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or abets any officer, clerk, or agent in violation of this section, shall be deemed guilty of a misdemeanor.

FORFEITURE AND DISSOLUTION

107. A national banking association forfeits its franchise if its officers knowingly violate any provisions of the act, and may be dissolved when such violation is adjudged by a proper court.

If the directors of any association knowingly violate, or permit any of the officers, agents, or servants of the association to violate, any of the provisions of the act, all the rights, privileges, and franchises of the association shall be thereby forfeited. Before the association shall be declared dissolved, how

pointed under section 5240, Rev. St. U. S. (U. S. Comp. St. 1901, p. 3516), to examine the affairs of national banking associations, refers to any entries made with that intent, whether before or after the appointment of the agent. United States v. Britton, 107 U. S 655, 2 Sup. Ct. 512, 27 L. Ed. 520.

The comptroller of the currency is an agent within the provision that every officer who makes any false entry in a report to any agent appointed to examine the affairs of such association shall be guilty of a misdemeanor, and it is immaterial that Rev. St. U. S. § 5240 (U. S. Comp. St. 1901, p. 3516), confers power upon him to appoint suitable agents to examine the affairs of such banks. Intent to injure a bank by a false report to the comptroller is not negatived as matter of law by the fact that the report showed the bank to be in better condition than it really was. United States v. Corbett, 215 U. S. 233, 30 Sup. Ct. 81, 54 L. Ed. 173.

The section includes a false entry in a report voluntarily made, if with the requisite unlawful intent. Harper v. United States, 170 Fed. 385, 95 C. C. A. 555. See, also, Bacon v. United States, 97 Fed. 35, 38 C. C. A. 37.

Entries in the books of a bank showing loans to persons named on the security of stocks deposited as collateral, when in fact the transactions were purchases of the stock by the bank, the supposed borrowers being merely dummies, wholly irresponsible for the amount of the notes which they gave, without any intention of

ever, the violation shall be determined and adjudged by a proper court of the United States, in a suit brought for that purpose by the comptroller of the currency in his own name.1

VOLUNTARY LIQUIDATION

155

108. A national bank may go into voluntary liquidation and be closed by vote of the stockholders, upon complying with the requirements of the act.

Any association may go into liquidation and be closed by a vote of two-thirds of its stock. Notice of the fact must be certified to the comptroller of the currency, and publication must be made that the association is closing up its affairs, and

paying the same or any knowledge of the actual transactions, were false entries, and, when made by the direction of an officer of the bank who conducted the transactions, a jury was justified in finding that they were fraudulent and made with intent to deceive the bank examiner and his agents. The fact that entries in a report made by a bank to the comptroller accurately state the facts as shown by the books does not prevent them from being false, where the books themselves do not correctly show the actual transactions or condition of the bank. Morse v. United States, 174 Fed. 539, 98 C. C. A. 321. See, also, Hayes v. United States, 169 Fed. 101, 94 C. C. A. 449. Cf. Twining v. United States, 141 Fed. 41, 72 C. C. A. 529. See, generally, Allis v. United States, 155 U. S. 117, 15 Sup. Ct. 36, 39 L. Ed. 91; Scott v. United States, 130 Fed. 429, 64 C. C. A. 631; Richardson v. United States, 181 Fed. 1, 104 C. C. A. 69. See "Banks and Banking," Dec. Dig. (Key No.) § 256; Cent. Dig. §§ 958-967.

155 Rev. St. U. S. § 5239 (U. S. Comp. St. 1901, p. 3515); ante, p. 398. Sufficiency of information for forfeiture. Trenholm v. Commercial Nat. Bank (C. C.) 38 Fed. 323. The forfeiture comes within Rev. St. U. S. § 1047 (U. S. Comp. St. 1901, p. 727), limiting suits for a penalty or forfeiture to five years. Welles v. Graves (C. C.) 41 Fed. 460.

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Until the forfeiture is determined, the bank may do business. phens v. Monongahela Nat. Bank, 88 Pa. 157, 32 Am. Rep. 438. "Banks and Banking," Dec. Dig. (Key No.) § 284; Cent. Dig. §§ 1083-1087.

notifying note holders and other creditors to present their claims, and a deposit must be made with the treasurer of the United States sufficient to redeem all outstanding circulation.158 The association continues to exist, as a person, in law, capable of suing and being sued, for the purpose of winding up its affairs.157 After the bank has gone into liquidation, its officers have no authority, unless such authority is expressly conferred by the stockholders, to bind them by the transaction of any business except that necessarily involved in winding up its affairs.158 Having ceased to do business as a going concern, it is not required to register a transfer of its stock and to issue a new certificate.159 The enforcement of the liabilities of the stockholders has already been considered.160 An association which is winding up its affairs may consolidate with another association.101

156 Rev. St. U. S. §§ 5220-5224 (U. S. Comp. St. 1901, pp. 3503, 3504).

As to rights of minority stockholders, see Green v. Bennett (Tex. Civ. App.) 110 S. W. 108; Watkins v. National Bank of Lawrence, 51 Kan. 254, 32 Pac. 914. See "Banks and Banking," Dec. Dig. (Key No.) § 281; Cent. Dig. §§ 1075-1079.

157 Central Nat. Bank v. Connecticut Mut. Life Ins. Co., 104 U. S. 54, 26 L. Ed. 693; Pritchard v. Barnes, 101 Wis. 86, 76 N. W. 1106; Merchants' Nat. Bank of Minneapolis v. Gaslin, 41 Minn. 552, 43 N. W. 483. Contra: Hodgson v. McKinstrey, 3 Kan. App. 412, 42 Pac. 929. See "Banks and Banking," Dec. Dig. (Key No.) § 281; Cent. Dig. 88 1075–1079.

158 Richmond v. Irons, 121 U. S. 27, 7 Sup. Ct. 788, 30 L. Ed. 864; Schrader v. Manufacturers' Nat. Bank, 133 U. S. 67, 10 Sup. Ct. 238, 33 L. Ed. 564. See "Banks and Banking," Dec. Dig. (Key No.) § 262; Cent. Dig. §§ 1001-1006.

159 Muir v. Citizens' Nat. Bank, 39 Wash. 57, 80 Pac. 1007. See, also, Richards v. Attleborough Nat. Bank, 148 Mass. 187, 19 N. E. 353, 1 L. R. A. 781. See "Banks and Banking," Dec. Dig. (Key No.) § 281; Cent. Dig. §§ 1075-1079.

160 Ante, p. 395.

161 Rev. St. U. S. § 5223 (U. S. Comp. St. 1901, p. 3504). net v. First Nat. Bank (Tex. Civ. App.) 60 S. W. 325;

See Bon-
Green v.

INVOLUNTARY LIQUIDATION

109. Whenever any association is dissolved and its franchises are declared forfeited for violation of the act, or whenever any creditor obtains judgment against any association in a court of record, and makes application accompanied by a certificate of the clerk of the court stating that such judgment has been rendered and has remained unpaid for 30 days, and whenever the comptroller of the currency shall have become satisfied of the insolvency of an association, he may, after due examination of its affairs, in either case, appoint a receiver to wind up its affairs and enforce the liability of the stockholders. Authority is also conferred upon the comptroller to appoint such a receiver for failure of an association to comply with certain other requirements of the act. When the receiver has paid the debts of the association, with certain exceptions, by vote of the stockholders an agent may be substituted for the receiver to wind up the affairs of the association.

Appointment of Receiver

The act as originally passed did not provide for a receivership upon the insolvency of the association. It provided for the appointment of a receiver by the comptroller to liquidate the affairs of an association upon its refusal to pay its circulating notes,162 and also in the following cases: For the reduction of its stock below the required minimum, deficiency in the required surplus, failure to maintain a proper reserve, failure to redeem or select an agent for the redemption of its cir

Bennett (Tex. Civ. App.) 110 S. W. 108. See "Banks and Banking," Dec. Dig. (Key No.) § 281; Cent. Dig. §§ 1075-1079.

162 Rev. St. U. S. § 5234 (U. S. Comp. St. 1901, p. § 3507).

culating notes, holding its own stock for six months, failure to pay up its capital stock and refusal to go into liquidation, and improperly certifying checks.163

In view of these and other provisions of the act, it was held that national banks were not subject to the bankrupt act of 1867, and that bankruptcy courts had no jurisdiction, as against such associations.16 By the present bankruptcy act they are expressly excepted from the class of persons who may be adjudged bankrupts.165 It was held, however, that the bank act did not oust the courts of their power to appoint a receiver in cases not within the special provisions of the act, as upon a creditors' bill.166

By a later enactment authority was conferred upon the comptroller to appoint a receiver to close up any association, after due examination of its affairs: (1) When the association is dissolved and its franchises are forfeited for violation of the provisions of the act; (2) when a creditor has obtained a judgment against the association which has been unpaid for 30

163 Rev. St. U. S. §§ 5141, 5151, 5191, 5195, 5201, 5205, 5208 (U. S. Comp. St. 1901, pp. 3462, 3465, 3486, 3492, 3494, 3495, 3497).

164 In re Manufacturers' Nat. Bank, 5 Biss. 499, Fed. Cas. No. 9.051. See, also, Cook County Nat. Bank v. United States, 107 U. S. 445, 2 Sup. Ct. 561, 27 L. Ed. 537. See "Bankruptcy," Dec. Dig. (Key No.) § 73; Cent. Dig. § 17.

165 Act July 1, 1898, c. 541, § 4b, 30 Stat. 547, as amended by Act Feb. 5, 1903, c. 487, § 3, 32 Stat. 797 (U. S. Comp. St. Supp. 1909, p. 1309).

166 Irons v. Manufacturers' Nat. Bank, Fed. Cas. No. 7,068, 6 Biss. 301; Wright v. Merchants' Nat. Bank, Fed. Cas. No. 18,084, 1 Flip. 568.

Under act June 3, 1864, c. 106, 13 Stat. 99, authorizing the formation of national banks, a federal court sitting in equity had jurisdiction in a proper case to appoint a receiver to liquidate its obligations, and to authorize him to collect and to enforce by action the liability of the shareholders of the bank under section 12 of the act (section 5151, Rev. St. U. S. [U. S. Comp. St. 1901, p. 3465]). King v. Pomeroy, 121 Fed. 287, 58 C. C. A. 209. See "Banks and Banking," Dec. Dig. (Key No.) § 287; Cent. Dig. §§ 1089-1127.

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