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Banks subject

to inspection.

Duty of Commissioner to annually examine books, etc.

SEC. 37. The said Commissioner shall devise a seal for the · use of his office, which shall continue to be the seal of said department. A description of the seal, with an impression thereof, shall be filed in the office of the Secretary of State.

SEC. 38. Every bank existing or hereafter incorporated under the laws of this State shall be subject to the inspection and supervision of the Commissioner of the Banking Department as provided in this act.

SEC. 39. It shall be the duty of the Commissioner of the Banking Department, and he shall have power for himself, his deputy, or any examiner he may appoint for that purpose, to examine once in each year the cash, bills, collaterals or securities, books of account, condition and affairs of each bank under the law, and also when requested by the board of directors of any bank. For that purpose he may examine, on oath, any of the officers, agents, clerks, customers or depositors of such bank touching the affairs and business of such bank. Any willful false swearing in any examination shall be deemed perjury. False swearing, He shall also ascertain whether each bank transacts its business at the place designated in the articles of incorporation, and whether its business is conducted in the manner prescribed by law.


Fee for examination.


how paid.

Collection of charges and fees.

SEC. 40. For each annual examination the bank examined shall pay into the State treasury for the credit of the general fund one-hundredth part of one per cent of the gross amount of the assets of said bank: Provided, That the examination fee of any bank shall not be less than ten dollars. The expenses Special expense, incurred and services performed especially for any bank shall be paid by such bank. If such charges or the annual fee are not paid after due notice, the Commissioner shall maintain an action in his name of office against the delinquent bank for the recovery of such charge, or annual fee, with interest thereon, and the sums so collected shall be paid into the State treasury. No person shall be appointed to examine a bank in which he is interested as stockholder, officer or employé, or otherwise. The Commissioner of the Banking Department, his deputy, every clerk in his employment and examiner shall be bound by oath to keep secret all facts and information obtained in the course of such examinations, except in as far as the public duty of such officer requires him to report upon or take official action regarding the affairs of such bank. No bank shall be subject to any visitation other than such as is required by this act, or otherwise authorized by law.

Certain facts
to be kept secret.

and information

Proceeding in

case bank re

to inspection,


SEC. 41. Whenever any officer of a bank shall refuse to subfuses to submit mit the books, papers and concerns of such bank to the inspectors [inspection] of the Commissioner, deputy, or examiner appointed as aforesaid, or refuse to be examined on oath touching the concerns of the bank, the Commissioner may, with the concurrence of the Attorney General, institute proceedings for the appointment of a receiver for such bank to wind up its business.

SEC. 42. Whenever it shall appear from the report of any

case capital of

capital of any bank is impaired or reduced below the amount Proceedings in required by law, it shall be the duty of the Commissioner, and bank is im he shall have power to examine said bank and ascertain the paired, etc. facts, and, in case he finds such impairment or reduction of capital, to require such bank to make good the deficiency so appearing. If any bank shall refuse or fail for ninety days after written requisition to make good the deficiency so appearing or found to exist, it shall be the duty of the Commissioner, with the concurrence of the Attorney General, to institute proceedings for the appointment of a receiver of such bank, to wind up its business.

to report to the

SEC. 43. On the thirty-first day of December the Commis- Commissioner sioner of the Banking Department shall make an annual report Governor to the Governor of the State, which report shall be published, annually. and shall exhibit:

to exhibit.

First, A summary of the state and condition of every bank What report from which reports have been received during the year, with an abstract of the whole amount of capital returned by them, the whole amount of their debts and liabilities, the total amount of means and resources, separating the reports of such banks and other corporations, and specifying the amount of lawful money held by banks at the time of their several returns, and such other information in relation to such banks and corporations as in his judgment may be required;

Second, A statement of the banks and corporations whose business has been closed during the year, the amount of their resources and liabilities, and the amount paid to the creditors thereof;

Third, The names and compensation of the clerks employed by him, and the whole amount of expenses of the banking department during the year;

Fourth, The amount of fees received for the examination of banks or other corporations, and fines collected and paid over to the State Treasurer.

may call a meet

bank, etc.

SEC. 44. Whenever the Commissioner shall deem it expedient Commissioner he may call a meeting of the stockholders of any bank, ing of stockorganized under the laws of this State, by a personal notice of holders of any such meeting for fifteen days previous thereto, and in case a majority of the stockholders cannot be reached by personal notice, then by publishing such notice at least once in each week for four successive weeks previous to the meeting in a newspaper published in the city, village or county where the bank is located, and if no newspaper is published there, then in the newspaper published at the nearest county seat.

holders, etc., to

SEC. 45. A book shall be provided and kept by every bank, Record of stockin which shall be entered the name and residence of the stock- be kept by bank. holders in the bank, the number of shares held by each, the time when each person became such stockholder, also all transfers of stock, stating the time when made, the number of shares, and by whom transferred. The said book shall at all subject to times be, during the usual hours of transacting business, sub- whom. ject to the inspection of the directors, officers, stockholders and

inspection, by

Penalty for not depositors of the bank. A neglect to provide and keep such

keeping record

and for refusal to exhibit it.

How penalty recovered.

Book to be evidence.

Liability of stockholders.

How liability enforced.

Certain transactions null and void.

book ready for examination, as herein provided, shall subject the officers of the bank, whose duty it is to provide and keep the same, to a penalty of one hundred dollars for every day's neglect; and a refusal by such officer to exhibit such book to any person rightfully demanding inspection thereof shall subject him to a penalty of fifty dollars; the said penalty may be sued for and recovered with costs by any person who will prosecute for the same in the name of the people of the State, and shall be paid to the State Treasurer for the credit of the banking department. In all actions, suits and proceedings under this act, the said book shall be presumptive evidence of the facts herein stated.

SEC. 46. The stockholders of every bank shall be individually liable, equally and ratably, and not one for another, for the benefit of the depositors in said bank to the amount of their stock at the par value thereof, in addition to the said stock; but persons holding stock as executors, administrators, guardians or trustees, and persons holding stock as collateral security, shall not be personally liable as stockholders, but the assets and funds in their hands constituting the trust shall be liable to the same extent as the testator, intestate, ward or person interested in such trust funds would be, if living or competent to act; and the person pledging such stock shall be deemed the stockholder and liable under this section. Such liability may be enforced in a suit at law or in equity by any such bank in process of liquidation, or by any receiver, or other officer succeeding to the legal rights of said bank.

SEC. 47. All transfers of notes, bonds, bills of exchange or other evidences of debt owing to any bank, or of deposits to its credit, all assignments of mortgages, or other security on real estate or judgments or decrees in its favor, or deposits of money, bills or other valuable things for its use, or for the use of its stockholders or creditors, all payments of money, either after the commission of an act of insolvency or in contemplation therof, with a view to prevent application of its assets in the manner prescribed in this act, or with a view to the preference of one creditor over another, shall be held to be null and void. SEC. 48. Legal process against any such bank shall be process against served upon its president or cashier or treasurer in the county where its business office is located or the plaintiff resides, or by leaving any attested copy at its banking house during banking hours with the teller, clerk or any officer of the bank.

Service of legal


Proceedings to enjoin.

When Attorney General to supervise suits under this act.

SEC. 49. All proceedings by any bank to enjoin the Commissioner in the discharge of his duties under the provisions of this act shall be had in the county where said bank is located, or before the supreme court of this State.

SEC. 50. All suits and proceedings arising out of the provision of law governing banks in which the State or any of its officers or agents shall be parties shall be conducted under the direction and supervision of the Attorney General.

papers, etc.,

Commissioner of the Banking Department certified by him, and Copies of certain authenticated by his seal of office, shall be evidence in all cases evidence. equally and with like effect as the original.

banks, etc., for

SEC. 52. The total liabilities of any bank or any person or of Liability of any company, corporation or firm for money advanced, includ- money, etc., ing in the liabilities of the company or firm the liabilities of the limited. several members thereof, except special partners, shall at no time exceed one-tenth part of the amount of the capital and surplus of such bank; but the discount of bills of exchange drawn in good faith against actually existing values and the discount of commercial or business paper actually owned by the person negotiating the same shall not be considered as money borrowed: Provided, however, That the foregoing limitations Proviso. shall not apply to loans upon real estate or other collateral securities authorized by this act: Provided, further, That by a Further proviso. two-thirds vote of the directors the liabilities of any bank or any person or company or corporation or firm, may be increased to a sum not exceeding one-fifth of the capital and surplus of the bank.

when bank

SEC. 53. Any bank organized under the provisions of this Proceedings act may go into liquidation and be closed by a vote of its stock- decides to go holders owning two-thirds of its capital. Whenever a vote is into liquidation. taken to go into liquidation it shall be the duty of the board of directors to cause notice of this fact to be certified, under the seal of the bank, by its president, cashier or treasurer, to the Commissioner of the Banking Department, and publication thereof, notifying creditors to present their claims against the bank for payment, shall be made once in each week for eight successive weeks, in a newspaper published in the city of Detroit, and also in a newspaper published in the city, village or county in which the bank is located, or if no newspaper is there published then in the newspaper published at the nearest county seat.

of banks.

SEC. 54. A bank which is in good faith winding up its busi- Consolidation ness for the purpose of consolidating with some other bank, may transfer its assets and liabilities to the bank with which it is in process of consolidation; but no such consolidation of banks shall be made without the consent of the Commissioner of the Banking Department, and not then to defeat or defraud any of the creditors in the collection of their claims against said banks, or either of them.

may be

SEC. 55. On becoming satisfied that any bank has refused to when receiver pay its deposits in accordance with the terms on which such appointed. deposits were received (if received in accordance with the provisions of this act), or that any bank has become insolvent, or that its capital has become impaired, or that any bank has violated any of the provisions of this act, or for any cause hereinbefore or hereinafter stated, the Commissioner of the Banking Department may forthwith, with the approval of the Attorney General, apply to a court of record of competent jurisdiction for the appointment of a receiver for such bank, who, under the direction of such court, shall take possession of the books, records and assets of every description of such bank, collect all

Duty of receiver.

Duty of Commissioner on appointment of receiver.

Dividends to be made by receiver.

Penalty for


debts, dues and claims belonging to it, and sell or compound all bad or doubtful debts, and sell all the real and personal property of such bank on such terms as the court shall direct, and may, if necessary to pay the debts of such bank, enforce all individual liability of the stockholders. Such receiver shall pay over all money so collected or received to the State Treasurer, and also make report to the Commissioner of all his acts and proceedings.

SEC. 56. The Commissioner shall, upon the appointment of a receiver, as above provided, cause notice to be given by advertising in such newspapers as he may direct once in each week, for twelve successive weeks, calling on all persons who may have claims against such bank to present the same to said receiver and make legal proof thereof.

SEC. 57. From time to time, under the direction of the Commissioner of the Banking Department, the receiver shall make ratable dividends of the moneys realized or collected by him on all such claims as may have been proved to his satisfaction or adjudicated in a court of competent jurisdiction, and the remainder of the proceeds, if any, after the costs and expenses of such proceedings and all debts and obligations of the bank are satisfied, shall be paid over to the stockholders of such bank, or their legal representatives in proportion to the stock by them respectively held.

SEC. 58. Every president, director, cashier, treasurer, teller, embezzlement, clerk or agent of any bank, who embezzles, abstracts or willfully misapplies any of the moneys, funds, credits or property of the bank, whether owned by it or held in trust, or who, without authority of the directors, issues or puts forth any certificate of deposit, draws any order or bill of exchange, makes any acceptance, assigns any note, bond, draft, bill of exchange, mortgage, judgment or decree, or who makes any false entry in any book, report or statement of the bank, with intent in either case to injure or defraud the bank, or any company, corporation or person, or to deceive any officer of the bank, or any agent appointed to examine the affairs of such bank, and any person who with like intent aids or abets any officer, clerk or agent, in violation of this section, or who shall issue or cause to be issued, or put in circulation, any bill, note or other evidence of debt to circulate as money, upon conviction thereof, shall be imprisoned in the State Prison or in the State House of Correction and Reformatory at Ionia, not to exceed twenty years.

Taxation of bank property.

Act to apply to

SEC. 59. All real estate owned by any bank may be taxed as other real estate in the city, village or township where the same may be situated, and the residue of its capital and surplus shall be taxed as personal property, but the assessment thereof for taxation shall not be at a greater rate than is assessed on money capital in the hands of individual citizens in the same city, village or township.

SEC. 60. The provisions of this act shall apply to and govern all State banks, all State banks organized and now existing within this State,

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