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again. If made payable at a future day, and any shareholder fails to pay his bid on the day the same is made due and payable, the directors may advertise and sell the shares of stock representing the lots of land on which the premiums remain unpaid, in the manner provided in the by-laws for the sale of shares on account of delinquent installments and premiums. En. March 21, 1872.

Legislative History.

Section 1 of the homestead act of 1870, page 474, is the basis of this section.

ANNUAL REPORT TO BE PUBLISHED.

Sec. 565, C. C. The actual financial condition of all homestead corporations must, by the directors thereof, be published annually in the [a] newspaper published at the principal place of business of the corporation, for four weeks, if published in a weekly, and two weeks, if published in a daily. The statement must be made up to the end of each year, and must be verified by the oath of the president and secretary, showing the items of property and liabilities. En. March 21, 1872.

Legislative History.

Section 8 of the homestead act of 1861, page 567, is the basis of this section.

PUBLICATION IN CERTAIN CASES.

Sec. 566, C. C. In any case in which a publication is required, and no newspaper is published at the principal place of business, the publication may be made in a paper published in an adjoining county. En. March 21, 1872.

See act of March 23, 1874, relative to homestead corporations, Statutes at Large, title “Homesteads."

TITLE X.

SAVINGS AND LOAN CORPORATIONS.

§ 571. May loan money-On what terms, how, and to whom, and

how long. & 572. Capital stock, and rights and privileges thereof, § 573. No dividends, except from surplus profits-To contract no

liability, except for deposits. $ 574. Property which may be owned by corporations — Restrictions

in purchases as provided above. 575. Married women and minors may own stock in their own right, $ 576. May issue transferable certificates of deposit-Special certifi

cates. $ 577. To provide reserve fund for the payment of losses. $ 578. Prohibition on director and officer, and what vacates office. § 579. Definition of phrase "create debts." $ 580. Banks, amount of capital stock required.

581. Restrictions on savings banks. 8 582. True names of persons engaged in banking must be shown. $ 583. Dividends-Surplus funds. $ 583a. Capital actually paid up must be published.

MAY LOAN MONEY-ON WHAT TERMS, HOW, AND TO WHOM,

AND HOW LONG. Sec. 571, C. C. Corporations organized for the purpose of accumulating and loaning the funds of their members, stockholders, and depositors, may loan and invest the funds thereof, receive deposits of money, loan, invest, and collect the same, with interest, and may repay depositors with or without interest. No such corporation must loan money, except on adequate security on real or personal property, and such loan must not be for a longer period than ten years. En. March 21, 1872. Amd. 1900-01, 295.

Banks cannot be created except under general laws: Const. Cal., art. XII, sec. 5.

Act relating to banking corporations repealed: See post, Statutes at Large, title “Banks and Banking."

Act compelling bank to publish statement of unclaimed leposits: See post, Statutes at Large, title “Banks and Banking."

Act providing for dissolution and winding up of savings banks and trust companies: See post, Statutes at Large, title “Banks and Banking."

Legislative History.

Sections 4 and 5 of the savings and loan act of 1862, page 199, as amended 1864, page 158, are the basis of this section. The original section has “six'' instead of “ten” years.

Section Cited.

Mitchell v. Beckman, 64 Cal. 123, 28 Pac. 110; Security Sav. Soe, v. Hinton, 97 Cal. 222, 32 Pac. 3; Savings Bank v. Barrett, 126 Cal 415, 58 Pac. 914; Winchester v. Howard, 136 Cal. 442, 89 Am. St. Rep. 153, 64 Pac. 692, 69 Pac. 77.

Annotation.

Savings Bank Defined.--For a definition of a savings bank, see Grant on Banking, 546; Huntington v. Savings Bank, 96 U. S. 388; Coite v. Society for Savings, 32 Conn. 173; Osborn v. Byrne, 43 Conn 155, 21 Am. Rep. 641; secs. 571-579, C. C., both inclusive; Mitchell v, Beckman, 64 Cal. 122, 28 Pac. 110.)

In order to constitute a savings and loan corporation, it is not necessary that the name of the corporation should in any manner ex press the fact that it is such. (City of Los Angeles v. State Loan & Trust Co., 109 Cal. 396, 42 Pac. 149.)

Savings banks may be either one in which the depositors are the Inembers and the bank merely their agent, and in which the depositors have an interest in the deposits and profits, or one in which the depositors are mere creditors and have no interest in the profits. Each of these kinds of savings banks accords with the provisions of the Civil Code respecting savings and loans corporations, and are both taxable under section 3617 of the Political Code. (City of Los Angeles v. State Loan & Trust Co., 109 Cal. 396, 42 Pac. 149.)

Where a loan and trust company has a savings department in which term savings deposits are received upon a specified rate of interest, the corporation, as regards its term savings deposits, is de facto a savings and loan corporation, and is properly assessed and taxed as such. (Los Angeles v. State Loan & Trust Co., 109 Cal. 396, 42 Pac. 149.)

A defect in a complaint consisting of a failure to allege the class of incorporations to which the plaintiff belongs is cured by such an allegation in the answer of defendant. (Savings Bank v. Barrett, 126 Cal. 413, 58 Pac. 914.)

Taxation of Deposits.—This section expressly authorizes savings and loan corporations to receive deposits, loan and invest the same, and repay depositors with or without interest. And under section 3617 of the Political Code such deposits are made an interest in the property of the corporation and taxable as such to the corporation. (Security Sav. Soc. v. H 97 Cal. 222. To same effect: City of Los Angeles v. Loan etc. Co., 109 Cal. 396.)

Construction of Section-Powers to “Invest," "Loan," etc.-The power given to savings and loan corporations in section 571, Civil Code, to “invest” their funds includes the power to put out money 80 as to produce a revenue, either by way of loan upon interest or by the purchase of stocks, securities, notes and mortgages, or any income producing property. (Savings Bank v. Barrett, 126 Cal. 413, 58 l'ac. 914.)

Under this section the corporation is expressly empowered to receive deposits of money, to loan, invest and collect the same. (Winchester P. Howard, 136 Cal. 442, 89 Am. St. Rep. 153, 64 Pac. 692, 69 Pac. 77. To same effect: Security Sav. Soc. v. Hinton, 97 Cal. 222. 32 Pac. 3.)

If a loan and trust company, which assumes to be a savings bank, in obtaining deposits has not complied with the statutes in loaning or investing funds, as required of savings and loan corporations, it is estopped to deny that it is a savings and loan corporation for the purpose of taxation upon the deposits so received. (City of Los An. geles v. State Loan & Trust Co., 109 Cal. 396, 42 Pac. 149.)

The provisions of this section are solely for the protection of the depositor. (City of Los Angeles v. Loan etc. Co., 109 Cal. 404, 42 Pae. 149.)

Power of Attorney General over Insolvent Bank.-Under the provision of the act of March 30, 1878 (Stats. 1877-78, p. 744), the attorney general, upon report of bank commissioner, can commence an act against the bank alone for the sole purpose of winding up its business, but no injunction or order can issue in said action until after a hearing and an opportunity for the bank to contest the allegations.

The attorney general is not empowered to maintain an action in behalf of the individual stockholders or creditors against the directors to prohibit them from transacting any further business of the corporation, and ex parte orders by the judge upon the filing of such complaint granting an injunction and appointing a receiver are unauthorized and void, and a writ of prohibition will be granted to stay proceedings thereunder. (People's Home Savings Bank v. Superior Court, 103 Cal. 27, 36 Pac. 1015. To same effect: Crane v. Pacific Bank, 106 Cal. 72, 39 Pac. 215; Fischer v. Superior Court, 110 Cal, 140, 42 Pac. 561.)

.

CAPITAL STOCK, AND RIGHTS AND PRIVILEGES THEREOF.

Sec. 572, C. C. When savings and loan corporations have a capital stock specified in their articles of incorporation, certificates of the ownership of shares may be issued; and the rights and privileges to be accorded to, and the obligations to be imposed upon, such capital stock, as distinct from those of depositors, must be fixed and defined, either in the articles of incorporation or in the by-laws. En. March 21, 1872.

Increase of capital stock: See post, Appendix, title “Banks and Banking."

Legislative History.

Section 17 of the savings and loan act of 1862, page 203, is the basis of this section.

Section Cited.

Mitchell v. Beckman, 64 Cal. 123, 28 Pac. 110; Los Angeles v. Loan etc. Co., 109 Cal. 401, 42 Pac. 149; Wells v. Black, 117 Cal. 160, 59 Am. St. Rep. 162, 48 Pac. 1090.

Annotation.

Stockholders' Liability.—The provisions of the Constitution and statute making stockholders liable for debts of the corporation apply to stockholders in savings banks. (Mitchell v. Beckman, 64 Cal. 117, 28 Pac. 110. To same effect: McGowan v. McDonald, 111 Cal. 67, 52 Am. St. Rep. 155, 43 Pac. 418.)

A savings and loan corporation may be formed with or without capital stock. (Los Angeles v. Loan etc. Co., 109 Cal. 401, 42 Pao. 149.)

Corporations may make only such by-laws as are consistent with the Constitution and laws of this state, and a by-law of a savings bank asserting that the stockholders were not held to their constitutional liability is void, and has no binding force upon the depositors. (Wells v. Black, 117 Cal. 157, 59 Am. St. Rep. 162, 48 Pac. 1090.)

A deposit in a savings bank having a capital stock is a debt against the corporation, when not otherwise agreed between the parties; and each stockholder in such corporation is liable to the depositors for his proportion of the debt, saving as that liability may have been modified or waived by contract of the parties. (Wells v. Black, 117 Cal. 157, 59 Am. St. Rep. 162, 48 Pac. 1090.)

The statute of limitations commences to run against the liability of the stockholders of a savings bank from the time when the debt was created and the liability incurred, upon the acceptance of each deposit; and, at the expiration of three years thereafter, the right

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