Digitized by the Internet Arciiive in 2007 with funding from IVIicrosoft Corporation http://www.archive.org/details/actofstateofbankOOcalirich CALIFORNIA BANK ACT AS AMENDED 1913 THm EDITION SSSUe© ©¥ CALJFORNiA BANKERS ASSOCIATIOM ?5| 'Am >v Jim BANK ACT OF THE STATE OF CALIFORNIA (WITH COMPLETE INDEX) STATUTES OF 1909 Chapter 76, Approved March i . In Effect July i AMENDED BY STATUTES OF 1911 Chapter 11, Approved Feb. 6. In Effect Feb. 6. Chapter 488, Approved Apr. 21. In Effect June 20. Chapter 494, Approved Apr. 21. In Effect June 20. Chapter 495, Approved Apr. 21. In Effect June 20. AMENDED BY STATUTES OF 1911 (Special Session) Chapter 2, Approved Dec. 18. In Effect Feb. 16. Chapter 24, Approved Dec. 24. In Effect Feb. 22. AMENDED BY STATUTES OF 1913 Chapter 104, Approved May q. In Effect Aug. 10. Chapter 192, Approved June 3. In Effect Aug. 10. Revised Edition Issued By CALIFORNIA BANKERS ASSOCIATION JUNE, 1913 MEMBERS OF THE CALIFORNIA BANKERS ASSOCIATION MAY SE- CURE ADDITIONAL COPIES OF THIS PAMPHLET BY ADDRESSING FREDERICK H. COLBURN. SEC- RETARY. I064 MILLS BUILDING. SAN FRANCISCO. CALIFORNIA I \\sr «- "f •^ e> BANK ACT OF CALIFORNIA. ARTICLE I. GENERAL PEOVISIONS. Section 1 . This act shall be known as the "bank act," and Name of Act shall be applicable to all corporations specified in the next section. Sec. 2. The word "bank" as used in this act shall be Definition of Bank construed to mean any incorporated banking institution which shall have been incorporated to conduct the business of receiv- ing money on deposit, or transacting a trust business as herein- defined. The soliciting, receiving or accepting of money or what acts deemed- its equivalent on deposit as a regular business shall be deemed banking business to be doing a commercial or savings bank business whether such deposit is made subject to check or is evidenced by a certifi- cate of deposit, a pass book, a note, a receipt or other writing ; provided, that nothing herein shall apply to or include money or its equivalent left in escrow or left with an agent, pending investment in real estate or securities for or on account of his Transacting banking principal. It shall be unlawful for any corporation, partner- business otherwise , \. ...... . 11' *ban by means of a ship, firm or mdividual to engage m or transact a bankmg banking corporation — business within this state except by means of a corporation ^^^^^^ duly organized for such purpose. Banks are divided into the classification of banks following classes: (a) Savings banks; (b) Commercial banks; and (c) Trust companies. Sec. 3. Corporations may be formed by any number of Method of forming natural persons, not less in any case than three, under the banking corporation laws of this state to conduct, as provided in this act, and not 4 CALIFORNIA BANK ACT ^ Otherwise, any one or more or all of the businesses mentioned in divisions (a), (b), and (c) of section two, of this act. -Savings bank" Sec. 4. The term "savings bank," when used in this act, defined means a bank organized for the purpose of accumulating and loaning the funds of its members, stockholders, and depositors, and which may loan and invest the funds thereof, receive deposits of money; loan, invest and collect the same with interest; and may repay depositors with or without interest, and having power to invest said funds in such property, securities and obligations as may be prescribed by this act ; and to declare and pay dividends on its general deposits, and a stipulated rate of interest on deposits made for a stated period or upon special terms. "Commercial bank" Sec. 5. The term "commercial bank," when used in this act, means any bank authorized by law to receive deposits of money, deal in commercial paper or to make loans thereon, and to lend money on real or personal property, and to discount bills, notes, or other commercial paper, and to buy and sell securities, gold and silver bullion, or foreign coins or bills of exchange. "Trust Company" Sec. 6. The term "trust company," when used in this act, defined j^^^ns any corporation which is incorporated under the laws of this state for the purpose of conducting the business of acting as executor, administrator, guardian of estates, assignee, re- ceiver, depositary or trustee under appointment of any court or by authority of any law of this state, or as trustee for any purpose permitted by law. Foreign 3ec. 7. No foreign corporation shall transact a banking corporations . ... . , ^ , . • i ,« i —prerequisites to busmess m this State without first complying with all the transacting banking requirements of the laws of this state relative to banks as business m tms state ,*,.,. i • i i • • < defined m this act, and without having assigned to its business in this state the amount of paid-up capital and surplus required by this act for the transaction of such business within this state. No foreign banking cor- poration shall transact business- in this state until such corporation has made the assignment of capital required by this section and has received a certificate from the super- intendent of banks. Any foreign banking corporation trans- GENERAL PROVISIONS 5 acting business in this state shall become subject to the Foreign corporaUons supervision of the state superintendent of banks. Every ~*o"^*""®^ foreign banking corporation, including those which were on January second, nineteen hundred thirteen, transacting Such corporation doing , . • j^i • J ^ 1 • 1 • 1 'a , domestic business business in this state, which receives any deposits or trans- subject to supervision acts any other, banking business or transacts its business of Superintendent. in such a manner as might lead the public to believe that its business is that of a bank shall conduct all its business in accordance with the statutes governing incorporated banking institutions organized under the laws of this state. The capital ^^^'^^^ assigned to its . . . , . . business in this state, of any such foreign banking corporation assigned to its busi- etc, to be kept separate ness in this state and all funds and deposits of money received by any such corporation in this state or for or in connection with its business in this state and all accounts and transactions Accounts of business . . ^ , . . . . . transacted in this state of said business transacted by any such foreign corporation to be kept separate in this state shall be kept separate and apart from the general ^^°"^ ^^°^^^ accounts business, assets and accounts of such foreign corporation in the same manner as if the business of such foreign corpora- tion conducted within this state was that of a separate and independent corporation organized under the laws of this state for the purpose of doing a banking business and all of the provisions of this act affecting investments, loans of ^°^"s ^^'^^ ^y foreign . . 1 . - , . , • . corporation — ^their money, receiving deposits and conducting business in any basis and security respect shall be deemed to apply to such assigned capital, investments, loans, deposits, assets, funds and business in the same manner as if such assigned capital, investments, loans, deposits, assets, funds and business were that of such separate and independent corporation; provided, that loans may be made by any such foreign corporation based on its entire paid-up capital and surplus in case such foreign corpo- ration shall have assigned to its business in this state a paid-up capital and surplus as above provided equal to 20 per centum of the deposit liability of such branch agency or office to residents of this state. Such funds and investments or loans thereof shall be appropriated solely to the security and payment of such deposits, and shall not be mingled with the investments of the capital stock or other money or property belonging to such corporation or be liable for the debts or obligations thereof. All income re- 5 CALIFORNIA BANK ACT Foreign corporations ccived from the investment of said funds over and above —continued ^^^^ funds as may be paid to depositors as interest or shall Application of \yQ carried to the surplus fund, as provided in section twenty-one investmeS^funS of this act, shall acprue as profits to the corporation and may be transferred to its general funds. No such foreign corpora- Further prerequisite tion shall transact any banking business in this state until '^i'^apSme^ ^* ^^^ executed and filed with the superintendent of banks a of Supt. as attorney written instrument appointing such superintendent or his 'procIZ^'etc! successor in office, its true and lawful attorney, upon whom all process issued by authority of or under any law of this state may be served, with the same effect as if such cor- poration was formed under the laws of this state and had been lawfully served with process therein. Such service upon such attorney shall be deemed personal service on such corporation. The superintendent of banks shall forth- with forward by mail, postage prepaid, a copy of every process served upon him under the provisions of this section, addressed to the manager or agent of such corporation, at its principal place of business in this state. For each copy of process, the superintendent of banks shall collect the sum of two dollars, which shall be paid by the plaintiff or moving party at the time of the service, to be recovered by him as a part of his taxable costs if he succeed in the suit Foreign corporation Of proceeding. No foreign corporation shall have or exer- '''''TomplnyZoZ's cise in this state the power to receive deposits of trust specified in Sec. 6. moneys, securities or other personal property from any per- tmstTompfnii may son or Corporation or any of the powers specified in section act as executor or six of this act, nor havc or maintain an office in this state trustee under will, -,, . - ««,i > f .t provided (1) simUar ^OT the transaction of, or transact, directly or indirectly, any privilege given such or similar business, except that a trust company incor- Califomia companies • i i in foreign states poratcd ju another state may be appointed and may accept appointment and may act in this state as executor of or trustee under the last will and testament of any deceased person, upon giving the bond required in such cases of individuals un- less waived by the last will and testament making such appointment and by taking and subscribing an oath for faithful performance of such trust by the president, vice-president, secretary, manager or trust officer of said corporation; pro- vided, that similar corporations organized under the laws of GENERAL PEOVISIONS 7 this state are permitted by law to act as such executor or trus- Foreign corporations tee in the state where such foreign corporation was organized ; and, provided, further, that such superintendent of banks, for acting as executor or the time being, shall be the attorney of such foreign corporation st^te^ontlnued qualifying or acting in this state as such executor or trustee, upon whom process against such foreign corporation may be served in any action or legal proceeding against such executor or trustee affecting or relating to the estate or property repre- sented or held by such executor or trustee, or any act or default of such foreign corporation in reference to such estate or property, and it shall be the duty of any such foreign corporation so qualifying or acting to file in (2) such foreign the office of said superintendent of banks a copy of its arti- suXcertifieTc^y^of cles of incorporation, or of the statute chartering such cor- articles, etc. poration, certified by its secretary under its corporate seal, together with the post office address of its home office, and a duly executed appointment of said superintendent of banks as its attorney to accept service of process as above provided, and said superintendent of banks, when any such process is served upon him, shall at once mail the papers so served to the home office of such corporation ; and provided, <^) No foreign corpora- , , , . . . , . , . tion having authority further, that no foreign corporation having authority to act as to act as executor or executor of or trustee under the last will and testament of ^^"-^^^ '^^^^ ^" ^^^^ , .,., ..,. , maintain any branch any deceased person shall establish or maintain, directly or office or agency in this indirectly, any branch office or agency in this state, or shall ^tate or solicit business . . , . , - . as executor or trustee in any way solicit, directly or indirectly, any business as therein executor or trustee therein, and that for any violation of this proviso, the court having jurisdiction of such executor penalty or trustee in said proceeding may in its discretion, revoke the right of such foreign corporation thereafter to act as executor or trustee therein ; provided, that nothing in this act Act not to affect right shall limit or affect the right of any foreign corporation doing ^^J^^^Zon^nT'"^ a banking business in this state, to lend within this state, forming part of its moneys of such corporation which do not form a part of the ^J^neit'tSf state moneys, deposits or assets of such corporation assigned or belonging to its business in this state. Sec. 8. Every corporation, at the time it applies for a certificate of authority to do a banking business, must file with 8 OALIFOBNIA BANE ACT Requirements imposed the Superintendent of banks a certified copy of its articles of "^tion^r^iyS'°for incorporation, or of the statute chartering such corporation, certificate of authority ^ certified copy of its by-laws, and also a certified copy of to do a banking . , . , - . busines all instruments amending or altering such articles of incor- poration or charter or by-laws. Thereafter a certified copy of each amendment or certificate shall likewise be so filed before such instrument takes effect. There must also be filed in the office of the superintendent of banks before he shall issue his certificate a certified copy of the affidavit required by section two hundred ninety a of the Civil Code. Each certification required by the provisions of this section other than that of by-laws must be by the secretary of state. Branch banks Sec. 9. No bank in this state, or any officer or director thereof, shall hereafter open or keep an office other than its principal place of business, without first having obtained the Prerequisites for written approval of the superintendent of banks to the open- opemng .^^ ^^ ^^^^ branch office, which written approval may be given or withheld in his discretion, and shall not be given by him until he has ascertained to his satisfaction that the public convenience and advantage will be promoted by the opening Capital required of such branch off icc ; provided, that no bank or any officer or director thereof, shall open or maintain any such branch office unless the capital of such bank, actually paid in, in cash, shall exceed the amount required by this act by the sum of twenty-five thousand dollars for each branch office opened and maintained. Every bank, before it opens a branch office, shall obtain the certificate of authority of the superintendent of banks $50 fee for certificate for the Opening of cach of said branch offices. The applicant shall pay for such certificate a fee of fifty dollars; provided, School savings however, that, in order to encourage saving among the children of the schools of this state, a bank may, with the written consent of and under regulations approved by the superintendent of banks and, in the case of public schools, by the board of educa- tion or board of school trustees of the city or district in which Bank may arrange for the school is situated, arrange for the collection of savings from '°" btTefcrrsHfc! t^^ school children by the principal or teachers of such schools or by collectors. The principal, teacher or person authorized by the bank to make collections from the school children shall GENEEAL PEOVISIONS 9 be deemed to be the agent of the bank and the bank shall be Branch banks- liable to the pupil for all deposits made with such principal, teacher or other person, the same as if the deposits were made by the pupil directly with the bank. Every bank and every Penalty such officer or director violating the provisions of this section shall forfeit to the people of the state the sum of one hundred dollars for every day during which any branch office hereafter opened shall be maintained jvithout such written approval. Sec. 10. No person shall be eligible for election as direc- Directors tor of a bank having a capital stock unless he is a stockholder of the bank, owning, in his own right, shares thereof of the Qualifications for par value of at least five hundred dollars; and every person anceTn°office^°'^* °^' elected to be director who, after such election, shall cease to be the owner in his own right of the amount of such stock afore- said, or shall hypothecate or in any way pledge such stock as security for any loan or debt shall immediately notify the su- perintendent of banks in writing of such sale or hypothecation and such director may be removed from the office of director by the superintendent of banks. If a bank be organized with- out capital stock, no person shall be eligible as a director thereof unless he is both a member and a depositor of such bank. Sec. 11. The board of directors of a bank must hold a Directors meetings meeting at least once a month. Each director, when appointed or elected, shall take an oath that he will, so far as the duty oath of directors devolves on him, diligently and honestly administer the affairs of such bank, and will not knowingly violate or wilfully permit to be violated any of the provisions of law applicable to such bank, and that he is the owner in good faith and in his own right of shares of stock of the par value required by section ten of this act, subscribed by him or standing in his name on the books of the bank, and that the same to an amount equal to the par value of at least five hundred dollars, are not hypothe- cated or in any way pledged as security for any loan or debt. Such oath shall be subscribed by the director making it, certi- oath to be filed with fied by the officer before whom it is taken, and immediately Superintendent. transmitted to the superintendent of banks and filed and pre- served in his office. 10 CALIFOBNIA BANE ACT No unauthorized Sec. 12. No pcrson, firm, company, copartnership or cor- ^poraSon.'^TtcT s'hai'i poration, either domestic or foreign, not subject to the super- advertise a banking yision of the Superintendent of banks, and not required, by the business or do acts . . r .t • i . ••».,. inducing pubuc to provisions of this act, to report to him, and which has not re- beiieve that business ceivcd a certificate to do a banking: business from the suoer- is that of bank or . , /■ , i i it « . , , trust company intendent of banks, shall advertise that he or it is receiving or accepting money or savings, and issuing notes or certificates of deposit therefor, or shall make use of any office sign, at the place where such business is transacted, having thereon any artificial or corporate name, or other words indicating that such place or office is the place or office of a bank or trust company, that deposits are received there or payments made on check, or any other form of banking busi- ness transacted, nor shall any such person or persons, firm, company, copartnership or corporation, domestic or foreign, make use of or circulate any letterheads, billheads, blank notes, blank receipts, certificates or circulars, or any written or printed, or partly written and partly printed, Unauthorized use paper, whatever, having thereon any artificial or corporate of title containing ^- , ..... , < < . word "bank." name or other word or words indicating^ that such business is "banker," etc.. "sav- the busincss of a bank, savings bank or trust company: nor ings bank." etc.. , „ , n i- "trust" or "trust Shall any such person, firm, company, copartnership or cor- company." forbidden poratiou, or any agent of a foreign corporation not having an established place of business in this state, solicit or receive de- posits or transact business in the way or manner of a bank, savings bank or trust company, or in such a way or manner as to lead the public to believe that its business is that of a bank, savings bank or trust company. Nor shall any person, firm, company, copartnership or corporation, domestic or for- eign, not subject to the supervision of the superintendent of banks, and not required by the provisions of this act to re- port to him, and which has not received from the superintend- ent of banks a certificate to do a banking business, hereafter transact business under any name or title which contains the word "bank," or "banker," or "banking," or "savings bank," or "savings" or "trust" or "trustee" or "trust company" ; pro- Section shall not z/ided, that this section shall not apply to the corporate name apply to name of , , ., i- , , . . , <- existing building and of any buildiug and loan association now or heretofore doing loan association business in this state ; and promded, further, that any such asso- GENEEAL PROVISIONS U ciation having in its corporate name words not clearly indi- Nature of business of eating the nature of its business shall, on all signs, letter heads aiodatioT mu^ be and advertising matter, state "This is a building and loan asso- ^^°'^ ®^*^®^ ^^ ^*^ title or advertising ciation or words to that effect; and provided, further, that any building and loan association may borrow money, issue investment certificates or evidences of indebtedness, stating the rate of interest and terms and conditions of repayment, and do such other business as may be authorized by the laws of the state relating to building and loan associations ; and provided, No b. & l. Assn. further, that no such association shall advertise or hold itself L a sa^ngs^aijT out to the public as a savings bank. Any person, firm, company, copartnership or corporation, domestic or foreign, violating Penalty any provision of this section shall forfeit to the state one hun- dred dollars a day for every day or part thereof during which such violation continues. Upon action brought by the super- injunction issuable intendent of banks the court may issue an injunction restrain- restraining acts in , ^ . 1 . violation of this mg any such person, firm, company, copartnership or corpora- section, etc. tion from further using such words in violation of the provi- sions of this section or from further transacting business in such a way or manner as to lead the public to believe that its business is that of a bank, savings bank or trust company dur- ing the pendency of such action and for all time and may make such other order or decree as equity and justice may require. Sec. 12a. Every person, firm, company, copartnership or Proper capital stock corporation, domestic or foreign, advertising that he or it Is must be paid in before . . . . , . . banking business is receiving or accepting money or savings, and issuing notes or permitted certificates of deposit therefor, or advertising that he or it is transacting the business of a bank, savings bank or trust com- pany, or making use of any office sign at the place where such business is transacted, having thereon any artificial or cor- porate name, or other words indicating that such place or office is the place or office of a bank, or trust company, or that deposits are received there or pay- ments made on check, or that interest is paid on deposits, or that certificates of deposit, either with or without interest are being issued, or that any other form of banking business is transacted, and every person, firm, com- pany, copartnership or corporation, domestic or foreign, mak- 12 CALIFOBNIA BANK ACT ing use of or circulating any letterheads, billheads, blank notes, blank receipts, certificates or circulars, or any written or printed, or partly written and partly printed, paper, whatever, having thereon any artificial or corporate name, or adver- tising that such business is the business of a bank, savings bank or trust company, must have the proper capital stock Certificate must be paid in and set aside for the purpose of transacting such busi- ^^'^busSess"^may^°be "^^s, and must havc received from the superintendent of banks, transacted as providcd for in this act, a certificate to do a banking busi- ness. Any person, firm, company, copartnership or corpora- tion, domestic or foreign, violating any provision of this sec- Penaity tion shall forfeit to the state one hundred dollars a day for every day or part thereof during which such violation con- injunction issuable tinues. Upou action brought by the superintendent of banks aaainst violations. etc. .1 . • • • .• . • • 1 the court may issue an mj unction restraining any such person, firm, company, copartnership or corporation from further vio- lating any provision of this section, and may make such further order or decree as equity and justice may require. Business herein Evcry pcrsou, firm, compauy, copartnership or corpora- transarted according tion doiug any of the things or transacting any of the business to this Act. defined in this section, must transact such business according to the provisions of the bank act, and the superintendent of Books examinable banks or his deputy or examiners shall have authority to ex- or vioations ^^^^ |.j^g accouuts, books and papers of every such person, firm, company, copartnership or corporation, domestic or for- eign, in order to ascertain whether such person, firm, company, This section not Copartnership or corporation has violated or is violating any applicable to name provisious of this scction ; provided, that this section shall not of b"^<^^°^8^^^^d^J^^^^^ ^ppjy ^Q ^jjg corporate name of any building and loan associa- tion now or heretofore doing business in this state; and pro- Any such association vided, further, that any such association having in its corporate shall on signs and name words not clearly indicatinsf the nature of its business printed matter indi- -^ ° ; cate it is a building shall, on all sigus, letterheads and advertising matter, state : and loan association uj^^^ jg ^ buildiug and loau associatiou" or words to that eflFect; and provided, further, that any building and loan asso- Powers of such . . - . • . ^ .•«' . association ciatiou may borrow money, issue investment certificates or evidences of indebtedness, stating the rate of interest and terms and conditions of repayment, and do such other business as may be authorized by the laws of the state relating to building GENEEAIi PEO VISIONS 13 and loan associations ; and provided, further, that no such asso- No b. & l. ass'i hold itself ou savings bank ciation shall advertise or hold itself out to the public as a savings f ^""^^ '^^^ °''* ^* bank. Sec. 12b. Nothing in this act shall be construed or held Use of word "trust" to apply to any corporation organized under the laws of any Life*insurl^ce^° other state which is authorized by its charter or articles corporation of incorporation to transact the business of life insurance and also to be known as and to transact business as a trust company and which shall have complied with the laws of this state affecting the transaction in this state of the busi- ness of life insurance by a foreign corporation and which shall have heretofore engaged in such business of life in- surance in this state, in such manner as to forbid or prevent its making use of its corporate title in its life insurance business in this state in any such way and to any such extent as it might have made use of the same if this act had not been passed. Sec. 12c. Any corporation organized under the laws of Foreign corporation, any country or state other than this state which has complied "o* transacting bank- . \ 11 r 1 ^ r 1 • . . mg, may lend money with all of the laws of this state pertaining to foreign corpora- tions and is not engaged in the business of banking or receiv- ing money on deposit in this state may lend money in this state and, for that purpose, may maintain offices in this state, and sue and be sued in this state under its proper corporate name, notwithstanding any prohibitions contained in this act as to the use of any words in the name, signs or advertising matter of corporations not under the supervision of the superintendent of banks. (Sec. 13. Repealed 1913.) Sec. 14. No bank, or officer thereof, shall advertise in Advertisement of any manner, or publish any statement of the capital author- ^^^^^^^ ized or subscribed, unless it or he advertise and publish in connection therewith, the amount of capital actually paid up. No bank shall publish a statement of its resources or joint advertising liabilities in connection with those of any other bank, unless condition of such statement shall show the resources and liabilities of ^^°^^°^^ each bank separately; nor shall surplus and undivided profits be advertised as an aggregate. 14 CALIFOBNIA BANK ACT Unclaimed deposits Sec. 15. All amounts of moncy heretofore or hereafter ^^^^tef 20yetls deposited with any bank to the credit of depositors who have not made a deposit on said account or withdrawn any part there- of or the interest, and which shall have remained unclaimed for more than twenty years after the date of such deposit, or with- drawal of any part of principal or interest, and for which no claimant is known or the depositor cannot be found, shall, with the increase and proceeds thereof, be deposited with the state treasurer in the same manner and subject to the same distribution as provided for in section one thousand two hun- dred thirty-four of the Code of Civil Procedure. The presi- Annuai statement (jg^t or managing* officer of every bank must, within fifteen to Supt. and to state o cs J > Controller concern- days after the first day of January of every year, return to the ins unclaimed superintendent of banks a sworn statement showing the names of depositors known to be dead, or who have not made further deposits, or withdrawn any moneys during the preceding twenty years and at the same time it shall be the duty of the president or managing officer of every bank to furnish to the state controller a list of the names of all depositors to whom said moneys belong or to whom said bank owes the same. Above statements s^ch Statement shall show in detail the following: matters, viz : shall include . ° ' First — The name and last known place of residence or postoffice address of the person making such deposit; Second — The amount and date of such deposit and whether the same are in moneys or securities, and if the latter, the nature of the same; Third — The interest due on such deposit, if any, and the amount thereof ; Fourth — ^The sum total of such deposit, together with the interest added thereto due from such bank on account of such deposit or deposits and interest thereon to such depositor, but Exception as to nothing contained herein shall require any corporation or per- son renting lock boxes or safes in vaults for storage purposes to open or report concerning property stored therein. Such report itemized as aforesaid shall be signed by the person mak- ing the same and shall be sworn to before a person competent to administer oaths as a full, complete and truthful statement of each of the items therein contained. The president or man- GENERAL PRO VISIONS 15 aging officer of every bank must, within fifteen days after the Biennial statement first day of January of every odd numbered year, return to Iccounts dTraS^ the superintendent of banks a sworn statement showing the lo years names of depositors known to be dead, or who have not made further deposits, or withdrawn any moneys during the pre- ceding ten years. Such statements shall show the amount of statement shau show the account, the depositor's last known place of residence or post office address, and the fact of death, if known to such president or managing officer. Such president or managing Publication of officer must give notice of these deposits in one or more news- ^^^ ^°^^°* papers published in or nearest to the town or city where such bank has its principal place of business, at least once a week for four consecutive weeks, the cost of such publication to be paid pro rata out of such unclaimed deposits. This section Smaii deposits does not apply to any deposit made by or in the name of a ®*^®p*®^ person known to the president or managing officer to be living, Penalties or which, with the accumulation thereon, is less than fifty dollars. The superintendent of banks must incorporate in his subsequent report such returns made to him as provided in this section. If any president or managing officer of any Fixing date of receipt bank nee^lects or refuses to make the sworn statement of deposit transferred ^ from another bank required by this section, such bank shall forfeit to the under Sec 31 or 3ia State of California the sum of one hundred dollars a day for each day such default shall continue. Any presi- dent or managing officer of any bank who violates any of the provisions of this section shall forfeit to the State of California the sum of one hundred dollars a day for each and every day such violation shall continue. For the purposes of this section all deposits received by any bank under the provisions of section thirty-one or section thirty-one a of this act shall be deemed to have been deposited with such bank at the time the deposit was made with the bank from which the deposit was transferred ; provided, that any bank which shall make any de- Bank making deposit posit with the State Treasurer in conformity with the provisions ^Jer tWs slction^' of this section shall not thereafter be liable to any person for the not thereafter liable same and any action which may be brought by any person against any bank for moneys so deposited with the State Treas- urer shall be defended by the Attorney General without cost to such bank. 16 OALIFOBNIA BANS ACT Deposit for married Sec. 16. When any deposit with a bank shall be made woman or minor to , . , . . , be held for exclusive ^Y OT in the name Of any married woman or minor, the same benefit, etc. ghall be held for the exclusive right and benefit of such depos- itor, and free from the control or lien of all other persons, ex- cept creditors, and shall be paid, together with the dividends, if any, and interest, if any, thereon to the person in whose name deposits shall have been made, and the receipt or acquittance of such minor shall be a valid and sufficient release and dis- charge for such deposit, or any part thereof, to the bank. Trust deposit When any deposit with a bank shall be made by any person in trust for another, and no other or further notice of the exist- ence and terms of a legal and valid trust shall have been given in writing to such bank, in the event of the death of the trustee, the same or any part thereof, together with the divi- dends or interest, if any, thereon, may be paid to the person for whom the deposit was made. When a deposit with a bank Joint account shall be made by any person in the names of such depositor provisions ^ . , . . , and another person or persons, and in form to be paid to either or the survivor or survivors of them, such deposit thereupon and any additions thereto made by either of such persons upon the making thereof, shall become the property of such person as joint tenants, and the same, together with all interest thereon, shall be held for the exclusive use of the persons so named, and may be paid to either during the lifetime of all or any or to the survivor or survivors after the death of one or more of them, and such payments and the receipt or acquit- tance of the one to whom such payment is made shall be valid and sufficient release and discharge to said bank for all pay- ments made on account of such deposit. Accounts of less than The surviviug husbaud or wife or the guardian of the estate *^^d'b7next''of kin ^^ ^^y i^sanc or incompetent husband or wife of any deceased without adminis- person, or, if no husband or wife is living, then the children tration ^^ ^j^^ guardian of the estates of any minor or insane or in- competent children of said decedent, or, if no children are living, then the father or mother or guardian of the estate of any insane or incompetent father or mother of such decedent, and if neither the father or mother is living, then the brothers and sisters or the guardian of the estates of any minor or insane GENERAL PROVISIONS 17 or incompetent brothers and sisters of such decedent, may, without procuring letters of administration, collect of any bank any sum which said deceased may have left on deposit in such bank at the time of his or her death; provided, such deposit shall not exceed the sum of five hundred dollars. Any bank, Bank to receive upon receiving an affidavit stating that said depositor is dead, ^^^^^^^ °®^ and that affiant is the surviving husband or wife or the guar- deposit dian of the estate of an insane or incompetent surviving hus- band or wife, as the case may be, of said decedent, or stating that decedent left no husband or wife, and that affiant is, or affiants are, the children, or the guardians of the estates of the minor, insane or incompetent children, as the case may be, of said decedent, or stating that decedent left neither husband, wife nor children, and that affiant is the father or mother, or the guardian of the estate of the insane or incompetent father or mother, as the case may be, of said decedent, or stating that the decedent left neither husband, wife, children, father nor mother, and that affiants are the brothers and sisters or the guardians of the estates of the minor, insane or incom- petent brothers and sisters, as the case may be, of said dece- dent, and that the whole amount that decedent left on deposit in any and all banks of deposit of this state, does not exceed the sum of five hundred dollars, may pay to said affiant or affiants, any deposit of said decedent, if the same does not exceed the sum of five hundred dollars, and the receipt of such affiant is sufficient acquittance therefor; provided, how- Guardian's affidavit ever, that whenever the affidavit herein mentioned is made by any guardian it shall be accompanied by a certified copy of the letters of guardianship issued to such guardian attached to a certificate of the clerk of the court having appointed such guardian to the effect that the said letters of guardianship have not been revoked. Sec. 17. Every bank now in existence or hereafter organ- Banks shall keep ized shall keep in its offices, in a place accessible to the stock- f ^cessibie to stock. holders, depositors holders, depositors, and creditors thereof, and for their use, a and creditors a list of book containing a list of stockholders in such corporation, and th°*ir hoidir T*^ the number of shares of stock held by each; and every such bank shall keep posted in its office, in a conspicuous place, X3 CALIFOBNIA BANE ACT Bank shall post in acccssible to the pubHc generally, a notice signed by the presi- tot:urr.S"l dent or secretary, showing: directors and their j^ The names of the directors of such bank. 2. The number and the par value of the shares of stock held by each director. The entries on such book and such notice shall be made and Time for making postcd withiu twcnty-four hours after any transfer of stock, changes in list^^d ^^^ gj^^jj ^^ prima focic evidence against each director and stockholder of the number of shares of stock held by each. (Sec. 18. Repealed 1913.) Percentage of Sec. 19. The aggregate of paid-up capital together with capitd^and^surpius ^j^^ surplus, of cvcry commercial bank, must equal ten per commercial banks ccutum of its dcposit liabilities ; such deposit liabilities shall not be increased when such proportion of paid-up capital and sur- plus is wanting, and in no event shall said paid-up capital be less than the minimum paid-up capital provided by this act; Graduated scale for provided, however, that the aggregate of paid-up capital and savings a s g^j-pj^g q£ cvcry savings bank having a capital stock, and the reserve fund of every savings bank without a capital stock, must equal the following percentages of its deposit liabilities : (a) Ten per centum of any amount up to and including two million dollars. {h) Seven and one-half per centum of any amount in ex- cess of two million dollars up to and including five million dollars. {c) Five per centum of any amount in excess of five mil- lion dollars up to and including fifteen million dollars. {d) Two and one-half per centum of any amount in ex- cess of fifteen million dollars up to and including forty million dollars. {e) One per centum of any amount in excess of forty mil- lion dollars. The deposits shall not be increased if such proportion of paid-up capital and surplus or reserve fund to deposit lia- bilities is not maintained. Sec. 20. Every commercial bank receiving deposits as a depositary bank of other banks shall have at all times as GENEEAL PEO VISIONS 19 its lawful money reserve an amount equal to twenty per Commercial bank centum of the aggregate amount of its deposits. Two- ""^^"^^^ fifths of such reserve shall be in its own keeping in lawful Reserve requirements money of the United States, or gold certificates or silver certifi- °^ ^^^p^^^^ ^^^ cates of the United States. The remaining three-fifths thereof may consist of moneys on deposit subject to call with any bank or banks in this state other than a savings bank; or one half of such three fifths or any less portion thereof may consist of moneys on deposit subject to call with any bank or banks in the cities of New York, Chicago or St. Louis, other than a savings bank, and the balance of such three fifths, of moneys on deposit subject to call with any bank or banks in this state other than a savings bank. Every commercial bank not receiving deposits as a deposi- Reserve requirements tary bank of other banks shall have at all times as its lawful nit r^^^de^ts money reserve, an amount equal to fifteen per centum of of oti^er banks the aggregate amount of its deposits. Two fifths of such reserve shall be in its own keeping in lawful money of the United States, or gold certificates or silver certificates of the United States. The remaining three-fifths thereof may consist of moneys on deposit subject to call with any bank or banks in this state other than a savings bank; or, one half of such three fifths or any less portion thereof may consist of moneys on deposit subject to call with any bank or banks in the cities of New York, Chicago or St. Louis, other than a savings bank, and the balance of such three fifths, of moneys on deposit subject to call with any bank or banks in this state other than a savings bank. If the lawful money reserve of any bank shall be less than the amount required by this section, such bank shall not increase its liabilities by making any new loans or discounts, otherwise than by discounting bills of exchange on sight, or by paying any divi- dends from profits until the full amount of its lawful money reserve has been restored. The superintendent of banks Bank faUing to make may notify any bank whose lawful money reserve shall be ^h°etiteqldredbr^* below the amount herein required, to restore such reserve; Superintendent and, if it shall fail for thirty days thereafter to re- ^e^ed Wven't store such lawful money reserve, such bank shall be deemed insolvent and may be proceeded against under the pro- 20 OALIFOENIA BANK ACT visions of this act; provided, that all deposits of money herein permitted or required shall comply with the provisions of section forty-three of this act. Dividends when and q,^q^ 21. The directors of any bank having a capital how declared . . i • i - i stock may, at certam times, and in such manner as its by- laws prescribe, declare and pay dividends to depositors and stockholders of so much of the profits of the bank, and of the interest arising from the capital, surplus and deposits, as may be appropriated for that purpose under its by-laws Portion of profits to or uudcr its agreements with depositors, but every such ecame o surp us ^^^■^ shall, before the declaration of any such dividend, carry at least one tenth part of the net profits of the stock- holders for the preceding half year, or for such period as is covered by the dividend, to its surplus, until such surplus shall amount to twenty-five per centum of its paid up capital Surplus convertible stock. The wholc or any part of such surplus, if held as into paid in capital ^]^g exclusivc property of the stockholders, may at any time be converted into paid in capital, in which event such surplus shall be restored in the manner above provided until it amounts to twenty-five per centum of the aggregate Losses in excess of paid Up Capital stock. Subjcct to the provisions of section chargeSlfto^u'r^ius'. ^i^eteen of this act, any losses sustained by any such bank except portion of in cxccss of its Undivided profits may be charged to and paid ^pre^serStuteT, ^^^^ ^^^ surplus, in which event such surplus shall be restored etc. in the manner above provided, to the amount required by law ; provided, however, that any bank which has invested any por- tion of its surplus in its bank premises, furniture and fixtures, vaults, or safe deposit vaults, and boxes necessary or proper No maximum limita- to Carry On its banking business shall not be permitted to tion to surplus charge any loss to that portion of its surplus so invested. A larger surplus may be created and nothing herein contained Capital and assets shall be coustrucd as prohibitory thereof. The capital and assets ^^a^TtockhoMrr^n °^ ^^^ ^^^^ h^Luk are a security to depositors and stockholders, order named dcpositors having the priority of security over stockholders. Preference by piedg- ^^^' ^^^- '^^ bank, banker, or bank officer, shall give ing assets forbidden, preference to any depositor or creditor by pledging the assets authorised ^^ ^^^ bank as collateral security, except as otherwise author- provided that, ized by law; provided that any commercial bank, or commer- GENERAL PROVISIONS 21 cial department of a departmental bank, may borrow money commercial for temporary purposes, and may pledge assets of said com- L^s'J^s'^defcertain mercial bank, or commercial department of said departmental conditions bank, not exceeding fifty per centum in excess of the amount borrowed, as collateral security therefor; provided, that any Restriction as to public moneys, or postal savings moneys, deposited with any postal S^ngs^ °' such bank under any provision of law, shall not be construed as "borrowed money" within the meaning of this section. No No bank to borrow bank shall at any time, without permission of the superintend- capuarand st^i^ ent of banks, borrow an amount exceeding the amount of its ^t^out permission paid-up capital stock and surplus at such time actually paid in and remaining undiminished by losses or otherwise. No Partial payment on bank shall make partial payments upon any certificate of de- out permission of posit. In no case shall an overdraft of more than ninety days Superintendent. standing be allowed as an asset of any bank. Any debt due overdraft as asset to any commercial bank, on which interest is past due and When debt deemed unpaid for the period of one year, unless the same is well ^^^ to be charged off secured, and is in process of collection, shall be considered a bad debt and shall be charged off to the profit and loss account at the expiration of that time. Sec. 22. Any corporation authorized by its articles of In- Departmental Banks corporation so to do, may combine the business of a commer- cial bank and savings bank and trust company, or any one or more or all of them ; provided, that no corporation authorized ^.®j*"j^*^°^^*° to transact a trust business and which is also organized to en- gage in the business of title insurance, shall engage in or com- bine the business of a commercial bank or savings bank. Sec. 23. When a bank desires to do a departmental busi- Prerequisites to estab- ness, it shall first obtain the consent of the superintendent of ^^^^ing departments banks, and in its application therefor, file a statement making a segregation of its capital and surplus for each department. Such capital and surplus, when so apportioned and approved Apportionment and by the superintendent of banks, shall be considered and treated anTs^TiTs^* ^^^^*^ as the separate capital and surplus of such department as if each department was a separate bank. Thereafter a bank may, from time to time, with the previous consent and approval of the superintendent of banks and subject to the provisions of section nineteen of this act, change any segregation and ap- 22 CALIFOBNIA BANK ACT Departmental Banks portionment of capital and surplus previously made and make —con inue ^ ^^^ segregation and apportionment of its capital and surplus. Paid up capital stock Every bank hereafter organized doing a departmental business requirements ^^^^^ ^^^^ ^^.^ ^^^ .^ ^^^j^^ Capital StOck aS f OUOWS : Where population (o) In any locality in which the population does not exceed not over 5,000 ^^^ thousaud pcrsons, not less than twenty-five thousand dol- lars if it transacts both a commercial and savings business, or not less than one hundred twenty-five thousand dollars, if it transacts both a commercial and trust business, or not less than one hundred twenty-five thousand dollars if it trans- acts both a savings and trust business and not less than one hundred twenty-five thousand dollars if it transacts a com- mercial, savings and trust business. Where population (b) In any city in which the population is more than 5,000 to 25.000 ^^g thousand persons, but does not exceed twenty-five thousand persons, not less than fifty thousand dollars if it transacts both a commercial and savings business, or not less than one hundred fifty thousand dollars if it transacts both a commercial and trust business, or not less than one hundred fifty thousand dollars if it transacts both a savings and trust business, and not less than one hundred fifty thousand dollars if it transacts a commercial, savings and trust business. Where population (c) In any city in which the population is more than twen- ty-five thousand persons but does not exceed one hundred thousand persons, not less than one hundred thousand dollars, if it transacts both a commercial and savings business, or not less than two hundred thousand dollars if it transacts both a commercial and trust business, or not less than two hundred thousand dollars if it transacts both a savings and trust busi- ness, and not less than two hundred thousand dollars if it transacts a commercial, savings and trust business. Where population (d) In any city in which the population is more than one 100,000 to 200,000 ,-,, - ,, . ijj hundred thousand persons but does not exceed two hundred thousand persons, not less than two hundred thousand dollars, if it transacts both a commercial and savings business, or not less than four hundred thousand dollars if it transacts both a commercial and trust business, or not less than four hundred thousand dollars if it transacts both a savings and trust busi- GENERAL PBO VISIONS 23 ness, and not less than four hundred thousand dollars if it Departmental banks . , . , ^ -t - — continued transacts a commercial, savmgs and trust busmess. (e) In any city in which the population exceeds two hun- when population dred thousand persons, not less than three hundred thousand exceeds 200.000 dollars if it transacts both a commercial and savings business, or not less than five hundred thousand dollars if it transacts both a commercial and trust business, or not less than five hun- dred thousand dollars if it transacts both a savings and trust business, and not less than five hundred thousand dollars if it transacts a commercial, savings and trust business. The foregoing classification shall not apply to any bank al- classification ready in existence which has received from the superintendent ex fstl^g^bTS:! or to of banks a certificate to do a banking business; nor to any bank included by bank the location of which shall have been included by an- ^ty^^ nexation or consolidation within the limits of a city of a class requiring a larger capitalization, but no bank thus ex- Restrictions as to cepted shall be permitted to establish any new branch office as excepted banks provided in section nine of this act or to remove its place of business from the original limits of the city or town- ship wherein it was located prior to such annexation or consolidation until it shall have the capital required of banks in such city not within said exception. Such excepted banks may not in any case decrease their capital stock but may in- crease the same in the manner provided by law to an amount either greater or less than that required of banks in such city not within said exception. The capital stock referred to herein capital of such banks shall be increased from time to time and to the same extent as ^y-^^^"^^ ^° provisions Sec. 19 provided for in section nineteen of this act. For the purposes of this act, the population shown and de- Population— termined by the last preceding federal census, or any subse- ^^^^ determined quent census compiled and certified under any law of this state, shall be deemed to be the population of any city in which any such bank is to be organized. If the principal place of business of any bank so organized is located outside of the corporate limits of any city, then the population of that portion of the judicial township in which said bank is to have its principal place of business, which is not included within the boundaries of any municipal corporation, as such population is shown and 24 CALIFOBNIA BANE ACT Departmental Banks determined by such federal or subsequent official census, shall be the basis for classification under the provisions of this act. ShaU obtain certifi- Sec. 24. Evcry bank, before it commences to do busi- cate of Supt. for each , r • , i , , i department HCSS or bcforc it opcns a ncw department and commences to transact business in or under such new department, shall obtain the certificate of the superintendent of banks for the Prerequisites to Opening of each of the departments specified. Each certifi- certificate ^^^^ herein provided for shall be given when the superin- tendent shall, by the examination required by this act, have satisfied himself that the proper amount of cash has been paid in as capital and the provisions of this act complied with. The applicant shall pay for the certificate for each department a fee of fifty dollars. Shall maintain sep- Sec. 25. Evcry bank shall maintain for each department ^^^aslets^re^h ^ l^wful moucy rescrvc equal in amount to that required department by this act for the respective business conducted, and shall keep separate and distinct the lawful money reserve of any department from that of any other department; and all Deposit by a dcposits made with other banks, whether temporary or ^^^othCTbaSs otherwise, shall be assets of the respective departments by which they were made, and shall be so carried on the books of such other banks, and shall be repaid only upon the order of the department to whose credit they stand. No One department not department shall rcccivc deposits of any other department to recew^ deposits q£ ^j^^ same corporatiou ; except that a trust department may (Note exception) make dcposits of trust or any other funds under its control with the commercial or savings department of the same Conditions governing corporation; provided, hozvever, that any bank having depart- ^by^onTdei)t.*to iTients shall havc the right to sell and transfer any bonds, another sccuntics or loans from one department to another upon receipt of the actual value thereof, if such bonds, securities or loans are, under the provisions of this act, a legal invest- ment for the department purchasing the same. Separate account Sec. 26. Every bank having different departments shall department, etc. keep Separate books of account for each department of its business, and shall be governed as to all deposits, reserves, investments and transactions relating to each department by GENERAL PROVISIONS 25 the provisions in this act specifically provided for the respec- Departmental :Banks tive kind of business. -<»ntinued It shall keep all investments relating to the savings depart- Savings dept. invest- ment entirely separate and apart from the investments of its ^parlt^ ^^ ^^^* other department or departments. Every bank shall conduct the business of all its departments Departments to be in one building, or in adjoining buildings, and shall keep b^^X^ g*" *'^^°"^°^ entirely separate and apart in each department the cash, securities and property belonging to such department, and shall Mingling of cash. not mingle the cash, securities and property of one department forWdden ^**^" with that of another. Sec. 27. All money and assets belonging to each depart- Priority of claims ment, whether on hand or with other banks, and the invest- ^e^^^^t assets of ' department ments made, shall be held solely for the repayment of the depos- itors and other claimants of each such department, as herein provided, until all depositors and other claimants of each such department shall have been paid, and the overplus then re- maining shall be applied to any other liabilities of such bank. Sec. 28. Every bank in this state must, on all its win- Signs, advertising. dow sisfns and in advertising, and on letterheads and other ^^^•' T.^* ^^®*^^^ ^ -.-.,. class of business stationery on which its business is transacted, use the word transacted "savings" if it conducts a savings business, or the word "trust" if it conducts a trust business, and the word "commer- cial" if it conducts a commercial business. Sec. 29. Every corporation heretofore created under the Bank without capita laws of this state, doing a banking business therein, and which -njfstoTc^pLy has no capital stock, may elect to have a capital stock, and may issue certificates of stock therefor, in the same manner as corporations formed under the provisions of part IV, title I, chapter I, article I, of the Civil Code, relating to the forma- tion of corporations; provided, that no such corporation shall use or convert any moneys or funds theretofore belonging to it, or under its control, into capital stock; but such funds or moneys must be held and managed only for the purposes and in the manner for which they were created. Before such change Prerequisites to such is made, a majority of the members of such corporation present conversion at a meeting called for the purpose of considering the proposi- Meeting toibe caUed tion whether it is best to have a capital stock, its amount, and 26 CALIFOBNIA BANE ACT the number of shares into which it shall be divided, must vote in favor of having a capital stock, fix the amount thereof, and the number of shares into which it shall be divided. Notice of meeting— ^oticc of the time and place of holding such meeting, and how given . , . « . t i • i r i Its object, must be given by the president of such corporation by mailing notice of such meeting to each member of such corporation at his last known postoffice address at least ten days prior to the day fixed for such meeting, and by publica- tion in some newspaper printed and published in the county, or city and county, in which the principal place of business of the corporation is situated, at least once a week for three Copy of proceedings succcssivc wccks prior to the holding of the meeting. A copy befiied'^'tht^'etk^ ^^ the procccdiugs of this meeting, giving the number of of state and county persous prcscut, the votcs taken, the notice calling the meeting, the proof of its publication, the amount of capital actually subscribed, and by whom, all duly certified by the president and secretary of the corporation, must be filed in the office of the secretary of state and clerk of the county where the Effect of proceedings articlcs of incorporation are filed. Thereafter such corporation is possessed of all the rights and powers, and is subject to all the obligations, restrictions, and limitations, as if it had been originally created with a capital stock. Bank may conduct Sec. 30. Any bank may conduct a safe deposit department, department ^ut shall not iuvcst more than one-tenth of its capital and surplus in such safe deposit department. Business of bank or Sec. 31. Any bank may sell the whole of its business or of a department may - i i r i i • <• r • i be sold to other bank the wholc 01 the busiucss of any of Its departments to any other bank which may purchase such business after obtain- ing the consent of the stockholders of the selling and of the purchasing banks holding of record at least two thirds of Method of making the issucd Capital stock of each of such corporations; such consent to be expressed either in writing executed and acknowledged by such stockholders and attached to the instrument of sale, or to a copy thereof, or by vote at a stockholders' meeting of each of such banks called for that purpose. The selling and purchasing banks must for such purposes enter into an agreement of sale and purchase, which agreement shall contain all the terms and conditions GENEBAIi PEO VISIONS 27 connected with such sale and purchase. Such agreement Saie of business shall contain proper provision for the payment of liabilities ■~^"*^*""®** of the selling bank or of the department sold, and in this Provisions of agree- particular shall be subject to the approval of the superin- °^®^*° ^ ® tendent of banks ; and shall not be valid until such approval is obtained. Such agreement may contain provisions for the transfer of all deposits to the purchasing bank, subject, however, to the right of every depositor of the selling bank to withdraw his deposit in full on demand after such trans- fer, irrespective of the terms under which it was deposited with the selling bank. The rights of creditors of the selling Rights of creditors bank shall not in any manner be impaired by any such sale, of tiuing baic nor shall any liability or obligation for the payment of any unimpaired by sale money due or to become due, or any claim or demand, in any manner, or for any cause existing against such selling bank or against any stockholder thereof, be in any manner released or impaired, and all the rights, obligations and relations of all the parties, creditors, depositors, trustees and beneficiaries of trusts shall remain unimpaired by the sale, but such bank to which the other shall sell all its busi- Purchasing bank ness or all the business of any of its departments, shall and'oWigltionfo^f succeed to all such relations, obligations, trusts and liabili- seUingbank ties and be held liable to pay and discharge all such debts and liabilities and to perform all such trusts of the selling bank in the same manner as if such bank to which the other had sold had itself incurred the obligation or liability or assumed the relation of trust, and the stockholders of the respective corporations so entering into such agreement shall continue subject to all the liabilities, claims and de- mands existing against them as such at or before such sale. Immediately after the execution of such agreement of sale Notice of sale of bank and purchase notice thereof shall be published for at least to^epubUshed four successive weeks in a newspaper in each of the counties of the state in which either of such banks shall have its principal place of business; provided, however, that no action Limitation of actions can be brought against such selling bank or any of its "ll^^l"^^^^^^^^ stockholders on account of any deposits so transferred after the expiration of one year from the last day of publication herein required. 28 CALirOENIA BANK ACT Consolidation of ^j^ affidavit showing such publication shall be filed in the office of the superintendent of banks within ten days Affidavit of pubiica- ^£^gj. ^j^g j^g^. publication thereof. The affairs of such selling tion of notice of sale ^ " to be filed bank, or selling department of a bank, shall remain subject to the provisions of this act. state banks may g^.^^ 3^^^ ^^ ^^^^^ incorporated under the laws of this consolidate -^ ^ state may consolidate with one or more banks incorporated under the laws of this state, its capital stock, properties, trusts, claims, demands, contracts, agreements, obligations, debts, liabilities and assets of every kind and description, upon such terms and in such manner as may be agreed upon by their respective boards of directors, a copy of which Agreement of directors agreement must be filed in the office of the superintendent to be approved by ° '■ ^ Superintendent of bauks ; provided, that such agreement shall be subject to the approval of the superintendent of banks and shall not be Agreement to be valid Until such approval be obtained; provided, further, that stockholders no such Consolidation shall take eflfect until such agreement shall have been ratified and confirmed in writing by the stock- holders of the respective banks holding of record at least two thirds of the issued capital stock of their respective banks, or such agreement may be submitted to the stockholders of each of such corporations at a meeting thereof to be called upon no- tice specifying the time, place and object thereof, addressed to each stockholder at his last known post oflPice address and de- posited in the post office, postage prepaid, at least two weeks prior to the date fixed for said meeting, and published for at least two successive weeks, prior to the date of said meeting, in a newspaper in each of the counties of the state in which any of such banks shall have its principal place of business, and if such agreement shall be approved at each of such meetings of the respective stockholders separately by the vote or ballot of the stockholders owning at least two thirds of the stock of each such bank, the same shall be the agreement of such banks. Articles of incorpora- j^ ^^^se of such consolidation "articles of incorporation and tion and consolidation , ^ to be prepared Consolidation" must be prepared, setting forth: First — The name of the new corporation ; Second — The purpose for which it is formed; GENEBAL PKOVISIONS 29 Third — The place where its principal business is to be Consolidation of transacted; ^'^"^ Fourth — The term for which it is to exist, which shall not Contents of such exceed fifty years; ^"^"^^^ Fifth — The number of its directors (which shall not be less than three) and the names and residences of the persons ap- pointed to act as such until their successors are elected and qualified ; Sixth — The amount of its capital stock and the number of shares into which it is divided ; Seventh — The amount of stock actually subscribed, and by whom ; Eighth — The names of the constituent corporations. Said articles of incorporation and consolidation must be Articles to be signed . r by officers of banks; Signed and countersigned by the president and secretary of approved by Supt- each constituent corporation and sealed with their cor- ratified by stock- porate seals. There must be annexed thereto the approval of the superintendent of banks and memoranda of the ratifica- tion and confirmation thereof by the stockholders of each con- stituent corporation, which must be respectively signed and acknowledged by stockholders representing at least two thirds of the capital stock of their respective corporations. When Piling of articles completed as aforesaid said articles must be filed in the office of the county clerk of the county in which is located the prin- cipal place of business of the new corporation, and a copy of- the articles of incorporation and consolidation certified by such county clerk must be filed in the oflfice of the secretary of state, and a copy of the articles of incorporation and consolidation certified by said secretary of state must be filed in the office of the superintendent of banks, and also in the office of the county clerk of any county in which were filed the original arti- cles of incorporation of either of the constituent corporations, and thereupon each constituent corporation named therein must Constituent corpora- , , . . ,, tions become extinct; be deemed and held to have become extinct in all courts and New corporation places, and said new corporation must be deemed and held in succeeds to aii rights 11111. 1 and obligations all courts and places to have succeeded to all their several capital stocks, properties, trusts, claims, demands, contracts, agreements, assets, choses and rights in action of every kind 30 CALirOENIA BAITK ACT Consolidated banks and description, both at law and in equity, and to be entitled —continued ^^ possess, cnjoy, and enforce the same and every thereof, as fully and completely as either and every of its constituents other results of con- might havc done had no consolidation taken place. Said con- solidation upon new ,. , , . i • i« j corporation solidatcd or ncw corporation must also, in all courts and places, be deemed and held to have become subrogated to its several constituents and each thereof, in respect to all their contracts and agreements with other parties, and all their debts, obligations, and liabilities, of every kind and nature, to any persons, corporations, or bodies politic, whomsoever, or whatsoever, and said new corporation must sue and be sued in its own name in any and every case in which any or either of its constituents might have sued or might have been sued at Existing contracts law or in equity had no such consolidation been made. Noth- coMoUd^ti^n. eti ^^S i" this scction contained shall be construed to impair the obligation of any contract to which any of such constituents were parties at the date of such consolidation. All such con- tracts may be enforced by action or suit, as the case may be, against the consolidated corporation, and satisfaction obtained out of the property which, at the date of the consolidation, be- longed to the constituent which was a party to the contract in action or suit, as well as out of any other property belong- ing to the consolidated corporation, and the stockholders of each constituent corporation so entering into such agreement shall continue subject to all the liabilities, claims and demands existing against them at or before such consolidation to the Right of consolidated samc extent as if the same had not been made. The right of ^^^*c°di!ng^^to ^^^^ ^^^ corporation to increase or decrease its capital stock, be governed by to change the uumbcr of its directors, to amend its articles of ifwrand'byTidf L°ct incorporation, to change its principal place of business, or its name, or to effect any other organic change shall be governed by the general corporation laws of this state and by the bank act, and the procedure to effect any such change shall be that defined by the general corporation laws and the bank act. MingUng of trust Sec. 32. Any bank receiving trust funds in accordance funds with other .^1,1 . • ,• 1 • , 1 ,• . . . assets forbidden With the provisions of this act relating to trust companies except as must not mingle such trust funds with the other assets of provided in Sec. 25 , . , . • 1 1 • ^• the corporation, except as otherwise provided in section OENEEAL PEO VISIONS 31 twenty-five of this act, and such funds shall not be carried Trust funds norpart or counted as any part of the lawful money reserve provided °^ ^^^^ reserve for in this act. The officers of any bank who knowingly violate or consent to the violation of this provision shall be violation guilty of a felony. (Sec. 33. Repealed 1913.) Sec. 34. No bank shall purchase or invest its capital or no bank to purchase surplus or money of its depositors, or any part of either, or lend upon its own ^ "^ ,^ / . . - capital stock, unless in shares of its own capital stock; nor loan its capital or necessary to prevent surplus or the money of its depositors, or any part of either, ^°^ °° *^^^* on shares of its own capital stock, unless such purchase or loan shall be necessary to prevent loss to such bank on debts previously contracted in good faith. Every person or corpora- Penalty tion violating any provision of this section shall forfeit to the people of the state twice the nominal amount of such stock. Sec. 35. No director, or officer, or employee, or con- no director, etc., trolling stockholder of any bank shall, directly or indirectly, financially interested , ° .;.,, - may sell to his bank for his own account, for himself, or as the partner or agent any note, etc., of others, sell or transfer, or cause to be sold or transferred without consent of . Superintendent. to the bank of which he is a director, officer, employee, or controlling stockholder, any note or bond secured by any mortgage or trust deed on real estate or any contract arising from the sale of real estate in which such director, or officer, or employee, or controlling stockholder is personally or financially interested, without the consent in writing of the superintendent of banks. Any director, or officer, or em- violation made ployee, or controlling stockholder of any bank who know- ^^^°^y ingly violates or consents to the violation of this provision shall be guilty of a felony. Sec. 36. No bank receiving deposits of money shall pur- Limitation upon chase, agree to purchase, underwrite or guarantee any bond ^^^^1^3°^^"^''*^* issue in excess of five per centum of its assets, except bonds of the United States, of the State of California, of the cities, cities and counties, counties or school districts of this state. Sec. 37. No bank shall purchase or invest its capital or no bank to purchase surplus or money of its depositors, or any part of either, in to^'*^enUo^r^ the capital stock of any corporation unless the purchase or debt acquisition of such capital stock shall be necessary to pre- 32 CALIFOBNIA BANK ACl vent loss to the bank on a debt previously contracted in good Stock so purchased faith. Any Capital stock so purchased or acquired shall be sold by such bank within six months thereafter if it can be sold for the amount of the claim of such bank against it; and all capital stock thus purchased or acquired must be sold for the best price obtainable by said bank within one year after Penalty such purchasc or acquisition. Every person or corporation violating any provision of this section shall forfeit to the peo- ple of the state twice the nominal amount of such stock. Director, etc., making Sec. 38. A director, officcr, agent or employee of any bank or conctirring in false , entry or report, etc., WnO, or omitting certain Y'lTst — Kuowinsflv rcccivcs or posscsscs himsclf of any of entries, etc., guilty ° -^ ^ •' of felony its property otherwise than in payment for a just demand, and with intent to defraud, omits to make or to cause or direct to be made a full and true entry thereof in its books and accounts ; or. Second — Concurs in omitting to make any material entry thereof ; or. Third — Knowingly concurs in making or publishing any written report, exhibit or statement of its affairs or pecuniary condition containing any material statement which is false ; or, Fourth — Having the custody or control of its books, wil- fully refuses or neglects to make any proper entry in the books of such corporation as required by law, or to exhibit or allow the same to be inspected and extracts to be taken therefrom by the superintendent of banks, his chief deputy or any of his examiners, shall be guilty of a felony. Officer, etc.. who ggc. 39. Any officer, director, agent, teller, clerk or em- overdraws his account < i i • i or^receives commis- ploycc of any bank who either, "°''*'1ng?oan.°etr. First— Kuowingly overdraws his account with such bank, guilty of felony and thereby obtains the money, notes or funds of any such bank; or. Second — Asks or receives or consents or agrees to receive any commission, emolument, gratuity or reward, or any money, property or thing of value, for his own personal benefit, or of personal advantage, for procuring or endeavoring to procure for any person, firm or corporation any loan from, or the pur- GENERAL PBOVISIONS 33 chase or discount of any paper, note, draft, check or bill of exchange, by such bank, or for permitting any person, firm or corporation to overdraw any account with such bank, is guilty of a felony. Sec. 40. No bank mentioned in this act shall make any Contract with depositor contract with any of its depositors whereby the stockholders' Z^Zyo^""^^^'^ liability provided for by the constitution of this state is in any manner waived, and if any such contract shall be so made, such contract shall be void. Sec. 41. No officer, director, agent, or other employee of No officer, etc, shau any bank shall directly or indirectly, for his own personal bene- ^! ^^^erested in pur- J. . , . , . ' chase of obhgation of fit, purchase, or be mterested m the purchase of any obliga- bank for less than tion of said bank for a less sum than shall appear upon the ^^^^^^"^ face of such obligation to be the value thereof. Every person violating any provision of this section, shall for each offense Penalty forfeit to the people of the state, three times the face value of any such obligation so purchased. Sec. 42. No officer, director, agent or other employee of No officer, etc., shaU any bank, shall directly or indirectly, for his own personal bene- \^ interested in pur- •^ "^ "^ ' ^ chase of assets of fit, purchase, or be interested in the purchase of any of the bank for less than assets of said bank for a less sum than the current market "^^^^^t value value thereof. Every person violating any provision of this Penalty section, shall for each offense, forfeit to the people of the state, twice the nominal amount of any such assets so purchased. Sec. 43. No bank shall deposit any of its funds in any Selection of other bank unless such other bank has been designated as a ^«P°^*a^ ^^ depositary for its funds by the vote of a majority of the directors, or trustees of the bank making the deposit, ex- clusive of the vote of any director who is an officer, director, or trustee of the depositary so designated; provided, how- ever, that any bank may designate any other bank its de- Restrictions upon positary by vote of a majority of its directors, including the vote of any director or trustee who is an officer, director or trustee of the depositary so designated, if such bank has secured the previous approval of the superin- tendent of banks, which approval he may at any time revoke for proper cause. 34 OALirOENIA BANK ACT Loan secured by stock Sec. 44. No bank shall hereafter make a loan secured °^co^orati^s:- ^^ ^hc stock of another -bank, if by making such loan the limitation upon total stock of such Other bank held by such loaning bank as collateral will exceed in the aggregate twenty-five per centum of the capital stock of such other bank; provided, that no loan upon the capital stock of any bank shall be made unless such bank has been in existence at least two years and has earned and paid a dividend upon its capital stock; and provided, further, that no bank may loan more than five per centum of its assets upon the capital stock of any corporation whatsoever as collateral security. Unpaid interest not Sec. 45. Interest Unpaid, although due or accrued, on previousTo^di^dend ^^^^s owing to any bank, shall not be included in calculation of its profits previous to a dividend. Limitation on loan Sec. 46. No bank shall iuvcst or loan more than five per °^oneTo^Tssue ccntum of its asscts in any one bond issue, except bonds of the United States, of the State of California, of the counties, cities and counties, cities or school districts of this state. Loan by commercial Sec. 47. No commercial bank shall,' except for the purpose bank on real estate- ^^ facilitating the salc of property owned by the bank, make any loan on the security of real estate, unless it is a first lien and is either First lien— short term ( 1 ) Made f or a period of time not exceeding six months and upon security worth fifteen per centum more than the market value of the real estate taken as security ; or First lien— long term (2) Made for a period of time exceeding six months and not exceeding ten years and does not exceed sixty per centum of the market value of the real estate taken as security. No commercial bank shall loan in the aggregate more than thirty-five per centum of its assets on real estate loans of the character specified in subdivision two of this section. These Subsequent liens or provisions, howcvcr, shall uot prevent any bank from taking incumbranc^e^^when another and immediately subsequent mortgage or deed of trust thereon when it already holds a first mortgage or deed of trust on such real estate, nor from accepting a second lien on real estate to secure the repayment of a debt previously con- tracted in good faith; nor shall it prevent subsequent liens of any kind from being taken to secure the payment of a debt GENERAL PROVISIONS 35 previously contracted in good faith when, in the judgment of the directors of such bank, such subsequent liens are necessary further to secure the payment of any debts and save such bank from loss. Sec. 48. Any national bank in this state receiving the Supt. may examine deposits of any bank organized and conducting business l^Zt^^^l^, under this act, must, at the request of the superintendent of of state bank banks, submit to an examination by him, or his duly ap- pointed examiners, should the superintendent of banks in his discretion deem it necessary or desirable that such ex- amination be made; and the expense of such examination shall be paid by such national bank ; and if any such national Effect of non-com- bank shall refuse to permit such examination to be made by, ^aX^ ^^ national or under the direction of, the superintendent of banks, then the superintendent of banks shall notify in writing every bank depositing its funds with such national bank, to with- draw its deposits therefrom, and all such banks shall comply with such order. Sec. 49. It shall not be lawful for any commercial bank, Oniy savings banks may solicit or re< savings deposits individual, trust company, association, firm, stock company, ^^^y solicit or receive copartnership or corporation, to advertise or put forth a sign as a savings bank, either directly or indirectly or in any way to solicit or receive deposits or to transact business in the way or manner of a savings bank, or advertise that he or it is receiving or accepting savings, or in any way which might lead the public to believe that such deposits are re- ceived or invested under the same conditions or in the same manner as deposits in savings banks, except in the case of savings banks or banks having savings departments, subject to the provisions of this act. Any commercial bank, indi- Penalty vidual, trust company, association, firm, stock company, copartnership or corporation, violating any provision of this section shall forfeit to this state one hundred dollars a day for every day during which such violation continues. Sec. 50. Every bank shall post in a conspicuous place Bank shall post last in its banking room or branch office the last certificate ob- certificate from Supt. tained from the superintendent of banks under the provisions 36 CALIFOBNIA BANE ACT of either section nine or one hundred twenty-seven of this act. Court may authorize Sec. 51. Any court having appointed and having juris- executor. guardian, jjictjon of any cxccutor, administrator, guardian, assignee, trustee, etc., etc., •'. !• • <• l to deposit in state reccivcr, depositary or trustee, upon the apphcation of such ^^"^ executor, administrator, guardian, assignee, receiver, deposi- tary or trustee, or upon the application of any person having an interest in the estate administered upon by such officer or trustee, after notice to other parties in interest as the court may direct, and after a hearing upon such application, may authorize such officer or trustee to deposit any money then in his hands as such officer or trustee or which may thereafter come into his hands, and until the further order of the court, in any bank organized under the laws of the State of California ; Such deposit reUeves and upon such dcposit being made, the officer or trustee so ''''tromuIbiiitretT depositing the same shall thereafter and while such moneys remain on deposit in such bank, be relieved and discharged from all liability and responsibility therefor, and the bond required of such officer or trustee given upon his appointment shall be thereupon by said court reduced to such an amount Such deposit payable as the court may deem reasonable ; such deposit shall be repaid ""^Ispre^e^^ddaS; ^^ly upon the orders of said court, and shall be a preferred claim against such bank and be paid in full before any other depositor of such bank shall have been paid. Certified checks Sec. 52. Whenever a check drawn on any bank is certified by any officer or employee of such bank, the amount thereof Must be immediately shall bc immediately charged against the account of the person, charged ^^.^ ^^ corporatiou drawing the same. Unlawful to certify It shall be unlawful for any officer or employee of any bank ""^"^s^Tuffunds ^o certify any check drawn upon such bank unless the person, firm or corporation drawing the check has on deposit with the bank at the time such check is certified, an amount of money subject to the payment of such check, equal to the amount specified in such check. Violation made felony Any officer or employee of any bank who shall wilfully violate the provisions of this section, or shall resort to any device, or receive any fictitious obligations, directly or indi- rectly, in order to evade the provisions hereof, or who shall GENERAL PEO VISIONS 37 certify checks before the amount thereof shall have been regu- larly entered to the credit of the drawer, shall be guilty of a felony. Sec. 53. The capital stock of any bank having a capital Par value of bank stock, shall have a par value of at least one hundred dollars $100 and the paid-up value shall be endorsed on the face of each Paid up value to be certificate issued, which paid-up value shall be the same on all Zt^'lt^^ ''""'^' certificates issued. No bank shall have preferred stock. Preferred stock forbidden Sec. 54. All real estate purchased by any bank at sales under pledges, mortgages or deeds of trust for its benefit soid'^SthilTylars* for money loaned and such as may be conveyed to it by after bank acquires borrowers in satisfaction and discharge of loans made ^^""^ °° ^ ^^^^^ ^°° thereon and all other real estate owned or held by it, which is not necessary for carrying on its business, must be sold by such bank within five years after title thereto shall have vested in it by purchase or otherwise. Parcels of such real Bank holding real estate not sold within said time may be purchased by any per- ^y*beIompeUer son wanting the same upon the conditions and proceedings fol- to sell same lowing : The intending purchaser may file a petition in the su- perior court in and for the county wherein said real estate or Court procedure any portion thereof is situated; upon the filing of such petition '^^°^^^^ ^^^""^^ a citation shall be issued out of said court directed to the bank owning such real estate requiring such bank to show cause on a day certain which shall be not earlier than ten days after the service of such citation, why commissioners should not be ap- pointed by said court for the purpose of appraising the value of the real estate described in the petition and of selling the same at public auction under the provisions of this section. If there shall be any liens or encumbrances of record against such real estate the person or persons holding such liens or encum- brances shall likewise be cited and the court shall in its final decree distribute the proceeds of such sale, if a sale thereof shall be made, according to the equities of the parties. If it shall appear at the hearing of such petition that the real estate therein sought to be purchased is held by such bank in violation of the provisions of this section or of the constitution of this state, the court shall appoint three commissioners to appraise the value thereof and sell the same at public auction at the 38 CALIFOENIA BANK ACT Forced sales of real county Seat of the county wherein said real estate or any part thereof is located. Notice of which said sale shall be given to Provisions for sale the bank Owning said real estate and to any other persons in- terested therein as shown by the records of such county at least ten days before the date of such sale and shall be published once a week for three successive weeks in some newspaper published in the county where such real estate or any part thereof may be located, or if no newspaper shall be published in such county, then in a newspaper published in some neigh- What notice of sale boring county. Such notice shall state the time and place of shall state cj ^ r such sale and shall describe the real estate to be sold with com- mon certainty and state the value thereof as fixed by the ap- praisement of such commissioners and state that no bid less than such appraised value will be received therefor. No sale Conditions of sale shall be made for an amount less than the appraised value of such real estate fixed by said commissioners, and in the event that no bid is received at such sale at least equal to said ap- praised value of said real estate no intending purchaser can in- stitute the proceedings provided for in this section within one Powers given to vest year thereafter. In case of any sale made under the provisions tit e in pur aser ^^ ^j^j^ scction and of the refusal of any bank owning such real estate or of any lienholder or encumbrancer to execute the conveyances or releases necessary or proper to vest the title of such bank, lienholder or encumbrancer in the purchaser thereof the court shall have power in such proceedings to direct said commissioners to execute such deeds, conveyances or releases upon the payment to them of the purchase price therefor. The Fees, costs, etc.. by fees of such commissioners and cost of sale shall be fixed by the court, upon making such appointment, but the entire ex- pense thereof shall not exceed one hundred dollars. The cost of any such proceedings shall be borne by the intending purchaser if no sale shall be made, but if a sale shall be made the costs of such proceedings shall be borne by the purchaser of the property and the person who filed the petition and ad- vanced the costs of such proceedings shall be reimbursed in Returns of sales casc he shall not become such purchaser. All sales hereunder shall be returned to the court having jurisdiction of the matter in the same manner as in the case of sales, by commissioners, of real estate on foreclosure of mortgages. Nothing in this sec- GENERAL PROVISIONS 39 tion contained shall be deemed to affect the power of the super- Supt. may require intendent of banks to require the writing down of the value of value real estate held by any bank, at any time, when such writing down shall be proper. Sec. 55. Receiving deposits, issuing certificates of de- what transactions posit, checks and bills of exchange, and the like, in the trans- ^^^reate d^t/'^^tc. action of the ordinary business of a bank, must not be con- strued to be the creation of debt within the meaning of the phrase "create debt" in section three hundred nine of the Civil Code, nor of indebtedness within the meaning of the phrase "the capital stock cannot be diminished to an amount less than the indebtedness of the corporation" in section three hundred fifty-nine of the Civil Code, except that no bank shall reduce its capital stock to an amount less than is required by this act to be maintained by such bank, or less than any indebtedness of such bank other than such deposits. The terms "real estate," or "real property," or "personal Definition of ^ property," when used in this act shall have the meaning -real property." defined in, and shall be construed in accordance with the "personal property" provisions of title I of part I of division second of the Civil Code. Sec. 56. Any bank organized and existing under the laws state bank authorized of this state is hereby authorized and empowered to join or reslrve a^Sita," associate itself with any "national reserve association of the United States" or branch thereof, or any plan now or hereafter created or established Ly act of con- gress whether such banking or currency association or plan be created by congress under the above or any other name. Nothing in this act shall prohibit any such bank from joining or associating itself with any such association or plan or branch thereof nor from invest- ing any part of its capital or surplus in the stock of such association, plan or branch thereof in accordance with the terms and provisions of such act of congress; provided, investment in such , , . 1 i, . it association limited however, that such investment shall in no case exceed the mlinimum amount required to join or associate itself With such association, plan or branch thereof. Any bank joining or associating itself with such association, plan or branch 40 CALirOENIA BANK ACT thereof, shall be permitted to conform to and transact its business in accordance with the terms and provisions of such act of congress creating the same and the rules and regulations of such association, plan or branch thereof, any- thing in this act to the contrary notwithstanding. ARTICLE II. SAVINGS BANKS. Capital required Sec. 60. Every savings bank hereafter organized must of savings banks j^^^^ ^^^^ ^p -^^ ^^^^ ^ Capital stock of not Icss than Population not over (a) Twcnty-five thousaud dollars if its principal place of business is located in any locality the population of which does not exceed five thousand persons; popuiS-$5oooo (^) ^^^*y thousand dollars if its principal place of busi- ness is located in any city the population of which is more than five thousand persons, but does not ex- ceed twenty-five thousand persons; poptdito-^moSo (^) O^^ hundred thousand dollars if its principal place of business is located in any city the population of which is more than twenty-five thousand persons but does not exceed one hundred thousand persons; 100.000 to 200.000 ((1) Two hundred thousand dollars if its principal place of population— $200,000 ^^. , ^ ir'i' business is located m any city the population of which is more than one hundred thousand persons but does not exceed two hundred thousand persons ; voX^^Z («) Three hundred thousand dollars if its principal place of business is located in any city the population of which is more than two hundred thousand persons. Excepting that any savings bank organized without capital stock must have a reserve fund of at least one million dollars. Until the capital stock or reserve fund hereinbefore re- quired shall be actually paid in, the superintendent of banks shall refuse to issue the certificate required by this act. The tion'not'reti^^rtive ^o^egoing classification shall not apply to any savings bank already in existence which has received its certificate to do a banking business from the superintendent of banks ; nor to SAVINaS BANKS 41 any bank the location of which shall have been included by Capital requirements -. - . ....... (. -j_ r of existing savings annexation or consolidation withm the limits of a city oi a bank not affected by class requiring a larger capitalization, but no bank thus ex- annexation, etc. cepted shall be permitted to establish any new branch office as provided in section nine of this act or to remove its place of business from the original limits of the city or township Wherein it was located prior to such annexation or con- solidation until it shall have the capital required of banks in such city not within said exception. Such excepted banks may not in any case decrease their capital stock but may increase the same in the manner provided by law to an amount either greater or less than that required of banks in such city not within said exception ; provided, that See. i9 and Sec. 23 , ,, , , 1 . rr . j^i • • unaffected by Sec. 60 nothing herein shall be construed to affect the provisions of section nineteen of this act relative to the proportion of capital and surplus to deposits or of section twenty-three of this act relative to the capital stock required of banks doing a departmental business. The provisions of section How population is twenty-three of this act, as to population, shall apply to ®*^™''''* any bank organized under the provisions of this section. Sec. 61. Any savings bank may purchase, hold and con- Property which vey real or personal property as follows: mry^pL^'^ase. 1 . The lot and building in which the business of the bank hold and convey is carried on; furniture and fixtures, vaults and safe deposit furniture, fi^xtTrrs!*etc. vaults and boxes necessary or proper to carry on its banking two-thirds vote business; such lot and building, furniture and fixtures, vaults necessary for purchase and safe deposit vaults and boxes shall not, in the aggregate, be o^ construction carried on the books of such bank as an asset to an amount exceeding its paid up capital and surplus; and hereafter, the authority of a two-thirds vote of all of the directors shall be necessary to authorize the purchase of such lot and building, or the construction of such building. 2. Such as may have been mortgaged, pledged or con- (2) Property mort- veyed to it in trust for its benefit in good faith, for money c^vtyed^ffsecurity loaned in pursuance of the regular business of the corpora- for loans ^^O"- (3) Property 3. Such as may have been purchased at any sales under purchased at sales ,, ,-- ,r., /-r under pledge, pledge, mortgage or deed of trust made for its benefit for mortgage, etc. 42 CALIFOBNIA BANE ACT money so loaned and such as may be conveyed to it by bor- rowers in satisfaction and discharge of loans made thereon. What personal prop- j^q savins:s bank shall purchase, own, or sell personal prop- erty savings bank ^ , ^ r r may purchase, own crty, exccpt such as may be requisite for its immediate ac- orseii: QQ^niodation for the convenient transaction of its business, notes or bonds secured by trust deeds or mortgages on real estate, bonds, securities or evidences of indebtedness, pub- lic or private, gold or silver bullion and United States mint certificates of ascertained value, and evidences of debt issued What bonds, securities, by the United States. No savings bank shall purchase, own, etc., savings bank . , - , , . . . , <•.<<< may purchase, own noid OT couvcy bonds, sccuritics Or cvidenccs of mdebtedness, or sell: public or private, except as follows: u. s. Bonds, etc. (a) Bonds or interest bearing notes or obligations of the United States, or those for which the faith and credit of the United States are pledged for the payment of principal and interest ; Bonds of this state (^) Bonds of this State, or those for which the faith and credit of the State of California are pledged for the payment of principal and interest ; Bonds of any state (c) Bouds of any State in the United States that has not, t, etc. ^j^bin five years previous to rhaking such investment by such bank, defaulted in the payment of any part of either principal or interest; Bonds of any Caiifor- ((/) Bouds of any county, citv and county, city or school nia county, city and ,. ^\ I r ^w ^ ^ \ ^ £ / /j- • • • county, city, school district of this State ; bonos of any permanent road division in district, county road any county issucd in pursuance of the provisions of article IX division, sewer, drain- , t,. . , , ^^ ^^^ . , t-» <• • i .- i i i r age, reclamation. Chapter II ; title VI ; part III of the Political Code ; bonds of protection, sanitary, any scwcr district, drainage district, reclamation district, or irrigation districts, . , • . • i • • • « i etc.. subject to speci- protcction distnct, or sanitary district organized under fied limitations the laws of this State; and any irrigation district bonds which the law may now or hereafter authorize to be used as security for the deposit of public moneys; provided, that the total amount of bonds so issued by any such sewer district, drainage district, protection district or sanitary district, does not exceed fifteen per centum of the value of the taxable property in said district as shown by the last equalized assessment roll of the county in which said district is located ; and promded, further, that the total amount SAVINGS BANKS 43 of bonds issued by any such irrigation district does not exceed Bonds which are - , , 1 r 1 1 1 legal investments Sixty per centum of the aggregate market value of the lands —continued within such district, and of the water, water rights, canals, reservoirs, reservoir sites and irrigation works owned or to be acquired or constructed with the proceeds of any of such bonds, by said district, such facts in reference to bonds of irrigation districts to be determined by a commission now or hereafter authorized by law to ascertain and report upon such facts. (e) Bonds of any county, city and county, city or town. Bonds of any county, in any state of the United States other than the State of Call- city and county city •' or town in any foreign fornia, issued under authority of any law of such state, which state, meeting speci- county, city and county, city or town, had, as shown by the ^ *"equiremen s federal or state census next preceding such investment, a popu- lation of more than twenty thousand inhabitants; provided, however, that the entire bonded indebtedness of such county, city and county, city or town, including such issue of bonds does not exceed fifteen per centum of the value of the tax- able property therein as shown by its last equalized assess- ment roll; and provided, further, that such county, city and county, city or town, or the state in which it is located has not defaulted in payment of either principal or interest due upon any legally authorized bond issue within five years next preceding such investment. (/) (1) Bonds of any railroad corporation incor- (See note page 49) porated under the laws of the State of California and operat- ing exclusively therein, provided said corporation has had, for Bonds of California its fiscal year next preceding such investment, net earnings, ''^;:^:^:tl after payment of all maintenance charges, operating expenses fied requirements and taxes, sufficient to pay the interest on all of its outstand- ing mortgage indebtedness ; or (2) Bonds of any railroad corporation incorporated un- Bonds of any railroad der the laws of any other state in the United States, operat- corporation organized -^ ' ^ under laws of any mg at least five hundred miles of standard gauge track exclu- foreign state, meeting sive of sidings ; provided, said corporation has had for its '^"^^"^ requirements fiscal year next preceding such investment, net earn- ings, after the payment of all maintenance charges, operat- ing expenses and taxes, amounting to at least one and one- 44 CALIFOBNIA BANE ACT Bonds which are half timcs the interest on all its outstanding mortgage '^"iTnUnu^J indebtedness; or Guaranteed bonds of (3) Bonds of any railroad corporation, the payment of any raUroad corpora- ^^ich has been guaranteed, both as to principal and interest, tion meeting specified *=* , . . requirements by a railroad corporation meetmg the requirements of either subdivision (1) or (2) of paragraph (f) of this section; the income of which latter corporation, together with the income of any corporation whose bonds it has guaranteed, shall have been sufficient to pay all its maintenance charges, operating expenses, taxes and interest on all its outstanding mortgage indebtedness and, in addition thereto, interest on the total outstanding mortgage indebtedness of any other corporation the payment of which it has guaranteed, for the periods specified in the respective subdivisions of this paragraph relating thereto; provided, that the excess of income of any corporation whose bonds have been so guaranteed, over its maintenance charges, operating expenses, taxes and interest on its outstanding mortgage indebtedness, shall not apply to or be included in determining the income so re- quired. Additional require- In determining the income of any corporation specified in b^SVptdfiedin paragraph (f) of subdivision three of this section, there paragraph (f) of shall be included the income of any corporation or corpora- tions out of which it shall have been formed through con- solidation or merger, and of any corporation or corporations, the entire business and income producing property of which the corporation issuing such bonds has wholly acquired. All bonds authorized for investment by paragraph (f) of subdivision three of this section must be secured by a mort- gage or trust deed which is at the time of making such investment either a first mortgage or deed of trust, a refunding mortgage or deed of trust providing for the re- tirement of all prior lien mortgage debts of said corporation, or an underlying or divisional closed mortgage or trust deed of property which forms a part of the operating system of the corporation then owning said property. Further requirements No savings bank shall purchasc the bonds of any rail- road corporation deriving less than twenty per centum of its gross receipts from passenger revenues. subdivision 3 as to railroad bonds SAVINGS BANES 45 The term "railroad corporation" when used in paragraph Bonds which are (f) of subdivision three of this section shall have the mean- —continued ing defined in the "Public Utilities Act" approved December "Railroad corpora- ^^ ^ _^ . . tion" defined 23, 1911. (sr) Bonds of any street railroad corporation ; or of any ^°^^^ °^ ^*^««* ^^^ ... road corporation, etc., gas; water; pipe line; light; power; light and power; gas, or other "public utuity" light and power; electrical; telephone; telegraph; or tele- 'ZT^l^^^^ phone and telegraph corporation or of any other "public ted requirements utility" incorporated under the laws of the State of Cali- fornia ; and (1) Operating exclusively in the State of California, provided, said corporation has had, for its fiscal year next preceding such investment, net earnings, after the payment of all maintenance charges, operating expenses and taxes, amounting to one and one-half times the interest on all its outstanding mortgage indebtedness; or (2) Operating its property in part within the State of California, provided, said corporation has had, for each of its two fiscal years next preceding such investment, net earnings, after the payment of all maintenance charges, operating expenses and taxes, amounting to one and one- half times the interest on all of its outstanding mortgage indebtedness ; or (3) The payment of which is guaranteed, both as to principal and interest, by a public utility corporation meeting the requirements of either subdivision (1) or (2) of para- graph (g) of this section, the income of which latter cor- poration, together with the income of any corporation whose bonds it has guaranteed, shall have been sufficient to pay all its maintenance charges, operating expenses, taxes and inter- est on all its total outstanding mortgage indebtedness, and in addition thereto, interest on the total outstanding mort- gage indebtedness of any other corporation the payment of which it has guaranteed, for the period specified in the respective subdivisions of this paragraph relating thereto; provided, that the excess of income of any corporation whose bonds have been so guaranteed, over its maintenance charges, operating expenses, taxes and interest on its out- 46 CALIFOBNIA BANK ACT Bonds which are Standing mortgage indebtedness shall not apply to or be legal |^®^*jyj^®^^ included in determining the income so required. In determining the income of any corporation specified in Income of corporation paragraph (g) of subdivision three of this section, there shall be included the income of any corporation or corpora- tions out of which it shall have been formed through con- solidation or merger, and of any corporation the entire business and income producing property of which the cor- poration issuing such bonds has wholly acquired. All bonds authorized All bonds authorized for investment by paragraph (g) by paragraph (g) £ gubdivision three of this section m-ust be secured by a must be secured by _ -^ mortgage or deed of mortgage or trust dccd which is at the timje of making such ^J.r^ui investment; either certain limitations I ^ closcd first mortgage or deed of trust; or II. A first mortgage or deed of trust containing pro- visions restricting the issuance of further bonds until such time as the income of said corporation shall have been at least sufficient, during the twelve months next preceding the is- suance of any additional bonds, to pay all maintenance charges, operating expenses, taxes and one and one-half times the interest on all its mortgage indebtedness then outstand- ing and on the additional bonds then proposed to be issued ; or III. A refunding mortgage or deed of trust providing for the retirement of all prior lien mortgage debts of said corporation, and restricting the issuance of further bonds until such time as the income of said corpora- tion shall have been at least sufficient, during the twelve months next preceding the issuance of any additional bonds, to pay all maintenance charges, operating expenses, taxes and one and one-half times the interest on all its mortgage indebtedness then outstanding, and on the additional bonds then proposed to be issued ; or IV. An underlying or divisional closed mortgage or trust deed of property which forms a part of the operating system of the corporation then owning said property. In the case of bonds secured by an underlying or divisional closed mortgage or trust deed, the net income required by this section shall be SAVINGS BANKS 47 based exclusively upon the income, maintenance charges, ope- Bonds which are rating expenses, taxes and mortgage indebtedness of or against —continued the property covered by such underlying or divisional closed mortgage or trust deed, or on the proper proportionate share of such property in the general income, maintenance charges, ope- rating expenses, taxes and mortgage indebtedness of the cor- poration then owning such property; provided, however, that if the payment of the bonds secured by such underlying or divisional closed mortgage or trust deed shall be guaranteed or assumed by the corporation then owning the property securing the same, such bonds shall be legal investments for savings banks, if the net income of such corporation from all sources after paying all of its maintenance charges, operating expenses, taxes and mortgage indebtedness shall equal the amount herein required, notwithstanding any insufficiency of the income de- rived from the property covered by such underlying or di- visional closed mortgage or trust deed to meet the requirements of this section. The term "street railroad corporation," "pipe line cor- -street raUroad cor- poration," "gas corporation," "electrical corporation," "tele- te°^fdeLTd\T'' phone corporation," "telegraph corporation," "water corpora- reference to "Public tion," and "public utility," when used in paragraph (g) of subdivision three of this section, shall each have the mean- ing defined in the "Public Utilities Act" approved December 23, 1911. {h) Notes or bonds secured by first mortgage or deed of Notes secured by first , _ , . , . - . mortgage or deed of trust or Other first lien upon real estate, improved or unim- trust or other first Uen proved : provided, that the entire note or bond issue shall not ex- ^^^^ ^^ estate, etc. ^ ' ^ 1 r t 1 —with certain ceed sixty per centum of the market value of such real estate, or limitations such real estate with improvements, taken as security ; cmd pro- vided, further, in case the said note or bond issue is created for a building loan on real estate, that at no time shall the entire outstanding note or bond issue exceed sixty per centum of the market value of the real estate and the actual cost of the improvements thereon taken as security. (*) Collateral trust bonds or notes when secured by (See note page 49) either : 48 CALIFOBNIA BANE ACT Bonds which are (1) Deposit of bonds authorized for investment by this ^^ ^ontiimed section, of a market value at least fifteen per centum in ex- cess of the par value of the collateral trust bonds or notes issued; or CoUaterai trust bonds (2) Deposit of bonds authorized for investment by this Wepo^t^ofruthot section, and other securities, of a combined market value at ized bonds as least twenty per centum in excess of the par value of the col- lateral trust bonds or notes issued ; provided, that the par value of said collateral trust bonds or notes shall in no case exceed the market value of that portion of the security represented by bonds authorized for investment by this section. Bonds legal for invest- (/) Bouds legal for investment by savings banks in the ban'ks'ilNewYoS ^^^^^^ ^^ ^^^ York or Massachusctts ; provided, however, and Mass., with that as to bonds of the character specified in paragraph (c) specified restrictions ^^ ^^^ ^^ subdivisiou three of this scctiou, such bouds shall also conform to the requirements of either of such para- graphs. Certificates of par- (k) Certificates issued by a corporation organized under ticipation in first ^j^^ j^^g q£ ^j^jg g^^^^ ^j^j^ ^ paid-up Capital stock of not less than mortgage on real ^ r r estate, etc., issued oue hundrcd thousaud dollars, evidencing and conferring par- by domestic corpora^ ticipation to an indicated amount in a first mortgage on real tion — under specified ^ o o restriction estate and the debt secured thereby, and guaranteeing the pay- ment of the principal of the mortgage debt at its maturity or within some specified time thereafter and agreeing to pay interest on the amount of the participation at some specified rate, the mortgage however and debt thereby secured to be assigned to a trust company and held by it as security for the payment of said mortgage certificates and for the perform- ance of all conditions imposed thereby upon the corporation issuing the same; provided, the said first mortgage indebted- ness shall not exceed sixty per centum of the market value of the real estate taken as security, and provided, further, that the trust company shall certify on each certificate that the aggre- gate amount of the certificates issued evidencing and con- ferring participation in any one such mortgage and mortgage debt does not exceed the principal of the said mortgage debt; but provided, nevertheless, that, unless such certificates are made legal investment for savings banks by other law of this SAVINaS BANKS 49 State, no savings bank shall purchase any such certificates until Bonds which are legal investm — continued the corporation issuing the same has first obtained the written ***** investments approval of the superintendent of banks to such certificates as an investment for savings banks. The actual expense of in- Approval of vestigating any issue of such certificates presented to the fo^'purch'a^^^ch cer- superintendent of banks for approval shall be paid by the cor- tificates required. , , , . , ,. i . tinless same made legal poration presenting the same, and the superintendent of banks, investment by other before making such investigation may require a cash deposit law of this state of such amount as he may deem necessary to cover such ex- Expense of pense. The superintendent of banks may accept and act upon Superintendent's , . . . - ' 1 ' investigation the opinions and appraisements of any title insurance or abstract company, attorneys or appraisers which may be pre- sented by such corporation so applying, and the reports of any of the executive officers of the corporation issuing such certifi- cates, on any question of fact concerning or affecting such certificates, the security thereof, or the financial condition of the corporation issuing the same. In lieu of or in addition to such opinions, appraisements and reports, the superintendent of banks may, if he deems proper, have any or all such mat- ters passed upon and certified to him by attorneys, appraisers or accountants of his own selection at the expense of the appli- cant. The superintendent of banks shall keep an official list Superintendent of all issues of such certificates approved by him. approved certificates No notes, bonds, or other securities, the payment of , . , . ' , , ,' ^ "^ - Note-. After Sept. 1, which is secured by any mortgage or deed of trust executed 1913. certain securities after September 1, 1913, shall be deemed to come within or ''^^^"^'^i°'"P^'"*V., 1 • r . 1 r 1 / rx / X graphs (f), (g) and (i) conform to the requirements of either of paragraphs (f), (g) must have been cer- or (i) of subdivision three of this section, unless such notes, tifiedbySupt. bonds or other securities shall, in the manner provided in this act, have been certified by the superintendent of banks, to come within and fully conform to the requirements of one or the other of said paragraphs. The legality of investments heretofore lawfully made pur- Legal investments suant to the provisions of this section, or of any law of this that^re^not affected state as it existed on and subsequent to July 1, 1909, shall not be affected by any amendments to this section or this act ; nor shall any such amendments require the changing of in- vestments once lawfully made under this act. 50 CALIFOBNIA BAITE ACT Bonds which are Any bonds authorized by this section as a legal investment ega ^^^™®J*^ for savings banks may be carried on the books of said bank at their investment value, based on their market value at the time they were originally bought, unless the superin- Supt. may require tendent of banks shall require any or all of the bonds which bank to write-down ^^^ thereafter have a market value less than the original investment value to be written down to such new market value which shall be done gradually if practicable and in such manner as he may determine ; or he may, by a plan of amorti- zation to be determined by him, require such gradual extinction of premium as will bring such bonds to par at maturity. Classes of bonds. No saviugs bank shall hereafter purchase or loan money etc.. issued by any upon any boud, uotc or Other evidence of indebtedness, issued "PubUc utility' m *" It ^ ,. .,.,,,. ...... , . which savings bank by any public Utility, subjcct to the jurisdiction, regulation may invest, etc. qj. control of the railroad commission of this state under the provisions of the "Public Utilities Act," approved December 23, 1911, unless each such bond, note or other evidence of in- debtedness was either: (a) Issued prior to the taking effect of the "Public Utilities Act" ; or (&) Issued under authority of the railroad commission, in accordance with the provisions of said act; or (c) A note issued for a period not exceeding twelve months, in accordance with the provisions of sub- division (b) of section fifty-two of said act. No provision of this act No provision of this act, and no act, or deed, done or c^ifomi^t^bfiiabif performed under or in connection therewith, and no finding for. or guarantee pay. made Or Certificate issued under any provision thereof, shall Ts^lt."^S:i be held or construed to obligate the State of California to under this act by pay, or be liable for the payment of, or to guarantee in any upenntendent ^nanuer whatsocvcr, the regularity or the validity of the issuance of any stock or bond certificate, or bond, note, or other evidence of indebtedness certified under any provision of this act, by the superintendent of banks, as being in con- formity with the requirements of any paragraph of subdi- vision three of this section. Sec. 61a. The superintendent of banks shall have power, when any issue of bonds or securities is presented to him for SAVINGS BANSS 51 that purpose, to investigate and ascertain whether such bonds Bonds which are or securities come within and fully conform to all the require- -!^ontintfed**"** ments of paragraphs (f), (g), (h) or (i) of subdivision three of section sixty-one of this act, or of either of said paragraphs. Supt. may investigate He may also investigate and ascertain for what period of time, ^^d a!crrt^nTthey and upon what conditions, any franchise granted to or held by conform to act any corporation issuing any such bonds or securities will remain in force. The actual expense of investigating any issue of Expense of bonds or securities so presented shall be paid by the person or ^°^^ ^^^ corporation presenting the same for investigation, and the su- perintendent of banks, before making such investigation may require a cash deposit of such amount as he may deem neces- sary to cover such expense. The superintendent of banks On questions concem- may accept and act upon the opinions and appraisements of mayTcT^on^^eg^^* any attorneys or appraisers which may be presented by such opinions and appraise- person or corporation so applying, and the reports of any of ^^puc^t?^"*^ ^ the executive officers of the corporation issuing such bonds or securities, on any question of fact concerning or affecting such bonds or securities, the security thereof, the franchise conditions herein mentioned, or the financial condition of the corporation issuing the same. In lieu of or in addition to Supt. may select such opinions, appraisements and reports, the superintendent a^dTccoun^^t^'ar of banks may, if he deems proper, have any or all such matters expense of applicant passed upon and certified to him by attorneys, appraisers or accountants of his own selection at the expense of the applicant. If the superintendent of banks shall find from such investiga- Supt. shau certify tion that the bonds or securities so presented come within and or refuse certificate fully conform to all the requirements of any of said paragraphs of subdivision three of section sixty-one of this act, and is satisfied from such investigation as to such franchise condi- tions, he shall so certify, otherwise a certificate shall be refused. The superintendent of banks shall keep an official list of all Supt. to keep list of . securities certified bonds and securities certified by him. Sec. 62. No savings bank shall, directly or indirectly, deal Restrictions upon , . , , , . , «_ r savings bank dealing or trade m real or personal property in any other case or for j^ property and con- any other purpose than is authorized by this act, and shall not tracting debts, etc. contract any debt or liability for any purpose whatever other than for deposits, except as in this section provided. 52 OALIFOBNIA BANE ACT Savings bank may S'avings banks may pay regular depositors, when requested pay <^^^^*^^^^y by them, by draft upon deposits to the credit with their banks, requested j^jj^j charge currcnt rate of exchange for such drafts. No savings bank shall borrow money, or pledge or hypothe- Savings bank not to catc any of its sccurities, except to meet the immediate ^t^^^demaTdTof ^^^n^^^^s of its own dcpositors, and then only in pursuance of depositors— except a rcsolution adopted by a vote of a majority of its board of "^ubikmoLyfand ^ircctors, duly entered upon their minutes, wherein shall be postal savings recordcd the ayes and nays upon each vote ; also with the °^°^^y^ written approval of the superintendent of banks, and he shall have the authority to fix the amount to be borrowed, and the term and rate of interest thereon; provided, however, that savings banks may, in the manner authorized by law, and without the written approval of the superintendent of banks, borrow the public moneys of the state, counties, cities and counties, and towns and receive such public moneys on deposit ; provided, also, that savings banks may in the manner author- ized by law, and without the written approval of the superin- tendent of banks, borrow postal savings moneys of the United States, and receive such postal savings moneys on deposit. Savings bank may Sec. 63. S'aviugs bauks may issue general certificates of ' deposit cleposit, which are transferable, as in other cases, by indorse- ment and delivery ; may issue, when requested by the depositor, special certificates, acknowledging the deposit by the person therein named of a specified sum of money, and expressly pro- viding on the face of such certificate that the sum so deposited and therein named may be transferred only on the books of the bank; payment thereafter made by the bank to the depositor named in such certificate, or to his assignee named upon the books of the bank, or in case of death, to the legal representa- tive of such person, of the sum for which such special certificate was issued, shall discharge the bank from all further liability on account of the money so paid. Time certificates of AH time Certificates of deposit, issued by a savings bank, deposit subject to in* i • , .... , ... same conditions as Shall DC subjcct to the Same limitations and conditions as other deposits, etc. applied to Other deposits, and notice thereof shall be given by the words "Subject to conditions of agreement with depos- itors" printed on the face of the certificate issued. SAVINaS BANES 53 Sec. 64. Each savings bank must prescribe by its by-laws, Savings bank to pre- or by contract with its depositors, the time and conditions on or'by contra^rw which repayment is to be made to depositors, except as in this ^"^^ conditions of ^ ^ repayment to act otherwise provided. In all cases the by-laws or contracts depositor shall provide that notice of at least thirty days may, at the Notice of at least option of any such bank, be required to be given of intention to ^f Sik Tbe* ZtT withdraw any deposit or part thereof, but whenever there is by depositor any call by depositors for repayment of a greater amount than the bank may have disposable for that purpose, the di- rectors or officers thereof must not make any new loan or investment of the funds of the depositors or of earnings there- of until such excess of call has ceased. The directors of any such bank having no capital stock shall, before the declaration of any dividend, carry at least one-tenth part of the net profits of such bank, for the preceding half year, or for the period covered by said dividend, to its reserve fund. Subject to the provisions of section nineteen of this act, any losses sustained by any such bank may be charged to and paid out of its reserve fund. A larger reserve fund may be created and nothing herein contained shall be construed as prohibitory thereof. The assets of any such bank are a security to its depositors. Any such bank organized without capital stock, may provide Savings bank without by its by-laws for the disposal of any amount in its reserve ca^^tl^tt^- fund in excess of the amount required by section nineteen of tenth profits to this act and may also provide for final disposal upon the dis- Dir^lion of such solution of the bank of its reserve fund or the balance thereof reserve remaining after payment of any losses of such bank. Sec. 65. No loan shall be made, directly or indirectly, to Savings bank shau any director or officer of any savings bank by such bank, or doctor or officer, on the endorsement, surety or guaranty of any such officer or °^ ^p°" ^^ endorse- j . ^ ^11 11 . . ment, etc., except may director, except that loans may be made to any corporation m loan to corporation which any director or officer of such savings bank may own or in which director or 1 t 1 • • 1 r 1 <• 1 1 . officer holds hold a minority number of shares of stock, upon authonza- minority stock tion of a majority of all the directors of such savings bank and the affirmative vote of all directors of such savings bank present at the meeting authorizing such loan; provided, how- eveVy that such loan shall in all other respects conform to and comply with all other provisions of this act. Such interested 54 CALIFOENIA BANK ACT Loans— continued director or officer shall not vote or participate in any manner Interested director in the action of the board on such loan. Such authorization not to act on such ^j^^jj ^^ entered upon the records or minutes of such savings Facts concerning bank. The fact of making such loan, the names of the ^'^po^toSupt' directors authorizing such loan, the corporate name of the borrower, the name of each director or officer of such bank who is a member, stockholder, or director of the corporation to which such loan is made, the amount of such loan, the rate of interest thereon, the time when the loan will become due, the amount, character and value of security given there- for and the fact of payment, when made, shall be forthwith reported in writing by the cashier or secretary of such savings bank to the superintendent of banks. ^TJS'to a^nTor ^ ^^^" ^^^ ^ ^^^^ ^^ ^"^ ^&^"* ^^ employee, other than employee an officcr Or dircctor, of any savings bank by such bank upon authorization of a majority of all the directors of such savings bank and an affirmative vote of all directors of such savings bank present at the meeting authorizing such loan; provided, Requirements however, that such loan shall in all respects conform to and comply with all other provisions of this act. Such authorization shall be entered upon the records or minutes Facts concerning of such savings bank. The fact of making such loan, the reported°to Supt! namcs of the directors authorizing such loan, the name of the borrower, the nature of his employment, the amount of sudh loan, the rate of interest thereon, the time when the loan will become due, the amount, character and value of the security given therefor, and the fact of payment, when made, shall be forthwith reported in writing by the cashier or secretary of such savings bank to the superintendent of banks. Any officer or director of any savings bank, who knowingly procures a loan from such savings bank, contrary to the provisions of this section, shall be guilty of a felony. Violations of section jj^ ^^g^ q£ ^j^g neglect or failure of the secretary or cashier of any such bank, to report to the superintendent of banks, as herein provided, any of the facts so required to be reported. Penalties the bank shall be liable therefor and shall forfeit to the people of the State of California twenty-five dollars per day for each day, or part thereof, during which such neglect or failure continues. SAVINGS BANKS 55 Sec. 66. No savings bank shall hereafter make any loans Loans— continued to any person, firm, co-partnership or corporation to an amount exceeding fifty per centum of the actual paid up capi- Savings bank not to tal stock and surplus of such bank, or in the case of a bank person, etc., exceed- orsfanized without capital stock, to an amount exceeding fifty ingso%paidup . capital and surplus per centum of the reserve fund of such bank; provided, how- ever, that any savings bank having a paid-up capital and sur- plus of less than fifty thousand dollars, but not less than twenty- Exceptions to five thousand dollars, may make any such loan on real estate foregoing security to an amount not exceeding twenty-five thousand dollars ; and provided further, that any savings bank having a paid-up capital and surplus of less than twenty-five thousand dollars may make any such loan on real estate security to an amount not exceeding its paid up capital and surplus, if each such loan in all other respects conforms to the provisions of this act. The renewal or extension of any loan heretofore Renewal or extension legally made by any savings bank shall not be construed to be °^^^ heretofore a "loan hereafter made" within the meaning of the provisions of this section. The legality of investments heretofore law- fully made pursuant to the provisions of this act as it existed on and subsequent to July 1, 1909, shall not be affected by the provisions of this section. For the purposes of this section Endorser or guarantor an endorser or guarantor shall be deemed to be a borrower. ^^^"^^^ ^^"•^'^^^ Sec. 67. 1. No savings bank shall loan money except on Savings bank to loan adequate security of real or personal property, and no such security for 'ikL^t^ed loan shall be made for a period longer than ten years; pro- period vided, that no such loan shall be made on unsecured notes. 2. No savings bank shall invest or loan more than five per Restrictions on in centum of its assets on any one bond issue, except bonds of the United States, of the State of California, bonds for which the faith and credit of the United States or of the State of California are pledged, or bonds of any county, city and county, city or school district in this state, or bonds of any irrigation district such as are legal for investment by savings banks. 3. No savings bank shall loan money: Loans on various .f.^, 1 / \ classes of bonds, etc. — (a) On bonds of the character specified m paragraphs (a), margin of security (b), (c), and (d) of subdivision three of section required sixty-one of this act, unless such bonds shall have a vestment in or loan on any one bond issue 56 CALIFORNIA BAITK ACT Loans — continued Loans by savings banks on various classes of bonds, etc. — margin of security required Real estate loans: To be first liens Not to exceed 60% of market value When bank may take second lien First mortgage real estate bonds market value at least ten per centum in excess of the amount loaned thereon; or, (b) On bonds of the character specified in paragraphs (e), (f) and (g) or on bonds or notes of the character specified in paragraph (i) of subdivision three of sec- tion sixty-one of this act, unless such bonds or notes shall have a market value at least fifteen per centum in excess of the amount loaned thereon ; or, (c) On bonds legal for investment by savings banks in the states of New York or Massachusetts, unless such bonds shall have a market value at least fifteen per centum in excess of the amount loaned thereon; or, (d) On personal property unless such personal property shall have a market value at least fifty per centum in excess of the amount loaned thereon ; or, (e) On other bonds, or on the capital stock of any corpora- tion, unless such bonds or stock shall have a market value at least fifty per centum in excess of the amount loaned thereon; provided, however, that no loan shall be made upon the capital stock of any bank unless such bank has been in existence at least two years and has earned and paid a dividend on its capital stock. 4. No savings bank shall make any loan on the security of real estate, except it be a first lien, and in no event to ex- ceed sixty per centum of the market value of any real estate taken as security except for the purpose of facilitating the sale of property owned by such savings bank; provided, that a second lien may be accepted to secure the repayment of a debt previously contracted in good faith; and, provided, also, that any savings bank holding a first mortgage or deed of trust on real estate may take or purchase and hold another and imme- diately subsequent mortgage or deed of trust thereon, but all such loans shall not exceed in the aggregate sixty per centum of the market value of the real estate securing the same; provided, further, that a savings bank may loan not to exceed ninety per centum of the face value of a note or bond secured by a first mortgage or deed of trust on real estate, but in no event shall any such loan exceed ninety per centum of sixty SAVINGS BANKS 57 per centum of the market value of the real estate covered by Loans— continued said mortgage or deed of trust. 5. No savings bank shall purchase, invest or loan its cap- Savings bank not to ♦ . 1 1 .1 r -. t • . . f invest in or loan on ital, surplus or the money of its depositors, or any part of mining stock either, in mining shares or stock. Any president or manag- ing officer who knowingly consents to a violation of any violation of Sec. 67 provision of this section shall be guilty of a felony. Jie^y^ ° ^^'^ Sec. 68. Every savings bank or savings department of Reserve required of a bank, shall at all times maintain a lawful money reserve ^^^^°^^^^^^- equivalent to four per centum of the aggregate amount of 4% of deposits its deposits ; one half of such lawful money reserve shall be kept on hand in lawful money of the United States or gold How and where to certificates or silver certificates of the United States, and one- half may consist of bonds of the United States or of lawful money of the United States or gold certificates or silver cer- tificates of the United States, on hand or on deposit subject to call with any reserve bank provided for in section twenty of this act; provided , however, that no sav- ings bank or savings department shall be required to main- tain in its own keeping a lawful money reserve in excess of four hundred thousand dollars, and when such lawful money reserve in its own keeping reaches that amount, the balance of cash necessary to make up the four per centum may be kept on deposit subject to call with any reserve bank pro- vided for in section twenty of this act. No new loan shall No new loans during i_ jj- 1 r • •iiiri deficiency in reserve be made during any deficiency in the lawful money reserve. Deposits with any commercial bank, or commercial depart- ment of a bank, on open account, to facilitate business trans- actions, as provided in this section, shall be permitted, and shall not be construed as loans. Not more than five per Restrictionson centum of the deposits of any savings bank shall be deposited fromtl^blnk^ with any one bank, except with the consent of the superintend- ent of banks. Not more than fifteen per centum of the deposits of any savings bank shall be deposited with all other banks, except with the consent of the superintendent of banks. No savings bank or savings department shall receive deposits of other banks other than savings deposits and such deposits shall not be treated or considered as a part 58 OALIFOBNIA BANE ACT of the lawful money reserve of such depositing bank; provided, that the sum so deposited shall not exceed ten thou- sand dollars. Public administrator Sec. 68^. Where a dcccdent, at the time of his or her decedent to remain death, left moneys on deposit with a savings bank, it shall be in savings bank lawful for any public administrator, who shall become the where deposited - . . - . .. « * . admmistrator of the estate, to allow such deposit to remam m said savings bank, and also, it shall be lawful for him to deposit therein to the account of said decedent, any and all moneys of said estate not required for the current expenses of admin- Effect of such deposit istration. Such deposit, whether made by the decedent or a public administrator, shall relieve the public administrator from depositing the same with the county treasurer. Moneys so deposited, whether by the decedent or by a public adminis- Method of withdrawal trator, may be drawn upon demand without notice, upon the order of said administrator, countersigned by a judge of a superior court, when required for the purpose of administra- tion or otherwise. Savings banks to Sec. 69. Every savings bank, and the business of every conform to this act . , . « < i « « « savmgs department of every other bank, must be conducted under and in accordance with the provisions of this act. ARTICLE III. COMMEBCIAL BANES. Loans Sec. 80. No commercial bank shall make any loans to Percentages of paid any pcrson, firm, co-partnership or corporation, to an "^hfs^thtt^mtTe ^^^^^^ exceeding the following percentages of its capital loaned by commer- stock actually paid in and surplus : "*^ ^^Wower'- ^* '^^^ P^^ centum without security, except where such (1) 10% without capital stock and surplus is less than twenty-five thousand (note except^^s) ^ol^ars, in which event an amount not to exceed twenty per centum of such capital stock and surplus may be loaned without security, and where such capital stock and surplus is greater than twenty-five thousand dollars and does not exceed fifty thousand dollars, a sum not exceeding five thousand dollars may be loaned without security. Nothing COMMEBCIAL BANES 59 herein shall prohibit any commercial bank from taking or Loan»-continued receiving any kind, character or amount of security whatso- ^"y security may be ever, either real or personal, for the protection of any loan *^^^" ^°^ ^"^^ i°*°s made under the provisions of this subdivision, but no such loan or any part thereof shall be considered or construed as a When not construed secured loan unless the whole thereof is loaned upon security ^^ ^^""^^ ^°^" worth at least fifteen per centum more than the amount of such loan; or, 2. Fifteen per centum, in addition to the amount that (2) is % (in addition may be loaned under the provisions of subdivision one of this rn^'iubdi^^s'ion i) section, upon security worth at least fifteen per centum more "po^ security exceed- 11 ,.11 1 ^^8 loan by 15 % than the amount of such loan so secured; provided, however, that a separate note or notes shall be taken for the unsecured Separate notes for loans and a separate note or notes shall be taken for the secured 'oans''^ ^""^ unsecured loans, and the secured and unsecured loans shall not be com- bined in any way within one note, or notes ; or, 3. Twenty-five per centum upon security worth at least (3) 25% upon security fifteen per centum more than the amount of its loans so se- (notfproUT^'' ^^^" cured; provided, however, that when secured loans to this amount or any amount in excess of fifteen per centum are made, then no unsecured loans shall be permitted in addition to such secured loans. A commercial bank may buy from, or discount for, any Commercial bank may person, firm, co-partnership or corporation, or loan upon bills p^^^hase or loan on of lading or bills of exchange drawn in good faith against ^ ^ ° ^ ^'^^' actual existing value an amount not exceeding seventy-five per centum of the paid up capital and surplus of such bank; and may also buy from or discount for any person, firm, co-partner- May purchase or ship or corporation, commercial or business paper actually discount commercial ,11 - ,. . paper, etc. owned by the person, firm, co-partnership or corporation nego- tiating the same, an amount not exceeding twenty-five per centum of the paid up capital and surplus of such bank; but the discount of bills of lading or bills of exchange drawn in good faith against actual existing value, and the discount Such discount not of commercial or business paper actually owned by the person, bo^o^ed*^ "'°''^^ firm, co-partnership or corporation negotiating the same, shall not be considered as money borrowed by the person, firm, co- partnership or corporation selling or discounting the same. 60 CALIFORNIA BANK ACT Loans— continued Sec. 81. No loan shall be made by any commercial bank upon the securities of one or more corporations, the payment Loans upon corporate of which is Undertaken, in whole or in part, severally, but not ^^^i^^^onditions jointly, by two or more individuals, firms, or corporations: specified (^) If the borrowcrs or underwriters be obligated abso- lutely or contingently to purchase the securities, or any of them, collateral to such loan, unless the borrowers or under- writers shall have paid on account of the purchase of such securities an amount in cash, or its equivalent, equal to at least twenty-five per centum of the several amounts for which they remain obligated in completing the purchase of such securities ; (b) If the commercial bank making such loan be liable, directly or indirectly, or contingently, for the repayment of such loan or any part thereof ; (c) If its term, including any renewal thereof by agree- ment, express or implied, exceed the period of one year ; {d) Or to an amount under any circumstances in excess of twenty-five per centum of the capital and surplus of the com- mercial bank making such loan. Paid up capital Sec. 82. Every commercial bank hereafter organized requirements: ^^^^ j^^^^ ^^j^ ^^ j^ ^^^j^ ^ Capital StOCk of nOt IcSS than, Population not over (^j) Twcuty-fivc thousaud dollars if its principal place of business is located in any locality the population of which does not exceed five thousand persons ; 5.000 to 25.000 (b) Fifty thousand dollars if its principal place of busi- pop ation. . ^^^^ .^ located in any city the population of which is more than five thousand persons but does not exceed twenty-five thousand persons ; J^o^,ZZ (^) One hundred thousand dollars if its principal place of business is located in any city the population of which is more than twenty-five thousand persons but does not ex- ceed one hundred thousand persons; poplX%2~Z (''). Two hundred thousand dollars if its principal place of business is located in any city the population of which is more than one hundred thousand persons but does not ex- ceed two hundred thousand persons ; COMMEBCIAL BANKS 61 (e) Three hundred thousand dollars if its principal place Population exceeding of business is located in any city the population of which is 2oo.ooo.-$3oo.ooo more than two hundred thousand persons. The foregoing classification shall not apply to any com- Foregoing ciassifica- mercial bank already in existence which has received its nOTap°pii"ab°e^o*^^^ certificate to do a banking business from the superintendent ^^nks included by annexation in of banks ; nor to any bank the location of which shall have larger city been included by annexation or consolidation within the limits of a city of a class requiring a larger capitalization, but no bank thus excepted shall be permitted to establish any new branch office as provided in section nine of this act or to remove its place of business from the original limits of the city or township wherein it was located prior to such annexation or consolidation until it shall have the capital required of banks in such city not within said exception. Such excepted banks may not in any case decrease their Restrictions as to capital stock but may increase the same in the manner pro- e*<^ep*e"— ^o" »""« liquidation and distribution, the certificate of appointment to Superintendent may be filed in the office of the superintendent of banks, and a cer- depu^y^ ^ les o tified copy in the office of the clerk of the county in which the principal office of such bank is located. The superintendent of banks may from time to time, by a certificate of appointment under his hand and official seal, specifying the powers conferred, authorize a special deputy superintendent to perform such duties connected with such liquidation and distribution as the superintendent of banks may deem proper. Such certificate of appointment shall be filed in the office of the superintendent of banks and a cer- tified copy in the office of the clerk of the county in which the principal office of such bank is located. The superin- Superintendentmay -.<.-, , - - , employ such counsel tendent of banks may employ such counsel and procure land expert assist- such expert assistance and advice as may be necessary in anceasmaybe the liquidation and distribution of the assets of such bank, uquidation and for that purpose may retain such of the officers or employees of such bank as he may deem necessary. The superintendent of banks shall require from a special deputy superintendent and from such assistants such security for the faithful discharge of their duties as he may deem proper. The superintendent of banks shall Superintendent to . . publish and'mail cause notice to be given by advertisement, in such newspapers notice to creditors as he may direct, weekly for three consecutive months, callinsr *° present and prove ' <=> claims against bank on all persons who may have claims against such bank to present the same to the superintendent of banks, and make legal proof thereof at a place and within a time, not earlier than the last day of publication, to be therein specified. The superintendent of banks shall mail a similar notice to all per- sons whose names appear as creditors upon the books of the l bank. If the superintendent of banks doubts the justice and Action upon rejected * .. .. . , . , . , , . claim — when must validity of any claim, he may reject the same, and serve notice be brought by of such rejection upon the claimant, either by mail or person- ^^^^^ ally. An affidavit of the service of such notice, which shall be prima facie evidence thereof shall be filed with the superin- tendent of banks. Any action upon a claim so rejected must be brought within six months after such service. Claims pre- 90 CALIFOKNIA BANK ACT invoiuntery disso- sented after the expiration of the time fixed in the notice to o —con in e ^.j-g^^j^Qj-g gj^^jj ^^ entitled to share in the distribution only to the extent of the assets in the hands of the superintendent of Superintendent to banlcs equitably applicable thereto. Upon taking- possession make and file in- , , , o r- ventory of assets o* the property and assets of any bank, the superintendent of banks shall make an inventory of the assets of such bank in duplicate, one to be filed in the office of the superintendent of banks, and one with the papers in said proceeding in the of- fice of the clerk of the county in which the principal office of such bank is located ; upon the expiration of the time fixed for Superintendent^ the presentation of claims the superintendent of banks shall clerk Ust of daims iTiakc in dupHcatc a full and complete list of the claims pre- presented. specify- scutcd, including and Specifying such claims as have been re- ing claims rejected . ,,,. i,-ii.i n-- /•» jected by him, one to be filed in the office of the superintend- ent of banks, and one with the papers in said proceeding in the office of the clerk of the county in which the principal Supplemental lists officc of such bank is located. Thereafter he shall make and file in said offices as above provided at least fifteen days be- fore each application to the court for leave to declare a divi- dend a supplemental list of the claims presented since the last preceding list was filed, including and specifying such claims as have been rejected by him, and in any event he shall make and file as above provided such a list at least once every six months after the filing of the original list, as long as he shall remain in possession of the property and business of any such bank. Such inventory and list of claims shall be open at all Compensation of reasonable times to inspection. The compensation of the special deputies and . , , • i 111 t other employees and spccial dcputy Superintendents, counsel and other employees au expenses of su- ^j^^j assistants, and all expenses of supervision and liquidation, pervision — how to ,,,--,, , . , r 1 1 1 1 11 be fixed and paid shall be fixed by the superintendent of banks and shall upon and reported ^]^g certificate of the superintendent of banks be paid out of the funds of such bank in the hands of the superintendent of banks. All such expenses must be reported by the superintendent of banks to the superior court of the county where the prin- cipal place of business of such bank is located and settled ^°" how dlpost^ ^y ^"^^ ^°"^* "P°^ ^^^^^^ *° ^^^^ ^^^^- ^^^ moneys col- lected by the superintendent of banks shall be from time to time deposited in one or more state banks of deposit, savings banks or trust companies, and, in case of the suspension or STATE BANJOUQ DEPAETMENT 91 insolvency of the depositary, such deposits shall be preferred involuntary dis»o- before all other deposits. At any time after the expiration such d^ts"""*** of the date fixed for the presentation of claims the superior given preference court may by order authorize the superintendent of banks to declare out of the funds remaining in his hands after the Declaration of payment of expenses one or more dividends, and after the pa^iai and final dividends — how expiration of one year from the first publication of notice made to creditors he may declare a final dividend, such dividends to be paid to such persons, and in such amounts, and upon such notice, as may be directed by the superior court of the county in which the principal office of such bank is located, objections by inter- Objections to any claim not rejected by the superintendent no\tejl^?eVby stpt of banks may be made by any party interested by filing a copy to be heard and dis. of such objections with the superintendent of banks, who shall orTelrL*''' '°'''' present the same to the superior court at the time of the next application to declare a dividend. The court to which such application is made shall thereupon dispose of said objections Court to make or may order a reference for that purpose, and should the proper provision . , . ^ . lOr unproved or un- objections to any claim be sustained by the court or by the claimed deposits referee, such claim shall not be allowed by the superintendent of banks until the claimant shall have established his claim by the judgment of a court of competent jurisdiction. The court must make proper provision for unproved or unclaimed de- posits. Should any bank at the time the superintendent of banks Bailors of property takes possession of its property and business, have in its pos- tobrnotmedby session, as bailee for safekeeping and storage, any jewelry, Superintendent to plate, money, specie, bullion, stocks, bonds, securities, valuable papers or other valuable personal property or should it have rented any vaults, safes or safe deposit boxes or any portion ther of for the storage of property of any kind, the super- intendent of banks may at any time thereafter cause to be mailed to the person claiming to be or appearing upon its books to be the owner of such property, or the person in whose name the safe, vault or box stands, a notice in writing in a securely closed, postpaid registered letter, directed to such person at his post office address as recorded upon its books, notifying such person to remove, within a period fixed by said notice and not less than sixty days from the date thereof, remove property 92 CALIFOENIA BANK ACT Involuntary disso- all such personal property and upon the date fixed by said lution— continued j^^^j^^g^ ^^^ Contract, if any, between such person and bank for the storage of said property or for the use of the said safe, vault or box shall cease and determine, and the amount of the unearned rent or charges, if any, paid by such person If such property not shall bccome a debt of the bank to said person. If the prop- removed within time gj.^ |3g j^Q^ removed within the time fixed by the notice, the fixed by notice, "^ ■' ' Supt. to dispose of Superintendent of banks may make such disposition of said same^as^ourt property as the superior court, upon application thereto, shall direct. And the superintendent of banks may cau^e any safe, Superintendent may vault or box to be Opened in his presence or in the ''or boxTo bfop^ntd prcsencc of one of the special deputy superintendents of banks, and its contents and of a uotary public not an officer or in the employ of the *^^^specified bank or of the superintendent of banks, and the contents thereof, if any, to be sealed up by such notary public in a pack- age upon which such notary public shall distinctly mark the name and address of the person in whose name such safe, vault or box stands upon the books of the bank and shall at- tach thereto a Hst and description of the property therein; and the package so sealed and addressed, together with the list and description, may be kept by the superintendent of banks in one of the general safes or boxes of the bank until delivered to the person whose name it bears, or until otherwise dis- Bank deeming itself poscd of as directed by the court. Whenever any such bank aggrieved may en- ^f whose property and business the superintendent of banks join proceedings , . ^ . i / • , r • j within ten days has taken possession as aforesaid, deems itself aggrieved after Supt. takes thereby, it may, at any time within ten days after such taking possession •' ' •' ' •' -^ ... possession, apply to the superior court in the county in which the principal office of such bank is located to enjoin further proceedings; and said court, after citing the superintendent of banks to show cause why further proceedings should not Hearing to be had be eujoiucd, and hearing the allegations and proofs of the b^'llteredtherein P^^tics and determining the facts may, upon the merits, dis- miss such application or enjoin the superintendent of banks from further proceedings, and direct him to surrender such Provisions concern- busiucss and property to such bank. An appeal as above pro- mg appeaHrom ^j^^g^ gj^^jj Operate as a stay of the judgment of the superior court, and no bond need be given if the appeal be taken by the superintendent of banks; but if the appeal be taken by STATE BANKING DEPAETMENT 93 such bank, a bond shall be given, as required by section nine involuntary disso- hundred forty-three of the Code of Civil Procedure. When- ISter "p^r" ""^ ever the superintendent of banks shall have paid to each and allowed claims, etc.. every depositor and creditor of such bank whose claim or of'stlkhofde^^^^^^^ claims as such creditor or depositor shall have been duly determine whether proved and allowed, the full amount of such claims, and shall uq^daton TaSnt have made proper provision for unclaimed and unpaid de- be elected for that posits or dividends, and shall have paid all the expenses of the p'''^°^ liquidation, the superintendent of banks shall call a meeting of the stockholders of such bank giving notice thereof for thirty days in one or more newspapers published in the county where the principal office of such bank is located. At such meeting the stockholders shall determine whether the super- intendent of banks shall be continued as liquidator and shall wind up the affairs of such bank, or whether an agent or agents shall be elected for that purpose, and in so determining the said stockholders shall vote by ballot, in person or by Manner of voting proxy, each share of stock entitling the holder to one vote, ^*^"^ meeting and the majority of the stock shall be necessary to a determi- nation. In case it is determined to continue the liquidation under Completion of the superintendent of banks, he shall complete the liquidation ^^^ ^ ^°"' of the affairs of such bank, and after paying the expenses (i) i^ ^y Supt. thereof, shall distribute the proceeds among the stockholders in proportion to the several holdings of stock in such manner and upon such notice as may be directed by the superior court. In case it is determined to appoint an agent or agents to (2) if by agent liquidate, the stockholders shall thereupon select such agent or agents by ballot, a majority of the stock present and voting, in person or by proxy, being necessary to a choice. Such agent or agents shall execute and file with the superintendent Agent shall execute of banks a bond to the people of the state in such amount, with such sureties and in such form as shall be approved by the superintendent of banks, conditioned for the faithful per- formance of all the duties of his or their trust, and thereupon the superintendent of banks shall transfer and deliver to such Superintendent shall agent or agents all the undivided and uncollected or other a^tsTo'^agent assets of such bank then remaining in his hands; and upon such transfer and delivery, the said superintendent of banks 94 OALIFOBNIA BANK ACT DUsoiution— shall be discharged from any and all further liability to such bank and its creditors. Such agent or agents shall convert Agent to convert the assets coming into his or their possession into cash, and 4 Tnd ^count'forTnd shall account for and make distribution of the property of said distribute property ^^nk as is hcrciu provided in the case of distribution by the superintendent of banks, except that the expenses thereof shall be subject to the direction and control of a court of record of competent jurisdiction. In case of the death, removal or refusal to act of any such agent or agents, the stockholders, on the same notice, to be given by the superintendent of banks upon proof of such death, removal or refusal to act being filed with him, and by the same vote hereinbefore provided, may elect a successor, who shall have the same powers and be subject to the same liabilities and duties as the agent originally Disposition of divi- elected. Dividends and unclaimed deposits remaining unpaid ^depo^s^tsremaiSng ^^ ^^^ hauds of the Superintendent of banks for six months unpaid six months after the ordcr for final distribution shall be by him deposited ^^^'^ °£Sributk)n w^*^ ^^^ ^^^^^ treasurer in the same manner and subject to the same disposition as provided for in section one thousand two hundred thirty-four of the Code of Civil Procedure. The superintendent of banks may pay over the moneys so held by him to the persons respectively entitled thereto upon being furnished satisfactory evidence of their right to the same. In cases of doubt or conflicting claims he may require an order of the superior court authorizing and directing the payment thereof. Bank ceasing busi- Sec. 136a. Any bank which has ceased to do a banking ness shall imme- busiucss whether through voluntary action on its part or diately liquidate ^ -^ . i n • through expiration of its corporate existence, shall immedi- ately liquidate its aflfairs : id any unclaimed deposits or divi- dends shall be paid into the state treasury in the manner and for the purposes provided in section one hundred thirty-six of If liquidation un- this act within six months after the date such bank ceased to ^tupt^'mfyta^ke conduct a banking business, and in case the superintendent possession and of bauks shall havc reason to conclude that the liquidation of uquidate g^^j^ ^^^^ j^ ^^^ being safely or expeditiously conducted, he may take possession of the property of such bank and liquidate its affairs in the same manner as provided in section one hun- STATE BANKING DEPARTMENT 95 dred thirty-six of this act. Whenever any bank of whose Dissolution— ■j continued property the superintendent of banks has taken possession as aforesaid, deems itself aggrieved thereby, it may within the Bank deeming itseii time and in like manner and effect as provided in section one ventiorof^sup"T' hundred thirty-six of this act apply to the superior court to may apply for . . , injunction enjom further proceedmgs. Sec. 136b. In any action or proceeding brought under jurisdiction vested any provision of this act, exclusive original jurisdiction shall counfyThere prin- be vested in the superior court of the county in which is lo- cipai place of busi- cated the prinicipal place of business of the bank affected J^^cated thereby, and all proceedings relating to the same matter, under any provision of this act, including proceedings for liquidation of the affairs of any such bank, shall be filed with and treated as a part of the record in such original pro- ceedings, and all papers relating to any such action or proceeding, including the copy of certificate of appointment of any special deputy and the inventories required to be filed in the matter of any such liquidation, shall be filed with and made a part of the record of such original pro- ceeding, without the payment of any additional fees there- for, and in any such action no damage may be awarded, but the action otherwise shall be tried and determined accord- ing to the provisions of the Code of Civil Procedure. Sec. 137. 1. Any bank shall have the right, on appli- Voluntary dissoiu- cation of the stockholders or members to apply to the superior under provisions of court of the county wherein its principal place of business is CodeofCivii 1 1- 1 -11 ,-1 ' 1 -i r ' Procedure situated, to dissolve said bank in the manner provided for in title six, part three of the Code of Civil Procedure. 2. At the expiration of four months after the settlement Payment to county of the final account of the receiver of any bank appointed prior f^nds by receiver to July 1, 1909, any dividends due depositors, or other cred- appointed prior to itors, or stockholders of such bank and remaining unpaid or uncalled for and in the hands of such receiver may be paid by him into the treasury of the county in which such bank is situ- ated which money shall be held in the treasury of said county, and at the same time it shall be the duty of such receiver to furnish to the county treasurer of said county a list of names of all depositors or other persons to whom such money belongs 96 CALIFOENIA BANK ACT or who are entitled thereto and thereupon such receiver shall be entitled to his discharge. Said funds to be 3. The moneys referred to in subdivision two of this sec- cottt°oli°er tion ^hall be paid out on the order of the court appointing such receiver. When such funds 4. All moueys paid under subdivision two of this section, escheat to state uncalled for within five years after being paid in, shall by operation of law, and without action had, escheat to the state. All moneys held by any county treasurer under subdivision two of this section, when such moneys have escheated to the state as hereinbefore provided, shall be paid by the county treasurer into the state treasury, and thereafter only be drawn out in such manner as may be provided for by law for the estates of deceased persons escheated to this state. Investment of 5. The State board of control must invest such moneys in the same manner that the state school land fund is invested as provided by law. But any claimant shall be entitled to recover as herein provided only the principal so paid into the state treasury. Failure to make Sec. 138. If any bank shall fail to make any report re- ^^^V siJ^i3o OT ^^^^^^ by the provisions of section one hundred thirty or one Sec. 130a hundred thirty-a of this act, within ten days from the day designated for the making thereof by the superintendent of banks, or to include therein any matter required by the pru- Penaity visious of either of said sections, it shall forfeit to the people of the state the sum of one hundred dollars for each day that any such report shall be so delayed or withheld by the failure or neglect of such bank. In event of such ^^ ^hc cvcut of the failure of any such bank to make any fauure, Supt. may such rcport required from it, the superintendent of banks may, make examination . - . - . , . . < • , i > i i i j at bank's expense ^^ ^is discretion, immediately cause the books, papers ana affairs of such bank to be examined at the expense of such bank. Directors shall Sec. 139. It shall be the duty of the board of directors of examine bank every bank to examine fully into the books, papers and affairs of the bank of which they are directors, and particularly into the loans and discounts thereof, with a special view to ascer- taining the value and security thereof, and of the collateral STATE BANKING DEPARTMENT 97 security, if any given, in connection therewith, and into such ^gf^^***®"* *"** other matters as the superintendent of banks may require; such examination to^be. made at least once a year, but no such subsequent yearly examinations shall be made within three months of the next preceding examination. Such directors Directors may em- shall have power to employ such assistance in making such ^Xngex^'natiori examinations as they may deem necessary. Within ten days after the completion of such examination, a report in writing Swom report of 1 1, , directors to be mada thereof, sworn to by the directors makmg the same, shall be and filed with mad3 by the board of directors of such bank, and placed on file ^«<=°^ds °f tank with the records of said bank, and shall be subject to examin- ation by the superintendent of banks. Such report shall particularly contain a statement of the What such report assets and liabilities of the bank examined, as shown by its books, together with any deductions from the assets, or addi- tions to liabilities, which such directors or committee, after such examination, may determine to make. It shall also con- tain a statement, in detail, of loans, if any, which in their opinion are worthless or doubtful, together with their reasons for so regarding them; also a statement of loans made on collateral security, which in their opinion are insufficiently secured, giving in each case the amount of the loan, the name and market value of the collateral, if it has any market value, and, if not, a statement of that fact, and its actual value as nearly as possible. Such report shall also contain a statement of overdrafts, of the names and amounts of such as they con- sider worthless or doubtful, and a full statement of such other matters as affect the solvency and soundness of the bank. If the directors of such bank shall fail to make such exam- if directors fau to ination or fail to cause it to be made, or shall fail to file such ^otor report!Spt" report of such examination in the manner and within the time may make extra specified, the superintendent of banks shall have authority to ^^^ make or cause to be made an extra examination of such bank, at the expense of such bank. Sec. 140. The superintendent of banks shall report during Superintendent shaii the month of October of each year, to the governor, for sub- ""^^ ^""""^^ '^^^ . . . . - to Governor mission to the next ensuing session of the legislature: examination at s expense 98 CALIFOENIA BANK ACT Report by 1. A summary of the state and condition of every bank upennten ent j-gq^jj-^^j ^q report to him, and from which reports have been Annual report rcccivcd the preceding year, with an abstract of the whole shall contain: ^mount of Capital returned by them, the whole amount of their debts and liabilities, and the total amount of means and Summary of rcsourccs, Specifying the amount of specie held by them at the general conditions ^^^^ ^f ^^^ j^^^ ^.^p^^^ ^^ ^^^^ ^^^ ^^^^ ^^^^^ information in relation to such banks as, in his judgment, may be useful. Statement of 2. A Statement of all banks authorized by him to do busi- new banks ^^^^ during the previous year, with their names and locations and dates of incorporation, and particularly designating such as have commenced business during the year. Statement of 3. A Statement of the banks whose business has been closed closed banks during the year. Desirable amend- 4. Any amendments to the banking law, which, in his ments to Bank Act judgment, may be desirable. Names and compen- 5. The uamcs and compcusatiou of all persons employed sation of employees ^y j^jj^^ ^^^ ^^le wholc amount of the receipts and expenses of the department during the year. Data concerning 6. The uamcs of bauks placcd in his hands in process of banks in liquidation liquidation, and the amount of dividends paid thereon. Number of copies Such rcport, and the usual number of copies for the use of of report printed ^^^ legislature, shall be printed and in readiness for distribu- tion by the state printer, and one thousand copies shall be printed for the use of the department, the expense of which shall be charged among the general expenses of the depart- ment. Weekly bulletin to Sec. 141. 1. The Superintendent of banks shall keep in his be publicly posted office, in a place accessible to the general public, a bulletin in Superintendent s ' r -^ -r^ . . office board upon which he shall cause to be posted at noon on Friday of each week a detailed statement, signed by him or, in case Contents of buUetin of his abscucc from San Francisco or inability to act, by the deputy superintendent in charge, giving the following items of general information with regard to the work of the department since the preceding statement : (a) The name of every bank that has filed in the banking Applications filed, , ,. . . < • .• . t, „• etc. department an application for authorization to commence busi- ness, its location and the date of filing of such application. STATE BANKING DEPAETMBNT 99 (b) The name and location of every bank authorized by the Superintendent's . , r , , i • • ..1 weekly bulIeUn— superintendent of banks to commence busmess, its capital, continued surplus, and the date of authorization. ^^^ ^^^^ (c) The name of every bank to which a certificate of authorized authorization has been refused by the superintendent of banks, certificates refused and the date of notice of refusal. (d) The name and residence of every person appointed by New employees, etc the superintendent of banks as a deputy, examiner or employee in the banking department, the title of the office to which appointed, the compensation paid, and the date of appoint- ment. (e) The date on which a call for a report by banks was Dates concerning r 1 1 iii-i. called reports. issued by the superintendent of banks, and the day designated as the day with reference to which such report should be made. (/) The name and location of every bank whose creditors Concerning banks ' "^ . • J r ""^hos^ creditors are or depositors have been paid in full by the superintendent of paid and stockhoid- banks and a meeting of whose stockholders shall have been ^""^ "^'^^ ^^^^ called, together with date of notice of meeting and date of meeting. (g) The name and location of every bank subject to the Banks Uquidated banking law whose affairs and business shall have been finally °^ ^^"^ ^*^°^ liquidated, or in course of liquidation. (h) The name and location of every bank which has applied Proposed changes for approval of a change of name, and the name proposed. mname 2. Every such bulletin, after having been posted as afore- Bulletins after being said for one week, shall be placed on a file for such statements, ^^^^^ *° ^^ ^^^^ to be kept in the office of the superintendent of banks. All such statements shall be public documents, and at all reason- able times shall be open to public inspection during usual bank- ing hours. Sec. 142. Every official report made by the superintendent Reports to be and every report duly verified of an examination made, shall in'^c^^urt*'^*^ ^^^ ^^^^ be prima facie evidence of the facts therein stated, for all purposes in any action or proceedings wherein such bank is a party. (Sec. 143. Repealed 1913.) 100 CALTFOBNIA BAME ACT Penalties and for- Sec. 144. Whenever by the terms of this act a penalty or act— how recovered forfeiture is imposed, the same shall be recovered in an action brought at the request of the superintendent of banks by the attorney general, in the name of the people of the state, and the sum recovered shall be paid into the state banking fund and used in payment of claims against the said fund. Powers, duties, etc.. Sec. 145. The powcrs, privileges, duties and restrictions tu'SneL'urd^er^raws Conferred and imposed upon any corporation or individual of this state, existing and doing business under the laws of this state are etc., to conform hereby abridged, enlarged or modified as each particular case to act j^^y i-equii-e to conform to the provisions of this act, notwith- standing anything to the contrary in their respective articles Act applies equally of incorporation or charters. All the provisions of this act to all corporations gJ^^JJ ^ppjy ^J^]^ gq^^l f^j-^^g ^^^ g£fg^^ ^q ^jj COrOOratioUS now or hereafter i i • i • i doing banking busi- which are now doing or which may hereafter do a banking ness in this state busjness in this statc, except where express exception or ex- unless excepted ^ ^ ^ '■ herein cmptiou may be made herein. The legality of investments Legality of prior heretofore made, or title to property heretofore acquired or or^ltbLTaScttd conveyed through transactions heretofore had by any bank by act; but non- pursuaut to any provision of law in force when such invest- compiying^invest- ^^^^^ ^^^ ^^^^ ^^ trausactious had, shall not be affected ments made prior to ' July 1, 1909. to be by the provisions of this act, except that any such investments and'^LtXto -"ade prior to July 1. 1909, when not complying with the conform to act, etc. provisious hcrcof, shall be changed to conform hereto; but such change shall be made gradually and in such manner as to prevent loss or embarrassment in the business of such bank, or unnecessary loss or injury to the borrowers on such se- curity; provided, further, that in any event, all investments and securities and excess in investments made prior to July 1, 1909, which are not in conformity with the provisions and spirit of this act and which have been acquired and are now held by any bank, must be written off as assets of such bank prior to July 1, 1918; and no bank holding any such invest- ments or securities acquired prior to July 1, 1909, shall, after July 1, 1918, be permitted to pay any dividends to its stockhold- ers until it shall have written off all such non-conforming in- vestments or securities ; and provided, further, that the legality of any investments heretofore lawfully made, pursuant to the STATE BANKING DEPARTMENT 101 provisions of this act as it existed on and subsequent to July 1, LegaUty of invest- 1909, shall not be affected by the provisions of this section. ments lawfully made ' •' ^ since July 1, 1909, Sec. 146. All acts, or parts of acts, in conflict with this act "o* effected by this are hereby repealed. Sec. 147. This act shall take effect July first, 1909. statutes of 1909: Chapter 76 Approved Mar. 1 In Effect July 1. Amended by Statutes of 1911: Chapter 11 Approved Feb. 6.... In Effect Feb. 6. Chapter 488 Approved Apr. 21.... In Effect June 20. Chapter 494 Approved Apr. 21.... In Effect June 20. Chapter 495 Approved Apr. 21 In Effect June 20. Amended by Statutes of 1911 (Special Session): Chapter 2 Approved Dec. 18 In Effect Feb. 16. Chapter 24 Approved Dec. 24 In Effect Feb. 22. Amended by Statutes of .1913: Chapter 104. .. .Approved May 9.... In Effect Aug. 10. Chapter 192. .. .Approved June 3.... In Effect Aug. 10. INDEX TO CALIFORNIA BANK ACT . ^ ,. Section Act, applicable to certain corporations 1 bank, repeals all acts in conflict 146 effective when 147 title of 1 Action, against bank, for escheated deposits 15 against bank, reports are prima facie evidence 142 against superintendent of banks 134-136 brought under bank act, jurisdiction in 136B for sale of real estate, when 54 may be maintained by superintendent of banks to dissolve bankl35A to recover penalties by Attorney General 144 Adjustment of investments made prior to this act 145 Administrator, deposits by : 51 may deposit with trust company 91-92-93 trust company, may act as 90 trust company, oath required 90 Advertisement, building and loan associations not to advertise as savings banks 12 capital, must show amount paid up 14 for deposits, prohibited when 12 liabilities, must show separate 14 of banks, how regulated 28 of merger 31A of sale of bank 31 of unauthorized banking prohibited 12 A of unauthorized trust company prohibited 12 A resources must show separate 14 savings, shall not be advertised, by whom 49 surplus must show separate 14 undivided profits must show separate 14 Affidavit by guardian to be accompanied by letters of guardianship. 16 must be certified by Secretary of State 8 must be filed before commencing business 8 reports of banks 130-130A reports of trust companies 101 when filed by surviving relative or guardian 16 Agrent, liability for fraud 38 of commercial bank, loan to 83 of savings bank — may borrow funds 65 overdrafts of — prohibited 39 purchase of assets of bank, by .42 restriction on purchase of obligations of bank — by 41 sale of mortgage to bank by 35 special deputy superintendent of banks in liquidating bank 136 superintendent of banks for service in foreign bank 7 Agreement of consolidation must be filed 31A of consolidation must have approval 31A sale and purchase 31 Amendment of articles of incorporation must be filed 8 Amortization of bonds by savings banks 61 Annexation, as affecting powers of banks and branch offices. . .23-60-82 Annual Report, copies for distribution 140 of superintendent of banks, to contain what 140 Appeal from order of superintendent of banks 134-136 from seizure of bank property 134-136 Applications to do banking business, investigation of 128 Appointment of appraisers ^^"^? of special deputy superintendent of banks 136 of superintendent of banks 120 Apportionment of capital and surplus to court trust business 90 of capital and surplus to departments 28 of capital and surplus to private trust business 90 104 CALIFOENIA BANK ACT Section Appraisal of property mortgaged to state treasurer by trust com- pany 99 Appraisers, appointment of 61-99 Articles of incorporation, amendments must be filed 8 as affected by bank act 145 may provide for departmental banking 22 must be certified by secretary of state 8 must be filed with superintendent of banks 8 not effective until filed 8 of trust company 90 on consolidation of merger 31 A violation of, by banks 134-135A-136 when filed by bank 128 Assessment, failure of bank to pay 123 of banks, how calculated 123 of banks, for state banking fund 123 refusal of stockholder to pay 133 stockholders must be notified 138 when capital stock impaired • 138 Assets, commercial bank may pledge for "borrowed money," to what extent 21A how may be reached in merger 31 A invested in bonds 36-46 of banks, relation of loans thereto 44 . of departments held for depositors 27 of departments may be transferred, when 25 of departments to be kept separate 26 overdrafts limited to ninety days 21 A purchased by directors, officers and employees 42 relation of, to investments 36-46 relation of, to loans by savings banks 67 sale and purchase 31 shall not be mingled with trust funds 32 shall not be pledged to give preference 21 A Assignee, deposits by 51-91-98 Assistants of state banking department 121 Attorney, designation of superintendent of banks by foreign cor- porations 7 may be employed in liquidating 136 of state banking department 121 Attorney General, actions brought by, to recover penalties 144 duty in action for escheated deposits 15 Auditor, superintendent of banks shall provide 124 Authorization, certificate for commercial bank 128 certificate for savings bank 128 certificate for trust company 128 of loans to officers and directors in commercial banks 83 refusal of, by superintendent of banks 128 refusal of, by superintendent of banks for branch office 9 Bad debts, compounding of 136 what are 21A Balance, sale of stock for assessment 133 unclaimed deposits 15 Bank, annual report of superintendent of banks 140 application to do business 128 articles of incorporation must be filed 128 as a borrower 21A assessed for state banking fund 128 banking corporations, how formed 8 bond investment limited 86 branch office 9 capital impaired 188 ceasing business must take what action 136A classified as to capital by population 23 commercial, purposes of 5 conducting business in unsound manner 134-135 A connection with by superintendent of banks prohibited 120 considered insolvent, when 20 definition of 2 departmental, separate books to be kept 26 departmental, shall make reports separately 129 departmental, shall publish statements separately 129 deposits with, does not create debt, when 55 dissolution of, by process of law 135A dissolved, funds of 137 distribution of funds of Insolvent 136 INDEX 105 Section escheat of unclaimed deposits 15 examination of, before issuance of certificate 127 examination of, by court 136 examination of, by directors 139 examination of, once a year 124 examination of, when failing to report 138 examiner, failure to report insolvent condition 126 examiner, must file oath 125 examiner, shall not act as receiver when 125 expiration of corporate existence 136A extra examination, expense of 124 failure to make report, penalty 138 failure to pay assessment 123 foreign, inspection of 7~. 124 forfeitures, how recovered 144 funds, when deposited with other banks 43 impairment of capital 133-136 in liquidation, names posted 141 insolvent condition of, failure to report 126 inspection of, by superintendent of banks 124 in unsafe condition 136 investment in bonds limited 46 investments, changed to conform to act 145 investments in own stock prohibited 34 license to foreign corporations 7 limited time to repair capital 183 limited time to report 138 limited to Investment in safe deposit 30 liquidation of, by superintendent of banks 136 loans on own stock prohibited 34 may apply to court to dissolve 137 may be cited to show cause 134 may conduct safe deposit department 30 may consolidate, how 31A may go into voluntary liquidation 136A-137 may join National Reserve Association 56 may purchase real estate, when 61-84 may resume business, when 136 must have certificate of superintendent of banks 24 must liquidate, when 136A must report loans to directors 83 mutual, may have capital stock 29 names of, not to be similar 127 National, examination of 48 new, information of, to be posted 141 obligations of — when purchased by officers, directors and em- ployees 41 penalties imposed, how recovered 144 publication of report of 132 publication of unclaimed deposits 15 purchase of 31 refusal to observe order of superintendent of banks 136 refusal to submit books 185A-136 report of, to superintendent of banks 130 rights of creditors in merger 31A sale of 31 savings, purposes of 4 shall not own stock of corporations 37 shall not transact business without certificate 127 signs must show business conducted 28 stationery must show business conducted 28 stock, as collateral, limited 44 stock, par value, minimum 53 suspending payment of obligations 135A trust company, purposes of 6 use of term restricted 12 violation of articles of incorporation 134-135A-136 when unsafe to continue business 135 A Bank Act, annual report of superintendent, as to 140 applicable to banking corporations 145 effective when 147 in relation to prior Investments 145 jurisdiction in actions brought under 136B repeals all acts in conflict 146 short title of 1 106 CALIFORNIA BANK ACT Section Baukinsr business, conducted in unsafe manner 134-135A certificate to be posted 60 defined 2 departmental 22 regulation of 12-12A-90 unlawful unless duly authorized 2 when advertised must have certificate 12 A Banking- Association, state banks may join 56 Banking* Corporations, see Corporations, Banking. Banking- Departnxent, see State Banking Department. Bank premises, departments to be in same or adjoining buildings.. 26 investment in, by commercial banks 84 Investment in, by savings banks 61 investment in, by trust companies 105 trust company may mortgage to state treasurer, when 97 Bills of exchang-e, commercial banks may buy or discount 80 not construed to create debt 55 Bills of leading*, commercial banks may buy or discount 80 Bond of deputy superintendent of banks 121 of special deputy superintendent of banks 136 of superintendent of banks 120 Bonds available for deposit by trust company 96 banks limited in investing, underwriting or guaranteeing 36-46 certified, official list to be kept 61 A cost of investigation of 61 A for deposits by court order, not required 94 legal as investment for savings banks 61 must be certified, when 61-61A power of superintendent of banks to investigate 61A savings banks may loan on 67 Books, audit of, by request 124 examination of, by directors 139 inspection of, by superintendent of banks 38 of departments to be kept separate 26 refusal of bank to submit 135A-136 Borrowed money, by savings banks must be approved 62 commercial banks may pledge assets for, to what extent 21 A limit on amount borrowed 21A superintendent of banks may extend limit 21A Borrower, endorser and guarantor, deemed to be 66 Branch office, certificate necessary to open 9 effect of consolidation of cities on 23-60-82 shall not be permitted to open, when 23 Building and loan associations, advertising, how restricted 12-12 A Bulletin, information to general public 141 to be filed as public document 141 to be posted by superintendent of banks 141 Business, authorization to commence 127 ceased by trust company 102 closing of 137 examination of 124 merger of 31A reports of 130-130A sale of 31 winding up affairs of 136 By-laws, amendments must be filed 8 must be filed with superintendent of banks 8 not effective until filed 8 of savings banks must prescribe what 64 Call for reports from banks, how often 131 Called reports, failure of banks to make, penalty 138 from banks, how often 131 of banks, publication of 132 time limited for banks to make 138 to contain what 130-130A Capital, advertising of, must show what 14 apportioned to departments 23 assigned by foreign corporations 7 impairment of 133-136 increase or decrease 23 Invested in bank premises, furniture and fixtures and safe deposit vaults 61-84-105 may be increased by surplus 21 must be paid up before issuance of certificate 127 necessary to open branch office 9 of commercial bank, relation to deposits 19 INDEX 107 Section of foreign corporations to be separate 7 of savings bank, in what invested 61 of savings bank, relation to deposits 19 of trust company, how invested 105 of trust company, in what invested 105 paid up and surplus must equal what 19 re-apportionment to departments 23 relation of surplus to 21 restriction as to loans 80 Capital stock, as collateral, limited 44 assessed when 133 banks shall not invest in their own 34 banks shall not loan on their own 34 commercial bank, amount required 82 directors must hold 10 may be sold for assessment 133 mutual banks may issue, how 29 of title insurance company doing trust business 106 paid up value to be endorsed 53 par value must be 53 reduction of 55 required according to classification 23-60-82 required by trust company 90 savings bank, amount required 60 Certificate issued by real estate corporations, legality for savings bank 61 necessary before transaction of business 24 necessary for new department 24 of deposit, not construed to create debt 55 of deposit, savings bank may issue 63 of special deputy superintendent of banks to be filed 136 of superintendent of banks, filing 128 of superintendent of banks in merger 31 A of superintendent of banks shall be issued, when 128 of superintendent of banks to be posted 50 of superintendent of banks to be withheld, when 127 of superintendent of banks, to state what 127 of trust company, when revoked 98 requisite fee 24 revoked, when trust business ceases 102 to open branch office 9 Certificate of deposit, bank cannot make partial payments on 21A Certification of bonds by superintendent of banks 61-61A of superintendent of banks not to obligate the state 61 Certified checks, issuance unlawful, when 52 must be immediately charged 52 Chang-e of investments to conform to act 145 Checks, certified, must be charged 52 certified, when unlawful 52 Chief deputy, failure to report insolvent condition of bank 126 Citation, issued by superintendent of banks 134 City, bonds of, available for deposit by trust company 96 legality of bonds of 61 Claims against bank in liquidation 136 objection to, liquidation 136 Classification, as applied to banks previously organized 23-60 of banks 2 of cities, governed by Federal census 23-60 of cities in relation to capital and surplus 23-60-82 of trusts 101 Collateral, commercial bank may pledge assets to what extent.... 21A directors to receive report on 139 Collateral trust, bonds, when legal for savings banks 61 Collections of deposits by survivors 16 Commercial hank advertising, how regulated 28 capital and surplus, their relation to deposits 19 capital required 82 classified as to capital by population 23 definition of 5 how formed to conduct 3 investment in bank premises 84 loans of, limited 80-81 loans to corporation 81-83 loans to directors and employees 83 loan to officers prohibited 83 may borrow money to what extent 21A 108 OALIFOENIA BANK ACT i. Section may pledge assets to what extent 21A must be duly authorized 2 overdrafts limited to ninety days as assets 21 A overdue interest, how limited 21A purposes of 5 real estate loans restricted 47 reserve required 20 Commercial paper, commercial banks may buy or discount 80 Commission to officers, directors and employees prohibited 39 Condition, must be published 132 Consolidation, approval of stockholders 31 A approval of superintendent of banks required 31A articles of incorporation and consolidation 31 A how assets of merged banks may be reached 31 A liability of banks in 31A of banks 31A of cities, effect on branch offices 23-60-82 rights of creditors in 31 A Construction, all preceding or conflicting acts repealed 146 create debt 55 Contracts, real estate, not to be sold to banks, when 35 with officers, directors, or employees 42 with savings depositors 64 Corporate existence, obligation of bank after expiration 136A Corporations, consolidated 31A doing title insurance and trust business 107 for banking, how formed 3 loans to, by commercial banks 81-83 loans to, by savings banks 65 mutual, may issue capital stock 29 powers and privileges must conform to act 145 sale and purchase 31 shall not use word "savings" when 12-12A-49 shall not use word "trust" when 102 stock, as collateral, limited 44 stock, banks shall not own 37 Corporations, toanliing-, may do departmental business, when 22 must file certain papers 8 Corporations — foreign, as fiscal agents 90 cannot exercise powers of trust company 7 loans based on total capitalization, when 7 may act as executor, when 7 may lend certain moneys not assigned to this state 7 may lend money in this state 12C must execute power of attorney to superintendent of banks. ... 7 powers as co-trustee 90 service of papers 7 service of process 7 shall not act as trustee 90 shall report to state banking department 130 subject to state laws 7 Costs, in liquidation 136 in sale of certain real estate 155 Counsel, compensation, liquidating delinquent banks 136 County, bonds of, available for deposit by trust company 96 legality of bonds of 61 County Clerk, certificate of superintendent of banks to be filed with 128 certificate of merger to be filed with 31A County deposits in savings banks 62 Court may authorize deposit with trust company 91 may order deposit with trust company 93 may require knowledge of private trusts 103 Court trust, definition of 101 to be separately secured 96 Create debt, meaning of restricted 55 Creditors, rights of, against banks sold 31 rights of, against merged bank 31A rights of in liquidation 136 Currency association, state banks may join 56 Debt, savings banks shall not contract except 62 Deceased depositors, amount due to must be reported 15 when moneys due to, escheat 15 D*eds of trust, legal for deposit by trust companies 96 INDEX 109 Section Definition of bank 2 of commercial bank 6 of "electrical corporation" 61 of "gas corporation" 61 of "pipe line corporation" 61 of public utility 61 of savings bank 4 of "street railroad corporation" 61 of "telegraph corporation" 61 of "telephone corporation" 61 of trust company 6 of "water corporation" 61 Departmental banks, application for permission to conduct 23 apportionment of capital and surplus 61 assets to be held for depositors, how 27 assets to be kept separate 26 books of account to be kept separate 26 classified as to capital by population 23 conducted by trust company 106 corporation may transact business of 22 departments to be in same or adjoining buildings 26 deposits, conditions of re-payment 27 investments, how held 27 may transfer assets, when 25 new department must have certificate 24 re-apportionment of capital and surplus 61 relation of departments 26 reserve required 25 shall make separate reports of departments 129 shall publish statements of departments separately 129 statement of segregation of capital and surplus 23 Departmental business, by title insurance companies 107 Deposit, by administrator 51 by assignee 51 by executor 51 by guardian 51 by order of court 51 by receiver 51 by trustees 61 certificate of, savings bank may issue 63 in national bank by state bank 48 of postal savings in savings banks 62 of trust companies with state treasurer, to be increased, when. 98 of trust companies with state treasurer to consist of what 96 trust companies may mortgage premises to state treasurer, when 97 Depositary, approval by superintendent of banks, when 43 national bank acting as 48 Depositor, contract with, in savings bank 64 deceased 15 repayment of, by savings banks 64 savings, may be paid by draft 62 unknown 15 Deposits, additional to be made by trust company when 98 advertising for, prohibited, when 12 collected by survivors, when 16 escheat of 15 joint 16 lawful reserve 20-64-105 must not be increased, when 19 not construed to create debt, when 55 of banks 43 of deceased persons, how collected 16 of foreign corporations to be separate 7 of married women 16 of minors 16 of other banks with savings banks 68 of savings banks with other banks 68 of trust company, may be withdrawn from state treasury 98 of trust company, securities may be exchanged 96 of trust company securities, title and appraisement 99 of trust funds 16 savings, advertised 49 savings bank, in what invested 61 savings bank, repayment of 64 state, county and municipal in savings banks 62 trust company, in what invested 106 unclaimed 15 110 CALIFOENIA BANK ACT Section unclaimed, when bank suspends business 136A when exempt from attachment or sale 16 when preferred 51-62 with other banks, by departments 25 with trust company, authorized by court 91 with trust company, by administrator 91-92-93 with trust company, by court order 93 Beputy of superintendent of banks, qualifications of 121 of superintendent of banks, salary 121 of superintendent of banks shall execute bond, when 121 Desig-nation of depositary 43 Directors, eligibility of 10 examination of bank by _^. . 139 in merger 31A liability for fraud 38 list of, to be posted 17 may authorize loans to directors, agents or employees 83 may be removed, when 10 may declare dividend, when 21 may employ assistance in examinations 139 may sell no bond or contract to bank, when 35 may sell stock for assessment 133 must hold monthly meetings 11 oath of 11 of commercial bank, loans to 83 of savings bank in relation to corporation loans 65 of savings banks, loans to, prohibited 65 of savings bank, shall not be endorsers 65 overdraft of, prohibited 39 purchase of assets of bank by 42 qualifications of 10-11 restriction on purchase of obligations of bank by 41 shall levy assessment, when 133 shall not receive commission 39 Discount, banks of 5 on bills of lading or bills of exchange, amount of 80 on commercial or business paper, amount of 80 Dissolution, banks shall have right to make application for 137 causes for 136 proceedings in 136-137 Dividends, accrued but unpaid interest not calculated 45 by banks holding illegal securities 145 directors may declare under what conditions 21 escheat to state, when 137 from banks in liquidation 136 in receivers' hands, how disposed of 137 of savings banks, how restricted 64 of suspended banks 136 A paid out on court order 137 trust company may receive, on securities deposited 96 when escheated to state, invested how 137 Draft, savings depositors may be paid by 62 Earningrs, disposition of 21 Electrical corporation, definition of 61 Eligibility of directors 10 Employees, liability for fraud 38 may sell no bond or contract to bank, when 35 of commercial bank, loans to 83 of savings bank, may borrow funds 65 of state banking department 121 overdraft of, prohibited 39 purchase of assets of banks by 42 restrictions on purchase of obligations of bank by 41 shall not receive commission 39 Endorser, deemed to be borrower, when 66 Entries, penalty for false 38 Escheat of deposits, duty of attorney general in action 15 Examination, at expense of bank, when 138 causes for dissolution 134-136 of banks, before issuance of certificate 127 of banks by directors 139 of banks, special 124 of banks upon failure to report 138 of national banks 48 of organization documents by superintendent of banks 8-127 of securities for deposit by trust companies 96-97-98-99 special per diem charged 124 INDEX 111 Section Examiner, failure to report insolvency 126 may administer oath 124 must take constitutional oath 125 oath of, must be filed, where 125 of state banking department 121 shall not be appointed receiver, when 125 Execution, deposit of married woman or minor exempt from, except 16 Executor, deposits by 51-91-93 foreign corporation may act, when 7 trust company may act as 6-90 trust company, oath required 90 Existence, corporate, obligations after expiration of 136A Expense of state banking department 122-123-124 Fee for appraisal of trust company securities 99 for branch office 9 for certificate 24 for examination of title of trust company securities 99 for filing proceedings in liquidation 136B for investigating bonds 61A for serving process on foreign corporations 7 for special examination 124 Filing* of certificate of superintendent of banks 128 of directors' examinations 139 of documents preliminary to organization 8 of list of unclaimed deposits 15 of proceedings in liquidation 136B Fiscal agrent, foreign corporation as 90 Foreigrn lianks, inspection of 124 Foreigrn corporations, see Corporations — foreign Forfeiture, causes for dissolution 134-136 of bank, recovered how 144 unauthorized banking prohibited 12-12A-49 unlawfully opening branch office 9 Funds of receiver, escheat to state, when 137 of state banking department 123 paid into county treasury by receiver, when 137 paid out on court order 137 when escheated to state, invested how 137 Furniture and fixtures for offices of state banking department 122 investment in, by commercial banks 84 investment in, by savings banks 61 investment in, by trust companies 105 Gas corporations, definition of 61 Government bonds available for deposit by trust company 96 legality of bonds of 61 Governor, annual report of superintendent of banks to be made to. . 140 superintendent of banks appointed by 120 Gratuities to officers prohibited 39 Guarantee of banks restricted 36 Guarantor deemed to be borrower 66 Guardian, affidavit of, must be accompanied by letters of guardian- ship 16 deposits by 51-91-93 may collect deposit, when 16 must file affidavit with bank, when 16 trust company may be, for estate 90 trust company, oath required 90 Hypothecation of assets 21A Impairment of capital stock 133-136 Incorporation, see Articles of Incorporation. Information accessible to general public 141 bulletin posted in office of superintendent of banks 141 for public 17 on file for stockholders 17 Injunction against superintendent of banks 134-136 restraining use of words or terms 12 Insolvent bank, duties of superintendent of banks 136 bank, failure to report 126 upon failure to restore reserve 20 Inspection of all banks once a year 124 special when necessary 124 Interest accrued, "but unpaid, not profits, when 45 on deposits of trust funds 95 overdue one year, debt considered bad 21 A trust company may receive on securities deposited 96 112 CALIFOBNIA BANE ACT Inventory, liquidation of delinquent banks f f 13? Investig-ation of bonds and securities by superintendent of banks.. 61A of bonds and securities, cost of 61A of fitness of stockholders 12g Investment certificates, building and loan associations may issue.. 12 A Investments, bank shall not invest in own stock 34 by savings banks after July 1, 1909, legality of 66 changed to conform to act, how 145 illegal, to be written ofe 145 in bonds, limited 36-46 in stock of corporations prohibited, except 37 of departments held for depositors 27 of each department, must be separate 26 of trust funds, how regulated 105 trust company, how governed 106 Irrlg-ation district bonds, legality of 61 Joint deposits, savings bank deposit in name of two or more per- sons 16 Judgment dissolving banks, superintendent of banks may procure. 135A Jurisdiction in actions brought under bank act 136B law, banking, effective, when _. 147 Iiawfxa reserve, trust funds not to be carried as 32 lesrality of bonds or notes for savings banks 61 of investments prior to this act 145 Iietters of administration, certain heirs need not procure, when.... 16 Ziiabilities, advertising to be separate 14 shall not be increased, when 20 Xilability for making false statement 88 of directors, ofticer or employees for fraud 38 of stockholders, cannot be waived 40 X^icense, forfeiture of 98-134-136 to banks 127 to begin business, fee for 24 to foreign corporations 7 to open branch offices 9 to trust companies 127 tife insurance companies, use of word "trust" by foreign 12B Iiimit, "borrowed money," amount of 21A of amount of real estate loans 47-67-105 of deposit liabilities 19 of deposit of savings banks in any one bank 68 of investment in safe deposit department 30 of loans by commercial banks 47-80 of loans by savings banks 66-67 of loans by trust companies 105 of loans on bank or corporation stock 44 of purchase, underwriting or guaranteeing bonds 36 of time for holding real estate 54 on deferred payment of interest 21 A superintendent of banks may extend, on money borrowed 21 A S^iguidation, banks in, claims against 136 banks in, names to be posted 141 compensation of counsel in 136 costs in i iv filing of proceedings in •'• , oe of banks b3'- superintendent of banks • • • . 136 of banks, voluntary 1 ol proceedings, notice to banks , • 136 voluntary, superintendent of banks may take possession j^eV" when corporate existence expires 136A Loans, bank shall not loan on own stock 34 by commercial banks, how limited 47-80-81 by commercial banks, to officers, directors and employees 83 by foreign corporations •/,« eli by savings banks, how limited """51 by savings banks, prohibited, when 68 by savings banks, renewal of .••.••; 5? by savings banks to directors or officers, prohibited 65 on corporation or bank stock, limited 44 real estate 4 J savings banks, effect of public utilities act 61 shall not be increased, when Uc o2 to corporations, directors or officers interested eeof to directors or employees • • ^5-83 trust company, how governed 105-106 when savings banks must not make new 4 64 INDEX 113 Section ]Doc»tion, powers as affected by consolidation of cities 23-60-82 powers of banks dependent upon 23-60-82 powers of trust companies dependent upon 23-90 ]Q088«s, may be charged to surplus, when 21 reserve fund may be charged with 64 shall be written off, when 21A Married woman, deposits of 16 Ueeting* of directors once a month 11 of members of mutual bank to capitalize 29 of stockholders, superintendent of banks may call 135 Uembers of bank may make application to dissolve 137 of mutual bank may elect to capitalize 29 Mersrer, see Consolidation. Mining- stock, loans on by savings banks, prohibited 67 Minor, deposits of 16 trust company guardian of estate only 90 Money, amount of lawful reserve to be kept on hand 20 reserve of savings banks 68 Mortgraare, deposited by trust company with state treasurer 97 of trust company deposited, title and appraisement 99 restriction as to loans on 47-67 sale to banks by officers, etc., permitted when 35 Municipal deposits in savings banks 62 Mutual bank, how reserve fund shall be increased 64 may have capital stock 29 payment of losses out of reserve fund, when 64 relation of reserve fund to deposits 64 STame, restrictions on 12-12 A-12B-12C-49 National bank, examination of as depositary 48 National Beserve Association, state banks may join 56 Notes, legal for savings banks, when 61 Notice of assessment of stock 133 of liquidation to all banks 136 required by savings banks from depositors 64 Oath of bank examiner 125 of directors 11 of office of superintendent of banks 120 refusal of officers to be sworn, penalty for 135A-136 who may administer 124 Officer, liability for fraud 38 may sell note, bond or contract to bank, when 35 of bank, loans to, prohibited 65-83-105 of savings bank in relation to corporation loans 65 of savings bank, shall not be endorser 65 of trust company entitled to knowledge of private trusts 103 overdraft by, prohibited 39 purchase of assets of bank, by 42 refusal to be examined on oafh 135A-136 restriction on purchase of obligations of banks by 41 shall not receive commission 39 Offices of state banking department 122 Official reports of superintendent of banks, prima facie evidence. . 142 Order, refusal of bank to observe 136 to show cause issued by superintendent of banks 134 Orgranization of bank, examination of documents 8-127 of banking corporation, papers to be filed 8 of trust companies 90 Overdraft, limited to ninety days as asset 21A prohibited to officers, employees, etc 89 Par value of capital stock, minimum 53 Payment of expenses of banking department 123-124 suspended by bank, cause for dissolution 185A-1S6 Payment of deposits by savings banks, notice required, when 64 of two name 16 to married women 16 to minor 16 Penalties to be paid into state banking fund 144 recoverable how 144 Percentagre of reserve required by savings banks 68 Per diem charged for special examinations 124 Personal property, savings banks may loan on 67 Petition of stockholders for dissolution 187 Pipe line corporation, definition of 61 114 CALIFOBNIA BANE ACT Section Place of BnsinMS, see Location. Pledgred, stock of directors must not be 11 Population, in relation to capital governed by federal census 23 see Location. Postal savlnfifs deposited in savings banks 62 deposits of shall not be construed as "borrowed money" 21A Powers, building and loan associations, restrictions on 12-12A of banks 2-4-5-6 of commercial banks 6 of savings banks 4 of trust companies 6 Preferred claims, deposits by order of court 51 deposits of postal savings as 62 deposits of public moneys as 62 Preferred creditors, bank shall not pledge assets except 21A Preferred stock, unlawful for banks 53 President, loans to, prohibited 65-83-105 publication of unclaimed deposits 15 verification of reports 130-130A Principal office 26 Private trust definition of 101 not subject to inspection of superintendent of banks 101 officers entitled to knowledge of 108 to be separately secured 96 trustees shall not disclose, what 103 Proceeding's against bank, reports are prima facie evidence 142 in dissolution 136-137 in liquidation, filing of 136B to enjoin superintendent of banks 134-136 when banks are merged 31A when bank sells assets 31 when capital of bank is impaired 133 when reserve falls below required amount 20 Process, service on foreign corporations 7 Profit and loss, certain debts charged off to, when 21 A Profits accrued, but uncollected interest not to be included in 45 Public, information for 17-141 Public administrator, deposits of, with trust company 92 may deposit with any bank, when 51 may deposit with savings bank, when 68% Publication, deceased depositors, list of 16 of false statement, penalty for 38 of notice of agreement of sale and purchase 31 of notice of assessment of stock 133 of notice of liquidation 136 of notice of mutual bank to capitalize 29 of notice of sale, affidavit to be filed 31 of report to superintendent of banks 132 of sale of real estate by court 54 unknown depositors, list of 15 Public moneys deposited in savings banks 62 deposit of, shall not be construed as "borrowed money" 21A Public Utilities Act, effect on loans and investments by savings banks 61 Public utility bonds, when legal for savings banks 61 definition of 61 Purchase of assets of banks by officers, directors, etc 42 of banks 31 of departments of banks 81 of obligations of banks by directors, etc 41 Purposes of commercial banks 6 of savings banks 4 of title insurance and trust company restricted 22 of trust company 6 Bailroad bonds, when legal for savings banks 61 Ratio of capital and surplus to deposit liabilities 19 of reserve to deposit liabilities 20-68-105 Seal estate, contract not to be sold to bank, when 85 corporation certificates, when legal for savings banks 61 held longer than five years, proceedings for sale of 54 loans on, by commercial bank 47 loans on, by savings bank 67 mortgaged as deposit by trust company 96 when second mortgages on, permitted 47 Reapportionment of capital and surplus to departments 23 INDEX 115 Section Seceiver appointed prior to July 1, 1909 137 bank examiner shall not act, when 125 deposits by 61 funds of, escheat to state, when 137 funds of, held in county treasury when 137 trust company, oath required 90 savings bank, payment to one of two or more persons 16 Report, annual, of superintendent of banks to governor 140 failure of bank to make, penalty 138 loans to agents or employees of savings banks 65 loans to directors and employees of commercial banks 83 of banks, called for how often 131 of banks, publication of 132 of banks, shall contain what 180 of banks, time to make limited 138 of banks to state banking department 130 of examination by directors 139 official, of superintendent of banks, prima facie evidence 142 special, to superintendent of banks 130A trust company must report, what 98-101 weekly bulletin by superintendent of banks 141 Begerve for departmental bank 26 how shall be restored 20 of commercial banks, relation to deposits 20 of departments to be kept separate 25 of savings banks 6g of savings banks, relation to deposits 19 percentage may be kept in eastern cities 20 required for commercial banks 20 trust company, how governed 106 B«B«ryo fond, mutual savings banks, required 60 of mutual savings bank, may be used how 64 Besources, advertising to be separate 14 Bevolving- fiind, superintendent of banks may retain 123 Safe deposit department, any bank may conduct 30 investment in, by commercial bank 84 investment in, by savings bank 61 investment in, by trust company 105 Safety deposits, in insolvent bank 136 Salary of employees of state banking department 121 of superintendent of banks 120 Sale of banks or departments 31 SavinfiTs of school children 9 shall not be advertised by whom 12-12A-49 Savings bank advertising, how regulated 28 bonds and notes when legal for investment 61 borrowed money, approval of 62 by-laws must prescribe what 64 capital and surplus, their relation to deposits 19 capital stock required 60 classified as to capital by population 23 contracts with depositors 64 corporation loans, directors or officers interested 65 county deposits in 62 definition of 4 department, reserve required 68 depositors, may be paid by draft 62 deposits of other banks with 68 employees or agents may borrow funds 65 how formed to conduct 3 investment in bank premises 61 investments, effect of public utilities act 61 investments, legality of 66 loans, effect of public utilities act 61 loans, must be secured, how 67 loans of, limited 66 loans to directors and officers prohibited 65 may borrow postal savings 62 may borrow public money 62 may issue certificates of deposit 63 municipal deposits in 62 must be conducted, how 69 must be duly organized 2 must not make new loans, when 64 mutual reserve fund of, must be increased, when 64 mutual reserve fund, when required 60 only, to receive savings deposits 49 116 CALIFOBNIA BANE ACT , , . . Section organized without capital stock 60 purposes of 4 real estate certificates, when legal for investment 61 real property may be purchased or held 61 reserve required 68 securities hypothecated, approval of 62 shall not contract debt, except 62 use of term restricted 12-12A-49 without capital stock reserve fund must equal what 19 Saving's department investments to be separate 26 Savingrs deposits, advertising for, prohibited, when 12-12A School district, bonds of, available for deposit by trust company... 96 legality of bonds of 61 School saving-s, how deposited 9 regulations concerning , 9 Seal of superintendent of banks 134 Second mortgrag'e, when bank may loan on 47-67 Secretary of state shall certify documents when 8 Securities, additional deposit of, by trust company 98 certified, official list to be kept 61A cost of investigation of 61A deposited by trust company, examination of 96-97-98-99 exchange of, by trust companies 96 hypothecated by savings bank 62 illegally held by banks 145 power of superintendent of banks to investigate 61 A withdrawal of, by trust companies 98 Security percentage, for savings bank loans 67 Service of papers on foreign corporations 7 Signs of banks must show what 28 Special deputy superintendent of banks 136 Special report of banks, superintendent of banks may require 130A State law, violated by banks 134-135A-136 legality of bonds of 61 shall be responsible for securities deposited by trust company. . 96 State hanbiugf department, assistants 121 attorney 121 banks must report to 130 bulletin to be filed as public document 141 chief deputy, failure to report insolvent condition 126 chief deputy, qualification of 121 created 120 examiner, failure to report insolvent condition 126 examiner of, must file oath 125 examiner of, shall not act as receiver, when 125 examiners 121 fund of 123 information to be posted in ofCice 141 officials of, cannot borrow from state banks 121 provision for offices 122 special report to ,..130A State banking- fund, amount of 128 banks shall be assessed for 123 method of assessing banks 123 salaries paid out of 123 State deposits in savings banks 62 Statement of all banks, to be submitted to Governor 140 State of California, bonds of, available for deposit by trust com- pany 96 State Treasurer, deposit with, by trust company 90 may accept mortgage on trust company premises, when 97 to receive deposits of trust company securities 96 Stationery of banks must show what 28 Statute of limitations on sale of bank or department SI Stock as collateral, limited 44 impairment of 133-186 Investment in, prohibited 37 number of shares held by directors to be posted 17 par value minimum 58 preferred prohibited 5S INDEX 117 Section BtocUxoldexs, controlling, may sell note, bond or contract to bank, when 35 Information for 17 fitness of, investigation of 128 liability of, cannot be waived 40 liability of, in sale 31 may elect receiver, when 136 may malce application to dissolve 137 meeting of, may be called by superintendent of banks 135 must be notified of assessment 133 must confirm consolidation 31 A names of, to be on file 17 refusal to pay assessment 133 Stockholders' meeting", superintendent of banks may call 135 Street railroad corporation, definition of 61 Somiuoxis, service on foreign corporations 7 Superintendent of banks, action by, to procure judgment of dissolu- tion 135A annual report to Governor 140 appointment of 120 approval of capital and surplus apportioned 23 approval of depositary, when 43 approval to open branch office 9 approval to transact banking business 127 authority to liquidate bank 136 bond required 120 bulletin to be posted in office of 141 certificate of 127 certificate of, to be posted 50 consent necessary to do departmental business 23 copy of corporate papers to be filed with 8 foreign corporations subject to supervision 7 holds office at pleasure of Governor 120 issuance of order to show cause, when 134 liquidation by 136 may appoint special deputies 136 may authorize additional deposits by trust company 98 may authorize deposits by trust company 96 may authorize exchange of trust company securities 96 may authorize withdrawal of trust company deposits, when... 98 may call meeting of stockholders 135 may enforce stockholders' liability 136 may examine national banks, when 48 may make extra examinations 124 may require special report 130A may retain revolving fund 123 may take possession of unsound bank 136 must not issue certificate until 8 oath of office 120 official reports prima facie evidence 142 official seal of 134 powers of 124 power to examine foreign corporations 124 power to investigate bonds and securities 61A reports of banks to ISO report to, by banks, how often 131 report to, by banks, to be published 132 salary 120 shall be appointed attorney of foreign corporations, when 7 shall direct discontinuance of unsound practices 134 shall file copy of license with county clerk 128 shall give notice of liquidation proceedings 186 shall not be connected with banks 120 shall not inspect private trusts 101 shall provide auditor, when 124 shall require banks to repair capital, when 138 trust company must report, what 98 Superior Court, as to conflicting claims, liquidation of banks 136 winding up affairs of bank 136 Surplus, advertising of, shall be separate 14 apportioned to departments 28 maximum necessary to maintain 21 may be converted into capital 21 of savings bank, in what invested 61 of trust company, in what invested 105 one-tenth of net profits to be added before dividend 21 re-apportionment to departments 23 when may be used to pay losses 21 118 CALIFOBNIA BANK ACT Section Survivixig' relatives may collect deposit, when ic Survivor, joint deposit to be paid to 16 Telegraph corporations, definition of 61 Telephone corporation, definition of 61 Title of act 1 to accompany mortgage deposited by trust company 99 Title insurance company doing trust business 106-107 shall not conduct commercial or savings bank 22 trust department, application of law 107 trust department, assessment for state banking department 107 trust department, must report to superintendent of banks 107 trust department, subject to supervision 107 Transfer of assets and liabilities by bank 31 Trust department, affairs shall be separate 90 Trust company, additional deposits by, to be authorized 98 additional deposit with state treasurer, when 98 additional powers dependent upon location 90 additional powers of certain companies 106-107 additional report required 101 advertising, how regulated 28 affidavit to be made before commencing business 90 appointment as trustee, bond not required except 94 articles of incorporation 90 capital required 90 causes for dissolution 134-136 court trusts 96 definition of 6 departmental business 106 deposits by, to be authorized 96 deposits with, authorized by court 91 deposits with, by court order 93 deposits with, how secured 98 deposits with state treasurer 96-97-98-99 exchange of securities deposited by, to be authorized 96 how formed to conduct 3 interest or dividends on securities deposited 96 investment of trust funds 94 knowledge of private trust confidential 103 lawful reserve of 105 liquidation of 136 may act as executor 6-90 may mortgage premises to state treasurer, when 97 may withdraw securities from state treasurer, when 98 must be duly organized 2 must not be foreign corporation, except 7 notification of increase in trusts to be made 98 oath as executor required 90 powers of 6 private trusts 96 private trusts, confidential 103 provisions for ceasing business 102 purposes of 6 qualifications 90 restriction on investments 105 revocation of certificate shall not affect trusts 98 securities deposited may be exchanged 96 shall pay interest on deposits 95 title and appraisement to accompany mortgage deposited with state 99 trust funds, meaning of term 98 trusts classified 101 use of term restricted 12-12 A-12B Trust department may deposit with department of same corpora- tion 25 operated by title insurance company. 106-107 Trustee, deposits by 51 foreign corporations prohibited to act as, except 90 Trust fujids, deposits of 16 interest on, as provided by court 95 investments, how regulated 105 meaning of term 98 shall not be counted as reserve 32 shall not be mingled 32 INDEX 119 Section Trusts, how classified 101 Unclaimed deposits, escheat of 15 publication of 15 Underwriting- of bonds, limited 86 Undivided profits, one-tenth to be carried to surplus before dividend 21 shall not be combined with surplus in advertising 14 United States bonds available for deposit by trust company 96 legality of bonds, of 61 Unknown depositors 15 Unsafe practices, penalty for 134-136 Vacancy in office of superintendent of banks, how filled 121 Violation of any law of state 134-135A-136 Voluntary liquidation of banks 136A-137 Warning* to discontinue violation of law 134 Water corporation, definition of 61 Withdrawal of savings deposits, conditions of 64 of securities by trust company 96-102 mimK?immmmmmMmimm i^^mK..,mr:wm.^'mK^''€sm .mt ->!* ian •■^.