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section repealed and present enacted March 23, 1907, Stats,
and Amdts. 1907, p. 927, Kerr's Stats, and Amdts. 1906-7, p. 420.
Repealing clause post § 648.

Former section. — 93 C. 300, 309, 28 P. 1049, 1050, 1051 (referred
to); 116 C. 410, 414, 48 P. 375 (referred to): 131 C. 336, 341, 63
P. 670 (referring to §640, as it stood originally); 136 C. 525,
69 P. 225 (referred to),

438



Tit. XVI.] PROFIT AND LOSS — DIVIDENDS. § 641

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

Status of present contracts, see post § 648.



§ 641. PKOFITS A?fD LOSSES. Profits and losses shall be
apportioned at least annually, and shall he apportioned to all
shares in each class at the time of such apportionment, accord-
ing to the actual or book value thereof. If the guarantee capi-
tal herein provided for, if any there be, together with the
reserve fund, or if the reserve fund, where there be no guar-
antee capital, shall not equal five per cent of the out-
standing loans at the time of each apportionment of profits,
the directors shall set aside, as a reserve fund, not less than,
five per cent of the net profits accruing since the last prior
apportionment, and shall continue so to do until said fund
shall amount to at least five per cent of the loans in force, at
which figure said fund shall thereafter be maintained. Said
reserve fund shall at all times be available to meet losses
arising from any source not heretofore provided to be assumed
by the guarantee capital.

[Dividend fund — Reserve.] Every such corporation having
a paid-in guarantee capital stock, may provide in their
by-laws, that an amount not exceeding one per cent per
annum on the average loans in force, shall be set aside from
and out of the net profits, at each annual distribution thereof,
— or a proportionate amount at each semi-annual distribution,
— from which to declare dividends on and provide a reserve
fund that shall be specially applicable thereto. At least one-
tenth of the amount so set aside shall be carried to such
reserve fund until the same shall amount to at least fifty
per cent of the paid-in guarantee stock.

History: Original section enacted March 31, 1891, Stats, and
Amdts. 1891, p. 255; see introductory note to this title; amended
by Code Commission, Act March 16, 1901, Stats, and Amdts.
1900-1, p. 387, held unconstitutional, see liistory, § 4 ante; former
section repealed and present enacted March 23, 1907, Stats,
and Amdts. 1907, p. 927, Kerr's Stats, and Amdts. 1906-7, p. 420.
In effect after July 1, 1907. Repealing clause post § 648.

439



§ 642 CIVIL CODE. [Div.I.Pt.IV.

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

Former Meetion. — 93 C. 300, 306, 28 P. 1049, 1050 (referred to);
116 C. 410, 414, 48 P. 375 (referred to); 131 C. 336, 341, 63 P.
670 (referring- to §641, as it stood originally); 136 C. 525, 69 P.
225 (referred to).

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

StatiMB. of present contracts, see post § 648.

§ 642. ^VITHDRAWALS. A stockholder or investor, desir-
ing to withdraw from any such corporation or to surrender a
part or all of his stock, or investment certificate, may do so
by giving thirty days notice, in writing, of his intention or
desire so to do. On the expiration of such notice, he is enti-
tled to receive the full amount paid in upon the stock or
investment certificate surrendered, exclusive of the entrance
or withdrawal fee, together with such proportion of the earn-
ings thereon as the by-laws may provide, or as may be fixed
by the board of directors; but not more than one-half of the
monthly receipts in any one month must be applied to with-
drawals for that month, without the consent of the board of
.directors, and no stockholder must be permitted to withdraw
whose stock is pledged to the corporation as security for a
loan, until such loan is fully paid. All withdrawals must be
paid in succession in the order that the notices of intention
are given. Whenever the demands of withdrawing stock-
holders or investors exceed the money applicable to their pay-
ment, the notices of intention to withdraw must be registered
in the order of filing and payments thereon must be made in
succession, in the order that such notices were filed and
registered. The board of directors may permit the with-
drawal of a part of the accumulations to the credit of a stock-
holder or member, on shares of instalment stock not issued
in serial form, without thereby reducing the number of shares
held by him.

History: Original section enacted March 31, 1891, Stats, and
Amdts. 1891, pp. 255-256; see introductory note to this title;
former section repealed and present enacted March 23, 1907,
Stats, and Amdts. 1907, p. 927, Kerr's Stats, and Amdts. 1906-7,
p. 421. In effect after July 1, 1907. Repealing- clause post § 648.

440



Tit. XVI.] MEMBERSHIP— SUPERVISION. §§ 643, 644

Former section. — 93 C. 300, 306, 28 P. 1049, 1050 (referred to);
116 C. 410, 414, 48 P. 375 (held not applicable); 131 C. 336, 342,
63 P. 670 (referring to §642, as it stood originally); 136 C. 525,
69 P. 225 (referred to).

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

Status of present contracts, see post § 648.



§ 643. MEMBERSHIP. Any person of full age and sound
mind may become a member of an association by taking one
or more shares therein and subscribing to the by-laws, and
annexing to his signature his post-ofRce address. A minor
may hold shares in the name of a parent, guardian, or next
friend, as trustee. The shares of stock in any such corporation
held by any person, to the extent of one thousand dollars,
shall be exempt from execution.

Hiistory: Original section enacted March 31, 1891, Stats, and
Amdts. 1891, p. 256; see introductory note to this title; amended
by Code Commission, Act March 16, 1901, Stats, and Amdts.
1900-1, p. 387, held unconstitutional, see history, § 4 ante;
former section repealed and present enacted March 23, 1907,
Stats, and Amdts. 1907, p. 928, Kerr's Stats, and Amdts. 1906-7,
p. 421. In effect after July 1, 1907. Repealing clause post § 648.

Former section. — 93 C. 300, 306, 28 P. 1049, 1050 (referred
to); 116 C. 410, 414, 48 P. 375 (held not applicable); 131 C. 336,
341, 342, 63 P. 670 (referring to §643, as it stood originally);
136 C. 525, 69 P. 225 (referred to).

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

Status of present contracts, see post § 648.



§ 644. STATE SUPERVISION AND CONTROL. All build-
ing and loan associations, as in this title defined, doing busi-
ness in this state, shall be under the supervision and control
of such official or officials as are by law vested therewith;
and except in the manner provided in this title, no corpora-
tion, firm, or association shall conduct or carry on the busi-
ness of accumulating the savings of its shareholders, mem-
bers, or investors, and loaning such accumulations to them, in
the manner of building and loan associations.

441



§ 645 CIVIL CODE. [Div.LPt.IV.

History: Original section enacted March 31, 1891, Stats, and
Amrlts. 1891, p. 256; see introductory note to tills title; former
section repealed and present enacted March 23, 1907, Stats,
and Amdts. 1907, p. 928. In effect after Julj' 1, 1907. Repealing
clause post § 648.

Former section. — 93 C. 300, 306, 28 P. 1049, 1050 (referred to);
116 C. 410. 414, 48 P. 375 (held not applicable): 131 C. 336, 341,
342, 344, 63 P. 670 (referring to § 644, as it stood originally); 136
C. 525, 69 P. 225 (referred to).

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

Status of present contracts, see post § 648.

§645. ANNUAL REPORT. Every association organized
under the provisions of this title, and every other association
doing a similar business, shall annually make a full report, in
writing, of the affairs and condition of such corporation,
within thirty days after its annual meeting, to the official or
officials vested with powers of state supervision and license.
Such reports shall be verified by the oath of the officers mak-
ing the same, and a copy of the same shall be delivered to
every stockholder, from the office of the corporation, who may
call for such report.

[Further reports.] Every association shall make any fur-
ther reports which the said officials may require, and in such
form and as to such matters relating to the conduct of the
business of the association as such official or officials may
designate.

[False statements iu reports perjury, when.] Any wilfully
false statement in making and verifying said report shall be
perjury. Any such association which shall fail to furnish the
said official or officials any such report required, within thirty
days after demand, shall forfeit the sum of ten dollars per
day for every day such report shall be delayed or withheld,
which may be recovered in an action brought by the attorney-
general in the name of the people of this state; and all
moneys so recovered shall be paid to the treasurer of this
state, who shall pay the same into such fund as may be pro-
vided by law, for the purposes of the official or officials vested
with power of supervision and license.

442



Tit. XVI.] FOREIGN — DEPOSIT BY. § 646

History: Original section enacted March 31, 1891, Stats, and
Amdts. 1891, pp. 256-257; see introductory note to this title;
former section repealed and present enacted March 23, 1907,
Stats, and Amdts. 1907, p. 928, Kerr's Stats, and Amdts. 1906-7,
p. 421. In force after July 1, 1907. Repealing clause post § 648.

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

Former section. — 93 C. 300, 306, 28 P. 1049, 1050 (referred to);
116 C. 410, 414, 48 P. 375 (held not applicable); 131 C. 336, 341,
342, 63 P. 670 (referring to §645, as it stood originally); 136 C.
525, 69 P. 225 (referred to).

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

Status of present contracts, see post § 648.

§646. FOREIGN CORPORATION— DEPOSIT BY. No

building and loan association, oi- company, association, or cor-
poration, organized under the laws of any otlier state or ter-
ritory, to carry on a business of a like character to that
authorized by this title, shall be allowed to do business, or to
sell their stock in this state, without first having deposited
with the state controller or treasurer the sum of fifty thousand
dollars in money, or in United States bonds or municipal bonds
of this state, or in mortgages upon real estate located within
this state, as a guarantee fund for the protection and indem-
nity of residents of the State of California, with whom such
companies, associations, or corporations shall do business;
the fund so deposited to be paid by the custodian thereof, to
the residents of California only, and not then until proof of
claim by final judgment has been filed with the custodian of
said fund against such foreign company, association, or cor-
poration. Any of the securities so deposited may be with-
drawn at any time upon others herein provided for, of like
amount, being substituted therefor.

[Agents of foreign corporations.] Any person or persons
who shall be found in this state as agent, or in any other
capacity, representing such foreign company, association, or
corporation, which has not complied with the provisions
of this section, shall be deemed guilty of a misdemeanor, and
upon conviction shall be punished by a fine not exceeding
one thousand dollars, or by imprisonment in the county jail,

443



§§ 647, 648 CIVIL CODE. [Div.I.Pt.IV.

not exceeding twelve months, or by both such fine and impris-
onment.

History: Original section enacted Marcli 31, 1891, Stats, and
Amdts. 1891, p. 257; see introductory note to this title; former
section repealed and present enacted March 23, 1907, Stats, and
Amdts. 1907, p. 929, Kerr's Stats, and Amdts. 1906-7, p. 422. In
effect after July 1, 1907. Repealing clause post § 648.

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

Former section. — 93 C. 300, 306, 28 P. 1049, 1050 (referred to);
116 C. 410, 414, 48 P. 375 (held not applicable); 131 C. 336, 339,

341, 342, 63 P. 670 (construed and applied); 136 C. 525, 69 P. 225
(referred to).

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

Status of present contracts, see post § 648.

§ 647. IlVYESTIttENT IN AND LOANS UPON BONDS. Any

building and loan association may invest in or loan upon bonds
of the United States, of the State of California, or of the coun-
ties or municipalities or school districts of said state, but
not to exceed twenty-five per cent of its capital.

History: Original section enacted March 31, 1891, Stats, and
Amdts. 1891, p. 257; see introductory note to this title; former
section repealed and present enacted March 23, 1907, Stats,
and Amdts. 1907, p. 929, Kerr's Stats, and Amdts. 1906-7, p. 423.
In effect after July 1, 1907. Repealing clause post § 648.

Former seetiou. — 93 C. 300, 306, 28 P. 1049, 1050 (referred to);
116 C. 410, 414, 48 P. 375 (held not applicable); 131 C. 336, 341,

342, 63 P. 670 (referring to § 647, as it stood originally); 136 C.
525, 69 P. 225 (referred to).

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

Status of present contracts, see post § 648.

§648. BUILDING AND LOAN ASSOCIATION. DEFINI-
TION OF TERM. The name "building and loan association"
as used in this title shall include: —

First. Corporations formed for the purpose of receiving
money from, and loaning money to, their members Only.

Second. Corporations, associations, companies, copartner-
ships, and individuals transacting the business of issuing or

444



Tit. XVI.] FORMATION — GUARANTEE. §§ 6481/^, 648a

selling bonds, debentures, certificates, shares of stock, or
other papers, by whatever names said instruments may be
designated, whether said instruments are issued for money
paid in advance or for money to be paid in installments, but
with an intent, either implied or expressed, that the proceeds
or accumulated installments thereof and thereon are to be
withdrawable or repayable, with accumulated profits, at some
future fixed, or indefinite date of maturity; provided always,
that this section does not include persons, copartnerships or
corporations engaged in any kind of banking business.

[In effect when.] Sec. 2. This act shall take effect and
be in force from and after its passage.

Hi.story: Enacted March 31, 1891, Stats, and Amdts. 1891, p
257; former section repealed and present section enacted March
23, 1907, Stats, and Amdts. 1907, p. 929, Kerr's Stats, and
Amdts. 1906-7, p. 423; amended March 22, 1909, Stats, and
Amdts. 1909, p. 609.

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

Former isectiun. — '127 C. 37, 39 (erroneously cited for § 648
C. C. P.), 59 P. 206 (correct citation); 131 C. 336, 342, 63 P. 670
(referring to §648 of original code as liaving been repealed);
64 P. 1000, 1007 (erroneously cited in dis. op. of Temple, J., for
§ 864); 136 C. 525, 69 P. 225 (referred to).

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

Definition of building and loan association. — See 1 W. & P.
899-901.

§648^^. TAXATION OF. ACT TAXING STOCKS NOT
APPLICABLE (repealed).

History: Enacted March 31, 1891, Stats, and Amdts. 1891,
pp. 257-258; see introductory note to this title; repealed March
22, 1905, Stats, and Amdts. 1905, p. 759.

136 C. 525, 69 P. 225 (referred to with other sections in gen-
eral way).

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

§ 648a. BUILDING AND LOAN ASSOCIATIONS. FORMA-
TION WITH OR WITHOUT GUARANTEE. Building and loan
associations may be formed under this title with or without

445



§ 648a CIVIL CODE. [Div.I.Pt.IV.

guarantee or other capital stock, with all the rights, powers
and privileges and subject to all the restrictions and lia-
bilities set forth in this title. If formed without any capital
stock or with guarantee capital stock only, the working capi-
tal may be accumulated by the issue of membership shares,
units or certificates having a paid up or ultimate matured
installment value of one hundred or two hundred dollars
each, and entitled to all the rights, powers and privileges
and subject to all the restrictions and liabilities provided in
this title for shares of authorized capital stock of a similar
class. Any building and loan association heretofore formed
may re-incorporate under the provisions of this section and
may substitute membership shares, units or certificates of
similar classes for its outstanding or authorized shares of
capital stock, other than guarantee capital stock, by the
unanimous vote of its board of directors and by a vote or
written assent of the stockholders representing at least two-
thirds of the subscribed capital stock and by filing amended
articles of incorporation with the county clerk of the county
in which the corporation's principal place of business is
located and a copy of said amended articles, certified by such
county clerk, in the office of the secretary of state.

Hi.st«»ry: Enacted March 25, 1909, Stats, and Amdts. 1909, p.
721.



446



Tit. XVII.] COLLEGES AND SEMINARIES. §§649,6-50

TITLE XVII.

COLLEGES AND SEMINARIES OF LEARNING.

[This is a new title added by Act March 14, 1885, Stats, and
Amdts. 1885, p. 132.]

§ 649. Articles of incorporation. Contents of.

§ 650. Board of trustees; term; quorum; powers.

§ 651. Existing- corporations may reincorporate under this act.

§ 649. ARTICLES OF I>C(>RPORATIO>. ( OXTEXTS OF.

Any number of persons who may desire to establish a col-
lege or seminary of learning may incorporate themselves as
provided in this part, except that in lieu of the requirements
of section two hundred ninety, the articles of incorporation
shall contain:

1. The name of the corporation.

2. The purpose for which it is organized.

3. The place where the college or seminary is to be con-
ducted.

4. The number of its trustees, which shall not be less than
five nor more than twenty-five, and the names and residences
of the trustees. The term for which the trustees named and
their successors are to hold office may also be stated. If it
is desired that the trustees, or any portion of them, shall
belong to any organization, society, or church, such limita-
tion shall be stated.

5. The names of those who hare subscribed money or prop-
erty to assist in founding the seminary or college, together
with the amount of money and description of property .sub-
scribed.

History: Enacted March 14, 1885, Stats, and Amdts. 1885, p.
133; amended February 20, 1909, Stats, and Amdts. 1909, p. 30.

§650. BOARD OF TRUSTEES; TERM; QU0RU3I; POW-
ERS. Unless otherwise provided in the articles of incorpora-
tion the board of trustees shall, as soon as organized, so
classify themselves that one-fifth of their number shall go

447



§ 650 CIVIL CODE. [Div.I.Pt.IV.

out of ofBce every year, and thereafter the trustees shall hold
office for five years.

[Quorum.] A majority of the trustees shall constitute a
quorum for the transaction of business, and the office of the
corporation shall be at the college or seminary.

[Powers of trustees.] The trustees shall have power:

1. [To elect i)resl(leiit.] To elect, by ballot, annually one of
their number as president of the board.

2. [To fill vacancies.] Upon the death, removal out of the
state, or other vacancy in the office, or expiration of the term
of any trustee, to elect another in his place; provided, that
where there are graduates of the institution, such graduates
may, under such rules as the board shall prescribe, nominate
persons to fill vacancies in the board of trustees. Such nomi-
nations shall be considered by the board, but it may reject
any or all such nominations, and of its own motion appoint
others.

3. To elect additional trustees; provided, the whole number
elected shall never exceed twenty-five at any one time.

4. To declare vacant the seat of any trustee who shall
absent himself from eight succeeding meetings of the board.

5. [To hold i>roi>erty.] To receive and hold, by purchase,
gift, devise, bequest, or grant, real or personal property for
educational purposes connected with the corporation, or for
the benefit of the institution.

6. To sell, niortg:age, lease and otherwise use and dispose
of the property of the corporation in such manner as they
shall deem most conducive to the prosperity of the corpora-
tion.

7. To direct and prescribe the course of study and disci-
pline to be observed in the college or seminary.

8. To appoint a president of the college or seminary, who
shall hold his office during the pleasure of the trustees.

9. To a|)p<»int sucli jtrofessors, tutors, and other officers as
they shall deem necessary, who shall hold their offices during
the pleasure of the trustees.

10. To grant such literary honors as are usually granted
by any university, college, or seminary of learning in the

448



Tit.XVII.] REINCORPORATING. § 651

United States and in testimony thereof to give suitable
diplomas under their seal, and the signature of such officers
of the corporation and the institution as they shall deem
expedient.

11. To fix salaries of the president, professors, and other
officers and employees of the college or seminary.

12. To make all by-laws and ordinances necessary and
proper to carry into effect the preceding powers and neces-
sary to advance the interests of the college or seminary;
provided, that no by-laws or ordinances shall conflict with
the constitution or laws of the United States, or of this state.

History: Enacted March 14, 1885, Stats, and Amdts. 1885, p.
133; amended March 20, 1909, Stats, and Amdts. 1909, p. 588.

§651. EXISTING CORPORATIONS MAY REINCORPO-
RATE UNDER THIS ACT. Any educational corporation, or
body claiming to be such, now existing, may, by a unanimous
vote of those of its trustees present at a special meeting called
for that purpose, and of which due notice shall be given to
each trustee, convey all its property, rights, and franchises,
to a corporation organized under this title. The fact that due
notice of the meeting was given to each trustee shall be con-
clusively proven by the entries in the minutes of the corpora-
tion or body making the conveyance. Said minutes shall be
certified to be correct by the president and secretary.

History: Enacted March 14, 1885, Stats, and Amdts. 1885, p.
134. In effect March 14, 1885; amended March 20, 1909, Stats,
and Amdts. 1909, p. 588.



Kerr's C. C. — 15 449



§ 652 CIVIL CODE. [Div.I.Pt.IV.



TITLE XVIII.

CONSOLIDATION OF COLLEGES AND INSTITUTIONS OF
HIGHER EDUCATION.

§ 652. Societies and organizations autliorized to consolidate.
§ 653. Specific grants, etc., must not be diverted.

§652, SOCIETIES AND ORGANIZATIONS AUTHORIZED
TO CONSOLIDATE. Whenever any benevolent, religious or
fraternal organization or society, having a grand lodge, assem-
bly, conference or other legislative or representative head in
the State of California, having two or more colleges or insti-
tutions of higher education under its patronage, shall, for the
purpose of greater efficiency and simplicity in the administra-
tion of its educational interests, desire to consolidate such
institutions under one management, such organization or
society shall be and is hereby authorized to consolidate such
institutions under one management by complying with the
following provisions:

[New Corporation — Trustees — Term of office.] Such grand
lodge, assembly, conference or other legislative or representa-
tive head having authorized a consolidation of its institutions,
a new corporation shall be formed. The board of trustees
of the new corporation shall at first consist of the persons
constituting the boards of trustees of the several institutions,
respectively thus consolidating, and others; provided the
number of trustees shall not exceed forty-five. The board of
trustees shall be so classified that the term of office of one-
third of its number shall expire each year; the successors of
such trustees, as their terms expire, shall be elected by such
grand lodge, assembly, conference or other legislative or rep-
resentative head, at its annual meeting.

The said hoard of trustees shall report annually to the grand



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