Shareholders are individually responsible equally and ratably for the debts of the bank, to the extent of the amount of their stock therein at par value, in addition to the amount invested therein'. Persons hold ing stock as executors, administrators, guard ians or trustees are not liable as stockhold ers, but the assets and funds in their hands are so liable.
State banking institutions may be organ ized as national banks. In such case, the articles of association may be accepted by a majority of the directors, who shall have the power to complete its organization; its shares may continue to be for the same amount as they were before, and the direc tors may continue until others are elected. The total liability to a bank of any person, firm or corporation, for money borrowed, shall never exceed one-tenth of the capital stock of the association actually paid in and one-tenth of its unincumbered surplus capi tal, both unincumbered, and the total of such liabilities shall in no event exceed thirty per cent. of the capital; but the discounting of bills of exchange in good faith against actu ally existing values and the discount of com mercial or business paper actually owned by the person negotiating the same, shall not be considered as money borrowed.
The act of May 30, 1908, providing for na tional currency associations, has been ex tended to June 30, 1915, by the act of Dec. 23, 1913 (infra).
The powers of national banks are to be measured by the act creating them ; Fowler v. Scully, 72 Pa. 456, 13 Am. Rep. 669 ; Logan Co. N. Bk. v. ToWnsend, 139 U. A. 67, 11 Sup. Ct. 496, 35 L Ed. 107; the wore:1k( of the act "by discounting and negotiating promis sory notes, etc.," are not to be read as limit ing the mode of exercising the "incidental powers" necessary to carry on the business of banking, but as descriptive of the kind of business which is authorized ; Shinkle v. Bank, 22 Ohio St. 516. A national bank may buy negotiable notes and bills of Ex change; Merchants' N. Bk. v. Hanson, 33 Minn. 40, 21 N. W. 849, 53 Am. Rep. 5 ; ion N. Bk. v. Rowan, 23 S. C. 339, 55 Ann. Rep. 26; Pape v. Bank, 20 Kan. 440, 27 .iliA. Rep. 183. This power, it has been held, sinli ply implies an authority to realize upon such commercial paper as the bank may receive in' the lawful conduct of its business, by nego- i tiating, selling, and transferring it by means ( of a re-discount obtained or otherwise. It ?
gives no implied authority to speculate or traffic in paper of this character or in finan cial securities of any description ; First N. Bk. v. Pierson, 24 Minn. 140, 31 Am. Rep. 341; Lazear v. Bank, 52 Md. 78, 36 Am. Rep. 355. In the last case, by a divided court, the opinion was, qualified by the re mark that a national bank might invest its surplus capital in notes. The purchas ing and discounting of paper has been held to be only a mode of loaning money ; Smith v. Bank, 26 Ohio St. 141. It may collect notes ; Mound City P. & C. Co. v. Bank, 4 Utah, 353, 9 Pac. 709; deal in national bonds; Leach v. Hale, 31 Ia. 69, 7 Am. Rep. 112 ; Yerkes v. Bank, 69 N. Y. 382, 25 Am. Rep. 298 ; and own coupons on state bonds ; First N. Bk. v. Bennington, 16 Blatch. 53, Fed. Cas. No. 4,807; and it may deal in stocks; Williamson v. Mason, 12 Hun (N. Y.) 97; but the tendency of the decisions is contra; First N. Bk. v. Hoch, 89 Pa. 324, 33 Am. Rep. 769; Fowler v. Scully, 72 Pa. 456, 13 Am. Rep. 699 ; First N. Bk. v. Bank, 92 U. S. 122, 23 L. Ed. 679; Weckler v. Bank, 42 Md. 581, 20 Am. Rep. 95. It may ir nd A ineol is. t e ra security, including Unite", S bondM! Third N. Bk. v. Boyd, 44 Md. 47, 22 Am. Rep. 35; or the stock of anot • a national bank ; Germania N. Bk. v. Case, ' U. S. 628, 25 L. Ed. 448; or a warehouse receipt for mer chandise; Cleveland v. • oeman, 40 Ohio St. 176; or a locomotiv=w Shoemaker v. Bank, 1 Hughes 101, Fe f- : s. No. 12,801; but it may not lend its credit ; Nat. Bk. of C. v. Atkinson, 55 Fed. 44 It may borrow money on its own notes, and pledge its as sets for its repayment ; 41 Bank. Mag. 1, It may, in a fair and botin Aide compronr of a contested claim against it, growing l of a legitimate banking /ransaction, pai larger sum than would halt been exacte, satisfaction of a demand, so as to obtai) the arrangement a transfer of stocks, if in the belief that by turning the stocks into money under more favorable circum stances a loss which would otherwise accrue from the transaction might be averted or diminished ; First N. Bk. v. Bank, 92 U. S. 122, 23 L. Ed. 679, affirming 39 Md. 600.