§§ 57, 131, 133.

Reports to superintendent.

L. 1916, ch. 96.

BANKING LAW.

(L. 1914, ch. 369.)

§ 57. When superintendent may take possession of delinquent corporation, banker or personal loan broker.

The business of private banking is subject to general regulation and when the superintendent of banks seizes possession of the property of a private banker because he thinks the bank unsafe, it is only an incident of the right of public control that the banker loses possession which he might have protected against direct process in a criminal prosecution. Matter of Mandel (1915), 224 Fed. 642.

§ 131.. Reports of directors' examinations; penalty for failure to make or file.

Liability of directors.-Directors specially charged by the statute to know the condition of their institution cannot be heard to say that they did not know the things which a fair and intelligent discharge of their duties must have disclosed. Gregory v. Binghamton Trust Co. (1915), 168 App. Div. 805, 154 N. Y. Supp. 376.

§ 133. Reports to superintendent; penalty for failure to make.—Within ten days after service upon it of the notice provided for by section fortytwo of this chapter, every bank shall make a written report to the superintendent, which report shall be in the form and shall contain the matters prescribed by the superintendent and shall specifically state the items of capital, deposits, specie and cash items, public securities and private securities, real estate and real estate securities, and such other items as may be necessary to inform the public as to the financial condition and solvency of the bank, or which the superintendent may deem proper to include therein, and shall also state the amount of deposits the payment of which, in case of insolvency, is preferred by law or otherwise over other deposits. Every such report shall be verified by the oaths of the president or vice-president and cashier, or assistant cashier, and such verification shall state that the report is true and correct in all respects to the best of the knowledge and belief of the persons verifying it, and that the usual business of the bank has been transacted at the location required by this article and not elsewhere. Every such report exclusive of the verification, shall within thirty days after it shall have been filed with the superintendent, be published by the bank in one newspaper of the place where its principal place of business is located, or if no newspaper is published there, in the newspaper published nearest to such place.

Every such bank shall also make such other special reports to the superintendent as he may from time to time require, in such form and at such date as may be prescribed by him and such report shall, if required by him, be verified in such manner as he may prescribe.

Every such bank which does not have an unimpaired surplus fund equal

L. 1916, ch. 96.

Reports to superintendent.

§§ 140, 188, 218.

to at least twenty per centum of its capital shall, within ten days after declaring a dividend, make a written report to the superintendent stating the amount of such dividend, the amount of its net earnings in excess thereof and the amount carried to the surplus fund. Such report shall be verified by the oath of the president or vice-president and cashier, or assistant cashier of the bank.

If any such bank shall fail to make any report required by this section on or before the day designated for the making thereof, or shall fail to include therein any matter required by the superintendent, such bank shall forfeit to the people of the state the sum of one hundred dollars for every day that such report shall be delayed or withheld, and for every day that it shall fail to report any such omitted matter, unless the time. therefor shall have been extended by the superintendent as provided by section forty-nine of this chapter. The moneys forfeited by this section, when recovered, shall be paid into the state treasury to reimburse the state for the sums advanced by it for the expenses of the department. (Amended by L. 1916, ch. 96, in effect Mch. 30, 1916.)

§ 140. Prohibitions against encroachments upon certain powers of banks. Application. A corporation organized for the purpose of increasing the business of retail merchants, which proposes to issue checks, stamps or other evidences of debt, and to sell them to merchants who in turn can place them in a bank to be eventually paid out of a fund which has been set aside by the corporation, thereby violates the provisions of this section. Atty. Genl. Opin., 5 State Dep. Rep. 530 (1915).

188. Provisions as to powers of trust companies.

Liability for interest on trust estate held as executor.—A trust company doing a banking business which has been named as an executor and appointed as such as permitted by the statute, which receives the trust estate on deposit, is not liable for the full legal interest of six per cent, but is liable only for the three per cent interest which it pays to other depositors. Where, on the accounting of such corporate executor, it is sought to surcharge its account with the amount of legal interest, the costs of a reference of the issue should be charged to the estate and not imposed upon the executor. Matter of People's Trust Co. (1915), 169 App. Div. 699, 155 N. Y. Supp. 639.

Preference of claims.-Sections 189 and 190 of the Banking Law of 1909 construed, and held that the claim for certain trust moneys is not preferred under the statute, nor is it preferred in equity. Madison Trust Co. v. Carnegie Trust Co. (1915), 167 App. Div. 4, 152 N. Y. Supp. 517.

Receipt by trust company of sum of money under agreement to purchase certain stocks, to hold same in trust for payor and to repay any balance, constitutes a trust. Such trust is not a preferred claim under section 190 of Banking Law of 1909. On default and insolvency of trust company, payor may recover a money judgment. Madison Trust Co. v. Carnegie Trust Co. (1915), 215 N. Y. 475.

§ 218. Reports to superintendent; penalty for failure to make.—Within ten days after service upon it of the notice provided for by section fortytwo of this chapter, every trust company shall make a written report to the superintendent, which report shall be in the form and shall contain

§ 239.

Investments of deposit and guaranty fund.

L. 1916, ch. 363. the matters prescribed by the superintendent and shall specifically state the items of capital, deposits, specie and cash items, public securities and private securities, real estate and real estate securities, and such other items as may be necessary to inform the public as to the financial condition and solvency of the trust company, or which the superintendent may deem proper to include therein, and shall also state the amount of deposits the payment of which, in case of insolvency, is preferred by law or otherwise over other deposits. Every such report shall be verified by the oaths of the president or vice-president and another principal officer of the trust company and such verification shall state that the report is true and correct in all respects to the best of the knowledge and belief of the persons verifying it, and that the usual business of the trust company has been transacted at the location required by this article and not elsewhere. Every such report exclusive of the verification shall, within thirty days after it shall have been filed with the superintendent, be published by the trust company in one newspaper of the place where its principal place of business is located, if there be one; if not, then in the newspaper published nearest where such trust company is located.

Every such trust company shall also make such other special reports to the superintendent as he may from time to time require, in such form and at such date as may be prescribed by him, and such report shall, if required by him, be verified in such manner as he may prescribe.

Every such trust company, which does not have an unimpaired surplus fund equal to at least twenty per centum of its capital shall, within ten days after declaring a dividend, make a written report to the superintendent stating the amount of such dividend, the amount of its net earnings in excess thereof and the amount carried to the surplus fund. Such report shall be verified by the oath of the president or vice-president and another principal officer of the trust company.

If any such trust company shall fail to make any report required by this section on or before the day designated for the making thereof, or shall fail to include therein any matter required by the superintendent, such trust company shall forfeit to the people of the state the sum of one hundred dollars for every day that such report shall be delayed or withheld, and for every day that it shall fail to report any such omitted matter, unless the time therefor shall have been extended by the superintendent as provided by section forty-nine of this chapter. The moneys forfeited by this section, when recovered, shall be paid into the state treasury to reimburse the state for the sums advanced by it for the expenses of the department. (Amended by L. 1916, ch. 96, in effect Mch. 30, 1916.)

§ 239. Investment of deposits and guaranty fund and restrictions thereon. -Subd. 8, amended by L. 1916, ch. 363, in effect May 1, 1916, as follows: 8. (a) Promissory notes payable to the order of the savings bank upon demand, secured by the pledge and assignment, if necessary, of the stocks

L. 1916, ch. 164.

Savings banks; repayment of deposits.

§ 248.

or bonds or any of them enumerated in subdivisions one, two, three, four, five and ten of this section or by the railroad bonds or any of them mentioned and described in subdivision seven of this section, but no such loan shall exceed ninety per centum of the cash market value of such securities so pledged. Should any of the securities so held in pledge depreciate in value after the making of such loan, the savings bank shall require an immediate payment of such loan or of a part thereof or additional security therefor, so that the amount loaned thereon shall at no time exceed ninety per centum of the market value of the securities so pledged for such loan.

(b) Promissory notes made payable to the order of the savings bank upon demand by a savings and loan association of this state which has been incorporated for three years or more and has an accumulated capital of at least fifty thousand dollars.

Subd. 10, added by L. 1916, ch. 363, in effect May 1, 1916, as follows: 10. Bonds of the land bank of the state of New York.

Prefer investments for savings bank.-The bonds of any city which is able to meet the conditions prescribed by this section, constitute a valid and proper investment of the funds of a savings bank. Atty. Genl. Opin., 6 State Dep. Rep. 499 (1916).

Bonds of the city of Omaha are proper investments for the funds of savings banks. Atty. Genl. Opin., 6 State Dep. Rep. 499 (1916).

$248. Regulations and restrictions as to repayment of deposits; pass books.-Subd. 1, amended by L. 1916, ch. 164, in effect Apr. 1, 1916, as follows:

1. The sums deposited with any savings bank, together with any dividends credited thereto, shall be repaid to the depositors thereof respectively, or to their legal representatives, after demand, in such manner and at such times, and under such regulations, as the board of trustees shall prescribe, subject to the provisions of this and the next following section. Such regulations shall be posted in a conspicuous place in the room where the business of such savings bank shall be transacted, and shall be printed in the passbooks or other evidences of deposit furnished by it, and shall be evidence between such savings bank and the depositors holding the same, of the terms upon which the deposits therein acknowledged are made.

The savings bank may at any time by a resolution of its board of trustees require a notice of sixty days before repaying deposits, in which event no deposit shall be due or payable until sixty days after notice of intention to withdraw the same shall have been personally given by the depositor, and such deposits, if not withdrawn within fifteen days after the expiration of the sixty days' notice, shall not then be due or payable under such notice or by reason thereof.

Nothing herein contained, however, shall be construed as impairing contracts heretofore made between savings banks and their depositors as to notice of withdrawal, or as prohibiting any savings bank from making payments of deposits before the expiration of said sixty day notice.

§ 279.

Savings banks; advertisements.

L. 1916, ch. 90. But no savings bank shall hereafter agree with its depositors in advance to waive said sixty days' notice nor shall it in the case of deposits hereafter made require a longer notice than the sixty days aforesaid.

A by-law of a savings bank permitting the secretary to waive the production of the pass book when paying deposits applies to joint accounts, and such waiver is not contrary to the provisions of this section. Brooks v. Erie County Savings Bank (1915), 169 App. Div. 63, 154 N. Y. Supp. 692.

A joint deposit in a savings bank in the name of husband and wife may be paid to either of them.-A bank is not negligent in making payment from such a deposit to a husband, in the absence of circumstances tending to show that it had knowledge or notice sufficient to put it upon inquiry that he was not entitled to draw the deposit. Brooks v. Erie County Savings Bank (1915), 169 App. Div. 63, 154 N. Y. Supp. 692.

Inability of depositor to produce book; statute construed. The provision of the Banking Law to the effect that no savings bank shall pay any deposit unless the pass book of the depositor shall be produced and the proper entry made therein at the time of the transactions, does not make the production of the pass book an arbitrary condition which must at all hazards be complied with, and a depositor is entitled to receive his money where circumstances render the production of the book impossible. The rule requiring the production of the book is to protect the bank against the payment of deposits to others than those entitled thereto, and the reasonableness of the excuse for not producing the book must be determined in the light of this purpose. Thus, where in an action by a depositor against a savings bank to recover a deposit, it appears that he had removed to a foreign country with his wife, and while he was confined in an asylum his wife obtained the pass book, together with the proceeds of a check which the depositor had drawn, and departed for parts unknown to him, and he was subsequently unable to ascertain her whereabouts after reasonable inquiry, and the bank had no rule relating to the payment of deposits without the production of the book, and at trial made no contention that the plaintiff's search for his wife was not adequate, a judgment founded upon the verdict of a jury for the amount of the deposit should be affirmed. Meighan v. Emigrant Industrial Savings Bank (1915), 168 App. Div. 542, 153 N. Y. Supp. 312.

§ 279. Advertisements of unauthorized savings banks and the use of the word "savings" prohibited; exception as to school savings.-Subd. 2, amended by L. 1916, ch. 90, in effect Mch. 30, 1916, as follows:

2. The principal or superintendent of any public school in the state of New York or any person designated for that purpose by the board of education or other school authority under which such school shall be, or the superintendent or other designated head of any philanthropic agency incorporated for philanthropic purposes, if such agency be so authorized by certificate of the superintendent of banks, may collect from time to time small amounts of savings from the pupils of said school, or from the children or persons under the direction or guidance of such philanthropic agency, and deposit the same on the day of collection in some savings bank in the state or, in villages and cities in which there is no regularly established savings bank, in any savings and loan association, trust company, state or national bank located in the state and having an interest department, and upon the subsequent establishment of a savings bank in