Chap. 507.-An ACT to revise, collate and codify into one act the general
statutes of the Commonwealth relating to banks and banking, which act shall
constitute and be designated and cited as the Virginia banking act. and to
repeal all Code sections and all acts and parts of acts inconsistent therewith.
and to provide penalties for the violations thereof. [S B 91]

Approved March 27, 1928

Whereas it is expedient to revise, collate and codify into one act
the general statutes of the Commonwealth relating to banks and
ing; therefore,

1. Be it enacted by the general assembly of Virginia, in the n
following, that is to say:

CONTENTS
TITLE I—BANKS OF DISCOUNT AND DEPOSIT

Sec.
Sec.
Sec.

Sec.

1. Meaning of “bank” in this act.

2. Banks coming under the provision of this act.

3. Who shall not do a banking or trust business.

4. Unlawful use of the term “bank,” “banker,” “banki

Sec. 5. Members, et cetera, of company carrying on banking
out authority of law: how punished.

Sec. 6. General assembly may repeal charters or modify law

Sec. 7. State banks permitted to become members of F
Reserve Bank system.

Sec. 8. State bank becoming national bank; notice to chief ex:
of banks; effect.

Sec. 9. National bank may become State bank; procedur
effect.

Sec. 10. Banks and banking institutions;
what laws governed.

Sec. 11. Their general powers.

Sec. 12. Kind of business banks may do; powers they may ex

Sec. 13. When branch banks may be authorized; branches 2
established; how operated; penalties.

Sec. 15. Not to begin business before obtaining certificate
State corporation commission; publication of certificate; pres
prorata fees in certain cases.

Sec. 16. Minimum capital stock of banks;
corporation commission.

Sec. 17. What part of capital stock to be paid before comm
business ; when residue to be paid; stock to be sold at not less tha
no commission or fees to be paid for sale of stock; individual |
of stockholders.

how incorporate

investigation by

Sec. 19. Directors and their number.

Sec. 20. Directors must be stockholders; shares required to q

Sec. 21. The election of directors: vacancies; how filled.

Sec. 22. Oaths of directors.

Sec. 23. Restrictions on discount by director of paper refu
his bank.

Sec. 24. The election of president; how often directors to r

Sec. 25. Settlement of cashier’s accounts.

Sec. 26. Limit on the pavment of interest by banks on s

deposits, certificates of deposit, et cetera, contract for more d
void; penalty for violation.
Sec. 27. Fraudulent entries or, et cetera, with intent,
accounts, by officers or clerks of banks; how punished.

Sec. 28. False certification of checks; how punished.

Sec. 29. Penalty for officer, director, or employee of a
received any commission or gift in connection with any I

Sec. 30. Penalty for receiving deposits when bank,
broker insolvent.

Sec. 31. Limitation to amount invested in bank buildi
and fixtures.

Sec. 32. For what purpose banks may purchase, hold
real estate.

Sec. 33. Surplus; dividends; undivided profits.

Sec. 34. How banks may use their deposits and other

Sec. 35. Payment of small bank balances to next of kin

Sec. 36. Deposits of deceased persons and persons unde

Sec. 37. Deposits of minors.

Sec. 38. Deposits in names of two or more persons, ¢
how discharged.

Sec. 39. Safety deposit box hired to two or more; acce
or survivor; who to have access.

Sec. 40. Check presented more than one year after
may refuse payment.

Sec. 41. Bank’s failure to pay check through error ; lim:

Sec. 42. Within what time a check must be presentec

Sec. 43. Fixing limitation on revocations, counterma:
ments and stop-payment orders relating to the payment c
or draft against bank accounts.

Sec. 44. Payment of forged or raised check; liabilit
notice to depositor; how given.

Sec. 45. Drawing, uttering, et cetera, checks, et cetera,
with intent to defraud; how punished; evidence of intent
credit; statement, et cetera, how evidenced.

Sec. 46. Regulating the issuance of certificates of def

Sec. 47. Sending collection items direct to bank; wh
liability of forwarding bank.

Sec. 48. Limit of liability of borrowers; loans on stocl

Sec. 49. Loans to officers, directors, clerks or employ:

Sec. 50. Banks pledging assets to give preference to
depositors ; approval of chief examiner. of banks.

Sec. 51. Banks borrowing money; reports; resolution
directors; certificates of deposit.

Sec. 52. Banks and trust companies may make acce
issue letters of credit.

Sec. 53. Statements rendered to the State corporation
and published; State corporation commission to furnish f
to cause examination of banks; notice of impairment of cay
banks; receivers; discontinuance of State deposits.
Sec. 55. Official communications of the State corpor
sion; receipt; how certified.

Sec. 56. Penalty for violating certain provisions of!
laws.

Sec. 57. Appointment of examiners and assistants.

Sec. 58. Fees for examination: when excess of fees t

Sec. 59. Making or circulating derogatory statem
banks or trust companies; how punished.

TITLE II—SAVINGS BANKS

Sec. 60. Savings banks, how incorporated.

Sec. 61. What savings banks are subject to this act.
Sec. 62. Directors and their number.

Sec. 63. Appointment of president and other officer
Sec. 64. Powers and duties of board.

Sec. 65. How amount of certificate of deposit recov
Sec. 66. How funds of bank to be invested.

Sec. 67. Increase of capital stock.

TITLE III—TRUST COMPANIES

Sec. 68. How incorporated; general powers and dut!
words “incorporated” or “corporation” in corporate nar

Sec. 69. Minimum capital; amount to be paid befor
business.

Sec. 70. Making and withdrawing deposits; power
directors.

Sec. 71. Powers of trust companies; regulations anc

Sec. 72. National banks as fiduciaries; rights; pow
and immunities.

TITLE IV—ADDITIONAL PROVISION

Sec. 73. When personal representative of a deceased
or endorser or an obligation for the payment of money
a renewal thereof on behalf of the estate of his deceder

Sec. 74. Effect of deposits in bank by a fiduciary o
personal credit of certain items drawn by or payab
fiduciary or agent.

Sec. 75. The creation, establishment and operation
loan associations.

TITLE V—CONSTRUCTION, TITLE AND RI

Sec. 76. Effect of title; correlation with other statt
Sec. 77. Partial unconstitutionality; effect.

Sec. 78. Short title.

Sec. 79. Repeal.
TITLE I—BANKS OF DISCOUNT AND DEPOSIT

Section 1. Meaning of “bank” in this act—The word “bank.”
wherever it shall appear in this act, shall include banks of deposit and
discount, savings banks, savings societies, savings institutions and trust
companies now chartered, or which may hereafter be chartered, and
any other corporation now chartered to receive deposits or to do any
banking business, and all persons, firms and associations receiving
deposits, or doing any banking business, except such private bankers
as are within the exception created by section three of this act. as
though each and every such institution, person, firm or association was
fully and accurately set out and mentioned.

Section 2. Banks coming under the provisions of this act.—The
provisions of this act shall apply to and govern all chartered banks, in-
cluding banks of deposit and discount, savings institutions, savings
societies and trust companies, and any other person, firm or associa-
tion receiving deposits or doing a banking business, except such private
bankers as are within the exception created by section three of this
act, and any other corporation authorized to receive deposits or to
do any branch of the banking business other than that of banks
organized under the banking !aws of the United States, which last-
mentioned banks are, however, expressly included within the pro-
visions of this act, touching the course and conduct of the business ot
banking, and in so far generally as this State has the right to enact
legislation in regard to such banks. The powers, privileges. duties
and restrictions conferred and imposed upon any bank existing and
doing business under the laws of this State are hereby abridged,
enlarged or modified, as each particular case may require. to conform
to the provisions of this act. Nothing in this act, however, sha‘l he
construed to change or affect any privilege or privileges granted bv
charter to any bank incorporated before June fifteenth, nineteen hun-
dred and ten, nor private bankers coming within the exception created
by section three of this act, nor to affect the legality of any investmen:
heretofore made or transactions heretofore had, pursuant to anv pro-
visions of law in force when such investments were made or trans-
actions had.

Section 3. Who shall not do a banking or trust business.—No
person, copartnership or corporation, except corporations duly char-
tered and already conducting the business of banking or trust, under
authority of the law of this State or the United States, or which shall
hereafter be incorporated under the laws of this State, or authorized to
do business under the banking laws of the United States, shall engage
in the business of banking or trust in this State, except that nothing
in this chapter shall prevent any person or co-partnership or corpora-
tion from lending money on real estate and personal security cr col-
lateral, or from guaranteeing the payment of bonds, notes, bills and
other obligations, or from purchasing or selling all stocks and bonds.
But this section shall not apply to or affect any private banker or firm
of private bankers who shall have been engaged in business on the
first day of January, nineteen hundred and ten. No bank or trust
company shall be incorporated in this State with authority to do a
banking business or trust business outside of this State, nor shall any
bank or trust company incorporated under the laws of anv other State,
be authorized to do business in this State. Nothing in this section
shall be construed to prevent banking institutions or trust companies
chartered under the authority of the Federal government, from trans-
acting business in Virginia.

Section 4. Unlawful use of the term “bank,” “banker” or “bank-
ing.’—No person, co-partnership or corporation not lawfully engaged
in the business of banking in this State and subject to the supervision
of the State corporation commission, by the provisions of this act
or authorized to transact a banking business under the laws of the
United States, shall make use of any office sign having thereon any
artificial or corporate name or other words indicating that any such
place or office is the place or office of a bank, savings bank, trust
company, bank or place of banking, nor shall any person, co-partner-
ship or corporation make use of or circulate any letterheads, billheads,
blank notes, blank receipts, certificates, circulars or any written or
printed paper whatever, having thereon any artificial or corporate name
or word or words indicating that such business is the business of a bank,
savings bank, trust company or banker, or a place of banking; nor
shall any person, co-partnership or corporation use the word “bank,”
“savings bank,” “banking,” “banker,” or “trust,” or the equivalent
thereof in any foreign language, or the plural of any such word or
words in any business, or in connection with any other business than
that of the business of banking as defined under this act. Any person
or persons violating the provisions of this or the preceding section,
either individually or as an interested party, in any co-partnership or
corporation, shall be guilty of a misdemeanor. The State corporation
commission shall have authority to examine the accounts, books and
papers of any person, co-partnership or corporation whom it has reason
to suspect is doing a banking business within the intent of this act,
in order to ascertain whether such person, co-partnership, or corpora-
tion has violated, or is violating, any provision of this act, and the
refusal to submit such accounts, books and papers shall be prima facie
evidence of such violation; but nothing in this act shall apply to any
private banker, or firm of bankers who shall have been engaged in
business on the first day of January, nineteen hundred and ten.

The use of the above terms in the name of any corporation or in
connection with any other business shall not be prohibited where the
context or remaining words show clearly and definitely that the cor-
poration or business is not a bank or trust company, and is not carry-
ing on a banking or trust business.

Section 5. Members, et cetera, of company carrying on banking
without authority of law, how punished—Every person, association
or company who shall trade or deal as a bank or trust company, or
carry on banking or do a trust business, without authority of law.
and their officers and agents therein, shall be confined in jail not exceed-
ing six months, and fined not less than one hundred nor more than
five hundred dollars.

Section 6. General assembly may repeal charters or modify laws.—
The general assembly reserves the right, at its pleasure, to repeal the
charter of any such bank chartered under the laws of the State of
Virginia, and to repeal, alter, or modify the provisions of this chapter.

Section 7. State banks permitted to become members of Federal
reserve bank system.—Any bank heretofore or hereafter incorporated
under the laws of this state may, if it so elect, become a member bank
of the Federal reserve bank system of the United States. subject to the
provisions of the act of congress of the United States, approved
December twenty-third, nineteen hundred and thirteen, and of any
amendment thereof permitting it to do so, and shall be vested with all
powers conferred upon State member banks of the said system by
terms of the said act or acts, which shall be exercised subject to all
restrictions and limitations imposed by the said Federal reserve act
or acts, or by regulations of the Federal reserve board made pursuant
thereto. The right, however, is expressly reserved to revoke or amend
the powers herein conferred. The chief examiner of banks may
disclose to the Federal reserve board, or to examiners duly appointed
by it, all information in reference to the affairs of any bank which
has become, or desires to become a member of the said system.

Section 8. State bank becoming national bank; notice to chief
examiner of banks; effect—Whenever any bank shall have become a
corporation for carrying on the business of banking under the laws of
the United States, it shall notify the chief examiner of banks of this
State of such fact, and shall file with him a copy of its authorization
as a national banking association certified by the comptroller of the
currency. It shall thereupon cease to be a corporation under the laws
of this State, except that for a period not exceeding three years there-
after, its corporate existence shall be deemed to continue for the pur-
pose of prosecuting or defending suits by or against it, and of enabling
it to settle and close its affairs, to dispose of and convey its property,
and to divide its capital, but not for the purpose of continuing the
business for which said corporation shall have been established.

Such change from a State to a national bank shall not release anv
such bank from its obligations to pay and discharge all the liabilities
created by law or incurred by it before becoming a national banking
association, or any tax imposed by the laws of this State up to the
date of its becoming such national banking association in proportion
to the time which has elapsed since the next preceding payment therefor,
or any assessment, penalty or forfeiture imposed or incurred under
the laws of this State up to the date of its becoming a national banking
association. |

Section 9. National bank may- become State bank; procedure and
effect—Any banking corporation organized under the laws of the
[Tnited States and doing business in this State may become an incor-
porated bank of this State with all the powers and subject to all the
obligations and duties imposed under the provisions of this section,
provided such banking corporation has authority by virtue of any law
of the United States, to dissolve its organization as a national banking
corporation. A national banking corporation desiring to become such
an incorporated bank of this State shall proceed in the following
manner:

First. It shall take such action, in the manner prescribed or au-
thorized by the laws of the United States, as shall make certain its
dissolution as a national banking corporation effective at a specified
future date.

Second. The required number of its directors shall thereafter and
before the time when its dissolution becomes effective, organize a cor-
poration according to the provisions of chapter one hundred and forty-
eight, with the same officers and directors as the said national banking
corporation, and shall make application for a certificate of authority
to do business under section fifteen of this act, attaching thereto, as a
part thereof, a statement of its financial condition, on forms prescribed
by the chief examiner of banks, as of the close of business the day
preceding the date of the said application, copies of the written author-
ity of stockho!ders and resolutions fixing the date on which its dissolu-
tion as a national banking corporation shall become effective, properly
verified by the affidavit of the president or cashier of the said national
banking corporation.

Third. Upon the granting of a certificate of authority to do busi-
ness in accordance with the provisions of section fifteen of this act,
and as soon as its dissolution as a national banking corporation becomes
effective, its corporate existence as a State bank shall begin. But
such bank shall transact no business as a State bank other than that
relating to its organization until its certificate of authority to do busi-
ness shall have been granted.

Fourth. At the time when the corporate existence of said State
bank begins all the property of the said national banking corpora-
tion, including all its right, title and interest in and to all property
of whatsoever kind, whether real, personal or nixed, and things in
action, and every right, privilege, interest and asset of any conceivable
value or benefit then existing, belonging or pertaining to it, or which
would inure to it, shall immediately by act of law and without any
conveyance or transfer, and without any further act or deed, be
vested in and become the property of such State bank, which shall have,
hold and enjoy the same in its own right as fully and to the same ex-
tent as 1f the same was possessed, held or enjoyed by said national
banking corporation; and such State bank shall be deemed to be a con-
tinuation of the entity and of the identity of said national banking cor-
poration, operating under and pursuant to the laws of this State, and
all the rights, obligations and relations of said national banking cor-
poration to or in respect to any person, estate, creditor, depositor,
trustee or beneficiary of any trust, and in or in respect to any executor-
ship or trusteeship or other trust or fiduciary function, shall remain
unimpaired, and such State bank, as of said beginning of its cor-
porate existence, shall by operation of this section succeed to all such
rights, obligations, relations and trusts, and the duties and liabilities
connected therewith, and shall execute and perform each and every
such trust and relation in the same manner as if such State bank had
itself assumed the trust or relation, including the obligations and liabih-
ties connected therewith. If said national banking corporation be acting
as administrator, co-administrator, executor, co-executor, trustee, or
co-trustee of or in respect to any estate or trust being administered
under the laws of this State, such relation, as well as any other or
similar fiduciary relations, and all rights, privileges, duties and obliga-
tions connected therewith shall remain unimpaired and shall con-
tinue into and in said State bank, from and as of the said beginning
of its corporate existance, irrespective of the date when any such rela-
tions may have been created or established and irrespective of the date
of any trust agreement relating thereto or the date of the death of
any testator or decedent whose estate is being so administered. Neither
the act of said national banking corporation, under subdivision one o!
this section, in fixing the date of or providing for its liquidation or
dissolution nor its liquidation or dissolution under the national banking
laws, nor any other thing done in connection with the change from a
national to a State bank, shall, in respect to any such executorship.
trusteeship or similar fiduciary relations, be deemed to be or to effect,
under the laws of this State, a renunciation or revocation of any
letters of administration or letters testamentary pertaining to such
relation, nor a removal or resignation from any such executorship or
trusteeship nor shall such act or any other thing done be deemed to
be of the same effect as if the executor or trustee had died or other-
wise become incompetent to act.

Fifth. The directors of said national banking corporation in office
at the time of its dissolution shall be the directors of the bank created
in pursuance hereof until its first annual election of directors there-
after, and shall have power to take all necessary measures to perfect
its organization, and to adopt such regulations concerning its business
and management as may be proper and not inconsistent with law.

Section 9a. State banks may be merged or consolidated with other
State or with national banks; by what laws such mergers or consolida-
tions governed ; vote required—Any bank organized and doing busi-
ness under the laws of this State may be merged or consolidated with
another bank organized and doing business under the laws of. this
State or with a banking corporation organized under the laws of the
United States doing business in this State upon compliance with
the provisions of sections thirty-eight hundred and twenty-one, and
thirty-eight hundred and twenty-two of the Code of Virginia relating
to mergers or consolidations of corporations except that such mergers
or consolidations of banks shall be ratified or confirmed by an affirma-
tive vote of the shareholders of each of such banks owning at least two-
thirds of its capital stock outstanding and having voting power. The
provis:ons of sections thirty-eight hundred and twenty-three, thirty-
eight hundred and twenty-five, and thirty-eight hundred and twenty-
six, of the Code of Virginia shall apply to such merged or consolidated
corporation, except as otherwise provided in this act.

Section 10. 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 incor-
porated, according to the provisions of chapter one hundred and forty-
eight, Code of Virginia, and shall be subject to all the general duties
and restrictions and shall have all the general powers, in the said chap-
ter contained, except as otherwise provided in this act.

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 act, and, so far as not in
conflict with this act, the provisions of chapter one hundred and forty-
eight, Code of Virginia, except so far as may be otherwise expressly
provided in the charter of such bank or hanking institution, heretofore
incorporated.

Section 11. Their general powers.—Every such bank or banking in-
stitution shall have power to adopt and use a common seal and to break
or alter the same at its pleasure; to have succession for the time stated
in its charter certificate of incorporation, or articles of association, and,
when no such period is stated, to be perpetual, subject to the power of
repeal reserved by the Constitution to the general assembly, unless it
shall be dissolved according to law by act of its shareholders, owning
two-thirds of its stock, or unless its charter becomes forfeited by some
violation of law; to make contracts; to sue and be sued, complain and
defend, in every court of law or equity as fully as natural persons; to
elect or appoint directors, and by its board of directors to appoint a
president, vice-president, cashier, and other officers; and to define
their duties, to require bonds of them, to fix the penalty thereof, and
to dismiss such officers, or any of them, at pleasure, and appoint
others to fill their places; and 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 trans-
ferred, its general business conducted, and the privileges granted to
it by law exercised and enjoyed, but by-laws made by the directors
may be altered or repealed by the stockholders at any annual or general
meeting.

Section 12. Kind of business banks may do; powers they may
exercise.—Every such bank 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 on real and personal security, or collateral; by guaranteeing
the payment of bonds, bills, notes and other obligations, having not
more than six months to run, by rediscounting paper; and in purchas-
ing and selling all stocks and bonds. No bank shall acquire or own its
own stock except when done to protect itself against loss from debts
previousiy contracted, in which case it shall be disposed of within three
months from the time acquired.

Section 13. When branch banks may be authorized; branches
already established; how operated; penalties—No bank or trust com-
pany heretofore or hereafter incorporated under the laws of this State
shall be authorized to engage in business in more than one place, excep
that, in tts discretion the State corporation commission may authorize
banks having a paid-up and unimpaired capital and surplus of fitty
thousand dollars or over to establish branches within the limits of the
city, town or village in which the parent bank is located or in other
cities having a population of not less than fifty thousand inhabitants.
This section, however, shall not apply to branch banks already estab-
I'shed, and this section shall not be construed to prohibit the merger
of two banks in the same or adjoining counties and the operation bv
the merged company of the two banks. But any branch bank hereto-
fore or hereafter established shall not be operated or advertised under
any other name than that of the identical name of the home bank,
unless permission be first had and obtained from the State corporation
commission, and unless such different name shall contain or have added
thereto language clearly indicating that it 1s a branch bank and ot
what bank it is a branch. Any bank or trust company violating the
provisions of this section shall be liable to a fine of one thousand dol-
lars, to be imposed and judgment entered therefor by the State cor-
poration commission, and enforced by its process.

Section 15. Not to begin business before obtaining certificate from
State corporation commission; publication of certificate; prescribing
pro rate fees in certain cases.—Before any bank shall begin business it
shall obtain from the State corporation commission a certificate of
authority authorizing it to do so; and prior to the issuance of such
certificate, the State corporation commission through its chief examiner
of banks, or one of his assistants, shall ascertain that all of the pro-
visions of law have been complied with, that the required amount of
capital stock has actually been subscribed and paid in cash, that oaths
of all its directors have been taken and filed in accordance with the pro-
visions of section twenty-two of this act and whether, in his opimion.
there is public need for banking facilities or additional banking tacilities.
as the case may be, in the community where the bank 1s proposed to be.
as to moral fitness, financial responsibility and business qualifications
of those named as officers and directors of the proposed bank and anvy-
thing else deemed pertinent. The State corporation commission shall
not issue its certificate of authority to do business to any bank where
there is no public necessity for banking or additional banking facilities;
where it has reason to believe that the corporation is formed for any
other than legitimate banking business, or that the moral fitness, finan-
cial responsibility, or business qualifications of the persons named as
officers and directors are not stich as to command the confidence of the
community in which the said bank is proposed to be located. From
which order, any party in interest aggrieved may appeal as in other
cases provided by law. The bank, within ten days after the receipt
of the certificate from the State corporation commission shall cause the
same to be published in some newspaper printed in the county or city
where such bank is located, once each week for two successive weeks,
or if no newspaper is published in said county or city then said publica-
tion shall be made at the nearest place at which a newspaper 1s pub-
lished. Proof of such publication shall be filed with the State cor-
poration commission. For any violation of this section such bank
shall be subject to a fine of not less than twenty-five dollars nor more
than one hundred dollars per dav for each day’s violation, said fine to
be imposed and judgment entered by the State corporation commission
and enforced by its process.

Section 16. Minimum capital stock of banks; investigation by State
corporation commission.—The State corporation commission shall not
have power to issue a charter to a bank with a minimum capital stock
of less than fifty thousand dollars. except that banks with a capital
stock of not less than twenty-five thousand dollars may be chartered
in any place, the population of which does not exceed three thousand
inhabitants, and provided that the minimum capital stock of trust com-
panies shall be as prescribed by section sixty-nine of this act, and, in
the case of a bank hereafter chartered in any place, the population of
which exceeds twenty-five thousand inhabitants, the minimum capital
stock required to issue a charter shall be increased above fifty thousand
dollars in the ratio of five thousand dollars additional minimum capital
stock for each ten thousand inhabitants by which the population of
such place may exceed twenty-five thousand inhabitants, as shown by
the last Federal, State, or local census preceding the issuance of such
charter.

Section 17. What part of capital stock to be paid before commenc-
ing business; when residue to be paid: stock to be sold at not less
than par; no commission or fees to be paid for sale of stock; individual
liability of stockholders.—Hereafter the subscriptions to the capital
stock of any bank incorporated under the laws of Virginia shall be paid
in money at not less than par, and at least the minimum amount of
capital prescribed by the charter shall be subscribed, and at least fifty
per centum of the subscription of each subscriber shall actually be paid
in cash before such bank shall be authorized to begin business, and the
remainder of the capital stock of such bank shall be paid in monthly
installments of at least ten per centum of the whole capital, payable
at the end of each succeeding month from the date of certificate of the
State corporation commission, authorizing such bank to begin business.
The payment of each monthly installment shall be certified to the
chief examiner of banks, under oath, by the president or cashier of such
bank. But no bank shall be authorized to begin business until at least
fifteen thousand dollars of its capital stock has been actually paid in
money, and no trust company shall be authorized to begin business
until the provisions of section sixty-nine of this act shall have been
complied with. Subscriptions to the capital stock of every bark.
heretofore or hereafter incorporated under the laws of this State, shall
be paid in money and accounted for to the bank in the full amount
paid for the same. No commissions, fees, brokerage, or other com-
pensation of any kind, by whatever name it may be called, either
directly or indirectly, shall be paid to any person, persons, partnership.
association or corporation for the sale of such stock of any bank or
trust company hereafter chartered. The State corporation commission
shall refuse to issue a certificate of authority to any bank to commence
business 1f commissions, fees, brokerage, or other compensation, hv
whatever name it may be called, either directly or indirectly, have been
paid or contracted to be paid by any bank, or by any one in its behalf,
to any person, persons, partnership, association or corporation for the
sale of stock in such bank. If the provisions of this section are violated
by any bank, heretofore or h-reafter incorporated under the laws o1
this State, it shall be liable to a fine of one thousand dollars, to be
imposed and judgment entered therefor by the State corporation
commission and enforced by its process.

Section 19. 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.

Section 20. Directors must be stockholders; shares required to
aualify—Every director of a bank shall be the owner in his own name
and have in his personal possession or control shares of stock in the
bank of which he is a director. having a par value of not less than one
hundred dollars which must be unpledged and unencumbered at the
time of his becoming a director and during the whole of his term
as such. Any director violating the provisions of this section shall,
immediately, vacate his office and the remaining directors shall proceed,
forthwith, to fill such vacancy as provided in section twenty-one of this
act.

Section 21. The election of directors; vacancies; how filled.—Tire
directors shall be elected at the annual mecting of the stockholders. and
all directors shall hold office for the term prescribed in the cert:fcate
of incorporation, or by-laws, and shall remain in office until their suc-
cessors are elected and qualified, subject to the provisions of section
twenty of this act. Any vacancy in the office of director shall be Aled
by appointment by the remaining directors within ninety days atter the
occurrence of such vacancy, and any director so appoimted shall hold
office until next election unless sooner removed for cause or his ornce
becomes vacant under the provisions of this act; provided, however,
that if the by-laws of any bank shal! provide for a greater number of
directors than the number of those elected at the annual meeting of the
stockholders, the board shall have the right or privilege to increase the
number of directors to the maximum number prescribed in such by-
laws. The directors so elected by the board to hold office until the
next annual meeting or until their successors are elected and qualified,
subject to the provisions of sections twenty and twenty-two of this act;
provided, however, that when it is desirable to reduce the membership
of the board, and it shall so resolve by an appropriate resolution, the
vacancy, if approved by the chief examiner of banks, shall be allowed
to remain until the next regular meeting of the stockholders.

Section 22. Oaths of directors—Every director of a bank incor-
porated under the laws of this State shall, within sixty days after his
election, take and subscribe te an oath that he will diligently and
honestly perform his duties as director, and that he is the owner and
has in his personal possession or control, standing in his own name
on the books of the bank, unpledged and unencumbered in any way,
shares of stock of the bank of which he is a director, having a par value
of not less than one hundred dollars, which must be unpledged and un-
encumbered at the time of his becoming a director and during the whole
of his term as such, and in case of re-election or reappointment, that
during the whole of his immediate previous term as a director, such
stock was not any time pledged or in any other manner encumbered or
hypothecated to secure a loan. Such oath subscribed to by such direc-
tor, certified by the officer before whom it is taken, shall be trans-
mitted by the cashier of said bank to the chief examiner of banks. Any
director who fails for a period of sixty days after his election or ap-
pointment to take the oath required by this section, shall automatically
forfeit his office, and the remaining directors shall appoint some qualli-
fied stockholder to fill his place and stead.

Section 23. Restrictions on discount by director of paper refused
hy his bank.—No director of a bank shall, directly or indirectly. pur-
chase or discount at a rate of interest exceeding that which the bank
might demand, any note or bill which the bank whereof he is a director
has refused to discount, knowing of such refusal.

Section 24. The election of president; how often directors to meet.
—The directors of every bank, as soon as may be after their first elec-
tion, 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. The directors shall elect or appoint, as the case may be,
such other officer or officers, clerk or clerks, as may be prescribed by
the by-laws or which in the judgment of the directors may be neces-
sary for the proper conduct of the business of the bank. The board of
directors shall require bonds from all of the active officials and em-
ployees of the bank. The surety on every bond shall be some good,
solvent bonding or surety company authorized to transact business in
Virginia, and the penalty of any such bond shall be increased when-
ever in the opinion of the State corporation commission it is deemed
necessary for the protection of the public interest. The board of direc-
tors of every bank shall hold meetings at least once in each calendar
month, at which meeting a maiority of the whole board shall be neces-
sary for the lawful transaction of business, except that the stockholders.
by by-law, may fix any number not less than five as quorum.

Section 25. Settlement of cashier’s accounts.—The directors shall.
at least twice in each calendar year, 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 examination and settlement shall
be recorded with the proceedings of the board.

Section 26. Limit on the payment of interest by banks on savings
deposits, certificates of deposit. et cetera. Contract for more declared
void; penalty for violation.—It shall hereafter be unlawful for any
bank as defined by sections one and two of this act, to pay, allow, give
or grant interest, or its equivalent, directly or indirectly, or by any
guise or device whatever on savings deposits or other deposits, certifi-
cates of deposit or any similar security issued in lieu of a deposit bv a
hank at a rate of interest greater than four per centum per annum.
Any contract for a greater rate made after the passage of this act shall
be void and unenforceable. The members of the board of directors
of any bank violating this act shall be personally liable, jointly and
severally to any person or persons who shall have been prejudiced or
who shall have lost through the payment of interest, as aforesaid, in
excess of four per centum to the extent of such loss or prejudice.

Section 27. Fraudulent entries, or, et cetera, with intent, et cetera,
in accounts, by officers or clerks of banks; how punished.—If any
offcer or clerk of any bank make, alter, or omit to make any entry
in any account, including loose-leaf ledger accounts kept in such bank,
with intent, in so doing, to conceal the true state of such account, or
to defraud the said bank or to enable or assist any person to obtain
money to which he was not entitled, such officer or clerk shall be con-
fined in the penitentiary not less than two nor more than ten vears.

Section 28. False certification of checks; how punished.—W hoever.
being an officer, employee, agent or director of a bank, certihes a check
drawn on such bank and wilfully fails forthwith to charge the amount
thereof against the account of the drawer thereof, or wilfully certifies a
check drawn on such bank when the drawer of such check has not on
deposit with the bank the amount of money subject to the payment of
such check and equivalent to the amount therein specified, shall be
eulty of a misdemeanor.

Section 29. Penalty for officer, director or emplovee of anv bank
who received any commission or gift in connection with any loan.—Ex-
cept as otherwise provided, any officer, director, employee, or attorney of
anv hank who stipulates for or receives or consents or agrees to receive
any fee, commission, gift or thing of value from any person, firm or
corporation, for procuring or endeavoring to procure for such person,
frm or corporation, or for any other person, firm or corporatioh. anv
loan from or the purchase or discount of any paper, note, draft, check,

bond, stock, security or bill of exchange by any such bank shall be
deemed guilty of a misdemeanor and shall be imprisoned not more than
one year in jail or fined not more than one thousand dollars, or both,
provided that the above prohibition shall not apply to any officer or
director, who is a member of a firm of licensed brokers, in buying
for or from or selling to, or for the account of a banking institution,
of which he may be an officer or director, in the ordinary course of
business, bonds, stocks or other evidences of debt at the usual rate of
commission for such service.

Section 30. Penalty for receiving deposits when bank, banker, or
broker insolvent.—Any officer or director of any bank and any private
banker or broker or any employee of any such bank, banker or broker,
who shall take and receive, or permit to be received, a deposit from
any person with the actual knowledge that said bank, banker or
broker is at the time insolvent, shall be guilty of embezzlement, and
shall be punished by a fine double the amount so received, and be
confined in the penitentiary not less than one nor more than three
years, in the discretion of the jury, for each offense. On the trial of
any indictment under this section it shall be the duty of: any such
bank, banker or broker, their agents or officers, to produce in court on
demand of the attorney for the Commonwealth, all books and papers
of such bank, banker or broker, to be read as evidence on the trial of
such indictment; but in determining the question of the solvency of any
bank, the capital stock thereof shall not be considered as a liability due
by it.

Section 31. Limitation to amount invested in bank building, furni-
ture and fixtures.—It shall hereafter be unlawful for any bank or trust
company incorporated under the laws of this State to invest in its bank
building and premises, including its furniture and fixtures, and includ-
ing such part of the stock in a building company or other corporation
of like nature as represents the ownership of said bank building or
premises, an amount greater than fifty per centum of its paid-in capital
stock and its surplus undiminished by losses. If, subsequent to any
such investment, the surplus of any such bank or trust company be
diminished by losses so that the said investment shall amount to more
than fifty per centum of its paid-in capital stock and its remaining
surplus, such bank or trust company shall not pay dividends in excess
of a rate of six per centum per annum until such surplus and paid-in
capital stock of such bank or trust company shall again be equal to
double the value of its bank building and premises, including its furnt-
ture and fixtures, and including any stock in any building corpora-
tion as hereinbefore mentioned. For any violation of this section the
directors of the offending corporation shall individually be responsible.

Section 32. For what purpose banks may purchase, hold and con-
vey 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 accommoda-
tion 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 the satisfaction of debts
previously 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, in whole or in part or shall
purchase to secure debts due to it; but no such bank or banking institu-
tion shall hold the possession of any real estate under mortgage or other
encumbrance, or the title and possession of any real estate purchased
to secure any debts due to it, for a longer period than ten years.

Section 33. Surplus; dividends; undivided profits—The board of
directors may declare a dividend of so much as they shall judge ex-
pedient, of the profits of the bank, after providing for all expenses,
losses, interest and taxes accrued, or due by said bank, and the crea-
tion of a ten per centum surplus fund; but before any such dividend
is declared, the capital shall be paid in full, and the directors shall
cause to be laid aside, to a fund known as a surplus fund, the entire
net profits, until such fund shall amount to at least ten per centum of
the capital stock. Any losses sustained by such bank in excess of its
net undivided profits may be charged to its surplus fund; provided, that
its surplus fund shall thereafter be reimbursed from: its earnings, and
no dividend shall be declared or paid by such bank until its surplus
fund shall be fully restored to the amount required by this section, or
which reduces the surplus below ten per centum of the capital. To
ascertain the net undivided profits before any dividend shall be de-
elared, all debts due to such bank on which interest is past due and
unpaid for a period of twelve months, unless the same are well secured
and in process of collection by law, shall be deducted from the profits
in addition to all expenses, losses, interest and taxes accrued, and the
balance shall be deemed to be the net profits.

Section 34. How banks may use their deposits and other funds.—
Every bank shall have power to use money it may receive on deposit,
and its other funds, in the manner prescribed in section twelve of this
act ; provided, however, that every such bank shall at all times maintain
a reserve of at least ten per centum of its demand deposits and of at
least three per centum of its time deposits. Reserve shall consist of
actual cash on hand and balances payable on demand, due from other
approved solvent banks. The term “demand deposits” shall mean all
deposits, the payment of which can be legally required under thirty
days. The term “time deposits” shall mean all deposits the payment
of which cannot be legally required less than thirty days and repre-
sented by a certificate of deposit, which so states or by a pass book
issued to the customer, in which the notice required for withdrawal is
printed, written or stamped in such pass book; provided, however, that
when any bank has become a member of the Federal reserve bank
system, it shall be required to comply with the reserve requirements of
the Federal reserve act.

Section 35. Payment of small bank balances to next of kin of
decedent—When the balance in any bank or trust company to the
credit of a deceased person, upon whose estate there shall have been
no qualification, shall not exceed three hundred dollars, it shall be
lawful for such bank or trust company, after one hundred and twenty
days from the death of said person, to pay said balance to his next of
kin, whose receipt therefor shall be a full discharge and acquittance to
such bank or trust company to all persons whomsoever on account of
such deposit.

Section 36. Deposits of deceased person and persons under dis-
abilities—It shall be lawful for any bank to pay any balance on deposit
to the credit of any deceased person (after two weeks shall have elapsed
from the date of his death), or of any person under disabilities, to the
personal representative, guardian, curator or committee of such person
upon a letter of qualification as such personal representative, guardian,
curator or committee, issued by any court of competent jurisdiction of
this State, and such letter shall be sufficient authority for such transfer,
and such bank making such transfer shall no longer be liable for such
deposit to any person whosoever. The presentation of a duly certified
letter of qualification as personal representative, guardian, curator or
committee shall be conclusive proof of the jurisdiction of the court
issuing same.

Section 37. Deposits of minors.——Whenever any deposit shall be
made in any bank by or in the name of any infant or minor, the same
shall be held for exclusive right and benefit of such minor, free from
the control of all persons whosoever, except creditors, and shall be
paid with interest, if any be due thereon, to the person in whose name
the deposit shall have been made, and the check, order or receipt of
such infant or minor shall be a good and sufficient release and discharge
for such deposit to the bank.

Section 38. Deposits in names of two or more persons, or survivors ;
how discharged—When a deposit has been made, or shall hereafter
be made, in any bank, trust company or private banking concern trans-
acting business in this State, under the names of two or more persons,
payable to either, or payable to either of the survivors, such deposit, or
any part thereof, or any interest or dividend thereon, may be paid
to either of said persons, whether the other or others be living or not,
and the receipt or acquittance of the person so paid shall be a valid,
sufficient and complete release and discharge of the bank, trust com-
pany or private banking concern for any payment so made.

Section 39. Safety deposit box hired to two or more; access of
either, or survivor; who to have access.—When a safety deposit box
shall have been hired, or shall hereafter be hired, from any bank, trust
company or private banking concern transacting business in this State,
under the name of two or more persons, with the right of access being
given to either, or with access to either the survivor or survivors of
said persons, any one or more of such persons, whether the other
or others be living or not, shall have the right of access to such deposit
vault, and may remove therefrom the contents of said box; and in
case of such removal, the said bank, trust company or private banking
concern shall be exempt from any liability for Permitting the said
person or persons access thereto.

Section 40. Check presented more than one year after date: bank
may refuse payment.—Where a check or other instrument payable on
demand at any bank or trust company doing business in this State 1s
presented for payment more than one year from its date of issue, such
bank or trust company may, unless expressly instructed by the drawer
or maker to pay the same, refuse payment thereof until notice thereof
is given to the drawer or maker and no Hiability shall thereby be
incurred to the drawer or maker for dishonoring the instrument by
such non-payment.

Section 41. Bank’s failure to pay check through error; limit of
liability—No bank or trust company doing business in this State shall
be liable to a depositor because of the non-payment through mistake or
error and without malice, of a check which should have been paid unless
the depositor shall allege and prove actual damage by reason of such
non-payment, and in such event the liability shall not exceed the
amount of damage so proved.

Section 42. Within what time a check must be presented—A check
must be presented for payment within a reasonable time after its issue.
or the drawer will be discharged from liability thereon to the extent
of the loss caused by the delay. The cleath of the drawer, however.
shall not operate as a revocation of authority of the bank upon which
it is drawn to pay the check if it be presented for payment within two
weeks from the date of the death of the drawer. Such bank shall
retain for a period of two weeks after knowledge of the death of the
depositor any money standing upon its book or books to the credit of
such depositor, and after paying thereout any checks which may be
presented within said period of two weeks shall, upon demand, pay
the residue to the persons entitled thereto in the manner prescribed
by law.

Section 43. Fixing limitations on revocations, countermands ot
payments and stop-payment orders relating to the payment of any
check or draft against bank accounts.—One. No revocation, counter-
mand or stop-payment order relating to the payment of any check or
draft against an account of a depositor in any bank or trust com-
pany doing business in this State shall remain in effect for more than
one vear after the service thereof on the bank, unless the same he
renewed, which renewals shall be in writing and which renewals shall
be in etfect for not more than one year from date of service thereot
on the bank or trust company, but such renewals may be made trom
time to time.

Two. All notices affecting checks upon which revocation, counter-
mand or stop-payment order have been made at the time of the taking
1928] ACTS OF ASSEMBLY 1323

effect of this act, shall not be deemed to continue for a period of more
than one year thereafter.

Section 44. Payment of forged or raised check; liability of bank;
notice to depositor; how given—No bank or trust company in this
State, which has paid and charged to the account of the depositor any
money on a forged or raised check, issued in the name of the said
depositor, shall be liable to said depositor for the amount paid thereon,
unless either (one) within six months after notice to said depositor
that the vouchers representing payments charged to the account of
said depositor for the period during which such payment was made
are ready for delivery, or (two) in case no such notice has been given,
within six months after the return to said depositor of the voucher
representing such payment, said depositor shall notify the hank or
trust company in this State that the check so paid is forged or raised.
The notice referred to in this section may be given by mail to said
depositor, at his last-known address, with postage prepaid.

Section 45. Drawing, uttering, et cetera, checks, et cetera, on any
bank with intent to defraud; how punished; evidence of intent to
defraud; credit, statements, et cetera —How evidenced.

First. Any person who, with intent to defraud, shall make or draw
or utter or deliver any check, draft, or order for the payment of
money, upon any bank, banking institution, trust company, or other
depository, knowing, at the time of such making, drawing, uttering or
delivering, that the maker or drawer has not sufficient funds in, or
credit with, such bank, banking institution, trust company, or other
depository, for the payment of such check, although no express repre-
sentation is made in reference thereto, shall be guilty of a misdemeanor.

Second. Any person convicted under the provisions of paragraph
one of this section shall, if the amount of such check, draft, or order
is under fifty dollars be sentenced to pay a fine of not more than one
hundred dollars, or to undergo imprisonment not exceeding thirty days,
or both. If the amount of such check, draft, or order is fifty dollars
or more, he shall be sentenced to pay a fine of not more than one hun-
dred dollars, or to undergo imprisonment not to exceed one year, or
both.

Third. In any prosecution under this section, the making or draw-
ing or uttering or delivery of a check, draft or order, payment of
which is refused by the drawee because of lack of funds or credit,
shall be prima facie evidence of intent to defraud and of knowledge of
insufficient funds in, or credit with such bank, banking institution,
trust company, or other depository, unless such maker or drawer shall
have paid the drawee thereof the amount due thereon, together with
interest and protest fees, within five days after receiving notice that
such check, draft, or order has not been paid to the drawee.

Fourth. The word credit, as used herein, shall be construed to mean
any arrangement or understanding with the bank, banking institution,
trust company, or other depository for the payment of such check,
draft or order.
Fifth. In any civil action growing out of an arrest under this sec-
tion no evidence of statements or representations as to the status of the
check, draft, order, or deposit involved, or of any collateral agreement
with reference to the check, draft or order, shall be admissible unless
such statements, or representations, or collateral agreement, be written
upon the instrument.

Section 46. Regulating the issuance of certificates of deposit—lIt
shall be unlawful for any bank, including banks of deposit and dis-
count, savings institutions, savings societies and trust companies, to
issue any certificate of deposit, or other negotiable instrument of its
indebtedness, to the holder thereof, except for lawful money of the
United States, checks, drafts, or bills of exchange which are the actual
equivalent of such money. Any officer or employee of any bank violat-
ing the provisions of this act shall be guilty of a misdemeanor and upon
conviction thereof shall be fined or imprisoned, or both in the discre-
tion of the court.

Section 47. Sending collection items direct to bank: where pay-
able; liability of forwarding bank.—Any bank, banker, or trust con-
pany, hereinafter called bank, organized under the laws of, or doing
business, in this State, receiving for collection or deposit, any check,
note or other negotiable instrument drawn upon or payable at any
other bank, located in another city or town, whether within or with-
out this State, may forward such instrument for collection directly to
the bank on which it is drawn or at which it is made payable, and
the failure of such payor bank, because of its insolvency or other
default, to account for the proceeds thereof, shall not render the
forwarding bank liable therefor, on account of it having been sent
direct; provided, however, such forwarding bank shall have used due
diligence in other respects in connection with the collection of such
instrument. And provided, further, that checks or drafts given in
payment for such collection items shall become a prior claim upon
the unpledged assets of such payor bank, and in the event of its
failure, before final payment of such checks or drafts by banks on
which drawn, the receiver thereof shall pay such dishonored checks or
drafts from the first monies coming into his hands, other than from
previously pledged securities.

Section 48. Limit of liability of borrows; loans on stock.—The
total liabilities of any person, partnership or corporation to any bank,
including the liabilities of the co-partnership, and the liabilities of the
several members thereof, except special partners, shall at no time,
exceed fifteen per centum of the capital and permanent surplus of such
bank, unless the same shall be authorized by a resolution of the board
of directors, approved by a majority of said board, or by the executive
committee of the said board, approved by a majority of such executive
committee which resolution shall be recorded in the minutes of said
board or committee, and signed by the directors present and consent-
ing thereto; provided, however, they shall, in no case, exceed forty
per centum of such capital and surplus. Provided, further, that the
limit of loans herein fixed shall not apply to real estate loans made
for immediate bona fide resale, or to bona fide loans made upon the
faith or security of agricultural, manufactured, industrial products, or
live stock, having a market value, and for which there is a ready sale
on the open market. Provided, further, that a discount of bills of ex-
change, drawn in good faith, against actually existing values, the dis-
count of commercial or business paper actually owned by the person
negotiating the same, and paper adequately secured by United States
government bonds, certificates of indebtedness, and bonds of the State
of Virginia including those of any county or municipality thereof, shall
not be subject to the limitations of this section. The word “liabilities,”
as herein used, shall include liability both as maker and endorser,
except, however, that there shall not be charged against the liability of
any person, firm or corporation the endorsement of paper which is
otherwise adequately secured. No loan shall be made by any bank
on the security of shares of stock in such bank in excess of two-thirds
of the book value of such stock at the time that such loan is made, nor
in any case until such shares are fully paid for in cash; provided, how-
ever, that the aggregate amount of such loans shall not at any time
exceed forty per centum of the paid in and unimpaired capital stock
of such bank. All loans of every character, in excess of fifteen per
centum of the capital and permanent surplus of any bank shall be
approved by a majority of the board of directors or executive com-
mittee as hereinbefore mentioned.

Section 49. Loans to officers, directors, clerks or employees.—No
officer, director, clerk or employee of any bank shall borrow any amount
whatever from such bank except upon good collateral or other ample
security or endorsement, and no such loan shall be made until after it
has been approved by a majority of the directors or a committee ap-
pointed by the board of directors with authority to act; provided the
board of directors may by proper resolution authorize certain officers
to handle renewals of these loans ; and provided, further, that the board
of directors by specific resolution may fix for a definite period lines of
credit that may be granted to individual officers, directors, clerks or
employees on single name or other paper, not exceeding in any case the
loan limit provided in section forty-eight.

Section 50. No bank or trust company to give preference to
depositor or creditor by pledging assets; exceptions; limitations—No
bank or trust company shall give preference to any depositor or creditor
by pledging the assets of such bank or trust company, except as other-
wise authorized in this section; provided, that any bank or trust com-
pany which on February first, nineteen hundred and twenty-eight, was
engaged as a regular part of its business in so doing, may continue
hereafter when owning evidences of debt falling due at stated dates and
secured by liens on real or personal property, the values of which hens
are respectively adequate for the payment of the debts, to negotiate its
own notes or bonds and secure their payment by such evidences of debt
in an amount not more than one hundred and twenty-five per centum
of the amount of such notes or bonds if such notes or bonds shall be
pavable at such stated dates as that the proceeds of the payment otf
such evidences of debt will liquidate them; and further provided, that
any bank or trust company may deposit securities for the purpose of
securing deposits of the United States government, and its agencies.
and the Commonwealth of Virginia, and its political subdivisions, and
for the purpose of securing sureties on surety bonds furnished to
secure such deposits; and further provided, that any bank or trust com-
pany is authorized:

First, for any temporary purpose to -pledge its assets as security
for amounts of borrowed money which shall not, without the approval
of the chief examiner of banks given in advance in writing, exceed
in the aggregate the amount of its capital and surplus actually paid in
or earned, and remaining undiminished by losses or otherwise ; provided
that the amount of assets pledged for the security of a loan shall not
without such approval, so given, exceed one hundred and fifty per
centum of the amount borrowed, provided also, that no excess loan
made to any such bank or trust company shall be invalid or illegal as to
the lender, even though made without the consent of the chief examiner
of banks; provided, also, that rediscounting with or without guarantee
or indorsement of notes, drafts, bills of exchange or loans is hereby
authorized and shall not be limited by the terms of this act, and shall
not be considered as borrowed money within the meaning of this
section.

Second. To rediscount with and sell to a Federal reserve bank any
and all such notes, drafts, bills of exchange, acceptances and other
securities, with no restrictions, and as fully, and to the same extent
as this privilege is given to national bank members under the terms of
the Federal reserve act, or by the regulations of the Federal reserve
board made pursuant thereto.

Section 51. Banks borrowing money; reports; resolution of board
of directors; certificates of deposit—Any bank or trust company bor-
rowing money or rediscounting any of its notes shall at all times show
on its books and accounts and in its reports the amount of such bor-
rowed money or rediscounts. No officer or director or employee of
any bank or trust company shall issue the note of such bank or trust
company for borrowed money nor rediscount any note nor pledge any
of the assets of such bank or trust company, except when authorized
by resolution of the board of directors of such bank or trust company
previously made and entered upon the minutes of such bank or trust
company, under such rules and regulations and in such form as may
be prescribed by the chief examiner of banks; provided, it shall be
unlawful for any bank or trust company to issue its certificates of
deposit for the purpose of borrowing money.

Section 52. Banks and trust companies may make acceptances and
issue letters of credit—Any bank or trust company doing business in
this State may accept drafts or bills of exchange drawn upon it, having
not more than six months’ sight to run, which grow out of transactions
involving the importation or exportation of goods, or which grow out
of transactions involving the domestic shipment of goods, provided,
shipping documents conveying or securing title are attached at the time
of acceptance, or which are secured at the time of acceptance by a
warehouse receipt or other such document conveying or securing title
covering readily marketable staples. No bank shall accept, whether in
a foreign or domestic transaction for any one person, company, firm or
corporation to an amount equal at any time in the aggregate to more
than ten per centum of its paid-up and unimpaired capital stock and
surplus, unless the bank is secured either by attached documents or by
some other actual security growing out of the same transaction as the
acceptance ; and no bank shall accept such bills to an amount equal at
any time in the aggregate to more than one-half of its paid-up and
unimpaired capital stock and surplus; provided, however, that with
the approval of the banking division, State corporation commission,
regardless of the amount of capital stock and surplus any bank may
accept such bills to an amount not exceeding at any time in the aggre-
gate one hundred per centum of its paid-up and unimpaired capital
stock and surplus; provided, further, that the aggregate of acceptance
growing out of domestic transactions shall in no event exceed fifty
per centum of such capital stock and surplus and that all banks which
may have or shall hereafter become members of the Federal reserve
system, may accept drafts or bills of exchange drawn upon them by
banks or bankers in foreign countries or dependencies or insular pos-
sessions of the United States for the purpose of furnishing dollar
exchange as required by the usages of trade in the respective countmnes,
dependencies or insular possessions, according to the condition, limita-
tions and restrictions then in force, as prescribed by the Federal
reserve board of the United States. Any bank or trust company doing
business in this State may issue letters of credit authorizing the holders
thereof to draw drafts upon it or upon its correspondent at sight or on
time not exceeding one year, but the total amount issued for one person,
firm or corporation shall not at any one time exceed ten per centum
of the capital and surplus of the issuing bank or trust company.
Section 53. Statements rendered to the State corporation commis-
sion and published; State corporation commission to furnish forms;
when to cause examination of banks; notice of impairment of capital;
closing banks; receivers; discontinuance of State deposits —Every bank
as hereinafter defined in section one of this act shall make to the State
corporation commission, statements of its financial condition at such
times as the national banks organized under the laws of the United
States are required to make their statements to the comptroller of the
currency and at such other times as the State corporation commission
may deem necessary; and also within fifteen days after such call pub-
lish such statements in condensed form in some newspaper printed
in the county, city or town where such banking business is carried on
or where the principal office of such bank is located; and if there 1s no
such paper published in the county, city or town then such statements

shall be published in a newspaper published in the county, city or
town nearest thereto. The statement shall be made and published in
accordance with forms prescribed by the State corporation commis-
sion, certified under oath by the president or cashier of the bank, or.
if there is no cashier, by the treasurer, and attested by at least three of
its directors. It shall be the duty of the State corporation commission
to call upon all such banks doing business in Virginia 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 such bank two blank
forms, one of which, after being properly filled out and certified as
hereinbefore required, shall be returned to the State corporation com-
mission within fifteen days next succeeding the date of such call, and
the other filled out in like manner, shall be filed with the records of
said bank. The State corporation commission shall, not less than twice
in each and every year, and at such other times as they may deem neces-
sary, cause to be examined each and every bank doing business in this
State, and shall likewise cause to be examined at least once in each
and every year all national banks which are or may hereafter be qualt-
fied State depositories. Said State corporation commission shall also,
upon written application made to them by the board of directors or
by the stockholders representing two-fifths of the total outstanding
capital stock of any such bank doing business in this State, or when-
ever, in the judgment of the State corporation commission, it may be
necessary for the protection of the public or of persons depositing or
dealing with such bank, cause to be made a special examination of
such bank. All expenses incident to such special examination shall be
borne by the bank so examined. In making such examination as
required by this section, the officers, directors and employees of such
banks shall, upon the demand of the person or officer designated to
make such examination, give to such examiner full access to all the
money, books, papers, notes, bills and other evidences of debt due said
bank and shall also disclose fully and truly all indebtedness and
liability thereof, and shall furnish him with all information which
he may deem necessary to a full investigation into the affairs of
said bank, and said examiner shall have the right to examine, under
oath, any and all of the directors, officers, clerks and employees, in
any manner connected with the operation of any such bank touching
any matter or thing pertaining to said examination, and for that pur-
pose shall have authority to administer oaths to them. No previous
notice of any examination shall be given such bank or any of its
directors, officers, or employees.

If upon the examination of any bank, the State corporation com-
mission shall ascertain that the banking laws of this State are not
being fully observed, or that any irregularities are being practiced, or
that its capital has been or is in danger of being impaired, the said
commission shall give immediate notice thereof to the officers and
directors of such banks and demand that the impairment of the capital
stock shall be made good, or that the said irregularities shall be promptly
corrected, and upon the failure so to do within a reasonable time, not
exceeding thirty days after such notice, may provide for the appoint-
ment of a receiver to take charge oi the business affairs and assets of
said bank and to wind up its affairs as hereinafter provided.

If, however, upon the examination of any bank, it shall be found
to be insolvent, or it is deemed necessary by the State corporation com-
mission for the protection of the public interests, the commission may
at once close the doors of such bank without any notice whatsoever,
and the chief examiner of banks or one of his assistants shall take
charge of the books, assets, and affairs of such bank until the appoint-
ment of a receiver as provided by law.

If upon such examination it shall appear to the State corporation
commission that any such bank, which is designated as a State deposi-
tory, is insolvent or is unable to meet its obligations and the legal
demands upon it in the ordinary course of its business, the State corpora-
tion commission shall forthwith notify the auditor of public accounts
and the treasurer of the Commonwealth, who shall discontinue further
deposits therein of State funds and take such action as may be neces-
sary to protect the deposits of the State therein.

In any case the said State corporation commission may, and it shall
be its duty, whenever, in its judgment, it is necessary for the protection
of the interests of the State or of the depositors and creditors of any
such bank doing business in this State to apply to any court in this
Commonwealth having jurisdiction to appoint receivers, for the ap-
pointment of a receiver to take charge of the business affairs and
assets and to wind up the affairs and business of any such bank fail-
ing to comply with the requirements of the State corporation com-
mission, or found upon examination to be insolvent or unable to meet
its obligations and the legal demands made upon it in the ordinary
course and conduct of its business, as aforesaid.

Section 55. Official communications of the State corporation com-
mission; receipt; how certified —Each official communication directed
by the State corporation commission, or any State bank examiner, to
any bank, or to any officer thereof, relating to an examination or
investigation conducted or made by-the banking department of the
State corporation commission, or containing suggestions or recom-
mendations as to the conduct of the bank shall, if required by the
authority submitting same, be submitted by the officer or director re-
ceiving it, to the executive committee or board of directors of such
bank and duly noted in the minutes of such meeting. The receipt and
submission of such notice to the executive committee or board of
directors shall be certified to the State corporation commission within
such time as it may require, by at least three members of such com-
mittee or board.

Section 56. Penalty for violating certain provisions of the banking
laws.—Any such bank, banking institution, savings bank, savings society,
savings institution or trust company failing to comply with the pro-
visions of section fifty-three of this act, for a period of longer than
thirty days, after being called upon by the State corporation commis-
sion for such statement, or to do such other act as is therein provided,
shall be fined not less than one hundred nor more than one thou-
sand dollars, and the State corporation commission shall give notice
of such default in a newspaper published as provided in said section.
Any officer of any such joint stock company, bank, banking institution,
savings bank, savings institution, savings society, or trust company.
who shall refuse to give any examiner the information or refuse to be
sworn, as required by said section, shall be fined not less than twenty-
five nor more than one hundred dollars for such offense, and any such
officer who knowingly makes a false statement of the condition of any
such bank or institution, shall be deemed guilty of a felony and upon
conviction, shall be fined not less than one hundred nor more than
five thousand dollars, and be imprisoned in the penitentiary not less
than one nor more than ten years.

All records, reports and information concerning any bank other
than those required by law to be public, shall be open only to such
officers and employees of the State as may have occasion and authonty
to inspect them in the performance of their duties, and to any officer
or duly authorized agent of such bank, and the imparting of such
information by any employee or officer of the State may be sufficient
cause for his removal from the position he occupies under the State
government.

Section 57. Appointment of examiners and assistants.—The State
corporation commission, for the purpose of carrying out the provisions
of this chapter, shall appoint a chief examiner and such examiners
and assistant examiners, clerks and stenographers, as in its judgment
mav be necessary for the discharge of the several duties imposed upon
it by this act, provided that the persons appointed as chief examiner
or examiners of banks shall be citizens of this State experienced and
skilled in the science of bookkeeping, and shall have had at least five
years of service in some bank, or sufficient service as assistant ex-
aminers, in addition to the actual banking experience to make five years,
assistant examiners of banks two years of service in some bank, and
the State corporation commission shall fix the salaries of such chiet
examiner, examiners, assistant examiners, clerks and stenographers.
Such chief examiner, ‘examiners and assistant examiners, before enter-
ing upon the duties of their office, shall take the necessary oath before
the State corporation commission, as prescribed by the Constitution ot
this State. and such chief eximiner and his examiners and assistants
engaged in the examination of banks shall give bond in the penalty
of five thousand dol'ars, with surety in some good solvent bonding
company to be approved by the State corporation commission condi-
tioned for the faithful performance of their duties, and the premiums
on the sa‘d bonds shall be paid out of the fund created by the next
section.
Section 58. Fees for examination: when excess of fees to be re-
funded.—Every such bank shall pay for its semi-annual examination
provided for by section fifty-three of this act, fees as follows:

For the examination of banks for a period of one year, a minimum
fee of fifty dollars per bank, which shall cover the first fifty thousand
dollars of assets or less, to which shall be added, in the case of each
hank, according to its total assets, as shown by the statement of finan-
cial condition made to the State corporation commission next preceding
June the first as follows: For the amount by which its total assets
exceed fifty thousand dollars and do not exceed five hundred thousand
dollars, two dollars per ten thousand or fraction thereof; for the
amount by which its total assets exceed five hundred thousand dollars
and do not exceed two and a half million dollars, one dollar per ten
thousand or fraction thereof; for the amount by which its total assets
exceed two and a half million dollars and do not exceed five million
dollars, one dollar per twenty thousand dollars or fraction thereof ;
for the amount by which its total assets exceed five million dollars, and
do not exceed ten million dollars, one dollar per forty thousand or
fraction thereof; for all assets over ten million dollars, one dollar
per one hundred thousand dollars or fraction thereof; provided, how-
ever, that in the case of banks, the total assets of which do not exceed
one hundred thousand dollars of total resources, the fee shall not
exceed forty dollars.

And every bank having a branch or branches shall be assessed
fifty dollars per branch, in addition to the foregoing fees, which amounts
shall be assessed against each such bank by the State corporation com-
mission on the first day of July of each and every year and shall be
paid into the State treasury to the credit of “banking fund—State cor-
poration commission,” on or before the thirty-first day of July follow-
ing, to be used in carrying out the provisions of this act. All fees
so assessed shall be a lien on the assets of the bank, and if not paid
with'n thirty days from the date of said notice may be recovered in
any court of the county or city in which such bank or institution is
located having original jurisdiction of civil cases, on motion of and
in the name of the State corporation commission. The State corpora-
tion commission shall mail the assessment to each bank on or before
July first of each vear and certify a copy to the auditor of public
accounts, and it shall be the duty of the auditor of public accounts
to furnish the State corporation commission promptly with a list of
the banks which fail to pay the assessment on or before July thirty-first.

For national banks which are now and may hereafter be designated
as State depositories one-half of the foregoing scale of fees which
amount shall be assessed against each such national bank by the State
corporation commission on the first day of July of each and every
year, and shall be paid promptly and directly into the general fund of
the State treasury on or before the thirty-first day of July follow-
ing. The same provision in this section which makes the assessment a
lien against the assets of every such bank shall apply to such of the
national banks as are qualified State depositories on the first day of
July of each and every year. The State corporation commission shall
mail the assessment to each of the national banks above referred to on
or before the first of July of each year, and certify a copy to the
auditor of public accounts, and it shall be his duty to furnish the State
corporation commission promptly with a list of such of the national
banks which fail to pay assessment on or before July thirty-first.

Every bank authorized to begin business after the first day of July
and before the thirty-first day of December in any year shall pay the
full amount of fees prescribed above; and every bank authorized to
begin business after the first day of January and before the thirtieth
day of June of any year shall pay one-half of the fees prescribed
above. Such fees shall be based on the total resources of such bank
at its first examination after it has been authorized to begin business,
and at that time collected by the chief examiner of banks and paid
into the treasury as other funds arising under the provisions of this
act.

Section 59. Making or circulating derogatory statements affecting
banks or trust companies; how punish.—Any person who shall wil-
fully and maliciously make, circulate or transmit to another or others,
any statement, rumor or suggestion, written, printed or by word of
mouth, which is directly or by reference derogatory to the financial con-
dition or affects the solvency or financial standing of any bank, savings
bank, banking institution or trust company doing business in this State,
or who shall counsel, aid, procure or induce another to start, transmit
or circulate any such statement or rumor, shall be guilty of a misde-
meanor, and upon conviction thereof, shall be sentenced to pay a fine
of not more than one thousand dollars, or to be confined in jail not
more than one year, or both.

TITLE II—SAVINGS BANKS

Section 60. Savings banks, how incorporated.—Savings banks, sav-
ing institutions, and savings societies may be incorporated according
to the provisions of chapter one hundred and forty-eight, and shall be
subject to all the restrictions, have all the general powers in the said
chapter contained, except as otherwise provided in this act.

Section 61. What savings banks are subject to this act.—Every
savings bank, savings institution, and saving society which, since the
act of the twenty-fourth day of March, eighteen hundred and thirty-
eight, has been or hereafter may be incorporated, shall be subject to and
governed by the provisions of this act, so far as the said provisions
are not in conflict or inconsistent with the charter of such bank, institu-
tion, or society heretofore incorporated, and shall, moreover, be subject
to and governed by the general provisions of chapters one hundred
and forty-seven and one hundred and forty-eight, not in conflict with
this act, and shall be subject to and governed by any future laws which
may be passed affecting the same.
Section 62. Directors and their number.—The affairs of such bank,
Savings institution or savings society shall be managed by a board of
directors to consist of not less than five persons. The five persons first
named in the certificate incorporating such bank, institution, or society,
shall constitute the first board of directors thereof. They shall con-
tinue in office until the first meeting of the members. At such first
meeting and at every annual meeting thereafter, directors shall be
elected who may be removed by the members in general meeting, but
unless so removed shall continue in office until their successors shall
be elected. The number of the directors may be fixed by the certificate
of incorporation or by-laws, and may be increased at any general meet-
ing of the members.

Section 63. Appointment of president and other officers.—The direc-
tors shall appoint one of their body president, and may fill any vacancy
occurring in the board unless it be by removal, in which case the
members shall fill the same in general meeting. The board shall appoint
(to hold during its pleasure) the subordinate officers and agents, pre-
scribe their compensation, and take from them such bonds, with
surety, as it may deem fit.

Section 64. Powers and duties of board.—The board shall regulate
the admission of members, and furnish proof of their admission. It
may receive money on deposit and grant certificates therefor; but no
certificate shall be for less than one dollar, and it may buy, sell, draw,
or negotiate bills of exchange. The board may also make by-laws
and regulations for the management of the property of the bank, institu-
tion or society, and the conduct of its business, and pay its expenses
subject always to the power of the members in general meeting to
repeal or to modify such by-laws and regulations, and make others.

Section 65. How amount of certificate of deposit recovered.—lIf
any certificate of deposit be presented for payment at the time and in
the manner mentioned therein, and be not then paid, with all the interest
due thereon, the depositor, his personal representative or assigns, may,
by warrant or motion (according to the amount), recover from the
bank, institution, or society the whole amount due for principal and
interest at the time of the presentation of the certificate, with interest
on the whole at the rate of ten per centum per annum, from that time
until payment.

Section 66. How funds of bank to be invested——The money re-
ceived on deposit and other funds of the bank, institution, or society
may be invested in or loaned on any stocks or real security, or be
used in purchasing or discounting bonds, bills, notes, or other paper,
subject to the following restrictions: That no security for money or
other valuable things which may have become payable, other than bonds
or certificates of debt of this State, or of the United States, or of cor-
porations, shall be purchased for less than the full value thereof, with
all interest due thereon; and no debt or claim to become due, other
than such bonds or certificates, shall be purchased or discounted at a
rate of discount or interest exceeding the rate of one-half of one per
centum for thirty days; but the interest in any case mav he received
in advance.

Section 67. Increase of capital stock—The capital stock of any
such bank, institution, or society may be increased from time to time
to the maximum prescribed in its charter or certificate of incorporation.
and where there is no maximum so prescribed, then by amendment to
its charter or certificate of incorporation, as provided in chapter one
hundred and forty-eight.

TITLE HI—TRUST COMPANIES

Section 68. How incorporated; general powers and duties: use of
words “incorporated” or “corporation” in corporate name.—Trust
companies formed for the purpose of doing a trust business in this
State, or for the purpose of doing a trust business in addition to tke
general banking business in this State, may be incorporated according
to chapter one hundred and forty-eight, and shall be subject to all the
general duties and restrictions, and shall have the general powers pro-
vided in the statutes of this State, regulating banks of discount and
deposit and savings banks, or which may be hereafter provided by law,
except as shall be otherwise provided in this act, but in its articles
of incorporation, or in the case of an existing bank desiring to do a
trust business, in its amendments to its articles of incorporation it
shall state its intention to conduct a trust business. The word “incor-
porated” or the word “corporation” shall not hereafter be a necessarv
portion of the corporate name of any bank of discount and depvsit,
savings bank or trust company in this State, nor need the corporate
name of any bank doing a trust business hereafter contain the word
“trust” or “trusts.” .

Section 69. Minimum capital; amount to be paid before commenc-
ing business—No trust company shall be incorporated with a less
capital than fifty thousand dollars, which shall be fully paid ur before
commencing business. If the capital exceeds fifty thousand dollars.
at least that amount shall be paid before commencing business.

Section 70. Making and withdrawing deposits; power of board
of directors—The board of directors shall have the power from time
to time to prescribe conditions which shall govern the regulation of
making and withdrawing deposits, provided that should regulations be
adopted at variance with the withdrawal upon demand, such regula-
tions shall be printed in the pass book which shall be furnished the
depositor, and copies of such regulations shall be posted in two ac-
cessible places in the business office of such bank or trust company.

Section 71. Powers of trust companies; regulations and_ restric-
tions.—All banks which are authorized to do a trust business, and all
trust companies heretofore and hereafter chartered, shall have the
powers, and be subject to the regulations and restrictions conterred
or imposed upon companies authorized to do a general banking busi-
ness in this State, and shall in addition thereto have the tollowing
rights, powers and privileges:
1928] ACTS OF ASSEMBLY 1335

(a) To act as agent for any person, corporation, municipality or
State for the collection or disbursement of interest, or income or prin-
cipal of securities.

(b) To act as the fiscal or transfer agent of any State, municipality,
body politic or corporate, and in such capacity to receive and disburse
money; to transfer, register and countersign certificates of stock,
bonds or other evidences of indebtedness, and to act as agent of any
corporation, foreign or domestic, for any lawful purpose.

(c) To act as trustee under any mortgage or bond issued by any
individual, municipality, body politic or corporate, and accept and
execute any other municipal or corporate trust not inconsistent with
the laws of this State.

(d) To accept trusts from and execute trusts for married women,
in respect to their separate property, and to be their agent in the
management of such property, or to transact any business in relation
thereto.

(e) To act as guardian, receiver or trustee of the estate of any
minor and as depository of any money paid into court, whether for the
benefit of any minor or other person, corporation or party.

(f) To take, accept and execute any and all such lawful trusts,
duties and powers in regard to the holding and management and
disposition of any estate, real and personal, and the rents and profits
thereof, or the sale or lease thereof, as may be granted or confided to
it by any court of record, judge or clerk, or by any person. corporation,
municipality or other authority, and it shall be accountable to all
parties in interest for the faithful discharge of every such trust, duty
or power which it may so accept.

(g) To take, accept and execute any and all such trusts and powers
of whatever nature and description as may be conferred upon or
entrusted or committed to it by any person or persons, or any body
politic or corporate, or by other authority, by grant, assignment, trans-
fer, devise, bequest or otherwise, which may be entrusted or committed
or transferred to it or vested in it by order of any court of record,
judge or clerk, and to receive and hold any property or estate, real
or personal, which may be the subject of any such trust.

(h) To act as executor under the last will and testament or ad-
ministrator of the estate of anv deceased person; or as guardian of any
infant; or as committee of the estate of any insane person, idiot or
habitual drunkard, or trustee or committee for any convict in the peni-
tentiary, under appointment of any court of record, judge or clerk
thereof, having jurisdiction of the estate of such deceased person,
infant, insane person, idiot, habitual drunkard or convict.

(i) To guarantee the fidelity and diligent performance of their
duty by persons or corporations holding places of private or public
profit or trust in all cases where individual bonds are not required by
law, to guarantee the title to real or personal estate or become security
on any bond given by any person or corporation against loss or damage
by reason of any risk, assumed, by insuring the fidelity or diligent
performance of duty of any person or corporation, or by guaranteeins
or becoming surety on any bonds: provided, however, that bond:
guaranteed shall not be included as resources in calculating assessment:
under section fifty-eight of this act.

(j) No bank or trust company of this State, with a minimum un.
impaired capital stock of fifty thousand dollars or more, shall be re
quired by any officer or court of this State to give security upon ap
pointment to or acceptance of any office of trust which it may, by law
be authorized to execute; provided, however, that no bank or trus
company shall qualify on an estate having a value in exe@ess of it
combined unimpaired capital and surplus without giving bond for suct
excess.

(k) In all cases where any bank or trust company in this State
shall be appointed to act as trustee, executor or administrator of any
estate or guardian for any infant, or in any other fiduciary capacity,
it shall be lawful for the president, vice-president, cashier, treasurer,
secretary, or any other officer of such trust company to take and sub-
scribe for such corporation any and all oaths required to be taken or
subscribed by such executor, administrator, trustee, guardian, or other
fiduciary.

(1) Nothing in this section shall ever be construed as authorizing
the creation of a trust not lawful as between individuals nor to prohibit
the deposit of funds by court and fiduciaries in banks of deposit and
discount and savings banks.

Section 72. National banks as fiduciaries; rights; powers; priv-
ileges and immunities —All national banks which have been, or here
after may be, permitted by law to act as trustee and in other fiduciary
capacities, shall have all the rights, powers, privileges and immunities
conferred upon trust companies by this chapter.

TITLE IV—ADDITIONAL PROVISIONS

Section 73. When personal representative of a deceased maker.
surety or endorser of an obligation for the payment of money mav
execute a renewal thereof on behalf of the estate of his decedent—In
all cases where a decedent is the maker or one of the makers, as surety
or one of the sureties, an endorser or one of the endorsers of any note
or other obligation for the payment of money, which is due or past due
at the death of said decedent, or shall thereafter become due prior to
the settlement of the estate of said decedent, the said decedent's per-
sonal representative shall have authority and power to execute as such
personal representative a new note, bond or other obligation for the
payment of money, in the same capacity as decedent was obligated.
for the same amount or less but not greater than the sum due on the
original obligation, which shall be-in leu of the original obligation ot
the decedent, whether made payable to the original holder or another.
and shall have authority and power to renew said note, bond or other
obligation for the payment of money from time to time, and said note.
1928] ACTS OF ASSEMBLY

1337

bond or other obligation for the payment of money so executed by said
personal representative shall be binding upon the estate of said decedent
to the same extent and in the same manner and with the same effect that
the original note, bond or other obligation for the payment of money so
executed by the decedent was binding upon his estate; provided, that
the time for final payment of the note, bond, or other obligation for the
payment of money, or any renewal thereof by said personal representa-
tive shall not extend beyond a period of two years from the qualifica-
tion of the original personal representative as such upon the estate of
said decedent, except upon the order of a court of competent jurisdic-
tion.

Second. That the execution of any note, bond, or other obligation
for the payment of money by the personal representative of the dece-
dent mentioned in the first section of this act shall not be held or con-
strued to be binding upon said representative personally.

Section 74. Effect of deposits in bank by a fiduciary or agent to his
personal credit of certain items drawn by or payable to him as fidu-
ciary or agent.—If any fiduciary or agent makes a deposit in a bank
to his personal credit of checks drawn by him upon an account in his
own name as fiduciary, or of checks drawn by him upon an account in
the name of his principal, if he is empowered to draw checks thereon,
or of checks payable to his principal and endorsed by him as fiduciary,
the bank receiving such deposit is not bound to inquire whether the
fiduciary is committing thereby a breach of his obligation as fiduciary;
and the bank is authorized to pay the amount of the deposit or any
part thereof upon the personal check of the fiduciary without being
liable to the principal, unless the bank receives the deposit or pays the
check with actual knowledge that the fiduciary, in making such deposit
or in drawing such check, is committing a breach of his obligation as
fiduciary, or with knowledge of such facts that its action in receiving
the deposit or paying the check amounts to bad faith.

Section 75. No bank shall hereafter be granted in its charter, or
in any amendments thereto, authority to do business as an industrial
loan association. No industrial loan association shall hereafter be
granted authority in its charter, or in any amendment thereto to do a
banking business, and no such association shall hereafter be granted in
its charter or in any amendment thereto, the right to have in its title
the word “bank,” “banking,” “savings” or “trusts” or any words
tending to indicate that it is permitted to do a banking business in Vir-
ginia; provided, however, that nothing herein shall be construed as
limiting or affecting the power and authority of existing State banks
to conduct such business as they may have lawfully conducted here-
tofore.

TITLE V—CONSTRUCTION, TITLE AND REPEAL

Section 76. Effect of act, and correlation with other statutes —This
entire act is passed subject to the provisions of an act approved April
eighteenth, nineteen hundred and twenty-seven, entitled, an act to reor-
ganize the administration of the State government in order to secure
better service; and through co-ordination and consolidation, to promote
economy and efficiency in the work of the government; to create and
establish or continue certain departments, officers, divisions, offices,
and other agencies, and to prescribe their powers and duties; to abolish
certain offices, boards, commissions and other agencies, and to repeal
all acts and parts of acts inconsistent with this act to the extent of
such inconsistency, and especially section sixteen thereof. The effect
therefore of the said last mentioned act is as though it had been
passed subsequently to this as to all administrative details regarding
the supervision and examination of banks, and particularly that all
powers continued and all duties imposed by law upon the banking
division of the State corporation commission and-chief examiner oi
banks, are hereby transferred to, vested in, and shall be exercised or
performed by, the commissioner of insurance and banking; and wher-
ever the words “banking division” or other words denoting it appear
in any statute heretofore enacted and not repealed, the same shall be
construed to mean the bureau of insurance and banking, and wherever
the words “chief examiner of banks” or other words denoting the same
appear in any statute heretofore enacted and not repealed the same
shall be construed to mean commissioner of insurance and banking,
unless such construction would be inconsistent with the context. pro-
vided, however, that the said commissioner of insurance and banking
may at any time by an order general or special delegate his full and
whole power and authority to his chief deputy.

Section 77. Partial unconstitutionality; effect—If any part or
parts, section, subsection, sentence, clause, or phrase of this act is for
any reason declared to be unconstitutional or invalid, such decision
shall not affect the validity of this act as a whole, or any portion
thereof other than the part or portion so decided to be unconstitutional
or invalid.

Section 78. Short title.
banking act.

Section 79. Repeal.—Sections four thousand and ninety-eight, four
thousand and ninety-nine, fortv-one hundred, forty-one hundred and
one, as amended and re-enacted by an act, approved March twentv-
fourth, nineteen hundred and twenty-six, forty-one hundred and two.
forty-one hundred and three, forty-one hundred and four, as amended
and re-enacted by an act, approved March twenty-third, nineteen hun-
dred and twenty-two and as amended and re-enacted by an act, ap-
proved March twenty-third, nineteen hundred and twenty-three, forty-
one hundred and five, as amended and re-enacted by an act, approved
March twenty-fifth, nineteen hundred and twenty, and as amended and
re-enacted by an act, approved March twenty-third, nineteen hundred
and twenty-two, forty-one hundred and six, forty-one hundred and
seven, forty-one hundred and eight, forty-one hundred and nine as
amended and re-enacted by an act, approved March twenty-third,

This act may be cited as the Virgimia
nineteen hundred and twenty-two, forty-one hundred and ten, as
amended and re-enacted by an act, approved March twenty-fifth, nine-
teen hundred and twenty, forty-one hundred and eleven, as amended
and re-enacted by an act, approved March twenty-fifth, nineteen hun-
dred and twenty, forty-one hundred and twelve, as amended and re-
enacted by an act, approved March twenty-fourth, nineteen hundred
and twenty-six, forty-one hundred and thirteen, as amended and re-
enacted by an act approved March twenty-fifth, nineteen hundred and
twenty, and as amended and re-enacted by an act, approved March
twenty-third, nineteen hundred and twenty-two, forty-one hundred
and fourteen, as amended and re-enacted by an act, approved March
fourteenth, nineteen hundred and twenty-four, forty-one hundred and
fifteen as amended and re-enacted by an act approved March twenty-
fifth, nineteen hundred and twenty, forty-one hundred and sixteen, as
amended and re-enacted by an act, approved March twenty-third,
nineteen hundred and twenty-two, forty-one hundred and seventeen,
as amended and re-enacted by an act, approved March twenty-third,
nineteen hundred and twenty-two, forty-one hundred and eighteen, as
amended and re-enacted by an act, approved March twenty-third,
nineteen hundred and twenty-two, forty-one hundred and nineteen,
forty-one hundred and twenty, as amended and re-enacted by an act,
approved March twenty-fifth. nineteen hundred and twenty, forty-one
hundred and twenty-one, as amended and re-enacted by an act, ap-
proved March twenty-fifth, nineteen hundred and twenty, and as
amended and re-enacted by an act, approved March ninth, nineteen
hundred and twenty-six, forty-one hundred and twenty-two, as
amended and re-enacted by an act, approved March twenty-fifth, nine-
teen hundred and twenty, and as amended and re-enacted by an act,
approved March nineteenth, nineteen hundred and twenty-six, forty-
one hundred and twenty-three, as amended and re-enacted by an act,
approved March twenty-fifth, nineteen hundred and twenty, forty-one
hundred and twenty-four, forty-one hundred and twenty-five, as
amended and re-enacted by an act, approved February tenth, nineteen
hundred and twenty, forty-one hundred and twenty-six, forty-one
hundred and twenty-seven, forty-one hundred and twenty-eight, forty-
one hundred and twenty-nine, as amended by an act, approved March
twenty-fifth, nineteen hundred and twenty, forty-one hundred and
thirty, forty-one hundred and thirty-one, forty-one hundred and
thirty-two, forty-one hundred and thirty-three, forty-one hundred and
thirty-four, forty-one hundred and thirty-five, forty-one hundred and
thirty-six, forty-one hundred and thirty-seven, forty-one hundred
and thirty-eight, forty-one hundred and thirty-nine, forty-one hundred
and forty, forty-one hundred and forty-one, forty-one hundred and
forty-two, forty-one hundred and forty-three, forty-one hundred and
forty-four, forty-one hundred and forty-five, as amended and _ re-
enacted by an act. approved March fifteenth, nineteen hundred and
twenty-two, forty-one hundred and fortyssix, as amended and _ re-
enacted by an act, approved March fifteenth, nineteen hundred and
twenty-two and as amended and re-enacted by an act, approved Marct
twentieth, nineteen hundred and twenty-four, forty-one hundred anc
forty-seven, forty-one hundred and forty-eight, as amended and re
enacted by an act, approved March twentieth, nineteen hundred anc
twenty, as amended and re-enacted by an act, approved Marct
twentieth, nineteen hundred and twenty-four, and as amended by
an act to amend and re-enact subsection (i) of section forty-one
hundred and forty-eight of the Code of Virginia, approved March
twenty-first, nineteen hundred and twenty-four, and forty-one hunr-
dred and forty-nine of the Code of Virginia; an act entitled “‘an
act to amend and re-enact an act entitled an act to cause all
depositories or accounts in the several banks and banking corpora-
tions or associations in this Commonwealth, whereof the depositor 1s
unknown, or the person or persons to whom such account of deposit
belongs, or belong, is, or are unknown, and against which deposit or
account there has been no check, draft or order for a period of twenty-
one years, by one entitled to check thereon, to escheat to the Common-
wealth; and to direct the manner of reporting same, and the final dis-
position thereof, approved March fifteen, nineteen hundred and eigh-
teen, approved September ninth, nineteen hundred and nineteen; an
act to authorize and validate the payment of small bank balances and
small sums due from employers to next of kin of decedent, approved
March fifteenth, nineteen hundred and twenty-two; an act entitled an
act to prohibit the false certification of a check and to require the
amount of any check certified to be forthwith charged against the ac-
count of the drawer, and providing a penalty for the violation thereof.

approved March seventh, nineteen hundred and twenty-four; an act
entitled an act defining liability of collecting bank sending items direct
to bank on which drawn or where made payable, approved March
twentieth, nineteen hundred and twenty-four; an act entitled an act
fixing the liability of a bank, to its depositor for payment of torged
or raised checks, approved March twentieth, nineteen hundred and
twenty-four; an act entitled an act giving the bank the option to refuse
payment of a check presented one year after date, approved March
twentieth, nineteen hundred and twenty-four; an act entitled an act
declaring it a misdemeanor for any maker or drawer, with intent to
defraud, to make or draw or utter or deliver, any check, draft. or
order, when such person has not sufficient funds in, or credit with the
depository upon which the same is drawn, and making certain provi-
sions in relation to the admissibility of evidence in civil cases respect-
ing collateral agreements, statements or representations as to said
draft, check or order, growing out of arrest under this act, approved
March twenty-four, nineteen hundred and twenty-six; and an act
entitled an act to prohibit the issuance of certificates of deposit. or
other negotiable instrument of its indebtedness by any bank, including
banks of deposit and discount, savings societies and trust companies.
except upon certain terms.and providing a penalty for the violation
thereof, approved March twenty-fourth, nineteen hundred and twenty-
six; and all other acts and parts of acts inconsistent with the provisions
of this act are hereby repealed, but such repeal shall not have the effect
of reviving any act which may have been heretofore repealed by any
act repealed hereby.