in any one bank or trust company shall not exceed twentyfive per centum of the paid-up capital and surplus of such bank or trust company; or such available fund, or any part thereof, may be loaned upon pledge of the securities, or any of them, named in subdivision one, two, three and four of the last preceding section of this act, but not in excess of ninety per centum of the cash market value of such securities so pledged; and should any of the securities so held in pledge depreciate in value, after making any loan thereon, it shall be the duty of the trustees to require the immediate payment of such loan, or of a part thereof, or additional security therefor, so that the amount loaned shall at no time exceed ninety per centum of the market value of the securities pledged for the same.

2. This act shall take effect immediately.

§ 262. It shall further be lawful for any such corporation to deposit temporarily in banks or trust companies, as provided in the last preceding section of this act, the excess of current daily receipts over the payments, until such time as the same can be judiciously invested in the securities named in section two hundred and sixty of this act; and whenever it shall appear to the superintendant of the banking department that the trustees of any such corporation are violating the spirit and intent of the foregoing provision, by keeping permanently uninvested all, or an undue proportion, of the moneys received by them, it shall be his duty to report the facts to the attorney-general, who shall proceed against such corporation under the provisions of section two hundred and seventy-eight of this act.

§ 263. It shall be lawful for any such corporation to purchase, hold, or convey, real estate only, as follows:

1. A plot whereon is erected, or may be erected, a building or buildings requisite for the convenient transaction of its business, and from portions of which not required for its own use, a revenue may be derived. The cost of such building or buildings and lot in no case to exceed fifty per centum of the net surplus of such corporation, except by written permission of the superintendent of the banking

department, except where lots have been heretofore purchased, or where maps, plans and estimates have been made for the purpose of erecting a banking building.

2. Such as shall have been purchased by it at sales upon the foreclosure of mortgages owned by such corporation, or upon the judgments or decrees obtained or rendered for debts due to it, or in settlements effected to secure such debts, and all such real estate mentioned in the last preceding clause shall be sold by such corporation within five years after the same shall be vested in it, unless, upon application by the board of trustees, the superintendent of the banking department shall extend the time within which such sale shall be made; and it shall be lawful for any such corporation, with the approval in writing, and under the seal of the superintendent of the banking department, to change its location within the limits of any city or town. wherein it may be established; and in effecting such change of location, such corporation owning a banking-house and lot may purchase such additional plot under the provisions of subdivision one of this section as the corporation may require; and such banking-house and lot previously owned and occupied shall be sold, as provided in subdivision two of this section, concerning real estate acquired in satisfaction of debts.

§ 264. It shall not be lawful for the trustees of any savings bank to loan the moneys deposited with them, or any. part thereof, upon notes, bills of exchange, drafts, or any other personal securities whatever; and in all cases of loans upon real estate, a sufficient bond, secured by a mortgage thereon, shall be required of the borrower, and all the expenses of searches, examinations and certificates of title or appraisal of value, and of drawing, perfecting and recording papers, shall be paid by such borrower.

In the exercise of this discretion on this subject incorporators should exclude all securities over which they cannot have full control in the event of default in the payment of interest or principal, namely, securities that require the intervention in foreclosure of outside trustees, as for example the notes or bonds issued by mortgage companies doing business through the agency of trust companies. Speculative risks,

such as investments in stock of other corporations, are outside the limits of prudent trusteeship. The discounting of notes even on collateral security does not seem to be within the legal powers of these associations. (See index "Powers.")

The treatment of this subject in the articles of association will be a fair commentary to tentative members, of the conservatism of an association in the safe keeping of unemployed funds. Many associations totally omit this topic in their articles and others provide for a merely temporary deposit in a trust company or legal depository. The purpose of this clause in the statute is clearly the investment of funds not appropriated for advances to members, and not the designation of a depository for the temporary cash balance of the treasurer. The omission to regulate this subject by proper provisions in the articles is a defect in the legal organization of the association, but not such a defect as will dissolve the corporation or impair its legal powers. comments on this point, see index "Filing of Articles.")

(For further

Voting.

It is the custom to allow but one vote to a member, although he may be the owner of several shares. Every member is of right entitled to one vote. The by-laws may, however, allow to each member as many votes as he owns shares. Arrearages in dues or interest, or pledging of shares for advances, will not abridge this right, which continues until he serves notice of his intention to withdraw (see index, “Withdrawals "), or until the transfer of his shares has been noted on the books of the association (see index, "Transfer "). Where the articles and by-laws prescribe the penalty of forfeiture of stock for continued arrearages of dues, the sentence of the forfeiture of stock is also a forfeiture of membership, and the right to vote is lost. It is wise to specify minutely the mode of forfeiture and the exact time of cessation of membership.

Amendments to Articles.

Amending the articles of association or by-laws is a proper subject for a special meeting. A reliable guide in the formation of a special meeting is suggested by $$ 15-17, on the subject of the increase or diminution of capital stock. The minute regulations there provided afford all the necessary care and precaution. While it is explicitly required under this act to file amendments with the clerk of the county, careful opinion seems to be that the articles as amended should be so filed as originals (see § 3,). One of the principal reasons for filing the original articles is the publicity given to its subject matter, and the ease and liberty of access to all who may wish to inform themselves as to the actual contract of membership and the corporate elements of an association. An amendment may often substantially alter some features of the contract of membership or other important

relations. Unless the amendment is filed with a memorandum of reference to the original, and a marginal reference is made on the original giving notice of the amendment, the original articles filed may be misleading and delude instead of informing the public. A safe and practicable method is suggested that will prevent confusion and diminish error and render the filing of the amendments an intelligent duty. A certificate should be filed in the office of the clerk of the county, signed and acknowledged by the president or chairman of the special meeting, before an officer authorized to take acknowledgments, reciting the several steps taken in accordance with the provisions of the articles. applicable to special meetings, the number of members present, the number of votes cast for the resolution adopting the amendment. On this certificate should be a memorandum referring to the date of the filing of the original articles.

The power to alter and amend articles of association is often advantageous, and allows the necessary degree of flexibility and adaptability to the changing customs and needs of business. Although this power admits a wide discretion, it is at all times subject to the rule that amendments shall not in effect supersede the general object of the corporation. They must not impair the security and obligations of contracts previously made, nor deprive any member of his vested interests. (Angell & Ames on Corporations, § 345.)

Amendments adopted subsequent to service of notice of intention to withdraw cannot affect such withdrawing members. Armitage v. Walker, 2 Jurist N. S. 13.

SECTION III.

FILING OF ARTICLES-CORPORATE BIRTH-WHAT OFFICERS SHALL SIGN-GENERAL CORPORATE POWERS OF AN ASSOCIATION.

A true copy of such articles, signed by the officers of the association, together with a statement showing when the association was organized, and the place of the transaction of its business, and the names of the officers and trustees at the time of the making of such statement, which shall be verified by oath or affirmation before any officer authorized to take affidavits, to be used in courts of justice, shall be filed in the office of the clerk of the county in which such association shall transact its business; and thereupon the

persons who have subscribed the articles of association as aforesaid, and such other persons as shall become members of such association, and their successor, shall be a body corporate by the name specified in such articles of associations, and shall possess the powers and privileges, and be subject to the provisions of title third of chapter eighteen of the first part of the Revised Statutes, so far as those provisions are consistent with the provisions of this act, and they shall by their corporate name, be capable in law of purchasing, holding and conveying any real and personal estate whatever, which may be necessary to enable said company to carry on their operation named in such certificate.

A true copy of the articles must be signed by every one of the officers of the association. Directors or trustees are not, however, within the meaning of the term "officers as used in the statute and need not sign. This point was passed upon by the Court of Appeals in the case of Second Manhattan Building Association v. Hayes (4 Abb. Appeals 183). The facts in that case were as follows: The articles of association had been signed by all the officers and trustees, but one trustee. Hayes, grantor of the land in question, had mortgaged the premises to the association. Default being made by Hayes, the plaintiff brought an action of foreclosure and sale. Hayes defended on the plea that as all the trustees had not signed the articles of association, it had no legal corporate existence and could not sue. The opinion of Chief Justice Denio contains the following concise summary of the law: "When we speak of the officers of a corporation, the term is understood to define those who are intrusted with the executive powers of the corporate body."

When a trustee or director is also an executive officer, his signature is necessary. The statement as to the time of the organization, the place for the transaction of business, and the names of the executive officers and of the trustees, fulfills the requirement of the statute, if signed and sworn to by any one of the authorized officers. The verification must be by the affidavit of the officer who signs the statement. It is wise to have all the signatures to the articles, acknowledged before a notary or other duly authorized officer.

The filing of these papers duly authenticated incorporates the association. Any important defect or informality in the filed articles may be remedied by filing amended articles supplying the irregularities. Upon this second filing, the association will be legally regarded as a corporation from the filing of the first articles; the corporate powers being held to date back, it being really a filing now as of then. (2 Rev. Stat. p. 392, § 15) see index, "Amendments."