Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1914-01-10
DECISION HANDED
DOWN IN SILVER
CITYBANkC CASE
Mere Amendment of Chatter
Not Sufficient to Permit
Savings Institution to Be-
come Trust Company


santa re- Jan. e.- Assistant Aitor-
ney Genoral l. J Grimshaw Jhls fore
noon ruled that tic Peoples savings
Bank ~ silver City caunot by merely
intending ITS charter without comply
ing with certain other statutory re-
.uircmeuts add a trust company TO a
saHnrs bank business. He says in an
opinion to the state corporation COM
missions
Answering your request for opin-
T ion as To the right Of the Peoples
tsavines Rank of silver City TO amend
It's charter 50 as 20 include the enc
doWment OF powers Of a trust COM
pany. / beg To advise that after q iim-
lifted, but careful, study Of the propo-
siiion, am Of the opinion that the
laws Of New Mexico do not permit
iany such amendment.
This bank was created under Sec
ton 800 ct seq, Of the compiled laws
lof 1897, as amended by Chapter "a
OF the laws Of 1901 The powers
thereby conferred are the powers or.
dinarily exercised by savings banks
incorporated trust companies are
created under Chapter 52 OF the laws
Of 1903, as amended by Chapter 1913
OF tho laws OF 1903. The powers Of
The Two ORGANIZATIONS are quite sep-
arate and distinct The distinguish
ing features Of the two are that in a
savings banks articles there must be
named at least three iucorporators
whereas in trust companys articles
there must be named at least seven
incorporat0rs; that a trust company
IN a city of less thun 1000 persons
must have a subscribed capital of not
less than 100000, $4,000 OF which
must he paid In cash, to the directors
Of the company whereas the entire
capital stock Of a savings bank must
be paid in. in fun; that a savings
bank receives deposits which arc sub
iect to withdrawal hy check, whereas
the money held By trust company Is
not subject TO check
Under Sections 30 ana 81 Of Chap
lter 70 Of the laws Of 1905, savings
banks are permitted 10 amend their
articles They may change the ma
ltufe Of the oonpany's business. etc,
tbut 70 is provided, however that such
ichange and alteration shan contain
only such provisions as Il would be
lawful and proper to insert in an ore
jienal certificate fof incorporation
made at The thmamf making such
amendment Nowthtaact permitting
lthe Incorporation of Savings banks, rs
separate and distinct from the act
permitting the Incorporation Of trust
companies We hold that the Peoples
Savings bank can amend its charter
only By adding 20. on taking away,
some or any OF the powers now au-
thorlzed by law to be exercised by
savings banks; chat the amendment
cannot include the investurc of pow
ers granted unto a different class of
corporations and that. therefore, the
amendment should not be permitted.
The losic Of this holding is appar
emit Any other reasoning would be
contrary to the basic principles of
corporation law Also, an anomalous
condition would result The banks
capital stock rs now 100000. Under
the savings bank acts the entire $780,
coo would have TO be paid In cash
unto the treasurer Of the concern
whereas, under the trust company
act only $4,000 would have TO be
paid in TO the directors Of the COM
pany The two mandates are ire
concilable and Impossible of accom-
plishment. although the bank could
NOT legally transact business until the
entire capital Of 100000 had been
paid in
A contrary holding would permit
three persons 10 be named as incor
porators OF trust company whereas
the law provides that not loss than
five shall constitute the number of
necessary incorporates
The amendment, If permitted.
would have the effect of creating
new corporation, whereas an amend
ment cannot legally create a corpora
ton, but can only add TO, or take
away, powers the law authorizes the
creature Of the statute TO exercise.