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641. Profits and losses shall be apportioned at least annually, and shall be apportioned to all shares in each class at the time of such apportionment, according to the actual or book value thereof. If the guarantee capital herein provided for, if any there be, together with the reserve fund, or if the reserve fund, where there be no guarantee capital, shall not equal five per cent of the outstanding loans at the time of each apportionment of profits, the directors shall set aside, as a reserve fund, not less than five per cent of the net profits accruing since the last prior apportionment, and shall continue so to do until said fund shall amount to at least five per cent of the loans in force, at which figure said fund shall thereafter be maintained. Said reserve fund shall at all times be available to meet losses arising from any source not heretofore provided to be assumed by the guarantee capital. Every such corporation having a paid-in

guarantee capital stock. may provide in their by-laws, that an amount not exceeding one per cent per annum on the average loans in force, shall be set aside from and out of the net profits, at each annual distribution thereof, or a proportionate amount at each semi-annual distribution, from which to declare dividends on and provide a reserve fund that shall be specially applicable thereto. At least onetenth of the amount so set aside shall be carried to such reserve fund until the same shall amount to at least twenty-five per cent of the paid-in guarantee stock; provided, however, that no guarantee stock association with stock and reserve equalling the amount required by law need maintain a reserve in excess of fifty thousand dollars. 1921—1359.

642. A stockholder or investor, desiring to withdraw from any such corporation or to surrender a part or all of his stock, or investment certificate, may do so by giving thirty days' notice, in writing, of his intention or desire so to do. On the expiration of such notice, he is entitled to receive the full amount paid in upon the stock or investment certificate surrendered, exclusive of the entrance or withdrawal fee, together with such proportion of the earnings thereon as the by-laws may provide, or as may be fixed by the board of directors; but not more than one half of the monthly receipts in any one month must be applied to withdrawals for that month, without the consent of the board of directors, and no stockholder must be permitted to withdraw whose stock is pledged to the corporation as security for a loan, until such loan is fully paid. All withdrawals must be paid in succession in the order that the notices of intention are given. Whenever the demands of withdrawing stockholders or investors exceed the money applicable to their payment, the notices of intention to withdraw must be registered in the order of filing and payments thereon must be made in succession, in the order that such notices were filed and registered. The board of directors may permit the withdrawal of a part of the accumulations to the credit of a stockholder or member, on shares of installment stock not issued in serial form, without thereby reducing the number of shares held by him. 1907–927.

642a. Whenever an application for withdrawal of free shares or certificates shall have been on file, or the payment of matured shares demanded, and either shall have remained unpaid for a period of one year, all the receipts of the association from dues, interest, premium, loans repaid, and the proceeds of all other investments, shall, after the payment of expenses and general indebtedness, be applied toward the payment of withdrawals and maturities; and the board of directors or the officers vested by law with powers of state supervision and license may direct that such payments shall be made upon a ratable and proportionate basis. Whenever such applications or demands, whether heretofore or hereafter made, have been on file and remain unpaid in whole or in part for more than two years the official vested by law with powers of state supervision and license may, in his discretion, forthwith take possession of the property and business of such association, and retain such possession until its affairs be finally liquidated in the manner provided by law for the liquidation of associations by him. 1915--239.

643. Any person of full age and sound mind may become a member of an association by taking one or more shares therein and subscribing to the by-laws, and annexing to his signature his postoffice address. A minor may hold shares in the name of a parent, guardian, or next friend, as trustee. The shares of stock in any such corporation held by any person, to the extent of one thousand dollars, shall be exempt from execution. 1907--928.

644. All building and loan associations, as in this title defined, doing business in this state. shall be under the supervision and control of such official or officials as are by law vested therewith; and except in the manner provided in this title, no corporation, firm, or association shall conduct or carry on the business of accumulating the savings of its shareholders, members, or investors, and loaning such accumulations to them, in the manner of building and loan associations.

645. Every association organized under the provisions of this title, and every other association doing a similar business, shall annually make a full report, in writing, of the affairs and condition of such corporation, within thirty days after its annual meeting, to the official or officials vested with powers of state supervision and license. Such reports shall be verified by the oath of the officers making the same, and a copy of the same shall be delivered to every stockholder, from the office of the corporation, who may call for such report. Every association shall make any further reports which the said official or officials may require, and in such form and as to such matters relating to the conduct of the business of the association as such official or officials may designate. Any willfully false statement in making and verifying said report shall be perjury. Any such association which shall fail to furnish the said official or officials any such report required, within thirty days after demand, shall forfeit the sum of ten dollars per day for every day such report shall be delayed or withheld, which may be recovered in an action brought by the attorney-general in the name of the people of thi state; and all moneys so recovered shall be paid to the treasurer of this state, who shall pay the same into such fund as may be provided by law, for the purposes of the official or officials vested with power of supervision and license. 1907-928.

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646. Every building and loan association, and every other corporation, association or society organized under and by virtue of the laws of any other state or territory or of any foreign country, for the purpose of conducting and carrying on a business of a character similar to that authorized by this title, or whose by-laws, rules, prospectus, contracts or methods of business provide for the conducting or carrying on the business of accumulating the periodical payments cr savings of its shareholders, members or investors in the manner or building and loan associations, or as authorized and provided in this title, desiring to enter the State of California for the transaction of business or for selling its bonds, debentures, certificates, shares of stocks, shares of membership, contracts, or other similar securities, must first comply with the requirements of sections four hundred five and four hundred eight of the Civil Code and immediately thereafter deposit with the official vested by law with state supervision and license not less than fifty thousand dollars in lawful money of the United States or in bonds of the United States or of the State of California, or of any county, municipality or school district of said state, or of any public utility corporation, or of any irrigation district in said state, the bonds issued by which district are legal investments for savings banks or any notes or bonds. secured by mortgage or deed of trust payment of which is guaranteed by a policy of mortgage insurance, or mortgage participation certificates, issued by a mortgage insurance company in accordance with the provisions of chapter eight, title two, part four of division first of the Civil Code or in lieu thereof promissory notes secured by first mortgages or deeds of trust upon real estate located within this state, satisfactory to the official vested by law with state supervision and license of building and loan associations, all duly assigned or endorsed in blank, to be held by the said official as a guarantee fund for the protection and indemnity of residents of the State of California who shall invest in any of its bonds, debentures, shares, contracts, agreements or other securities, or with whom it shall do business.

It must also procure from the official vested by law with state supervision and license of building and loan associations, the license provided for building and loan and similar corporations and associations, paying the statutory fee therefor before entering upon the transaction of business, and annually renew the same; provided, however, that the official or officials, vested by law with state supervision and license of building and loan associations may, before issuing license to any building and loan association, or other corporation, organized under and by virtue of the laws of any other state or territory, or of any foreign country, doing a business which would properly place it under the supervision of the state building and loan commission, require such corporation, or corporati

o so modify or change their contracts, certificates of membership shares, or stock that they will conform in all respects to the requirements of associations organized within the State of California; and shall likewise conform in all other respects to the provisions of sections six hundred thirty-three to six hundred forty-eight a of the Civil Code of the State of California.

With the consent of the said official vested by law with state supervision and license any of the securities deposited as herein provided may be withdrawn at any time upon the substitution and deposit of others of form and character herein specified and of like or greater net value, so long as the aggregate net convertible value of all equals or exceeds the amount named herein. The fund thus created is not to be foreclosed or realized upon except for the liquidation of a final judgment in favor of residents of California who were investors in any of the above mentioned securities of such foreign company, corporation or association, and then only after certified proof thereof has been filed with the custodian.

Except as above provided, securities deposited as herein specified shall not be withdrawn until satisfactory proof of the liquidation of all liabilities to residents of California, approved by the official vested by law with state supervision and license, shall be filed with the custodian, when all may then be withdrawn.

Any person or persons who shall be found in the state, as principal, agent, solicitor, or in any other capacity, soliciting or conducting the business of selling, disposing of, or taking or soliciting subscriptions for the sale of any of the forms of bonds, debentures, shares, contracts, agreements or other securities of any such foreign company, corporation or association which has not complied with all the re

quirements of this section shall be deemed guilty of a misdemeanor punishable, upon conviction, by a fine of not less than one hundred nor more than one thousand dollars or by imprisonment in the county jail for not less than one nor more than twelve months, or by both such fine and imprisonment. 1923.

647. Any building and loan association may invest in or loan upon bonds of the United States, of the state of California, or of any county, municipality or school district of said state, or of any public utility corporation, and may also invest in or loan upon notes or bonds secured by mortgage or deed of trust, payment of which is guaranteed by a policy of mortgage insurance, or mortgage participation certificates, issued by a mortgage insurance company in accordance with the provisions of chapter VIII, of title II of part IV of division first of the Civil Code, the total of which investments at any time shall not exceed twenty-five per centum of the assets of such association; provided, however, that any such loan or investment made by such association must be approved by the official, or officials, vested with the powers of supervision and license. 1915-317.

647a. Any two or more building and loan associations may unite and become incorporated in one body, with or without any dissolution or division of the funds of either of them; or any such corporation, association or society may transfer its engagements, funds and property to any other like corporation, association or society upon such terms as may be agreed by an unanimous vote of their respective boards of directors, ratified by the written consent of the shareholders holding more than two-thirds of the shares in force in each of the respective contracting associations; provided, however, that any such consolidation or transfer must also be approved by the official or officials vested by law with powers of state supervision and license, 1919--37.

648. The name “building and loan associations,” as used in this title shall include:

First. Corporations formed for the purpose of receiving money from, and loaning money to, their members only.

Second. Corporations, associations, companies, copartnerships, and individuals transacting the business of issuing or selling bonds, debentures, certificates, shares of stock, or other papers, by whatever names said instruments may be designated, whether said instruments are issued for money paid in advance or for money to be paid in installments, but with an intent, either implied or expressed, that the proceeds or accumulated installments thereof and thereon are to be withdrawable or repayable, with accumulated profits, at some future fixed, or indefinite date of maturity; provided always, that this section does not include persons, copartnerships or corporations engaged in any kind of banking business. 1909–209.

648a. Building and loan associations may be formed under this title with or without guarantee or other capital stock, with all the rights, powers and privileges and subject to all the restrictions and liabilities set forth in this title. If formed without any capital stock or with guarantee capital stock only, the working capital may be accumulated by the issue of membership shares, units or certificates having a paid-up or ultimate matured installment value of one hundred or two hundred dollars each, and entitled to all the rights, powers and privileges and subject to all the restrictions and liabilities provided in this title for shares of authorized capital stock of a similar class. Any building and loan association heretofore formed may reincorporate under the provisions of this section and may substitute membership shares, units or certificates of similar classes for its outstanding or authorized shares of capital stock, other than guarantee capital stock by amending its articles of incorporation in the manner prescribed by section three hundred sixty-two of this code, except that such amended articles of incorporation must be adopted by a unanimous vote of the board of directors. 1921—136.

TITLE XVII.

Colleges and Seminaries of Learning. Section

Section 649. Incorporation generally. 651. Re-incorporation. 650. Trustees generally.

649. Any number of persons who may desire to establish a college or seminary of learning may incorporate themselves as provided in this part, except that in lieu of the requirements of section 290, the articles of incorporation shall contain:

1.' The name of the corporation. 2. The purpose for which it is organized. 3. The place where the college or seminary is to be conducted.

4. The number of its trustees, which shall not be less than five nor more than thirty and the names and residences of the trustees. The term for which the trustees named and their successors are to hold office may also be stated. If it is desired that the trustees, or any portion of them, shall belong to any organization, society, or church, such limitation shall be stated.

5. If said corporation is to have capital stock, the amount of its capital stock and the number of shares into which it is divided, and the amount actually subscribed and by whom. 1911–583.

650. Unless otherwise provided in the articles of incorporation the board of trustees shall, as soon as organized, so classify themselves that one-fifth of their number shall go out of office every year, and thereafter the trustees shall hold office for five years. A majority of the trustees shall constitute a quorum for the transaction of business, except where the number of trustees exceeds thirteen they may, in the by-laws, provide that not less than seven shall constitute a quorum. The office of the corporation shall be at the college or seminary or at such place as shall be designated by the board of trustees.

The trustees shall have the power:

1. To elect, by ballot, annually one of their number as president of the board.

2. Upon the death, removal out of the state, or other vacancy in the office, or expiration of the term of any trustee, to elect another in his place who shall hold office for the time and under the conditions prescribed in the by-laws of the corporation; provided, that where there are graduates of the institution, such graduates may, under such rules as the board shall prescribe, nominate persons to fill vacancies in the board of trustees. Such nominations shall

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