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security of those dealing with it as to a majority of the
stockholders may seem proper, not inconsistent with the pro-
visions of this title or part.

Hi.story: Enacted March 21, 1872,

§ 446. PREMIUMS, HOW PAYABLE. All premiums must
be payable wholly in cash, or one-half or a greater proportion

269



§§ 447-450 CIVIL CODE. [Div.I,Pt.IV.

in cash, and the remainder in promissory notes bearing inter-
est, as may be provided for by the by-laws. Agrreenients and
policies of insurance made by the corporation may be upon
the basis of full or partial participation in the profits, or
without any participation therein, as may be provided by the
by-laws and agreed between the parties.

Hi.story: Enacted March 2], 1872.

§ 447. INSURAX E (OMPAMES TO FURMSH DATA TO
INSURANCE C03I.1IISSI0NER. E.MPLOYMENT OF ACT-
UARY (repealed).

History: Enacted March 21, 1872; amended March 30, 1874,
Code Amdts. 1873-4, p. 211; Feb. 2.=), 1889, Stats, and Amdts. 1889,
p. 36; amended by Code Commission, Act March 16, 1901, Stats.
and Amdts. 1900-1, p. 357, held unconstitutional, see history, § 4
ante; repealed March 18, 1907, Stats, and Amdts. 1907, p. 141,
Kerr's Stats, and Amdts. 1906-7, p. 413. In effect immediately.
Incorporated in Political Code as noted under § 419. See Pol. C.
§ 625.

§448. NO STAMPS REQUIRED ON ACCIDENT INSUR-
ANCE CONTRACT (repealed).

History: Enacted March 21, 1872; repealed by Code Commis-
sion, Act March 16, 1901, Stats, and Amdts. 1900-1, p. 358, held
unconstitutional, see history, § 4 ante; re-repealed March 21,
1905, Stats, and Amdts. 1905, p. 571; re-repealed March 8, 1907,
Stats, and Amdts. 1907, p. 141, Kerr's Stats, and Amdts. 1906-7,
p. 413. In effect immediately.

§449. [VALUATION OF POLK lES.] RETALIATORY
CLAUSE (repealed).

History: Enacted March 30, 1874, Code Amdts. 1873-4, p. 271;
amended by Code Commission, Act March 16, 1901, Stats, arid
Amdts. 1900-1, p. 358, held unconstitutional, see history, § 4 ante;
repealed March 8, 1907, Stats, and Amdts. 1907, p. 141, Kerr's
Stats, and Amdts. 1906-7, p. 413. In effect immediately. Incor-
porated in Political Code as noted under § 419 ante. See Pol. C.
§ 618.

§450. POLICIES ISSUED IVITHIN STATE. Every con-
tract or policy of insurance hereafter made by any person or

270



Tit.II.ch.III.] POLICIES IN STATE. §450

corporation organized [1] under the laws of this state, or [2]
under those of any other state or country, with and upon the
life of a resident of this state, and delivered within this state,
shall contain, unless specifically contracted between the
insurer and the insured for tontine insurance, or for other
term or paid-up insurance, a stipulation that when, after
three full annual premiums shall have been paid on such
policy, it shall cease or become void solely by the non-payment
of any premium when due, its entire net reserve, by the
American experience mortality, and interest at four and one-
half per cent yearly, less any indebtedness to the company on
such policy, shall be applied by such company as a single pre-
mium, at such company's published rates in force at the date
of original policy, but at the age of the insured at time of
lapse, either to the purchase of non-participating term insur-
ance for the full amount insured by such policy, or upon the
written application by the owner of such policy, and the sur-
render thereof to such company within three months from
such non-payment of premium, to the purchase of a non-
participating paid-up policy, payable at the time the original
policy would be payable if continued in force; both kinds of
insurance to be subject to the same conditions, except as to
payment of premiums, as those of the original policy.

[Proof of death within year.] It may be provided, however,
in such stipulation, that no part of such term insurance thall
[shall] be due or payable, unless satisfactory proofs of death
be furnished to the insuring company within one year after
death, and that, if death shall occur within three years after
such non-payment of premium, and during such term of insur-
ance, there shall be deducted from the amount payable the
sum of all the premiums that would have become due on
the original policy if it had continued in force.

If the reserve on endowment policies he more than enough
to purchase temporary insurance, as aforesaid, to the end of
the endowment term, the excess shall be applied to the pur-
chase of pure endowment insurance, payable at the end of the
term, if the insured be then living.

271



§451 CIVIL CODE. [Div.I.Pt.IV.

[Penalty for failure to comply with above provisions.] If

any life insurance corporation or company shall deliver to
any person in this state a policy of insurance upon the life
of any person residing in this state, not in conformity with
the provisions of this section, the right of such corporation
or company to transact business in this state shall thereupon
and thereby cease and terminate, and the insurance commis-
sioner shall immediately revoke the certificate of such corpora-
tion or company authorizing it to do business in this state,
and publish such revocation, daily, for the period of two
weeks, in two daily newspapers, one published in the city of
San Francisco, and the other in the city of Sacramento.

HlHtory: Enacted March 30, 1874, Code Amdts. 1873-4. p. 271;
amended April 1, 1878, Code Amdts. 1877-8. p. 82; April 26. 1880.
Code Amdts. 1880 (Pol. Code pt.). pp. 91-92; amended by Code
Commission, Act March 16. 1901, Stats, and Amdts. 1900-1. p.
358, held unconstitutional, see history, § 4 ante.

See Kerr's Cyc. C. C. for 6 pars, annotation.

123 C. 677, 679, 680, 56 P. 546 (construed and applied); 129
C. 459, 460, 62 P. 48 (construed and applied); 139 C. 332, 335.
96 A. S. 146. 73 P. 168 (reference to New York statute, similar
in many respects).

As to many miscellaneous matters of insurance, see note
§ 414, ante.

§451. CERTAIN ORDERS NOT INSURANCE COMPA-
NIES (repealed).

History: Enacted March 30, 1874, Code Amdts. 1873-4. p. 271;
amended April 7, 1878, Code Amdts. 1877-8. p. 82, repealed April
26, 1880, Code Amdts. 1880 (Pol. Code pt.), p. 92; re-enacted
March 23, 1885, Stats, and Amdts. 1885, p. 221; repealed March 8,
1907, Stats, and Amdts. 1907, p. 141, Kerr's Stats, and Amdts.
1906-7, p. 413. In effect immediately.

See Kerr's Cyc. C. C. for 3 pars, annotation.

121 C. 317, 321, 53 P. 901 (referred to); 133 C. 686, 690, 691. 66
P. 25 (referred to); 148 C. 470. 478. 113 A. S. 291. 83 P. 804. 805.
4 L. N. S. 247, 7 A. C. 672 (associations like the "United Mod-
erns," not conducted for profit, are not regular insurance com-
panies).

As to many miscellaneous matters of insurance, see note
§ 414, ante.

272



Tit.II,cil.III,] DIVIDENDS, HOW MADE. § 452

As to statutory provisions g-overning- mutual benefit and life
associations, see Kerr's Cyc. C. C. §§ 452a, 453, 453d-453p and
notes.

Fraternal and secret societies — What constitute. — See Kerr's
Cyc. C. C. § 453p and note; also 3 Encyc. L. 1041; 14 Id. 11.

Special rules applicable to mutual or memtaersliip life or ac-
cident insurance. — See 52 A. S. 543-578.

§ 452. COEPORATIOAS, LIFE INSURANCE— DIVIDENDS,
HOW MADE. No corporation formed under the laws of this
state, and transacting life insurance business, must make
any dividends, except from profits remaining on hand after
retaining unimpaired:

1. The entire capital stock;

2. A sum sufficient to pay all losses reported or in course of
settlement, and all liabilities for expenses and taxes;

3. A sum sufficient to reinsure all outstanding policies, as
ascertained and determined upon the basis of the American
experience table of mortality, and interest at the rate of four
and one-half per cent per annum.

History: New section added by Code Commission, Act March
16, 1901, Stats, and Amdts. 1900-1, p. 359, held unconstitutional,
see history, § 4 ante; re-enacted March 21, 1905, Stats, and
Amdts. 1905, p. 571. Original section 452, regulating determina-
tion of net valuation of policy at expiration' of term, was
enacted April 1, 1878 (Code Amdts. 1877-8, p, 83), and repealed
April 26, 1880, Code Amdts. 1880 (Pol. C. pt.), p. 92.



273



§ 452a CIVIL CODE. [Div.I.Pt.IV.

CHAPTER IV.

MUTUAL BENEFIT AND LIFE ASSOCIATIONS.

[This chapter was added by Code Commission, Act March 16,
1901, Stats, and Amdts. 1900-1, p. 360, held unconstitutional, see
history. § 4 ante; re-enacted March 20, 1905.]

§ 452a. Formation of tl:e association. [Mutual benefit and life.]
§ 453. Levying of assessments — By-laws which may be made.

§452a. FORMATION OF THE ASSOCIATION— [MUTUAL
BENEFIT AND LIFE.] Associations of not exceeding one
thousand persons may be formed for the purpose of paying
to the nominee of any member a sum, upon the death of the
member, not exceeding three dollars for each member of the
association. Such association may be formed by

Filiue: articles of incorporation in the oftice of the clerk of
the connty in which the principal place of business is situated
and a certified copy of such articles of incorporation, duly
certified by the county clerk, in the office of the secretary of
state.

[What articles must sho^v.] Such articles must state the
name of the corporation, its general purposes, its principal
place of business, its term of existence, not exceeding fifty
years, the names and residences of the directors selected or
appointed to serve for the first year, and must be signed
and verified as required by sections two hundred and ninety-
two and five hundred and ninety-four.

History: Enacted March 20, 1905, Stats, and Amdts. 1905, pp.
410-411; See introductory note to this chapter.

See Kerr's Cyc. C. C. for 26 pars, annotation.

As to definitions and distinctions between benevolent and
beneficial associations, see 3 Encyc. L. 1043.

As to features of law specially applicable, see 52 A. S. 543.

As to many miscellaneous matters of insurance, see note
§ 414, ante.

As to mutual benefit associations, see 14 A. S. 526; 19 A. S.
781-791; 3 Encyc. L. 1045.

As to what are benevolent associations and their purposes
and position as insurance companies, see 2 L. 420.

274



Tit.II,ch.IV.] ASSESSMENTS— BY-LAWS. § 453

§453. LEVimG OF ASSESSMENTS— BY-LAWS WHICH
MAY BE MADE. Each association provided for in this chap-
ter may, on the death of a member, levy an assessment on the
surviving members of not exceeding three dollars for each
member, and collect and pay the same to the nominee of such
decedent, and may also provide for the payment of such
annual payments by members as may be deemed just, but no
member must be subject to any annual assessment in excess
of that established when he joined the association. The asso-
ciation may make such by-laves not inconsistent with the
laws of the state as may be necessary for its government
and the transaction of its business; may, by its name, sue
and be sued;

[Loaning funds and purchasing real estate.] Loan such
funds as it may have on hand ; and own sufficient real estate
for its business purposes and such as it may be necessary to
purchase on foreclosure of its mortgages.

History: Enacted March 20, 1905, Stats, and Amdts. 1905, pp.
410-411.

See Kerr's Cyc. C. C. for 115 pars, annotation.

As to assignment of interest of beneficiaries, see 87 A. S. 541.

As to conclusiveness and review of decisions of tribunals of
benevolent societies, see 49 L. 353-401.

As to effect of changes of by-laws as against pre-existing
members, see 83 A. S. 706.

As to effect of decisions of tribunals of benevolent associa-
tions, see 13 L. 625.

As to enlarged powers conferred upon benevolent associa-
tions by statute, see 4 L. 382.

As to law of benevolent societies, determining rights of
members, see 5 L. 96.

As to many miscellaneous matters of insurance, see note
§ 414, ante.

As to power to make by-laws and amend and repeal same,
see 3 L. 409.

As to property rights in benevolent societies, see 2 L. 841.

As to remedies of members of benevolent associations, see 59
A. S. 198.

As to result of death of beneficiary before insured, see 11 A.
S. 721-724.

As to unborn child's rights generally, see Kerr's Cyc. C. C.
§ 29 and note.

As to when insurance paj^able to heirs, see 44 A. S. 404-409.

275



§ 453a CIVIL CODE. [Div.I.Pt.IV.



CHAPTER V.

CORPORATIONS TO DISCOVER FIRE AND SAVE PROPERTY
AND HUMAN LIFE FROM DESTRUCTION THEREBY.

[This chapter was added at recommendation of Code Commis-
sion, Act March 16, 1901, Stats, and Amdts. 1900-1, pp. 360-362,
held unconstitutional, see history, § 4 ante; re-enacted March
21, 1905. A codification of Act April 1, 1876, Stats. 1875-6, pp.
689-690, as amended by Act March 29, 1897, Stats, and Amdts.
1897, pp. 223-225.]

§ 453a. Powers of the corporation. [Underwriters].

§ 453b. Right of way of corporation and its officers when run-
ning to fires.

§ 453c. Yearly meeting's of corporation, notice to be given
thereof, and proceedings which may be authorized
thereat.

§453a. POWERS OF THE fORPO RATION. [UNDER-
IVRITERS.] Any corporation of underwriters heretofore
organized and now existing, or which may be hereafter
organized under the laws of this state, for the purpose of
discovering and preventing fires and of saving property and
human life from conflagration, and doing business within any
municipal corporation of this state, has power, at its own
proper cost and expense, to maintain a corps of men, with
proper ofRcers, equipped with the necessary machinery and
apparatus therefor, whose duty it is, so far as practicable, to
discover and prevent fires and save property and human life
from conflagration; and for the effective discharge of such
duties, authority is hereby granted such corps to enter any
building on fire, or in which property is on fire, or which
such corps or any officer thereof deems to be immediately
exposed to any existing fire, or in danger of taking fire from
a burning building, and to remove or otherwise save and pro-
tect from conflagration or damage by water any property,
during and immediately after such fire.

[Not to interfere with fire departments.] Nothing in this
chapter must be so construed as in any degree to lessen,

276



Tit.II.ch.IV.] RUNNING TO FIRES. § 453b

impair, or interfere with tlie powers, privileges, duties, or
autliority of tlie regular five department of such municipality;
nor can any act of such corps justify any owner of any build-
ing, or property in abandoning such building or property.

History: Enacted March 21, 1905, Stats, and Amdts. 1905, pp.
571-572; see introductory note to this chapter.

See Kerr's Cyc. C. C. for 2 pars, annotation.
As to many miscellaneous matters of insurance, see note
§ 414, ante.

§453b. RIGHT OF WAY OF CORPORATION AND ITS
OFFICERS WHEN RUNNING TO FIRES. Such corporation,
with its officers and corps, when running to a fire with its
horses, vehicles, and salvage apparatus, has the same right'
of way as is or may be bestowed by any ordinance of the
municipality or law of this state upon the regular fire depart-
ment of the municipality wherein such corporation is acting;
but the rights of such fire department must always be para-
mount to the rights of such corporation.

[Certain laws and ordinances governing fire departments
to govern.] All ordinances now existing or which may here-
after be passed by the municipal authorities of any city and
county, or of any incorporated city or town wherein such a
corporation may carry on business, and all laws of this state
applicable to such city and county, or city or town, for the
conviction or punishment of any person or persons wilfully
or carelessly obstructing the progress of the apparatus of the
fire department of such city and county, or city or town, while
going to a fire, or of any person or persons wilfully or care-
lessly injuring any animal or property of said fire department,
are equally applicable to any person or persons wilfully or
carelessly obstructing the progress of the apparatus of such
corporation while going to a fire, and to any person or per-
sons who wilfully or carelessly injures any animal or prop-
erty of such corporation; and said laws and ordinances, and
their penalties, may be enfo-rced in the same courts and in the
same manner, and with equal force and effect, as in the case
of the fire department.

277



§ 453c CIVIL CODE. [Div.I.Pt.IV.

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

§ 453c. YEARLY MEETINGS OF COEPORATION, NOTICE
THEREOF, PROCEEDINGS WHICH MAY BE AUTHORIZED
THEREAT. [WHO MAY VOTE.] In the month of July, in
every year, there must be held a meeting of all corporations
created for the purposes specified in this chapter; of which
ten days' previous notice must be inserted in at least one
daily newspaper published in the municipality where said
corporation is organized or established, at which meeting
each insurance company, corporation, association, under-
writer, agent, person, or persons doing a fire insurance busi-
ness in said municipality, whether members of said corpora-
tion or not, shall have a right to be represented, and shall be
entitled to one vote.

[Power of majority i)reseut — Fixing: expenses.] A majority
of the whole number so represented has power to decide upon
the question of sustaining the fire patrol organized by corpo-
rations heretofore created, or that may be hereafter created,
and fixing the maximum amount of expenses which may be
incurred therefor during the fiscal year next to ensue, which
amount must in no case exceed two per centum of the aggre-
gate premiums returned as received, as provided in this sec-
tion, and the whole of such amount, or so much thereof as
may be necessary, may be assessed upon all insurance com-
panies, corporations, associations, underwriters, agents, per-
son, or persons who assume risks and accept premiums for
fire insurance in said municipality, as hereinbefore mentioned,
in proportion to the several amounts of premiums returned,
as received by each, as hereinafter provided, and

[Assessments, how coHeeted.] Such assessment is collect-
able by and in the name of said corporation, in any court of
law in the state of California having jurisdiction, in such man-
ner and at such time or times as said corporation may deter-
mine.

[Pciyment of employees, etc., how provided for.] In order
to provide for the payment of persons employed by said cor-
poration, and to maintain suitable rooms, and apparatus for

278



Tit.II.ch.V.] YEARLY MEETINGS. § 453c

saving life and property contemplated, said corporation is
empowered to require a statement to be furnished, semi-
annually, by all insurance companies, corporations, associa-
tions, underwriters, agents, or persons, of the aggregate
amount of premiums received for insuring property in the
municipality where said corporation is organized or estab-
lished, for and during the six months next preceding the first
day of July and the first day of January of each year, which
statement must be sworn to by the president or secretary of
the corporation or association, or by the agent or person so
acting or effecting such insurance in said municipality, and
must be handed to the secretary of said corporation hereto-
fore created or hereafter to be created under the provisions
of this chapter within ten days after the first day of July and
the first day of January of each year. Said secretary must,
within the ten days aforesaid, by written or printed demand
signed by him, require from every insurance company, corpo-
ration, association, underwriter, agent, or person engaged in
the business of fire insurance in the municipality where said
corporation is organized or established, the statement here-
inbefore provided for. Such demand may be delivered per-
sonally at the office of such insurance company, corporation,
association, underwriter, agent, or person within said munici-
pality, and every officer of such insurance company, corpora-
tion, association, and every such underwriter, agent, or per-
son, who, for fifteen days after said demand, neglects to ren-
der the statement herein provided for, forfeits fifty dollars
for the use of said corporation, and also forfeits for its use
twenty-five dollars in addition for every day he so neglects
after the expiration of the said fifteen days, and such addi-
tional penalty may be computed and collected up to the time
of the trial of any action brought for the recovery thereof.
The penalty herein provided for may be sued for and col-
lected, with costs, in any court of law within the state of
California having jurisdiction, by and in the name of said
corporation.

History: Enacted March 21, 1905, Stats, and Amdts. 1905, pp.
572-574; see introductory note to this chapter.

279



§ 453d CIVIL CODE. [Div.T,Pt.IV.



CHAPTER VI.

LIFE, HEALTH, ACCIDENT, AND ANNUITY OR ENDOWMENT
INSURANCE ON THE ASSESSMENT PLAN.

[This chapter was added at the recommendation of Code Com-
mission, Act March 16, 1901, Stats, and Amdts. 1900-1, pp. 359-
366, lield unconstitutional, see history § 4 ante; re-enacted at
instance Code Commissioner Marcli 20, 1905, Stats, and Amdts.
905, c. CCCLIII, p. 418. A codification of Act March 19, 1891,
Stats, and Amdts. 1891, p. 126. In connection with that Act see
123 C. 107, 110, 55 P. 708; 129 C. 628, 633, 62 P. 191.]

§ 453d. Contracts which may be made by, defined.

§ 453e. Formation of corporations; issuing of contracts; invest-
ments.

§ 453f. Pre-existing corporations, right of to reincorporate.

§ 453g. Contracts of insurance; contents and effects of.

§ 453h. Reserve and emergency fund.

§ 453i. Foreign corporations. Conditions precedent to doing
business in tliis state.

§ 453j. Limitations upon riglit to issue contracts of insurance.

§ 453k. Exemptions from attachment and execution.

§ 4531. Statements to be filed with the insurance commissioner;
proceedings to be taken by him thereon.

§ 453m. Lapsing of policies. When forbidden.

§ 453n. Fees and penalties.

§ 453o. Insurance commissioner to present bills for certain
expenses.

S 453p. Exemption of fraternal societies from this chapter.

§453d. CONTRACTS WHICH MAT BE MADE BY,
DEFINED. Every contract whereby a benefit may accrue to
a party or parties therein named upon the death or physical
disability of a person insured thereunder, or for the payment
of any sums of money dependent in any degree upon the col-
lection of assessments or dues from persons holding similar
contracts, is deemed a contract of mutual insurance upon the
assessment plan. Such contracts must show that the liabili-
ties of the insured thereunder are not limited to fixed pre-
miums.

History: Enacted March 20, 1905, Stats, and Amdts. 1905, p.
418. See introductory note to this chapter. A codification of
§ 1, Act March 19, 1891, Stats, and Amdts. 1891, p. 126.

280



Tit.II,ch.VI.] ISSUING CONTRATS. § 453e

See Kerr's Cyc. C. C. for 9 pars, annotation.
As to life, accident, etc., insurance, see note § 414, ante.
As to many miscellaneous matters of insurance, see note
§ 414, ante.

Special features of law applicable to. — See 52 A. S. 543-579.
When complete. — See 69 A. S. 143-153.

§ 453e. FORMATION OF CORPO RATIONS; ISSUING COX-

TRACTS; INVESTMENTS. Corporations may be formed to
carry on the business of mutual Insurance upon the assess-
ment plan, and are subject only to the provisions of this
chapter.

[Membership before contracts issued.] No such corpora-
tion must issue contracts of insurance until at least two hun-
dred persons have applied, in writing, for membership or-
insurance therein, and have paid to the treasurer of such
corporation the sum of five thousand dollars. Tin's sum must
be invested in bonds or securities, approved by the insurance
commissioner of this state, or deposited in some bank in this
state where it will earn interest.

[Deposit with state treasurer.] Said bonds or securities, or
evidences of such deposit, must be placed, through the insur-
ance commissioner of this state, with the state treasurer, and
the principal sum must be held in trust for the contract-
holders of such corporation, with the right in the corporation
to exchange said bonds, securities, or evidence of bank deposit
for others of like value. Such corporation must also, as a
condition precedent to issuing any contracts of insurance,
obtain the written certificate of the insurance commissioner
that it has complied with the requirements of this chapter;



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