Chap. 578.—An ACT to amend and re-enact chapter 48 of the Code of Virginia,
as amended by an act entitled an act to amend and re-enact sections 1165 and
1166 of chapter 48 of the Code of Virginia, prescribing qualifications of bank
directors, approved February 29, 1888, and by an act entitled an act to repeal
section 1168 of chapter 48 of the Code of 1887, fixing a limitation on banking
associations in discounting accommodation paper to one-tenth part of the
capital stock of such association actually paid in, approved March 2, 1888, and
by an act entitled an act to amend and re-enact section 1163 of the Code of
Virginia, in relation to banks holding real estate, approved February 15, 1894,
and by an act entitled an act to amend and re-enact section 1170 of the Code
of Virginia, in relation to statements made by banks, approved January 22,
1898.

Approved January 4, 1904.

1. Be it enacted by the general assembly of Virginia, That chapter
forty-eight of the Code of Virginia, as amended by an act entitled “an
act to amend and re-enact sections eleven hundred and sixty-five and
eleven hundred and sixty-six of chapter forty-cight of the Code of Vir-
zinia of eighteen hundred and eighty-seven, prescribing qualifications
of bank directors,” approved February twenty-ninth, eighteen hundred
and eighty-eight, and by an act entitled “an act to repeal section eleven
hundred and sixty-eight of chapter forty-eight of the Code of Virginia,
fixing a limitation on banking associations in discounting accommoda-
tion paper to one-tenth part of the capital stock of such association ac--
tually paid in,” approved March second, eighteen hundred and eighty-
eight, and by an act entitled “an act to amend and re-enact section
eleven hundred and sixty-three of the Code of Virginia, in relation to
banks holding real estate,” approved February fifteenth, eighteen hun-
dred and ninety-four, and by an act entitled “an act to amend and re-
enact section eleven hundred and seventy of the Code of Virginia, in re-
lation to statements made by banks,” approved January twenty-second,
eighteen hundred and ninety-eight, be amended and re-enacted so as to
read as follows:

Chapter XLVIII.
Of Banks of Discount and Deposit.

§ 1154. Banks and banking institutions; how incorporated; by what
laws governed.—Banks of discount and deposit, and corporations formed
for the conduct of a general banking business, may be incorporated ac-
cording to the provisions of chapter one of an act entitled “an act con-
cerning corporations,” which became a law May twenty-first, nineteen
hundred and three, and shall be subject to all the general duties and re-
strictions, and shal] have all the general powers, in the said act contained,
except as otherwise provided, in this chapter.

All banks and banking institutions (including savings banks, savings
societies, and savings institutions), now chartered and existing, or that
may hereafter be chartered, under the laws of the State of Virginia,
shall be governed by the provisions of this chapter, and, so far as not
in conflict with this chapter, the provisions of the act entitled “an act
concerning corporations,” which became a law May twenty-first, nine-
teen hundred and three, except so far as may be otherwise expressly pro-
vided in the charter of such bank or banking institution, heretofore in-
corporated, and except as to any savings bank, savings society, or sav-

114
ings institution, so far as said provisions are not inconsistent with the
provisions of chapter forty-nine.

$1155. Their general powers.—Every such bank or banking institu-
tion shall have power to adopt and use a common seal, and to break or
alter the same at its pleasure; to make contracts; to sue and be sued in
every court of law or equity, as fully as natural persons; to elect or ap-
point directors, and by its board of directors to appoint a president, vice-
president, cashicr, and other officers; defining their duties, requiring
bonds of them, and fixing the penalty thereof; dismissing such officers,
or any of them, at pleasure, and appointing others to fill their places.

§ 1156. By-laws.—Every such bank and banking institution shall have
power to prescribe, by its board of directors, by-laws not inconsistent with
the laws of this State or the laws of the United States, regulating the
manner in which its stock shall be transferred, its general business con-
ducted, and the privileges granted to it by law exercised and enjoved.
By-laws made by the directors may be altered or repealed by the stock-
holders at any annual or general meeting.

§ 1157. Directors and their number.—The affairs of such bank or
banking institution shall be managed by a board of directors, to consist
of not less than five persons. The number of directors may be increased
at any annual meeting of the stockholders. A majority of the directors
shall be citizens of this State. 7

§ 1158. Restrictions on discount by director of paper refused by his
bank.—No director of a bank shall, directly or indirectly, purchase or
discount at a rate of interest exceeding that which the bank might de-
mand, any note or bill which the bank whereof he is a director has re-
fused to discount, knowing of such refusal.

§ 1159. The election of president; how often directors to meet-—The
directors of such bank or banking institution, as soon as may be after
their first election, and after every annual election of directors, shall
elect from their own body a president, who shall act until his successor
is elected or appointed, and shall also elect or appoint, as the case may be,
such other officer as may be prescribed by the by-laws. The board of di-
rectors shall hold meetings at least once a month.

§ 1160. Settlement of cashier’s accounts——The directors shall, once
in three months at the least, cause an examination to be made of the
moneys of the bank, and a settlement to be made of the accounts of the
cashier, a statement of which cxamination and settlement shall be re
corded with the proceedings of the board.

§ 1161. Kind of business banks may do; powers they may exercise.—
Every such bank or banking institution shall have power to exercise, by
its board of directors, or duly authorized officers or agents, subject to law,
all such incidental powers as shall be necessary to carry on the business
of banking; by discounting and negotiating bills of exchange, promis-
sory notes, drafts, and other evidences of debt; by receiving deposits ;
by buying and selling exchange, coin, and bullion, and by loaning money
en real and personal security, or collateral; by guarantecing the pay-
ment of bonds, bills, notes, and other obligations; by rediscounting
paper ; and in purchasing and selling all stocks and bonds.

$1162. How banks may use their deposits and other funds.—Everv
such bank or banking institution shall have power to use money it may
receive on deposit, and its other funds, in the manner prescribed in the
preceding section.

§ 1163. For what purposes banks may purchase, hold, and convey real
estate.—Every such bank or banking institution may purchase, hold, and
convey real estate for the following purposes, and for none other:

First. Such as shall be necessary for its immediate accommodation
in the transaction of its business.

Second. Such as shall be mortgaged or otherwise encumbered to it in
good faith, by way of security for debts contracted.

Third. Such as shall be conveyed to it in satisfaction of debts pre-
viously contracted in the course of its dealings.

Fourth. Such as it shall purchase at sales under judgments, decrees,
mortgages, or deeds of trust held by it, or shall purchase to secure debts
due to it. But no such bank or banking institution shall hold the pos-
session of any real estate under mortgage or other encumbrances, or the
title and possession of any real estate, purchased to secure any debts due
to it, for a longer period than fifteen years.

§ 1164. No loan to be made on stock until paid for—No loan shall
be made by a bank or banking institution to a stockholder therein, on the
security of his shares of stock, in such bank or banking institution, until
such shares are fully paid according to the terms and conditions of the
subscription agreement.

§ 1165. Directors must be stockholders—Every director of a bank or
banking institution must own, in his own right, at least one hundred dol-
lars at par value of the capital stock of the bank or banking institution
of which he is a director. Any director who ceases to be the owner of
one hundred dollars of the capital stock, or becomes in any other means
disqualified, shall thereby vacate his office.

§ 1166. Oath of directors.—Each director of a bank or banking insti-
tution chartered under the laws of this State and doing business therein,
when appointed or elected, shall take an oath, so far as the duty devolves
on him, that he will diligently and honestly administer the affairs of
such bank, and that he is the owner, in good faith, in his own right, of at
least. one hundred dollars at par value of the capital stock of the said
bank, and that the same is not hypothecated, or in any way pledged as
security for any loan or debt. Such oath, subscribed by the director
making oath and certified by the officer before whom it is taken, shall be
transmitted by the cashier of the said bank to the State corporation
commission to be filed and preserved in the office of the said commission.

§ 1167. The election of directors; vacancies; how filled.—The direc-
tors shall be elected at the annual meeting of the stockholders, and all
directors shall hold office for the term prescribed in the certificate of in-
corporation, or by-laws, and shall remain in office until their successors
are elected and qualified, subject to the provisions of section eleven hun-
dred and sixty-five. Any vacancy in the office of director shall he filled
by appointment by the remaining directors, and any director so ap-
pointed shall hold office until the next clection, unless sooner removed
for cause, or his office becomes vacant under the provisions of this chap-
ter.

§ 1168. Surplus fund; dividends—There shall be no dividend of
profits of a higher rate than six per centum per annum on the capital
908 ACTS OF ASSEMBLY.

stock paid in until the bank shall have a surplus or contingent fund aris-
ing from the profits of, at least, five per centum of ite capital. Nor
shall any dividend of profit be made by which sych fund is reduced be-
low the said five per centum. coe

§ 1169. Statements to be rendered to the State corporation commis-
sion and published; State corporation commission to furnish forms;
when to cause examination of bank.—Every joint stock company, and
every bank and banking institution (including savings banks, savings
societies, and savings institutions), now chartered, or that may hereafter
be chartered, under the laws of the State of Virginia, and doing a bank-
ing business therein, shall annually make to the State corporation com-
mission statements of its financial condition at such times as the said
commission may, by its rules, prescribe, identically as the national banks,
organized under the laws of the United States, are required to make
their statements to the controller of the currency; and also publish such
statements in condensed form, as published by the said national banks,
in some newspaper printed in the county, city, or town where such bank-
ing business is carried on, or where the principal office of the said com-
pany, bank, banking institution, savings bank, savings society, or sav-
ings institution is located; and if there be no such paper published in
such county, city, or town, then a newspaper published in the county,
city, or town nearest thereto. The statement shall be made in accordance
with forms prescribed by the State corporation commission, certified,
under oath, by the president or cashier of the bank, and attested by at
least three of its directors. It shall be the duty of the State corporation
commission to call upon such companies, banks, banking institutions,
savings banks, savings societies, and savings institutions for the state-
ments hereinbefore mentioned, and at the time prescribed, and to have
prepared such forms as may be necessary to carry out the provisions of
this section. Whenever calls for statements are made by the State cor-
poration commission, it shall forward to each company, bank, banking
institution, savings bank, savings society, or savings institution, hereto-
fore or hereafter incorporated under the laws of this State, and doing
business therein, two blank forms, one of which, after bemg properly
filled out and certified, as hereinbefore required, shall be returned to the
State corporation commission within thirty days next succeeding the date
of such call, and the other, filled out in like manner, shall be filed in
such bank, banking institution, savings bank, savings society, or savings
institution. The State corporation commission shall, not less than once
in each and every year, and at such other times as they may deem neces-
sary, cause to be examined each and every such bank, banking institu-
tion, savings bank, savings society, or savings institution, heretofore or
hereafter designated as a State depository. All expense incident to such
examination shall be borne by the bank or institution so examined. The
State corporation commission shall also, upon written application made
to them by the stockholders representing one-fifth of the amount of the
capital stock of any such bank, banking institution, savings bank, savings
society, or savings institution, doing business in this State, or whenever
in the judgment of the corporation commission it may be necessary so
to do for the protection of the public, or persons depositing or dealing
with any such joint stock company, bank, banking institution, savings
bank, savings society, or savings institution, appoint some competent
person to make a special examination, in person, into its condition and
to report the same to the commission. All expense incident to such ex-
amination shall be borne by the bank or institution so examined. If,
upon any such examination, it shall appear to the State corporation com-
mission that any such joint stock company, bank, banking institution,
savings bank, savings society, or savings institution, which is a desig-
nated State depository, is insolvent or unable to meet its obligations and
legal demands upon it in the ordinary course of its business, the said
commission shall forthwith notify the auditor of public accounts and
the treasurer of the Commonwealth, who shall discontinue further de-
posits therein of State funds, and take such action as may be necessary
to protect the deposits of the State therein; and in any case the corpora-
tion commission may, and it shall be its duty, whenever in its judgment
it may be necessary for the protection of the interest of the State, or of
the depositors and creditors of any joint stock company, bank, banking
institution, savings bank, savings society, or savings institution, doing
banking business in this State, to apply to any court in this Common-
wealth having jurisdiction to appoint receivers of corporations, for the
appointment of a receiver to take charge of the business, affairs, and as-
sets, and to wind up the affairs and business of any such joint stock
company, bank, banking institution, savings bank, savings society, or
savings institution, so found upon examination to be insolvent or unable
to meet its obligations and legal demands upon it in the ordinary course
and conduct of its business as aforesaid.

§ 1170. Penalty for failure to report; false statement by officer a
felony.—Any such joint stock company, bank, banking institution, sav-
ings bank, savings society, or savings institution failing to comply with
the provisions of the preceding section for a period longer than thirty
days after being called upon by the State corporation commission for
such statement, shall be fined not less than one hundred dollars nor more
than one thousand dollars. The State corporation commission shall give
notice of such default in a newspaper published as provided in the pre-
ceding section; and any officer of any such joint stock company, bank,
banking institution, savings bank, savings society, or savings institution,
who knowingly makes a false statement of the condition of any such
bank, shall be deemed guilty of a felony, and upon conviction shall be
fined not less than one hundred dollars nor more than five thousand dol-
lars, and imprisoned in the penitentiary not less than one nor more than
ten years.

§ 1171. Penalty for receiving deposits when bank insolvent.—Any of-
ficer ot employee of any bank, banking institution, savings bank, sav-
ings society, or savings institution, who shall take and receive money
from a depositor with the actual knowledge that the said bank, banking
institution, savings bank, savings society, or savings institution is, at
the time, insolvent, shall be guilty of embezzlement, and shall be
punished by a fine double the amount so received and imprisoned not
less than one or more than three years in the penitentiary for each of-
fense. Any officer of any bank, banking institution, savings bank, savings
society, or savings institution, who shall permit money to be received
from a depositor with the actual knowledge that the said bank, bank-
910 ACTS OF ASSEMBLY.

ing institution, savings bank, savings society, or savings institution is,
at the time, insolvent, shall be guilty of embezzlement, and shall be
punished by a fine double the amount so received and imprisoned for not
less than one nor more than three years in the penitentiary for each of-
fense. On the trial of any indictment under this section, it shall be the
duty of any such bank, banking institution, savings bank, savings so-
ciety, or savings institution, their agents or officers, to produce in court,
on demand of the attorney for the Commonwealth, all books and papers
of such bank, banking institution, savings bank, savings society, or sav-
ings institution, to be read as evidence on the trial of such indictment:
provided, that in determining the question of the solvency of any such
bank, banking institution, savings bank, savings society, or savings in-
pant eDN, the capital stock thereof shall not be considered as a liability
ue by it.

§ 117%. Inspection of banks by the general assembly—There may, at
any time, be an inspection of the books and examination into the pro-
ceedings of any such joint stock company, bank, banking institution, sav-
ings bank, savings society, or savings institution, by a joint committee
of the two houses of the general assembly, or a committee of either house,
or one or more commissioners appointed by the general assembly.

§ 1173. General assembly may repeal charters or modify laws.—The
general assembly reserves the right, at its pleasure, to repeal the charter
of any such joint stock company, bank, banking institution, savings
bank, savings socicty, or savings institution, and to repeal, alter, or
modify the provisions of this chapter. ,

2. This act shall be in force from its passage.