The protection given to the bank and the depositors by the provisions of this section is valueless. It is no punishment

to vacate an office after the funds of the bank have been taken.

Where the Legislature has not by the enactment of a law prohibited an officer of a State bank from borrowing money therefrom, or limited the amount which any one person may borrow, such loans are, if made in good faith and authorized by the board of directors, lawful. But a loan made by an officer of a bank to himself of the funds of the bank over which he presides, without first having such loans approved by the board of directors, is as previously stated, unlawful.

The law regulating the power of officers presiding over savings banks generally prohibtits such officers or directors from borrowing or becoming in any manner indebted to the association over which they preside. This inhibition is upon the principle that they are acting in the capacity as trustees. That the funds are trust funds, and are such as should be sacredly guarded by them, and when loaned or invested they must be to such persons who have no responsibility as officers or directors.

Loans to officers and directors in all banking corporations over which they preside should be authorized and limited by legislation. That the Legislature is invested with power to impose such limitations, there can be no question. If the State has the power to regulate the business of banking, it is clothed with authority to protect and direct its management at least upon the lines of prudence and safety.

CHAPTER XXXII.

EMPLOYING COUNSEL.

§ 244. Authority in president or cashier.

Subdivision 4 of section 5136, Revised Statutes of the United States, provides that a national bank is endowed with the power "to sue and be sued, complain and defend in any court of law and (or) equity as fully as natural persons.”

A national bank under this provision of the law has full power to employ an attorney to bring or defend suits in any court of law or equity.

The by-laws of the bank may provide that the board of directors shall have the exclusive power to engage or employ counsel for the bank, or the authority may be delegated to the president. If the by-laws are silent and no provision is made delegating the authority to engage or employ counsel, the president of a bank, as its executive officer; has the authority conferred upon him without waiting for or first obtaining such authority from the board of directors.

The agreement for compensation to be paid the counsel so employed may be made by the president, and the bank will be bound thereby.

In the case of The Citizens' National Bank of Kingman v. George F. Berry & Co., 53 Kan. 696, the court holds that the president of a banking corporation has the power to employ counsel and manage the litigation of the bank in the absence of any order of the board of directors depriving him of such power.

In the absence of the president of the bank, the cashier has the power to employ counsel and may perform this function at any time if the necessity is an emergency, without first obtaining authority from the board of directors.

Where the district attorney conducts a suit against a national bank and obtains a forfeiture of its charter, it is held that he is not entitled to more than $10, the amount prescribed by section 824, Revised Statutes of the United States, there

being no other law authorizing or giving compensation to a district attorney for such service.1

A district attorney cannot recover compensation for services rendered for conducting suits arising out of the provisions of the National Banking Law, in which the United States or any of its agents or officers are parties.2

1 Bashaw v. United States, 47 Fed. Rep. 40.

2 Gibson v. Peters, Receiver, 150 U. S. 342.

CHAPTER XXXIII.

DONATIONS BY BANKS.

§ 245. Power vested in stockholders.

A bank cannot, through its officers or directors, donate any portion of its funds, surplus, profit, or capital, for any purpose whatever. Objects of usefulness or charity, however worthy of encouragement or aid, cannot in any way be supported by gifts or donations from a banking corporation.

This restriction seems to be a very hard one, but it is not within the power of the officers or directors of the association to give away any of its funds or earnings.

The stockholders, if the consent of all are obtained, may make donations, but the president, cashier, or directors are prohibited.

A subscription in support of a church, or circulating the Bible either at home or in foreign lands, if made without the consent of all the stockholders, is unlawful.

Where the president of a bank who subscribed a fund to certain parties, on condition that they would erect a paper mill in a certain city, held, first, that the making of donations of its funds to aid in the building of a paper mill, was no part of the business for which the bank was incorporated; second, that the act of the president was not within the scope of his authority and that the bank, in the absence of an authorization or ratification by it of the president's act, was not bound by the agreement made.

The funds of a corporation belong to its shareholders, and an agent of the corporation has no implied authority to give away the corporate property. In Jones v. Morrison, 31 Minn. 140, it is said:

"The directors of the corporation have no authority to appropriate its funds in paying claims which the corporation is under no legal or moral obligation to pay; as to pay for past services which have been rendered and paid for at a fixed salary, previously agreed on; are under a previous agreement, that there should be no compensation for them."

To the same effect, see Salem Bank v. Gloucester Bank, 17 Mass. 1; Bissel v. City of Kankakee, 64 Ill. 249; Miner v. Mechanics' Bank, 1 Pet. (U. S.) 44. See Case v. Bank, 100 U. S. 446, where the court, in discussing this question, correctly

says:

'If this bank can be bound by the agreement of its president to donate $200 to an individual, to aid him in building a paper mill, then the bank can be bound by the agreement of its president to donate its entire capital. Such a rule as this would confer upon the agent of a corporation greater powers than that possessed by its directory."