its organization, . . . to make
contracts, . . . to sue and be sued, as fully as natural
persons,"
to elect and dismiss officers, to make bylaws, and to
exercise
"all such incidental powers as shall be necessary to carry on
the business of banking. . . . But no such association shall
transact any business, except such as is incidental and necessarily
preliminary to its organization, until it has been authorized by
the Comptroller of the Currency to commence the business of
banking."
Rev.Stat. § 5136.
The question upon which this case turned was whether a national
banking association which, after having duly made and filed its
articles of association and organization certificate with the
Comptroller of the Currency, but not having received from him a
certificate authorizing it to do banking business, enters with the
owner of real estate into a contract of lease, for a term of five
years, determinable at the end of any year by either party, of an
office to be occupied by the association as a banking office, is
bound by the lease, according to its provisions.
This action was brought by the lessor in such a lease against
the defendant as lessee. The first question that presents itself
upon the record is whether this Court has jurisdiction of this writ
of error.
The defendant contended, and the highest court of the State of
Illinois adjudged, that the contract of lease sued on was not
incidental and necessarily preliminary to the organization of the
corporation, and therefore, by virtue of the last clause of section
5136 of the National Bank Act, above cited,
Page 165 U. S. 546
having been executed by the defendant before being authorized by
the Comptroller of the Currency to commence the business of
banking, did not bind the defendant.
If the decision had been the other way, it would, as admitted at
the bar, have been a decision against an immunity set up and
claimed by the defendant under a statute of the United States, and
therefore reviewable by this Court on writ of error.
Swope v.
Leffingwell, 105 U. S. 3;
Logan County Bank v. Townsend, 139 U. S.
67;
Metropolitan Bank v. Claggett, 141 U.
S. 520;
Chemical Bank v. Hartford Deposit Co.,
161 U. S. 1.
It does not, however, follow that the plaintiff is not entitled
to a review by this Court of the judgment, so far as it was against
him.
The plaintiff, in the courts of the state, and by his assignment
of errors filed with the writ of error sued out from this Court,
specially set up and claimed a right to recover, so far as
concerned the construction of that section of the statute, upon two
grounds.
His first ground was that the execution of the lease by the
defendant was "incidental and necessarily preliminary to its
organization," and therefore within the exception of the last
clause of the section in question. As to that ground, the case
stands thus: the defendant relied on the prohibition to transact
any business until it had been authorized by the Comptroller of the
Currency to commence the business of banking. The plaintiff relied
on the exception out of that prohibition. The decision against the
plaintiff therefore was a decision against a right claimed by him
under a statute of the United States.
The case, in this particular, is analogous to those arising
under the provision of the Bankrupt Act that a bankrupt who had in
all things conformed to his duty under the act should receive a
discharge from all his debts, with certain exceptions, among which
were debts created by his fraud or embezzlement, or by his
defalcation as a public officer, or while acting in a fiduciary
character. Rev.Stat. §§ 5114, 5117. In
Strader v.
Baldwin, 9 How. 261, indeed, under the like
provision
Page 165 U. S. 547
of a former Bankrupt Act, where a bankrupt, being sued upon a
debt, pleaded his discharge, and the plaintiff replied that the
debt was contracted while acting in a fiduciary capacity, and the
decision of the state court was in favor of the defendant, this
Court held that it had no jurisdiction, because the decision below
was in favor of the right set up by the defendant. But the court
there failed to notice that the decision, while in favor of the
right or immunity, set up by the defendant, of a discharge under
the Bankrupt Act, was also against the right or immunity, set up by
the plaintiff, under the clause excepting fiduciary debts from the
effect of that discharge. And the case has accordingly been
overruled in similar cases arising under the recent Bankrupt Act,
in which this Court has taken jurisdiction not only when the writ
of error was sued out by the defendant,
Neal v. Clark,
95 U. S. 704, but
also when it was sued out by the plaintiff, because, as was said by
Chief Justice Waite in delivering judgment in the latest case upon
this point, the plaintiff
"specially set up and claimed an immunity, under § 5117 of the
Revised Statutes, from the operation of the discharge in
bankruptcy, because of the fraudulent and fiduciary character of
his debt, and the decision was against him."
Hennequin v. Clews, 111 U. S. 676;
Palmer v. Hussey, 119 U. S. 96,
119 U. S.
98.
The plaintiff's second ground likewise affords ample support for
the appellate jurisdiction of this Court. It was specially set up
and claimed by the plaintiff that, taking the whole section
together, the defendant, from the date of filing with the
Comptroller of the Currency its articles of association and its
organization certificate, became a corporation empowered to make
contracts appropriate to the business of banking, and that any such
contracts were valid as between the parties to them, even if they
violated the restriction in the last clause of the section, and
therefore might afford a reason for which the United States could
enforce a forfeiture of the charter. This position of the plaintiff
was, in effect, that so far as he was concerned, the bank had power
under the statute of the United States to make the contract sued
on, and the decision of the highest court of the state that the
statute,
Page 165 U. S. 548
rightly construed, did not give such power to the bank was a
decision against the right so specially set up and claimed by the
plaintiff under a statute of the United States, and is therefore
reviewable by this Court. Rev.Stat. § 709.
But we are of opinion that there was no error in that
decision.
While, by the earlier provisions of section 5136 of the Revised
Statutes, the association, upon filing its articles of association
and its organization certificate with the Comptroller of the
Currency, becomes "as from the date of the execution of the
organization certificate," and "for the period of twenty years from
its organization," a body corporate, with the usual powers of a
banking corporation, yet, by the last clause of that section,
Congress has enacted that
"no such association shall transact any business except such as
is incidental and necessarily preliminary to its organization,
until it has been authorized by the Comptroller of the Currency to
commence the business of banking."
By subsequent sections of the National Bank Act, the Comptroller
is required to make a careful examination into the condition of the
association, and taking into consideration a full statement upon
the oaths of the president and cashier and of a majority of the
directors, and any other facts which may come to his knowledge, by
means of a special commission of inquiry or otherwise, to ascertain
and determine that at least fifty percent of the capital stock has
been duly paid in, and that the association has in all other
respects complied with the provisions of the National Bank Act,
required to be complied with before commencing the business of
banking, and thereupon, and not before, to make and to give to the
association a certificate, under his hand and official seal, that
the association has complied with all those provisions, and is
authorized to commence the business of banking. Rev.Stat. §§ 5168,
5169. The Comptroller, as this Court has said, is "clothed with
jurisdiction to decide as to the completeness of the organization."
Casey v. Galli, 94 U. S. 673,
94 U. S. 679;
Bushnell v. Leland, 164 U. S. 684.
Until the association has been authorized by the Comptroller
Page 165 U. S. 549
to commence the business of banking, section 5136 peremptorily
forbids the corporation to "transact any business" whatever,
whether appertaining or not to the business of banking, "except
such as is incidental and necessarily preliminary to its
organization." The only business which it is permitted to transact
is "such as is incidental and necessarily preliminary," not to
carrying on, or even to commencing, the business of banking, but
"to its organization" -- that is to say, such as is requisite to
complete its organization as a corporation, which might doubtless
include electing directors and officers, receiving subscriptions
and payments for shares, procuring a corporate seal, and a book for
recording its proceedings, temporarily hiring its proceedings, any
small debts incidental to the completion of its organization.
To take a lease is certainly to "transact business," within the
meaning of the statute, and a lease for a term of years at a large
rent, of offices to be occupied by the bank "as a banking office,
and for no other purpose," however necessary it might be for the
transacting, or even for the commencing, of banking business by a
corporation whose organization had been completed, and which had
been lawfully authorized to commence the business of banking, is in
no sense incidental or necessarily preliminary to the organization
of the corporation.
The provision of section 5190 that "the usual business of each
national banking association shall be transacted at an office or
banking house located in the place specified in its organization
certificate" refers to its "usual business," after obtaining the
certificate from the Comptroller, and to "the place" -- that is,
the city or town -- in which, after it has been authorized by the
Comptroller's certificate to commence its business of banking, its
"office or banking house" is located.
The lease sued on therefore was clearly prohibited by the very
terms of the statute from which the association assumed to derive
its power to execute the lease.
The doctrine of
ultra vires, by which a contract made
by a corporation beyond the scope of its corporate powers is
unlawful and void, and will not support an action, rests, as this
Court
Page 165 U. S. 550
has often recognized and affirmed, upon three distinct grounds:
the obligation of any one contracting with a corporation to take
notice of the legal limits of its powers, the interest of the
stockholders not to be subject to risks which they have never
undertaken, and, above all, the interest of the public that the
corporation shall not transcend the powers conferred upon it by
law.
Pearce v. Madison &
Indianapolis Railroad, 21 How. 441;
Pittsburgh
&c. Railway v. Keokuk & Hamilton Bridge Co.,
131 U. S. 371,
131 U. S. 384;
Central Transportation Co. v. Pullman's Car Co.,
139 U. S. 24,
139 U. S.
48.
When the corporation is created by a charter granted by the
legislature, any person dealing with it is bound to take notice of
the terms of the charter and of the general laws restricting or
defining the powers of the corporation.
Pearce v. Madison &
Indianapolis Railroad, above cited;
Zabriskie
v. Cleveland &c. Railroad, 23 How. 381,
64 U. S. 398:
Thomas v. Railroad Co., 101 U. S. 71;
Pennsylvania Railroad v. St. Louis &c. Railroad,
118 U. S. 290,
118 U. S. 630. In
like manner, when the corporation is formed under general laws by
the recording or filing in a public office of the required articles
of association and certificate, any person dealing with the
association is bound to take notice of the documents recorded or
filed, upon which, as authorized and controlled by the general
laws, depend the existence of the corporation, the extent of its
corporate powers, and its capacity to act as a corporation.
Oregon Railway v. Oregonian Railway, 130 U. S.
1,
130 U. S. 25;
Central Transportation Co. v. Pullman's Car Co., above
cited.
It is settled by a long series of decisions of this Court that a
lease of a railroad by one railroad corporation to another which is
beyond the corporate powers of either is unlawful and void, and
cannot be made good by ratification or estoppel, so as to sustain
an action upon the lease; that this is so not only when the lease
is
ultra vires of the lessor corporation, and therefore
open to the objection of disabling it from performing those duties
to the public, its performance of which was the consideration upon
which it received its charter from the state, but even if the lease
is
ultra vires of the lessee corporation only, and
therefore not open to that particular
Page 165 U. S. 551
objection.
Thomas v. Railroad Co.; Pennsylvania Railroad v.
St. Louis &c. Railroad; Oregon Railway v. Oregonian
Railway, and
Central Transportation Co. v. Pullman's Car
Co., above cited;
St. Louis &c. Railroad v. Terre
Haute & Indianapolis Railroad, 145 U.
S. 393,
145 U. S.
404.
The case at bar is no less clear than those just referred to.
Congress, indeed, in establishing the system of national banks
instead of undertaking to grant special charters of incorporation
upon its own judgment of the expediency of doing so in each case,
has allowed corporations to be organized by voluntary acts of the
associates under the general conditions defined in the statute. But
the capacity of these voluntary associations to make contracts and
to transact business has not been left to depend upon their own
will, however formally expressed, without any public authority's
having ever passed upon their responsibility and fitness. On the
contrary, Congress has entrusted to the Comptroller of the Currency
the power and the duty of making a careful examination into the
condition of the association, including the amount of its capital
stock actually paid in, and its compliance with the requirements of
the statute in other respects, and, if the result of his
examination is satisfactory, of granting to the association an
official certificate that it is authorized to commence the business
of banking, and has forbidden the corporation to transact any
business whatever, except so far as required to perfect its
organization, until it has received the certificate of the
Comptroller.
The result of the Comptroller's examination, and his certificate
of that result, and of the authority thereupon granted the
corporation to commence the business of banking, of course, appear
on the records of his office, as do the articles of association and
the organization certificate previously transmitted to him.
Everyone dealing with the corporation is bound to take notice of
the facts thus appearing on a public record, upon which, by the
very terms of the National Bank Act, depend the right of the
association to exist as a corporation, and its capacity to transact
business.
The Comptroller's examination and certificate are required,
Page 165 U. S. 552
not only for the security of those dealing with the bank, but
also for the protection of the stockholders, for, without them,
stockholders who had paid in the amount of their subscriptions
might find themselves held liable for debts contracted by the
corporation, without its having obtained the payments due from
other stockholders, and otherwise complied with the requirements of
the act.
One important object of Congress in requiring the fitness of
each corporation for carrying on business with safety to its
stockholders and to all persons dealing with it to be ascertained
and certified by a public officer before the corporation should
have power to transact any business whatever, except to complete
its organization as a corporation, doubtless was to create and
maintain public confidence in the new system of national banks
established by Congress to take the place of the local banks to
which the people had been accustomed.
The cases on which the plaintiff principally relied are
distinguishable in essential elements from the case at bar.
Whitney v. Wyman, 101 U. S. 392,
Harrod v. Hamer, 32 Wis. 162, and
Hammond v.
Straus, 53 Md. 1, depended on provisions of local statutes,
differing from those of the National Bank Act, and in
Whitney
v. Wyman the corporation, after being authorized to commence
business, had ratified the previous contract.
Chubb v.
Upton, 95 U. S. 665, was
to the familiar point that one who has contracted with a
de
facto corporation cannot set up irregularity in its
organization in defense of a suit upon the contract.
Smith v.
Sheeley, 12 Wall. 358, merely held that when land
had been conveyed for full value to a
de facto
corporation, the grantor and those claiming under him could not
afterwards deny its capacity to take the title.
National Bank
v. Matthews, 98 U. S. 621, and
National Bank v. Whitney, 103 U. S.
99, depended upon section 5137 of the Revised Statutes,
specifying the purposes for which a national bank might purchase,
hold, and convey real estate, which as construed by the court, did
not make void mortgages taken for other purposes by a banking
association authorized to transact business.
See also Fritts v.
Palmer, 132 U. S. 282,
132 U. S. 293,
and cases cited;
Thompson v. Bank, 146 U.
S. 240,
146 U. S.
251.
Page 165 U. S. 553
The present case is not one of irregularity of organization, or
of abuse of a legal power, but of an attempt to exercise a power
expressly prohibited by statute.
The lease sued on having been executed by the defendant,
contrary to the express prohibition of the statute, which
peremptorily forbade the corporation to transact any business,
unless to perfect its organization, and thus denied it the capacity
of entering into any contract whatever, except in perfecting its
organization, the lease is void, cannot be made good by estoppel,
and will not support an action to recover anything beyond the value
of what the defendant has actually received and enjoyed.
Central Transportation Co. v. Pullman's Car Co.,
139 U. S. 24,
139 U. S. 54-61;
Logan County Bank v. Townsend, 139 U. S.
67.
The plaintiff, who by the judgment below has recovered rent at
the rate stipulated in the lease for all the time of the
defendant's occupation, as well as all that the defendant had
agreed to pay towards the repairs, has certainly no ground of
complaint, and the defendant, not having sued out a writ of error,
is in no position to object to the amount recovered.
Judgment affirmed.
*
"SEC. 5133. Associations for carrying on the business of banking
under this title may be formed by any number of natural persons,
not less in any case than five. They shall enter into articles of
association which shall specify in general terms the object for
which the association is formed. These articles shall be signed by
the persons uniting to form the association, and a copy of them
shall be forwarded to the Comptroller of the Currency, to be filed
and preserved in his office."
"SEC. 5134. The persons uniting to form such an association
shall, under their hands, make an organization certificate, which
shall specifically state:"
"First. The name assumed by such association."
"Second. The place where its operations of discount and deposits
are to be carried on."
"Third. The amount of capital stock and the number of shares
into which the same is to be divided."
"Fourth. The names and places of residence of the shareholders,
and the number of shares held by each of them."
"Fifth. The fact that the certificate is made to enable such
persons to avail themselves of the advantages of this title."
"SEC. 5135. The organization certificate shall be acknowledged
before a judge of some court of record, or notary public, and shall
be, together with the acknowledgment thereof, authenticated by the
seal of such court or notary, transmitted to the Comptroller of the
Currency, who shall record and carefully preserve the same in his
office."
"SEC. 5136. Upon duly making and filing articles of association
and an organization certificate, the association shall become, as
from the date of the execution of its organization certificate, a
body corporate, and as such, and in the name designated in the
organization certificate, it shall have power:"
"First. To adopt and use a corporate seal."
"Second. To have succession for the period of twenty years from
its organization, unless sooner dissolved or its franchise becomes
forfeited."
"Third. To make contracts."
"Fourth. To sue and be sued, complain and defend, in any court
of law and equity, as fully as natural persons."
"Fifth. To elect or appoint directors, and by its board of
directors to appoint a president, vice-president, cashier and other
officers, define their duties, require bonds of them, and fix the
penalty thereof; dismiss such officers or any of them at pleasure,
and appoint others to fill their places."
"Sixth. To prescribe, by its board of directors, bylaws not
inconsistent with law."
"Seventh. To exercise, by its board of directors or duly
authorized officers or agents, subject to law, all such incidental
powers as shall be necessary to carry on their business of banking
by discounting and negotiating promissory notes, drafts, bills of
exchange and other evidences of debts, by receiving deposits, by
buying and selling exchange, coin and bullion; by loaning money on
personal security, and by obtaining, issuing and circulating notes,
according to the provisions of this title."
"But no such association shall transact any business, except
such as is incidental and necessarily preliminary to its
organization, until it has been authorized by the Comptroller of
the Currency to commence the business of banking."
"SEC. 5168. Whenever a certificate is transmitted to the
Comptroller of the Currency as provided in this title, and the
association transmitting the same notifies the Comptroller that at
least fifty percentum of its capital stock has been duly paid in,
and that such association has complied with all the provisions of
this title required to be complied with before an association shall
be authorized to commence the business of banking, the Comptroller
shall examine into the condition of such association, ascertain
especially the amount of money paid in on account of its capital,
the name and place of residence of each of its directors, and the
amount of capital stock of which each is the owner in good faith,
and generally whether such association has complied with all the
provisions of this title required to entitle it to engage in the
business of banking, and shall cause to be made and attested by the
oaths of a majority of the directors, and by the president or
cashier of the association, a statement of all the facts necessary
to enable the Comptroller to determine whether the association is
lawfully entitled to commence the business of banking."
"SEC. 5169. If, upon a careful examination of the facts so
reported and of any other facts which may come to the knowledge of
the Comptroller, whether by means of a special commission appointed
by him for the purpose of inquiring into the condition of such
association or otherwise, it appears that such association is
lawfully entitled to commence the business of banking, the
Comptroller shall give to such association a certificate, under his
and official seal, that such association has complied with all the
provisions required to be complied with before commencing the
business of banking, and that such association is authorized to
commence such business."
"SEC. 5170. The association shall cause the certificate issued
under the preceding section to be published in some newspaper
printed in the city or county where the association is located for
at least sixty days next after the issuing thereof."
"SEC. 5190. The usual business of each national banking
association shall be transacted at an office or banking house
located in the place specified in its organization
certificate."
