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1. Such as is requisite for its accommodation in the convenient transaction of its business, not exceeding in value one hundred and fifty thousand dollars;

2. Such as is conveyed to it, or to any person for it, by way of mortgage or in trust, or otherwise, to secure or provide for the payment of loans previously contracted, or for moneys

due;

3. Such as is purchased at sales upon deeds of trust or judgments obtained or made for such loans or debts;

4. Such as is conveyed to it in satisfaction of debts previously contracted in the course of its dealings.

All such real estate so acquired, which is not requisite for the accommodation of such corporation in the transaction of its business must be sold and disposed of within five years after such corporation acquired title to the same. No such real estate must be held for a longer period than five years, unless the corporation first procures a certificate from the insurance commissioner that the interest of the corporation will suffer materially by a forced sale of such real estate, in which event the time for the sale may be extended to such time as the insurance commissioner directs in the certificate. En. March 21, 1872.

POLICIES, HOW ISSUED AND BY WHOM SIGNED.

Sec. 416, C. C. All policies made by insurance corporations must be subscribed by the president or vice-president, or in case of the death, absence, or disability of those officers, by any two of the directors, and countersigned by the secretary of the corporation. All such policies are as binding and obligatory upon the corporation as if executed over the corporate seal. En. March 21, 1872.

DIVIDENDS, OF WHAT AND WHEN DECLARED.

Sec. 417, C. C. The directors of every insurance corporation, at such times as their by-laws provide, must make, declare, and pay to the stockholders dividends of so much of the net profits of the corporate business and interest on capital invested as to them appears advisable; but the moneys received and notes taken for premium on risks which are undetermined and outstanding at the time of making the dividend must not be treated as profits, nor divided, except as provided in chapter II of this title. En. March 21, 1872.

Declaring dividends: See ante, sec. 309, C. C., and notes.

Legislative History.

The basis of this section is section 21 of the insurance act, of 1865-66, page 748.

DIRECTORS LIABLE FOR LOSS ON INSURANCE IN CERTAIN

CASES.

Sec. 418, C. C. If any insurance corporation is under liabilities for losses to an amount equal to its capital stock, and the president or directors, after knowing the same, make any new or further insurance, the estates of all who make such insurance, or assent thereto, are severally and jointly liable for the amount of any loss which takes place under such insurance. En. March 21, , 1872.

The basis of this section is section 13 of the insurance act of 1865-66, page 743.

CAPITAL TO BE AT LEAST TWO HUNDRED THOUSAND DOL

LARS. Sec. 419, C. C. Every company, corporation, or association hereafter formed or organized under the laws of this state for the transaction of business in fire, marine, inland navigation, or life insurance, must have a subscribed capital stock equal to at least two hundred thousand dollars, twenty-five per cent of which must be paid in previous to the issuance of any policy, and the residue within twelve months from the day of filing the certificate of incorporation. No person, corporation, or association organized or formed under the laws of any other state or country, as a stock company, must transact any such insurance business in this state, unless such person, corporation, or association has a paid-up capital stock equal to at least two hundred thousand dollars in available cash assets, over and above all liabilities for losses reported, expenses, taxes, and reinsurance of all outstanding risks, as provided in section six hundred and two of the Political Code of this state. Nor must any person, corporation, or association, organized or formed under the laws of any other state of country as a mutual insurance company, transact any such insurance business in this state, unless such person, corporation, or association possesses available cash assets equal to at least two hundred thousand dollars, over and above all liabilities for losses reported, expenses, taxes, and reinsurance of all outstanding risks, as provided in said section six hundred and two of the Political Code of this state. En. March 21, 1872. Amd. 1873-74, 269; 1877-78, 80.

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Legislative History.

The original section is as follows: “Sec. 419. No company, corporation, or association, shall hereafter be formed or organized under the laws of this state, for the transaction of business in any kind of insurance, except on livestock, without a subscribed capital equal at least to one hundred thousand dollars in United States gold coin, twentyfive per cent whereof must be paid in previous to the issue of any policy, and the remainder by monthly or quarterly installnrents within twelve months from the day of filing the certificate of incorporation. Nor must any individual or person bo permitted to transact business as agent of any nonresident person or corporation, whether foreign or domestic, in any kind of insurance. except on livestock, unless such person or corporation possesses available cash assets, exclusive of stock notes, to the amount of at least one hundred thousand dollars in United States gold coin, over and above all liabilities."

The amendment of 1873-74 is substantially the sanre, except that it required a subscribed capital of two hundred thousand dollars.

Section Cited.

People v. Flint, 64 Cal. 49, 28 Pac. 495.

Annotation.

Without statement in articles of incorporation of insurance comj'any of (1) amount of stock actually subscribed, and (2) that it equals one hundred thousand dollars, such articles do not form a corporation. (People v. Flint, 64 Cal. 49, 28 Pac. 495.)

For requisites of articles of incorporation generally, and effect of failure to comply therewith, see sec. 290, C. C., and notes, ante.

EXCEPTION, CAPITAL OF ONE HUNDRED THOUSAND DOL

LARS. Sec. 420, C. C. Every company, corporation, or association, hereafter formed or organized under the laws of this state for the transaction of business in any kind of insurance not enumerated in section four hundred and nineteen of the Civil Code must have a subscribed capital stock equal to at least one hundred thousand dollars, which must be paid in at the times and in the manner prescribed for the payment of the capital stock of a corporation organized under section four hundred and nineteen of said Civil Code. No company, corporation, or association, formed or organized under the laws of any other state or country as a stock company, must transact any such insurance business in this state without a paid-up capital stock of not less than one hundred thousand dollars in available cash assets, over and above all liabilities for losses reported, expenses, taxes, and reinsurance of all outstanding risks, as provided in section six hundred and two of the Political Code of this state. Nor must any company, corporation, or association, formed or organized under the laws of any other state or country as a mutual insurance company, transact any such insurance business in this state unless such company, corporation, or association possesses available cash assets equal to at least one hundred thousand dollars over and above all liabilities for losses reported, expenses, taxes, and reinsurance of all outstanding risks, as provided in said section six hundred and two of the Political Code of this state. En. Stats. 1877-78, 80.

CHAPTER II.

FIRE, MARINE, AND TITLE INSURANCE CORPORATIONS. § 424. Payment of subscriptions— Capital to be all paid in twelve

months. § 425. Certificate of capital stock paid up to be filed, and when. § 426. Property which may be insured. § 427. Funds may be invested, how. § 428. Limit of one risk. $ 429. Amounts to be reserved before making dividends. § 430. Reservation by companies with less than two hundred thou

sand dollars capital. 431. Amounts to be reserved by life insurance companies. § 432. Corporations for insuring titles to real estate.

PAYMENT OF SUBSCRIPTIONS-CAPITAL TO BE ALL PAID

IN TWELVE MONTHS. Sec. 424, C. C. The entire capital stock of every fire or marine insurance corporation must be paid up in cash within twelve months from the filing of the articles of incorporation, and no policy of insurance must be issued or risk taken until twenty-five per cent of the whole capital stock is paid up. En. March 21, 1872.

Fire insurance: See sec. 2752, C. C.
Marine insurance: Sec. sec. 2655 et seq., C. C.

Act conferring power to establish fire patrol: ee post, Appendix, title “Fire Patrol."

County fire insurance companies, act providing for: See post, Appendix, title “Insurance."

CERTIFICATE OF CAPITAL STOCK PAID UP TO BE FILED,

AND WHEN. Sec. 425, C. C. The president and a majority of the directors must within thirty days after the payment of the twentyfive per cent of the capital stock, and also within thirty days after the payment of the last installment or assessment of the capital stock limited and fixed, prepare, subscribe, and swear

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