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CHAPTER V.
GENERAL PROVISIONS AFFECTING CORPORATIONS.

S 40.3 [a]. General provisions apply, when — Special provision.s
apply, when.

§ 404. Legislature may amend, etc., corporation laws and dis-
solve corporations.

§403[a]. GENERAL THOVISIONS APPLY, WHEN SPE-
CIAL PROVISIONS APPLY, WHEN. The provisions of this
title are applicaljle to every corporation, unless such corpo-
ration is excepted from its operation, or unless a special pro-
vision is made in relation thereto inconsistent with some
provisions in this title, in which case the special provision
prevails.

Hi.«ttory: Enacted Marcli 21. 1905, Stats, and Amdts. 1905, p.
410.

§404. LEGISLATURE MAY AMEND, ETC., CORPORA-
TION LAWS AND DISSOLVE CORPORATIONS. The legis-
lature may at any time amend or repeal this part, or any
title, chapter, article, or section thereof, and dissolve all
corporations created thereunder; but such amendment or
repeal does not, nor does the dissolution of any such corpo-
ration, take away or impair any remedy given against any
such corporation, its stockholders or officers, for any liability
which has been previously incurred.

History: Enacted by Code Commission, Act March 16, 1901,
Stats, and Amdts. 1900-1, p. 353, held unconstitutional, see his-
tory, § 4 ante; re-enacted March 21, 1905, Stats, and Amdts. 1905,
p. 410.

See Kerr's Cyc. C. C. for 15 pars, annotation.

As to dissolution of corporation, see 2 L. 549, 8 L. 858, 9 L. 33,
34; 12 A. D. 239-243, 40 A. D. 737-740.

As to effect of dissolution of corporation, whether by repeal
of its charter or otherwise, see 7 A. S. 717-726.

As to effect of proceedings, by dissolution, upon rights of
action, see 15 L. 627-629.

234



Tit.I,ch.VI.] FOREIGN CORPORATIONS. § 405

As to equitable jurisdiction, see 9 L. 650.

As to many miscellaneous matters affecting corporations gen-
erally, see note § 283, ante.

As to restraining exercise of corporate franchise, see 9 L.
273.



CHAPTER VI.

FOREIGN CORPORATIONS.

[This chapter is a codification, Act April 3, 1880 (Stats. 1880,

p. 21), and Act March 17, 1899 (Stats, and Amdts. 1899, p. Ill),

amending Act April 1, 1872, Stats. 1871-2, p. 826. See 120 C. 156,

47 P. 874, 52 P. 302, 40 L. 350.]

§ 405. Designation of person on whom process may be served —
Service on the secretary of state, when valid.

§ 406. Foreign corporations, statute of limitations in favor of
— Proof of corporate existence — Change of designation.

§ 407. Foreign railroads, rights in this state.

§ 408. Foreign corporations to file certified copies of articles of
incorporation.

§ 409. Foreign corporations, fees to be paid by, on filing certi-
fied copies of articles of incorporation.

§ 410. Foreign corporations, penalty for failure to file certified
copies of articles of incorporation.

§405. DESIGNATION OF PERSON ON >VHOM PROCESS
MAY BE SERVED. SERVICE ON SECRETARY OF STATE
VALID, WHEN. Every corporation other than those created
by or under the laws of this state must, at the time of filing
the certified copy of its articles of incorporation, file in the
office of the secretary of state a designation of some person
residing within the state upon whom process issued by
authority of or under any law of this state may be served.
A copy of such designation, duly certified by the secretary
of state, is sufficient evidence of such appointment. Such
process may be served on the person so designated, or, in
the event that no such person is designated, then on the
secretary of state, and the service is a valid service on such
corporation.

History: Added by Code Commission, Act March 21, 1901,
Stats, and Amdts. 1900-1, p. 353, held unconstitutional; see his-

235



§ 406 CIVIL CODE. • [Div.I.Pt.lV.

tory, § 4 ante; re-enacted March 21, 1905, Stats, and Anidts. 1905,
p. 630. A codification of § 1 Act March 17, 1899; see introductory
note to this chapter; amended March 18, 1907, Stats, and Amdts.
1907, p. 558, Kerr's Stats, and Amdts. 1906-7, p. 410.

See Kerr's Cyc. C. C. for 21 pars, annotation.

As to distinction between words "writ" and "process," sec
Kerr's Cyc. C. C. P. § 17 par. 6 and note.

As to many miscellaneous matters affecting corporations gen-
erally, see note § 283, ante.

§406. FOREKiX (OKrOKATlON, STATUTE ()F LIMITA-
TIONS IN FAVOR OF— PROOF OF CORPORATE EXIST-
ENCE—CHANGE OF DESIGNATION. Every corporation
which complies with the provisions of this chapter is there-
after entitled to the benefit of the laws of this state limiting
the time for the commencement of civil actions, but no cor-
poration not created by or under the laws of this state is
entitled to the benefit thereof, nor can any such corporation
maintain or defend any action or proceeding in any court of
this state until the corporation has complied with the pro-
visions of the preceding section.

[Proof of foreign corporation.] In any action or proceed-
ing instituted against any body styled as a corporation, but
not created by nor under the laws of this state, evidence
that such body has acted as a corporation, or employed
methods usually employed by corporations, must be received
by the court for the purpose of proving the existence of such
corporation, the sufficiency of such evidence to be determined
by the court with like effect as in other cases.

[Designation for service — Revocation, etc. — New designa-
tion.] Every corporation which has complied with the laws
then in force, requiring it to make and file a designation of
the person upon whom process against it may be served, need
not make or file any further designation. Any designation
heretofore or hereafter made may be revoked by the filing
by the corporation with the secretary of state of a writing
stating such revocation. Within forty days after the death
or removal from the state of any person designated by the
corporation, or after the revocation of the designation, the

236



Tit.I.Ch.VI.] FOREIGN RAILROADS. § 407

corporation must make a new designation, or be subject to
the provisions and penalties of this chapter.

Historj-: Enacted by Code Commission, Act March 16, 1901,
Stats, and Amdts. 1900-1, p. 353, held unconstitutional, see his-
tory, § 4 ante; re-enacted March 21, 1905, Stats, and Amdts. 1905,
pp. 630-631; see introductory note to this chapter.

See Kerr's Cyc. C. C. for 11 pars, annotation.

As to many miscellaneous matters affecting corporations gen-
erally, see note § 283, ante.

Construction of statute is strict. — See Kerr's Cyc. C. C. § 405
and note par. 12.

Interstate commerce — Interference with not permitted. — See
Kerr's Cyc. C. C. § 405 and note par. 15.

Limitations — How pleaded. — See 'Kerr's Cyc. C. C. P. § 458
and note.



§ 407. FOREIGN RAILROADS, RIGHTS IN THIS STATE.

Every railway or other corporation organized for the pur-
pose of carrying freight or passengers under or by virtue of
the laws of the United States, or of any state or territory
thereof, may build railroads, exercise the right of eminent
domain, and transact any other business which it might do
if it were created and organized under or by virtue of the
laws of this state, and has the same rights, privileges, and
immunities, and is subject to the same laws, penalties, obli-
gations, and burdens as if created or organized under and
by virtue of the laws of this state. Nothing contained in
this section shall be construed to exempt any corporation
from any duty or liability imposed upon it by any of the
provisions of this chapter.

History: Enacted by Code Commisison, Act March 16, 1901,
Stats, and Amdts. 1900-1, p. 354, held unconstitutional, see his-
tory, § 4 ante; re-enacted March 21, 1905, Stats, and Amdts. 1905,
p. 631; see the introductory note to this chapter.

As to many miscellaneous matters affecting corporations gen-
erally, see note § 283, ante.

As to statute conferring right of eminent domain on foreign
corporation, see Kerr's Cyc. C. C. § 407, note.

237



§§408,409 CIVIL CODE. [Div.I.Pt.IV.

§408. FOREIGN (OKPORATION MUST FILE CERTI-
FIED COPY OF ARTKLES OF INTORPORATIOX [IX
OFFICE OF SECRETARY OF STATE]. Every corporation
organized under the laws of another state, territory, or of
a foreign country, which [1] is now doing business in this
state, or [2] is maintaining an office herein, or [3] which shall
hereafter do business in this state, or [4] maintain an office
herein, or [5] which shall enter this state for the purpose
of doing business herein, must file in tlio office of the secre-
tary of state of the state of California [1] a certified copy
of its articles of incorporation, or [2] of its charter, or [3]
of the statute or statutes, or [4] legislative, or executive, or
governmental act or acts creating it, in cases where it has
been created by charter, or statute, or legislative, or execu-
tive, or governmental act, duly certified by the secretary of
state, or other officer authorized by the law of the jurisdic-
tion under which such corporation is formed to certify such
copy, and [5] a certified copy thereof, duly certified by the
secretary of state of this state, [a] in the office of the county
clerk of the county where its principal place of business is
located, and [b] also where such corporation owns property.

History: Enacted March 21, 1905, Stats, and Amdts. 1905, p.
631; amended March 18, 1907, Stats, and Amdts. 1907, p. 559,
Kerr's Stats, and Amdts. 1906-7, p. 411.

See Kerr's Cyc. C. C. for 2 pars, annotation.

As to failure to designate agent, see Kerr's Cyc. C. C. § 405
and note pars. 2, 3.

As to many miscellaneous matters affecting corporations gen-
erally, see note § 283, ante.

Business — What constitutes doing. — See Kerr's Cyc. C. C. § 405
and note par. 5.

§409. FOREIGN CORPORATIONS, FEES TO BE PAID
BY, 0> FILING (ERTIFIEI) COPIES OF ARTKLES OF
INCORPORATION. For filing and issuing a certified copy
as required in section four hundred and eight of this code,
corporations formed under the laws of another state, or of
a territory, or of a foreign country, must pay the same fees

238



Tit.I.ch.VI.] FAILURE TO FILE COPIES. § 410

as are paid by corporations formed under the laws of this
state.

History: Enacted March 21, 1905, Stats, and Amdts. 1905, p.
631; see introductory note to this chapter.

As to many miscellaneous matters relating to corporations,
see note, § 283, ante.

Doing business — As to wliat constitutes. — See Kerr's Cyc. C.
C. § 405 and note par. 5; 3 W. & P. 2155.

Same — Single or isolated transaction by foreign corporation
does not constitute. — See 10 L. N. S. 693; 3 W. & P. 2155.



§ 410. FOREIGX CORPORATIOXS, PENALTY FOR FAIL-
URE TO FILE CERTIFIED COPIES OF ARTICLES OF
INCORPORATION^. Every corporation organized under the
laws of another state, territory, or of a foreign country,
which shall neglect or fail, within ninety days from the tak-
ing effect of this section, to comply with the conditions of
sections four hundred and eight and four hundred and nine
of this code, shall be subject to a tine of not less than five
hundred dollars, to be recovered in any court of competent
jurisdiction; and it is hereby made the duty of the secretary
of state, as he may be advised that corporations are doing
business in contravention of sections four hundred and eight
and four hundred and nine of this code, to report the fact
to the governor, who shall instruct [1] the district attorney
of the county wherein sucli corporation has its principal
place of business, or [2] the attorney-general of the state,
or both, as soon as practicable, to institute proceedings to
recover the fine provided for in this section, and the amount
so recovered must be paid into the state treasury to the credit
of the general fund of the state;

[Further penalty, inability to maintain suits.] In addition
to which penalty, no foreign corporation which shall fail to
comply with sections four hundred and eight and four hun-
dred and nine of this code can maintain any suit or action
in any of the courts of this state until it has complied with
said sections; provided, that any such corporation which,
prior to the eighth day of March, nineteen hundred and one,

239



§ 410 CIVIL CODE. [Div.I,Pt.IV.

shall have complied with the provisions of the act entitled
"An act to amend 'An act in relation to foreign corporations,'
approved April first, eighteen hundred and seventy-two,"
approved March seventeenth, eighteen hundred and ninety-
nine, is exempted from the provisions of this section and
the two sections next preceding.

History: Enacted March 21, 1905, Slats, and Amdts. 1905, pp.
631, 632; see introductory note to this chapter.



240



Tit.II.ch.I.] INSURANCE COMPANIES. § 414

TITLE II.

INSURANCE CORPORATIONS.

Chapter I. General Provisions, §§ 414-421[a].

II. Fire, Marine, and Title Insurance Companies,
§§ 424-432.

III. Mutual Life, Health, and Accident Insurance Cor-

porations, §§437-452.

IV. Mutual Benefit and Life Associations, §§ 452a, 453.
V. Corporations to Discover Fire and Save Property

and Human Life from Destruction Thereby,
§§ 453a-453c.
VI. Life, Health, Accident, and Annuity or Endow-'
ment Insurance on the Assessment Plan,
§§ 453d-453p.

CHAPTER I.
GENERAL PROVISIONS.

§ 414. Subscription to capital stock opened, and how collected.

§ 415. Purchase and conveyance of real estate. [What property
may be held; what must be sold within Ave years.]

§ 416. Policies, ho^v issued and by whom signed.

§ 417. Dividends, of what and when declared.

§ 418. Directors liable for loss on insurance in certain cases.

§ 419. Certain insurance companies to have capital stock of
two hundred thousand dollars [repealed].

§ 420. Certain insurance companies to have capital stock of one
hundred thousand dollars [repealed].

§ 421. Investment of capital and accumulations of certain cor-
porations — Report of officers [repealed].

§ 421 [a]. Same— Same.

§414. SUBSCEIPTIONS TO CAPITAL STOCK OPENED,
AND HOW COLLECTED. After the secretary of state issues
the certificate of incorporation, as provided in article one,
chapter one, title one, of this part, the directors named in
the articles of incorporation must proceed in the manner

241



§ 414 CIVIL CODE. [Div.I,Pt.IV.

specified, or in their by-laws, or if none, then in such man-
ner as they may by order adopt, to open books of sub-
scription to the capital stock then lyisubscribed, and to
secure subscriptions to the full amount of the fixed capital;
to levy assessments and instalments thereon, and to collect
the same, as in chapter two of title one provided.

History: Enacted March 21, 1872; amended by Code Commis-
sion, Act March 16, 1901, Stats, and Amdts. 1900-1, p. 354, held
unconstitutional, see history, § 4 ante.

INSURANCE — GENERALLY.

As to insurance in general, see Kerr's Cyc. C. C. §§ 2527-2766
and notes.

Accident, death, evidence of cause of. — See 50 A. S. 441.
Accident policy — Cause of loss or death under. — See 3 L. 443;

9 L. 371; 9 L. 687; 13 L. 263; 17 L. 753; 30 L. 211.

Same — What constitutes an accident within an accident pol-
icy.— See 30 L. 206-211.

Accidental means, what is injury or death by. — See 54 A. R.
302; 8 A. S. 763.

Action on contract of — As to generally. — See 4 A. C. 1045;
5 A. C. 402; 7 A. C. 809; 10 A. C. 821; 4 L. N. S. 870; 5 L. N. S.
88; 10 L. N. S. 264; 12 L. N. S. 907; also "Loss and its adjust-
ment," this note.

Same — Constitutionality of statute providing- damages or
penalty for refusal or failure of insurance company to pay
loss. — See 5 A. C. 405.

Same — Defense of ultra vires by insurance company in an
action on a policy. — See 4 A. C. 1046.

Same — Right of noncomplying foreign insurance company
to enforce domestic contract. — See 9 A. C. 338.

Same — Submission to arbitration as condition precedent to
suit on insurance contract, when. — See 8 A. C. 171; also "Arbi-
tration clause," this note.

Acts and declarations of agent — Liability of principal for. —
See 2 A. C. 99; see also 1 A. C. 723; 3 A. C. 980; 3 A. C. 1145;

10 A. C. 92; 10 A. C. 732; see also "Authority of insurance
agent," this note.

Adjustments of, when may be opened. — See 35 A. R. 775.

Against fire. — See "Fire" Insurance," this note.

Agents — Notice to. — See notes §§ 18, 19, ante.

Same — Stipulations that persons procuring policies must be
deemed agents of the assured. — See 53 A. R. 201.

Same — Waiver or estoppel by. — See 9 L. N. S. 1084; also
"Estoppel and waiver" this note.

242



Tit.II,ch.I.] INSURANCE, GENERALLY. § 414

Alienation, recovery by insurer, retaining a lien or insurable
interest after. — See 59 A. D. 304.

Arbitration clause — Agreements to submit disputes respecting
to.— See 2 A. S. 565.

Same — Effect of failure to arbitrate. — See 4 L. N. S. 288; also
"Action on Contract," this note.

Same — Submission to as a condition precedent. — .See 10 L.
558; 11 L. 598.

Assessrnents and premiums. — See "Premiums and assess-
ments," this note.

Assignment of, when valid and wliat constitutes. — See 56 A.
D. 747.

Autliority of insurance agents. — See "Acts and declarations
of agent," this note.

Same — As to generally, see 2 A. C. 299; 1 L. 217; 1 L. 482;
1 L. 563; 7 L. 217; 8 L. 72; 10 L. 60*9; 11 L. 341; 20 L. 277; 21
L. 342.

Same — Effect of limitations on agent's authority to waive
conditions in insurance policy. — See 2 A. C. 112; 9 A. C. 380.

Same — Employment of clerk by. — See 10 L. 69.

Same — Insurance agent is agent of the assured when. — See
20 L. 277.

Same — ^Knowledge of agent — Imputed to company when. —
See 1 L. 217.

Same — Same — For notice to company when. — See 1 L. 563;
also 21 L. 342.

Same — Liability of agent to insurance company for loss oc-
casioned by disobedience of Instructions. — See 8 L. 72.

Same — Right of insurance agent to commissions on renewal
premiums after termination of agency. — See 7 A. C. 1169.

Same — Subagent, effect of notice to. — See 21 L. 342.

Beneficiary— Power of insured to destroy rights of. — See 49
L. 737-753.

Same — Change of. — See 5 L. 95; 15 L. 350; 63 L. 862.

Benefit association, as an insurance company. — See 38 L. 33-54.

Blood relative, insurable interest in life of. — See "Insurable
interest," this note.

By-laws — As to, generally, 1 L. N. S. 1065; 8 L. N. S. 521; 12
L. N. S. 504.

Cancellation of policy or contract. — See 3 L. N. S. 114; 7 L. N.
S. 1163; 12 L. N. S. 881.

Cause of loss or death. — As to, generally, 3 L. 486; 6 L. 495;
9 L. 685; 13 L. 838; 26 L. 267; 68 L. 282.

Same — Explosion. — See 19 L. 594-598; 29 L. 359.

Certificate of magistrate, necessity for, and waiver of. — See
23 A. S. 258.

Child, insurable interest in life of. — See "Insurable interest,"
this note.

243



§ 414 CIVIL CODE. [Div.I.Pt.IV.

Concealment or misrepresentations, when avoids policy. — See
35 A. R. 629.

Conclusiveness of proof of loss or death, as against insured
or beneficiary. — See 44 L. 846-860.

Condition — As to keeping and producing books and papers. —
See 51 L.. 699-713.

Same — Against keeping petroleum or other inflammable
fluids, when violated. — See 37 A. R. 650.

Same — Requiring payment before delivery of policy, waiver
of.— See 57 A. R. 514.

Consent of person whose life is insured as a condition prece-
dent.— See 56 L. 586-591.

Constructive total loss of insured building. — See 56 L. 784-
792.

Contract of insurance — Irt general, see 2 A. C. 17; 2 A. C.
99; 9 A. C. 916.

Same — Divisibility of insurance contracts. — See 2 A. C. 22.

Same — Validity of oral contract of insurance. — See 6 A. C.
624.

Same — When contract of insurance is complete. — See 9 A. C.
220; 69 A. S. 143.

"Cyclone," meaning of in insurance policy. — See 8 L. N. S.
308; 2 V7. & P. 1809.

Death, proof of. — See "Loss and its adjustment," this note.

Description of insured property, mistakes in. — See 16 A. D.
462.

Determination as to, by tribunals of association. — See 49 L.
363, 372.

Distribution of assets of insolvent insurance company — As
to who are distributees. — See 38 L. 97-100.

Same — Contract right. — See 38 L. 110.

Same — Priorities. — See 38 L. 103-107.

Same — Special funds, reinsurance and stockholder's liabil-
ity. — See 38 L. 108-110.

Same — Valuation and adjustment of claims. — See 38 L. 100-
102.

Distribution of surplus upon dissolution of mutual insurance
company. — See 3 L. N. S. 653.

Divorce as affecting wife's right to insurance upon husband's
life.— See 50 L. 552-554.

Duty of insured to submit to examination and furnish in-
formation. — See 52 L. 424-427,

Effect of extra hazards. — See 11 L. 299.

Effect of receipt of insurance money. — To mitigate damages
for personal injuries. — See 67 L. 87.

Same — To mitigate damages for wrongful death. — See 67
L. 92.

244



Tit.II.ch.I.] INSURANCE, GENERALLY. § 414

Effect of stipulations seeking to niake agent of insurer agent
of the assured. — See 77 A. D. 724.

Entirety of, policy void as to part of property wliether void
in toto. — See 74 A. D. 498; 38 A. R. 230.

Estoppel -and waiver — As to generally, see 1 L. 217; 1 L. 222;
1 L. 256; 1 L. 563; 7 L. 81; 8 L. 74; 9 L. 317; 10 L. 558-560; 11
L. 599; 2 L. N. S. 548; 3 L. N. S. 444; 4 L. N. S. 421; 4 L. N. S.
607; 4 L. N. S. 758; 10 L. N. S. 136; 10 L. N. S. 1064-1089.

Same — Knowledge of fraud of insurance agent. — See 5 L. 646;
16 L. 33-38.

Same — Rendition of policy as waiver of mistake or fraud
of insurer or its agent. — See 67 L. 705-744.

Estoppel by application made out by agents. — See 9 A. S.
229.

Explosion, as cause of loss or death. — See 19 L. 594-598: 29
L. 359.

Expulsion from society, effect of on insurance. — See 25 L.
149.

Extra hazards, effect of on policy of insurance. — See 11 L.
299.

"Extrahazardous," meaning of in insurance policy. — See 97
A. D. 798, 3 W. & P. 2624.

Extrinsic evidence to control or vary policy. — See 2 A. D.
364.

False representations as to previous application for insurance,
effect on policy. — See 55 L. 122-138.

Fidelity, nature of, and rules governing. — See 100 A. S. 774.

Fire Insurance — Alterations in premises, when avoid policy. —
See 26 A. S. 407.

Same — Change of title, sale by one partner to another,
whether amounts to. — See 49 A. R. 22; 52 A. R. 442.

Same — Conditions as to use of premises, construction of.- — -
See 30 A. S. 731.

Same — Conditions requiring notice of other insurance to be
indorsed on the policy. — See 64 A. D. 221.

Same — Forfeiture, hazard, increase of, what results in. — See
66 A. S. 691.

Same — Insurable interest must exist under policj', when. —
See 52 L. 330-341.

Same — Loss by, what included in. — See 45 A. D. 657.

Same — Same— Total, what is. — See 59 A. S. 810.

Same — On property illegally used, validity of. — See 40 L. 845-
848.

Same — Overvaluation of insured property, effect of. — See 29
A. D. 616; 25 A. R. 74.

Same — Prohibited risks, conditions against, when broken. —
See 33 A. R. 781.

Same — Right of insurer to rebuild or repair. — See 11 A. R. 57.

245



§ 414 CIVIL CODE. [Div.I,Pt.IV.

Same — Subsequent insurance, when avoids. — See 20 A. R. 319.

Same — -Use or keeping of forbidden materials, when avoids
policy. — See 24 A. R. 150.

Same — Warranties, answers concerning- watchmen, when
deemed to be. — See 33 A. R. 832.

Same — What property included within policies respecting. —
See 22 A. R. 253.

Same — When remains in force after removal of property. —
See 33 A. R. 147.

First and last days in computing time on. — See 49 L. 208.

"For whom it may concern." — See 16 A. D. 323.

Foreign companies — Restriction on business of, etc. — See 20
L. 405-409; 24 L. 298-312. -

Same — Revocation of license of on account of removal of
action to Federal court. — See 1 L. N. S. 1019.

Same — Suits by or on behalf of — Effect of location of insured
property within the state to prevent action by foreign insur-
ance company on contract made in another state. — See 9 L. N.
S. 417.

Forfeiture of policy — As to generally, see 2 A. C. 99; 8 A. C.
497.

Same — Acts and knowledge of agents, when prevent. — See 9
A. S. 236.

Same — And suspensions — As to, generally. — See 1 L. 256; 2
L. 118; 4 L. 538; 5 L. 806: 9 L. 189; 9 L. 317; 14 L. 283; 26 L.



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