by law shall be required to be paid or secured before the commencement of its operations, has been actually paid or secured to be paid, according to law. Such affidavit may be made before any officer authorized to administer oaths in the county where the corporation has its principal place of business, and shall be filed in the clerk's office of such county. Every such corporation shall cease to be a corporation if the affidavit above required shall not be made and filed within one year from the time its charter shall be granted.

(Former section 13; R. S., 1556; L. 1882, ch. 409, §§ 192, 193, 194.) See General Corporation Law, § 101.

Every

14. Deposit of bonds or mortgages with superintendent. such corporation, except banks, savings banks and domestic corporations specified in article six, and eight of this chapter, engaged in receiving deposits of money in trust in this state, and required to make a report of its affairs to the superintendent of banks, shall, before engaging in such business, transfer and assign to the superintendent registered public stocks or bonds of the United States or of this state, or of any city, county, town, village or free school district in this state, authorized by the legislature to be issued, to the amount in value, and to be at all times so maintained by the corporation, of ten per centum on its paid up capital stock, but not less in any case than one hundred thousand dollars in cities the population of which exceeds five hundred thousand inhabitants, and not less than fifty thousand dollars in cities containing more than one hundred thousand inhabitants and less than five hundred thousand inhabitants, and not less than thirty thousand dollars in cities containing more than twenty-five thousand inhabitants and less than one hundred thousand inhabitants, and not less than twenty thousand dollars in cities or towns of less than twenty-five thousand inhabitants, the number of inhabitants in each city or town to be ascertained by the last federal census or state enumeration. Such stocks must be registered in the name of the superintendent officially as held in trust under and pursuant to this chapter, and the same shall be held by the superintendent in trust, as security for the depositors with and the creditors of such corporation, and subject to sale and transfer, and to the disposal of the proceeds thereof by the superintendent, only on the order of a court of competent jurisdiction.

Until the order of such court, authorizing such sale or transfer or other disposition thereof, the superintendent shall pay over to such corporation the interest which may be received on such securities. Should any corporation, at any time, have deposited with the superintendent more than the amount hereby required, the excess may be refunded. With the approval of the superintendent, such a deposit may be made by the corporation, either wholly or in part, in bonds or mortgages satisfactory to the superintendent, on improved, unincumbered productive real property in this state worth at least. seventy-five per centum more than the amount loaned thereon. In the case of any foreign corporation, including co-operative savings and loan associations organized or incorporated in any state or county outside of this state, as defined in section two of this chapter, doing business in this state, it shall deposit with the superintendent in trust as security for the depositors with and creditors of said corporation. in this state one hundred thousand dollars in securities enumerated in this section. If any foreign corporation doing business in this state shall refuse or neglect to make the deposit herein required with the superintendent, the fact shall be reported by the superintendent to the attorney-general, who shall forthwith take such proceeding as may be necessary to enjoin and restrain such corporation from transacting any business in this state, and the court to which such application shall be made shall be authorized to make such order or decree, and to issue such process in the premises to enforce compliance by the corporation with the provisions of this chapter, or to restrain the transaction of business by it in this state, as it

may deem

(Former section 14; R. S., 1528; L. 1882, ch. 409, § 67.) See section 76, post.

proper.

1. In an opinion by the attorney-general, filed in the banking department, February 16, 1883, that officer held that under the banking law of 1882 the superintendent of the banking department had such incidental power as was necessary to carry out the general powers conferred upon him; and further that such superintendent had the right to approve of mortgages upon property which was of sufficient value, conditional upon the insurance on the property being properly kept up, and in the assignment taken by him might require a clause to that effect. If the insurances were not kept up, then there was not full compliance with the provisions of the clause that the amount in value must be maintained by the corporation.

The attorney-general, in conclusion, said: "I do not think it was the meaning of the law to prohibit the taking of a mortgage upon city property upon which

was erected a substantial block, though to make that security entirely satisfactory, an insurance in proper form in some solvent company might be required." As to the constitutionality of this section as to foreign corporations. People v. Granite State Provident Ass'n, 161 N. Y. 492; Blake v. McClung, 172 U. S. 239.

§ 15. Exchange of securities. - The securities deposited by any corporation pursuant to the provisions of this chapter with the superintendent of banks in trust for any purpose, may be exchanged from time to time for other securities receivable as provided in this chapter; and so long as the corporation so depositing shall continue solvent and comply with the laws of the state, it may be permitted by the superintendent to collect the interest or dividends on such deposits, and from time to time to withdraw any of such securities on depositing with the superintendent other like securities, the par and market value of which shall be equal to the par and market value of those withdrawn.

When any such deposit consists of bonds and mortgages, the president or authorized agent of the corporation depositing the same shall annex to every such mortgage his affidavit that the mortgage was made and taken in good faith for money loaned by the corporation which he represents, to the amount therein named, and that no part thereof has been since paid or returned; or if any part has been paid, the amount unpaid, and that he has reason to believe and does. believe that the premises thereby mortgaged are worth at least seventy-five per centum more than the amount of the mortgage thereon; and the superintendent shall prescribe such regulations for ascertaining the title and value of the real property mortgaged as he may deem necessary.

(Former section 15; R. S., 1528; L. 1882, ch. 409, § 67.)

Assigned mortgages are not valid substitutes in exchange for securities deposited with the banking department, as the bank officials cannot make affidavit that such mortgages were “taken in good faith for money loaned." Opinion Atty. Gen., June 21, 1909.

The above opinion was confirmed by Supreme Court, Special Term, Albany county, in Central Trust Co. v. Clark Williams as Supt., by decision filed August 10, 1909.

§ 16. Publication of report of examiners. Whenever the superintendent shall deem it proper, a copy of any report made by any examiner shall be published in the state paper and in at least one daily

newspaper in the city of New York, and in one newspaper published in the county where the principal place of business of such corporation or individual is located.

(Former section 16; R. S., 1517, 1518; L. 1882, ch. 409, §§ 12, 15; L. 1884, ch. 47.)

§ 17. Impairment of capital. Whenever the superintendent shall have reason to believe that the capital stock of any corporation or individual banker, to which this chapter is applicable, is reduced by impairment or otherwise below the amount required by law, or by its certificate or articles of association, he may require such corporation or individual banker to make good the deficiency within sixty days after the date of such requisition. He may examine or cause to be examined any such corporation to ascertain the amount of such impairement or reduction of capital, and whether the deficiency has been made good as required by him. The directors of every such corporation upon which such requisition shall have been made shall immediately give notice of such requisition to each stockholder of the corporation, and of the amount of the assessment which he must pay for the purpose of making good such deficiency, by a written or printed notice mailed to such stockholder at his place of residence, or served personally upon him. If any stockholder shall refuse or neglect to pay the assessment specified in such notice within sixty days from the date thereof, the directors of such corporation shall have the right to sell to the highest bidder at public auction the stock of such stockholder, after giving previous notice of such sale for two weeks in a newspaper of general circulation published in the county where the principle office of such corporation is located; or such stock may be sold at private sale, and without such published notice, provided, however, that before making a private sale thereof an offer in writing to purchase such stock shall first be obtained, and a copy thereof served upon the owner of record of the stock sought to be sold either personally or by, mailing a copy of such offer to such owner at his place of residence or the address furnished by him to the corporation; and if, after service of such offer, such owner shall still refuse or neglect to pay such assessment within two weeks from the time of service of such offer, the said directors may accept such offer and sell such stock to the person or persons making

such offer, or to any other person or persons, making a larger offer than the amount named in the offer submitted to such stockholder; but such stock shall in no event be sold for a smaller sum than the valuation put on it by the superintendent in his determination and certificate, which valuation shall not be less than the amount of the assessment called for and the necessary costs of sale. Out of the avails of the stock sold the directors shall pay the necessary costs of sale, and the amount of the assessment called for thereon. The balance, if any, shall be paid to the person or persons whose stock has been thus sold. A sale of stock as herein provided shall effect an absolute cancellation of the outstanding certificate or certificates evidencing the stock so sold, and shall make the same null and void, and a new certificate or new certificates shall be issued to the purchaser or purchasers of said stock. If it shall appear to the superintendent that any such corporation or individual banker has violated its charter or any law binding upon it, he may by an order under his hand and official seal addressed to such corporation or individual banker direct the discontinuance of such violation, or, if it shall appear to the superintendent that any such corporation or individual banker is conducting business in an unsafe or unauthorized manner, he may in like manner direct the discontinuance of such unsafe or unauthorized practices. Such order shall require such corporation or individual banker to show cause before the superintendent at a time and place to be fixed by him, why said orders should not be observed.

(Former section 17; R. S., 1518, 1562, 1586; L. 1882, ch. 409, §§ 17, 233; L. 1890, ch. 429; L. 1905, ch. 649; L. 1907, ch. 552; L. 1908, ch. 143.)

After the superintendent of banks has taken possession of the assets of an insolvent banking corporation with the intention of having an action brought to dissolve the same, proceedings for voluntary dissolution will not lie. In re Murray Hill Bank, 153 N. Y. 199, 47 N. E. 298. Affirming same case, 14 App. Div. 318, 629, 43 N. Y. Supp. 836, 44 N. Y. Supp. 1125. See notes to section 142.

§ 18. Causes for dissolution. If the capital of any corporation to which this chapter is applicable shall be impaired, or if any such corporation shall refuse to submit its books, papers and concerns to the inspection of any examiner, or if any officer thereof shall refuse to be examined upon oath touching the concerns of such corporation, or if it shall violate its charter, or any law of the state, or if such