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Consolidated supplement to the codes and general laws of 1909, showing the changes affecting the codes and the general laws for the years 1911 and 1913, together with the citations contained in volumes 154 to 164 of the California Supreme Court reports and in volumes 8 to 19 of the California Appell online

. (page 105 of 295)
Online LibraryCaliforniaConsolidated supplement to the codes and general laws of 1909, showing the changes affecting the codes and the general laws for the years 1911 and 1913, together with the citations contained in volumes 154 to 164 of the California Supreme Court reports and in volumes 8 to 19 of the California Appell → online text (page 105 of 295)
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the state of California, conditioned for the faithful performance of its
duties as such fiscal agency, in such amount or amounts as may from
time to time be fixed by the state treasurer with the approval of the
governor.

Bonds payable at agency.

§ 2. Any and all bonds and coupons heretofore issued by the state
of California, or hereafter to be issued, which by their terms are made
payable at the office of the state treasurer, without further designation
of a place of payment, shall at the option of the holder thereof abo be
payable at the fiscal agency to be designated by the governor under the
terms of this act.

Remittances to agency.

§ 3. The controller of the state of California shall draw his warrant
on the treasury for, and the state treasurer shall, out of any funds in the
treasury available and appropriated for the payment of the principal and
interest of the said debt, transmit or remit to the said fiscal agency, in
the form of check or draft payable in the said city of New York, at such
time as may be arranged bv the state treasurer with such fi.scal agency,
subject to the approval of the governor, as hereinafter provided, sufficient
funds out of any funds in the hands of such state treasurer, or other
officer, applicable to such purposes for the redemption of such bonds
and coupons; provided, however, that the time when such funds shall he
transmitted or remitted to such fiscal agency shall be not less than thirty
days before the maturity of any such bonds or coupons. Express charges
and postage shall be a proper charge against the state and shall be paid
said fiscal agency and be allowed the state treasurer or other proper officer
in his settlement.

Receipt for funds sent.

§ 4. On receipt of any funds by the said fiscal agency, it shall be
the duty of such agency to notify the officer from whom received of the
receipt thereof and immediately on the payment of such bonds anil
coupons for which funds were transmitted or remitted said bonds and



971 BONDS. Act391i, §§5-8

coupons shall he canceled and returned to the state treasurer or officer
from whom such funds were received. The fiscal agency is hereby au-
thorized to redeem such bonds and coupons when duly presented to it
by the holder, whether the certificate herein provided for has been
attached to said bonds or not.

Certificate atta<rhed to bonds.

§ 5. The state treasurer and any other officers of the state authorized
to sell and deliver any bonds of the state, are hereby authorized at the
time of delivery to the purchaser to attach to any bonds of the state
which have been or shall be authorized to be issued by the state, whether
such bonds have been heretofore signed, countersigned and sealed, or
shall hereafter be signed, countersigned and sealed, a copy of this act

and a certificate in the following terms: "Pursuant to the above act,

in the city of New York, state of New York, has been designated as
the fiscal agency of the state of California in said city, to continue as
such until the designation of another fiscal agency in said city. Attached
before issuance to state of California bond, dated , 19 — , No. —

Sacramento, California, 19 — .

State Treasurer."
Notice of designation of agency to be published.

§ 6. It shall be the duty of the secretary of state immediately after
the passage of this act and the designation of the fiscal agency provided
herein, to publish a notice of the same in some paper of general circula-
tion in the city of Sacramento, in the state of California, and in the said
city of New Y^ork, in the state of New York, once a week for two weeks
and thereafter all bonds and coupons of the state which are by their
terms payable at the office of the state treasurer, shall also be payable
at the said fiscal agency at the option of the holder.

Treasurer authorized to act.

§ 7. The state treasurer, subject to the approval of the governor, is
hereby authorized to do all acts and things necessary or proper to carry
the provisions of this act into effect, including among other things the
making of such arrangements with the fiscal agency as may be deemed
necessary including the compensation, if any, of such agency for services
rendered under this act, and the time when funds for the redemption of
bonds and coupons shall be transmitted or remitted to such fiscal agency.

Urgency measure.

§ 8. This act is hereby declared to be an urgency measure within the
meaning of section 1, article 4, of the constitution and is deemed neces-
sary for the immediate preservation of the public peace, health and
safety. The following is a statement of the facts constituting such neces-
sity: It is necessary for the purpose of promptly and immediately sup-
plying funds for the construction and completion of highways and harbor



Act 428 GENERAL LAWS. . 972

improvements which have been authorized by the legislature and ratified
by vote of the people and have been begun, that this act be passed and
that provision for the payment of bonds and coupons of the state be made
in conformity with the requirements of financial usage and custom by
providing for the payment thereof at a place and in a manner which will
place the said bonds and coupons on an equality with the bonds of other
states and of public bodies. The necessity of immediately obtaining and
furnishing funds for said purpose to prevent loss to the state and to
secure the completion without unnecessary delay of the said improve-
ments for the preservation of the public peace, health and safety require
that this act shall take immediate effect.

TITLE 63.

BUILDING AND LOAN ASSOCIATIONS.

ACT 428.

An act creating a bureau of building and loan supervision; providing for
the appointment of an administration official therefor to be known
as the building and loan commissioner; prescribing his duties, powers
and compensation; providing for a secretary, his powers and com-
pensation; providing for the rental of ofliccs for the use of the
bureau and for traveling and office expenses; providing a system for
licensing building and loan and other associations, and for assessing
and collecting the license fees necessary to meet the salaries and other
expenses of the bureau of building and loan supervision; providing a
course of procedure where violations of law, or unsafe practices are
found to exist, or are reported by the commissioner to the attorney
general; providing for involuntary liquidation by trustees, and pro-
ceedings in connection therewith; providing for exemption of prop-
erty of associations in liquidation from attachments, executions and
liens, pending liquidation; providing for and requiring associations
to procure licenses, pay assessments levied for pro rata of salaries and
expenses, and to make and file reports; providing penalties for viola-
tions of law and orders of the commissioners; repealing an act
approved March 21, 1905, entitled "An act creating a bureau of
building and loan supervision; providing the appointment of admin-
istration officials therefor to be known as the building and loan
commissioners; prescribing their duties, powers and compensation;
providing for a secretary, his powers and compensation; providing
for the rental of offices for the use of the bureau and for traveling
and office expenses; providing a system for licensing building and
loan and other associations, and for assessing and collecting the
license fees necessary to meet the salaries and other expenses; provid-
ing a course of procedure where violations of law, or unsafe practices
are found to exist, or are reported by the commissioners to the attor-
ney general; providing for involuntary liquidation by trustees, and
proceedings in connection therewith; providing for exemption of



973 BUILDING AND LOAN ASSOCIATIONS. Act 428

property of associations in liquidation from attachments, executions
and lieus, pending liquidation; providing for and requiring associa-
tions to procure licenses, pay assessments levied for pro rata of
salaries and expenses, and to make and file reports providing pen-
alties for violations of law and orders of the commissioners; provid-
ing for succession in office, and repealing all acts and parts of acts
in conflict herewith; also repealing an act approved March 23, 1907,
entitled 'An act to amend section sixteen (16) of an act entitled "An
act creating a bureau of building and loan supervision; providing
for the appointment of administration officials therefor to be known
as the buihling and loan commissioners; prescribing their duties,
powers and compensation; providing for a secretary, his powers and
compensation; providing for the rental of offices for the use of the
bureau and for traveling and office expenses; providing a system for
licensing building and loan and other associations, and for assessing
and collecting license fees necessary to meet the salaries and other
expenses; providing a course of procedure where violations of law,
or unsafe practices are found to exist or are reported by the com-
missioners to the attorney general; providing for involuntary liqui-
dation by trustees, and proceedings in connection therew^ith; pro-
viding for exemption of property of associations in liquidation from
attachments, executions and liens pending liquidation; providing for
and requiring associations to procure licenses, pay assessments levied
for pro rata of salaries and expenses, and to make and file reports;
providing penalties for violations of law and orders of the com-
missioners; providing for succession in office, and repealing all acts
and parts of acts in conflict herewith," ' approved March 21, 1903,
relating to and providing for reports to building and loan commis-
sioners and the publication thereof; also repealing an act approved
March 20, 1909, entitled "An act to amend sections 3 and 11 of an
act entitled 'An act creating a bureau of building and loan super-
vision; providing for the appointment of administration officials
therefor to be known as the building and loan commissioners; pre-
scribing their duties, powers and compensation; providing for a
secretary, his powers and compensation; providing for the rental of
offices for the use of the bureau and for traveling and office ex-
penses; providing a system for licensing building and loan and other
associations, and for assessing and collecting license fees necessary
to meet the salaries and other expenses, providing a course of pro-
cedure where violations of law, or unsafe practices are found to exist
or are reported by the commissioner to the attorney general; pro-
viding for involuntary liquidation by trustees, and proceedings in
connection therewith; providing for exemption of property of asso-
ciations in liquidation from attachments, executions and liens
pending liquidation; providing for and requiring associations to pro-
cure licenses, pay assessments levied for pro rata of salaries and
expenses, and to make and file reports; providing penalties for viola-



Act 428, §§1-3 GENERAL LAWS. 974

tions of law and orrlers of the commissioners; providing for succession
in office, and repealing all acts and parts of acts in conflict here-
with/ " approved March 21, 1905, relating to the powers and duties
and salaries of the state building and loan commissioners.

[Approved April 5, 1911. Stats. 1911, p. 607.]
Amended 1911, Ex. Sess., p. 6.

Bureau of building and loan supervision.

§ 1. There is hereby created a bureau, to be known and designated as
the "Bureau of Building and Loan Suitervision," with powers of super-
vision, examination and license of all building and loan associations,
mutual loan associations, co-operative home associations, and all other
corporations, associations, and societies wlienever, wherever and however
formed, which are based, or are operating on plans or methods similar to
building and loan associations as defined in section 648 of the Civil Code.
Said bureau is charged with the enforcement of all laws designed for
the formation, government or operation, in this state, of any such associa-
tion, corporation or society, and is vested with power to determine what
associations, corporations and societies come within the purview of the
laws. [Amendment approved December 18, 1911; Stats. Ex. Sess. 1911,
p. 6.]

Building and loan commissioner. Secretary.

§ 2. The adniinistrution of said bureau shall be vested in a com-
missioner, to be known and designated as the "Building and Loan Com-
missioner," who shall be appointed by the governor and commissioned to
hold office at the pleasure of the governor. He must be a citizen of this
state; and he must not be in any way connected with any association,
corporation or society coming under his supervision. He shall be author-
ized and empowered to appoint a secretary, with powers of examination
the same as his own, who must be a practical, skilled accountant, fully
conversant with building and loan accounts.

Salaries. Traveling expenses. Ofl&ce, where maintained. Rent and other
expenses.
§ 3. The commissioner shall receive a salary of twenty-four hundred
dollars per annum, and his secretary shall receive a salary of twenty-one
hundred dollars per annum. Such salaries shall be in full for all services
rendered, and neither the commissioner nor the secretary shall receive or
accept any fees from any other source for services performed in their
official capacity. There shall also be allowed and paid the necessary
traveling expenses of the commissioner and his secretary, incurred while
traveling in their line of duties, not to exceed the sum of fifteen hundred
dollars per annum. The commissioner shall jirocure and have an office
in the city of San Francisco, which office shall be kept open for business
every business day, duriug such hours as are commonly observed by the
banks of that city as banking hours. For such office there shall be al-



975 feUILDING AND LOAN ASSOCIATIONS. Act 428, §§ 4-6

lowed anrl paid a total rental of not exceeding seventy-five dollars per
month. Said commissioner may also provide such fuel, stationery, print-
ing, postage, office help and other necessary conveniences as may be
re(juisite in such office, at a cost not to exceed in the aggregate the sum
of fifteen hundred dollars per annum. All said salaries and expenses shall
be audited and paid in the same manner as the salaries and expenses of
other state officers. [Amendment approved December 18, 1911; Stats.
Ex. Sess. 1911, p. 6.]

Bonds of commissioner and secretary.

§ 4. Before entering upon their duties, the commissioner and the
secretary shall each execute an official bond in the penal sum of five thou-
sand dollars, each of which bonds must be guaranteed b_y a duly authorized"
suretj' or bonding company, the premium on which shall be paid from the
allowance for office exjionses. Any bond executed under this section must
be approved by the governor and filed and recorded in the office of the
secretary of state, and such commissioner and secretary must take the
oath of office as prescribed by the Political Code for the state officers in
general. [Amendment approved December 18, 1911; Stats. Ex. S'^ss. 1911,
p. 7.]

Duties. Report to governor.

§ 5. It shall be the duty of the commissioner to furnish to all asso-
ciations, corporations or societies, which, in his judgment, legally come
under his jurisdiction, and that have otherwise complied with the re-
quirements of law, a license authorizing them to transact business for
one year from the date of said license; to receive and place on file in
his office the annual or other reports required by law to be made by
building or loan associations or other corporations or societies licensed
by him; to supply each with blank forms for such statement; and to
make, on or before the first day of October in each year, a tabulated
report to the governor of this state, showing the condition of all such
associations, corporations or societies reporting to him, with such recom-
mendation as he may deem proper, accompanied by a detailed statement
of all moneys received by him since his last report and the disposition
thereof.

Examination of associations.

§ 6. It shall be the duty of the commissioner, in person, or the
secretary, at least once in each year, without previous notice, to visit
and examine into the affairs of every such association, corporation or
society licensed by him, incorporated or doing business in this state;
on such occasions he shall have free access to all the books, records,
securities and papers of every such association, corporation or society,
and shall first count the cash and cheek the bank balance of such cor-
poration or association with the proper amount of funds as shown by
the books to be on hand and at the date and hour of such examination,
and shall then examine and verify the books, accounts, and securities,



Act428, §§7, 8 GEXER.vL LAWS. 976

and, so far as possible and consistent, the values of all property owned
or held as collateral security for moneys loaned, and otherwise use
reasonable diligence to ascertain the financial condition and solvency
thereof. He and his secretary shall have power to administer oaths in
the line of duty, and to examine under oath the officers, employees and
agents, or the custodian or receiver, relative to any or all the business
thereof. The commissioner or his secretary or representative shall re-
ceive for any examination into the books and affairs of any such asso-
ciation, corporation or society formed outside of the state of California
and applj'ing for a license to do business in this state, their reasonable
expenses, which shall be paid by the association, corporation or society
so examined; provided, that they may accept the result of any such
examination made by the duly constituted authorities of any state having
similar laws of supervision.

Books of associations. Revaluation of real estate.

§ 7. To facilitate the examinatinns specified in the foregoing section,
he shall require every such association, corporation, or society to keep
its books in such form as to accurately show its assets and liabilities
in detail and to keep records written in ink, showing the appraised values
of the real estate security held in connection with each loan, and signed
in each case by the appraiser, officer or committee charged with making
such estimated valuations. The commissioner may make a revaluation
of the real estate owned, and of the other securities of any such asso-
ciation, corporation or society licensed by him, on which the loan pay-
ments may be delinquent for six months or more, and may, for that
purpose, appoint local appraisers, who shall be disinterested persons, at
the expense of such association, corporation or society; the expense of
such appraisement to be fixed Ijy the commissioner, Ijut not to exceed
the sum of five dollars for property located outside of any incorporated
limits and three dollars for property located inside of any incorporated
limits for each property so examined and appraised. Each appraiser so
appointed shalf be required to make a sworn report to the commissioner
of his estimated valuations of all property so examined and appraised.

May issue subpoenas, etc.

§ 8. The commissioner shall have power to issue subpoenas and re-
quire attendance of any or all trustees, or agents of any such association,
corporation or society, and such other witnesses as they may deem neces-
sary, in relation to its affairs, transactions and condition, and any such
person so served with such subpoena may upon ajiplication of the com-
missioner be required b}^ order of the superior court of the county where
the corporation, association or society has its principal place of business
to appear and answer such pertinent questions as may be put to him by
such commissioner aud be required to produce su'-h books, papers or
documents in his possession as may be required by such commissioner.



977 BUILDING AND LOAN ASSOCIATIONS. Act 428, § 9

Violation of law by association. Duty of commissioner. Notice to at-
torney general. Reference to superior court.
§ 9. If the commissioner, as the result of any examination, or from
any report made to him or to the shareholders, shall -find that any associa-
tion, corporation or society licensed by him, is violating the provisions
of its charter or of the laws of this state provided for its government,
or is conducting its business in an unsafe or unauthorized manner, he may,
by an order addressed to the association, corporation or society so offend-
ing, direct a discontinuance of such violations or unsafe pra.ctices and a
conformity with all the requirements of law; and if such association, cor-
poration or society shall refuse or neglect to comply with such order
within the time specified therein; or if it shall appear to the commissioner
that any such association, corporation or society is in an unsafe condi-
tion, or is conducting its business in an unsafe manner, such as to render
its further proceeding hazardous to the public, or to those having funds
in its custody; or if he shall find that its assets are impaired to such an
extent that, after providing for all liabilities other than to shareholders,
members and investors, they do not exceed in volume the dues or prin-
cipal payments paid in by the shareholders, members and investors and
credited to or on account of all classes of stock, shares or certificates of
investment, issued and outstanding, he shall, in order to prevent waste
and diversion of assets, assume and take charge of the affairs and business
of such association, corporation or society and possession and control
of all its property and assets, and retain such possession pending action
by the proper court. Upon taking such action, he may, under his hand
and official seal, appoint a custodian, require from him a good and suffi-
cient bond, and place him in charge as his representative. He shall im-
mediately notify the attorney general of his action and of all the neces-
sary facts in connection therewith; and thereupon it shall become the
duty of the attorney general to at once apply to the superior court of the
county in which such association, corporation or society has its principal
place of business, for an order citing such association, corporation or
society to show cause, if any it may have, within not exceeding ten days,
why the action of the commissioner should not be approved and confirmed
by the court, and made permanent. Such court may in such application,
and after a full hearing, approve or disapprove of the action of the com-
missioner. If the court shall approve and confirm the action of the com-
missioner, such approval and confirmation shall operate as a permanent
injunction against the further prosecution of business by such association,
corporation or society, and the commissioner shall proceed immediately to
liquidate the business and affairs thereof, and so continue until such
liquidation has been completed. If the action of the commissioner shall
be disapproved by the court, the commissioner shall cause all reasonable
expenses incurred by him during his occupancy or possession, including
not exceeding eight dollars per diem, for each business day, as the
compensation of the custodian, to be paid from the funds of such associa-
62



Act 428, § 9 GENERAL LAWS, 978

tion, corporation or society, and immediately restore the balance of the
property and assets thereof to the possession of the proper officers.

Commissioner employed to conduct business.

The approval and confirmation of the action of the commissioner, by
the court, shall operate to empower the commissioner to collect all moneys,
debts and claims due to or belonging to such association, corporation or
society and to give him full receipt therefor; to release or reconvey all
real or personal property pledged as security for loans; to approve and
pay all just and equitable claims; to prosecute all actions necessary to
enforce liquidations; and, on the order of the court, to compound bad
or doubtful debts and to sell and convey real and personal property.

Inventory of assets. Notice to claimants. Schedule of claims. Liquida-
tion. Final report.
As soon as practicable after the approval and confirmation of the ac-
tion of the commissioner, by the court, he shall cause an inventory of all
the assets of such association, corporation or society to be made in dup-
licate, the original to be filed with the proper court and the duplicate
in the office of the commissioner. He shall cause due notice to be given



Online LibraryCaliforniaConsolidated supplement to the codes and general laws of 1909, showing the changes affecting the codes and the general laws for the years 1911 and 1913, together with the citations contained in volumes 154 to 164 of the California Supreme Court reports and in volumes 8 to 19 of the California Appell → online text (page 105 of 295)