In General

The charter or articles of incorporation usually designate the place that is, the city or town-where the business is to be transacted or the banking house is to be located. It seems that the effect of this is to confine the bank to that place, and that, unless expressly authorized, it may not establish a banking house or agency elsewhere for the purpose of receiving deposits and conducting a general banking business.10 It does not follow, however, that it may not through agents in other places enter into contracts and perform acts which are properly incidental to the business as it is ordinarily conducted. A banking corporation, having power to deal in bills of exchange, may buy bills through an agent at a place other than that where it is located within the state,11 or in another state, if permitted by the laws of that state.12 It may, of course, make collections, keep money on deposit for purposes of exchange, and perform a multitude of other acts through its agents at distant points.

The National Bank Act provides that the organization certificate shall state where the operations of loan and discount. are to be carried on, “designating the particular state and the particular county, city, town or village," 18 and that

*

10 Bruner v. Citizens' Bank, 134 Ky. 283, 120 S. W. 345; People ex rel. Platt v. President, etc., of Oakland County Bank, 1 Doug. (Mich.) 282. See "Banks and Banking," Dec. Dig. (Key No.) § 33; Cent. Dig. $$ 39, 40.

11 City Bank of Columbus v. Beach, Fed. Cas. No. 2,736, 1 Blatchf. 425. See Potter v. Bank of Ithaca, 7 Hill (N. Y.) 530. See "Banks and Banking," Dec. Dig. (Key No.) § 32; Cent. Dig. § 38.

12 Bank of Augusta v. Earle, 13 Pet. 519, 10 L. Ed. 274. See "Banks and Banking," Dec. Dig. (Key No.) § 32; Cent. Dig. § 38; "Corporations," Dec. Dig. (Key No.) § 52; Cent. Dig. §§ 143, 144, 2563,

2567.

13 Rev. St. U. S. § 5134 (U. S. Comp. St. 1901, p. 3454). See McCormick v. Market Nat. Bank, 162 Ill. 100, 44 N. E. 381.

A national bank located in another state is a foreign corporation, and cannot keep an office of discount and deposit in New York, in

"the usual business * shall be transacted at the office or banking house located in the place specified in its organization certificate." 14 Under these provisions it has been held that a national bank may not make a contract for cashing checks upon it at any other place than such office or banking house; 15 but it has been held that these provisions do not prevent the purchase of coin by one bank at the office of another. "The provisions," it was said, "must be construed reasonably. The business of every bank, away from its officefrequently large and important—is unavoidably done at the proper place by the cashier in person, or by correspondents or other agents." 16

The question of the power or authority of a banking corporation to act or contract elsewhere than at the place where its banking house is established is, of course, to be distinguished from the question in what state it has its legal existence. Although it can perform certain acts elsewhere, a banking corporation, like any other corporation, has no legal existence beyond the state by which it was created, and, so far as it can be a citizen, resident, or inhabitant, is a citizen, resident, or inhabitant only of that state.17 Questions of jurisdiction over it for purposes of suit in the state and federal courts,18 and for purposes of taxation,1o are not here involved.

violation of a statute of that state. National Bank of Fairhaven v. Phoenix Warehousing Co., 6 Hun (N. Y.) 71. See "Banks and Banking," Dec. Dig. (Key No.) § 32; Cent. Dig. § 38.

14 Rev. St. U. S. § 5190 (U. S. Comp. St. 1901, p. 3486).

15 Armstrong v. Second Nat. Bank (D. C.) 38 Fed. 883. See "Banks and Banking," Dec. Dig. (Key No.) §§ 32, 239; Cent. Dig. §§ 38, 893.

16 Merchants' Nat. Bank v. State Nat. Bank, 10 Wall. 604, 19 L. Ed. 1008. See, also, Burton v. Burley (C. C.) 13 Fed. 811, 9 Biss. 253. See "Banks and Banking," Dec. Dig. (Key No.) § 32; Cent. Dig. § 38. 17 Clark, Corp. (2d Ed.) 66.

18 See Beals, Foreign Corp. §§ 74-79, 279-284; post, p. 428.

19 See Beals, Foreign Corp. § 462 et seq.; Clark, Corp. (2d Ed.) 219.

Branch Banks

The right to establish branch banks is sometimes conferred 20 and sometimes withheld; 21 but in this country banking corporations are usually confined to the exercise of the essential banking functions at the place where by the charter the banking house is to be located. Without express authority a banking corporation has not power to establish a branch bank.22 Under charters and statutes authorizing branches they are usually not distinct corporations,23 but mere agencies of the parent bank, although sometimes they have had separate corporate existence.24

The National Bank Act authorizes state banks having branches, the capital being joint, to become national banks, and to retain the branches, subject to certain restrictions.25 Foreign Banking Corporations

While a banking corporation may by its agents enter into certain contracts and perform certain acts in a state other than

20 See State v. Ashley, 1 Ark. 513; People ex rel. Stickney v. Marshall, 6 Ill. 672; Farmers' Bank v. Garten, 34 Mo. 119; State ex rel. Flumerfelt v. Engle, 50 Wash. 207, 96 Pac. 1045. See "Banks and Banking," Dec. Dig. (Key No.) § 33; Cent. Dig. §§ 39, 40.

21 See Bowman v. Cecil Bank, 3 Grant, Cas. (Pa.) 33. See “Banks and Banking," Dec. Dig. (Key No.) § 33; Cent. Dig. §§ 39, 40.

22 Bruner v. Citizens' Bank of Shelbyville, 134 Ky. 283, 120 S. W. 345. See, also, People ex rel. Platt v. President, etc., of Oakland County Bank, 1 Doug. (Mich.) 282. See "Banks and Banking," Dec. Dig. (Key No.) § 33; Cent. Dig. §§ 39, 40.

23 See Wallace v. State Bank, 7 Ark. 61; Bank of Montreal v. Clark, 108 Ill. App. 163; Farmers' Bank of Kentucky v. Calk, 4 Ky. Law Rep. 617; Union Bank v. Dunn, 17 La. 234; Merchants' Bank of St. Louis v. Farmer, 43 Mo. 214; Worth v. Bank of Hanover, 122 N. C. 397, 29 S. E. 775; Mason v. Farmers' Bank at Petersburg, 39 Va. 84. See "Banks and Banking," Dec. Dig. (Key No.) § 33; Cent. Dig. §§ 39, 40.

24 See McNeil v. Wyatt, 3 Humph. (Tenn.) 125; Bank of Tennessee v. Burke, 1 Cold. (Tenn.) 623. See "Banks and Banking," Dec. Dig. (Key No.) § 33; Cent. Dig. §§ 39, 40.

25 Rev. St. U. S. § 5155 (U. S. Comp. St. 1901, p. 346).

that by which it was created,2 like any other corporation it can do so only with the consent of the state where it so acts. A state may exclude a foreign corporation altogether, or may impose such terms as it sees fit as a condition of allowing the corporation to do business.27 Some states have passed statutes prohibiting foreign banking corporations from engaging in the banking business. These statutes in terms or by construction apply only to the business of receiving deposits and making discounts, or to keeping an office for that purpose,28 and it is not generally a violation of the statute to engage in an isolated transaction, as to lend money and to take security therefor, or to discount a bill.29 Similarly under statutes requiring foreign corporations to comply with certain conditions before transacting business, it is usually held that a single transaction, as the purchase of a note, does not bring the corporation within the statute.3

26 Ante, p. 270.

30

27 Paul v. Virginia, 8 Wall. 168, 19 L. Ed. 357; Clark, Corp. (2d Ed.) 602 et seq.

Banking corporations are not within the act authorizing foreign corporations to transact business in the state. New York Mortgage Co. v. Secretary of State, 150 Mich. 197, 114 N. W. 82. See "Banks and Banking," Dec. Dig. (Key No.) § 18; Cent. Dig. §§ 23, 24.

28 Taylor v. Bruen, 2 Barb. Ch. (N. Y.) 301; Bowman v. Cecil Bank, 3 Grant, Cas. (Pa.) 33.

So on ground of public policy. Bank of Marietta v. Pindall, 23 Va. 465. See, also, Bank of Newberry v. Stegall, 41 Miss. 142. See "Banks and Banking," Dec. Dig. (Key No.) § 18; Cent. Dig. §§ 23, 24; "Corporations," Dec. Dig. (Key No.) § 636; Cent. Dig. §§ 2505-2509.

29 See Silver Lake Bank v. North, 4 Johns. Ch. (N. Y.) 370; Suydam v. Morris Canal & Banking Co., cited 5 Hill (N. Y.) 491, note; Id., 6 Hill (N. Y.) 217; Pickaway County Bank v. Prather, 12 Ohio St. 497; Kennedy v. Knight, 21 Wis. 340, 94 Am. Dec. 543. See "Banks and Banking," Dec. Dig. (Key No.) § 18; Cent. Dig. §§ 23, 24.

30 Commercial Bank v. Sherman, 28 Or. 573, 43 Pac. 658, 52 Am. St. Rep. 811. Cf. State v. Etna Banking & Trust Co., 34 Mont. 379, 87 Pac. 268. See Clark, Corp. (2d Ed.) 614.

Bringing an action is not doing business. Citizens' State Bank v.

TIFF.BKS.& B.-18

CAPITAL STOCK

70. Banking corporations, except savings banks, usually have a capital stock, and membership in the corporation, with its resulting rights and obligations, is determined by ownership of the shares thereof.

The questions arising here are for the most part questions of general corporation law, and do not distinctively concern banking corporations, except so far as the law is affected by particular statutes and charters governing banking corporations, and it would not be possible to treat of them without entering fully into the field of corporations. For the law as a whole relating to the capital stock, including subscription to and issue of the stock,31 increase and reduction of the stock,3 32 the rights incident to membership, the transfer of the stock and the corporation's lien on the shares for debts due from the stockholders, the liability of the stockholders for the corporate debts and the enforcement thereof,35 and kindred matters, the reader must consult the books upon corporations and the statutes of the several states.

33

Cowles, 89 App. Div. 281, 86 N. Y. Supp. 38; Western Nat. Bank v. Kelly, 48 Misc. Rep. 366, 95 N. Y. Supp. 574. See "Banks and Banking," Dec. Dig. (Key No.) § 18; Cent. Dig. §§ 23, 24; "Corporations," Dec. Dig. (Key No.) § 642; Cent. Dig. §§ 2520-2527.

31 See Clark, Corp. (2d Ed.) c. 10; post, p. 368. 32 Clark, Corp. (2d Ed.) 346; post, pp. 369, 372. 33 Clark, Corp. (2d Ed.) c. 11; post, p. 378.

84 Clark, Corp. (2d Ed.) c. 12; post, pp. 375, 377. 85 Clark, Corp. (2d Ed.) c. 14; post, p. 381.