BANCROFT LIBRARY THE LIBRARY OF THE UNIVERSITY OF CALIFORNIA BANK ACT OF THE STATE OF CALIFORNIA AS AMENDED 1915 Chapter 76 Statutes of 1909: Approved March 1. In effect July 1, Amended by Statutes of 1911: 1909. Chapter Chapter Chapter Chapter 11 488 494 495 Approved Feb. 6. In effect Feb. 6, Approved Apr. 21. In effect June 20, Approved Apr. 21. In effect June 20, Approved Apr. 21. In effect June 20, 1911. 1911. 1911. 1911. Amended by Statutes of 1911 (Special Session] : Chapter Chapter 2, 24, Approved Dec. 18. In effect Feb. 16, Approved Dec. 24. In effect Feb. 22, Amended by Statutes of 1913: 1912. 1912. Chapter 104, Chapter 192, Approved May 6. In effect Aug. 10, Approved May 31. In effect Aug. 10, 1913. 1913. Amended by Statutes of 1915: Chapter 140, Chapter 608, Chapter 611, Chapter 612, 1 Approved April 28. In effect Aug. 7, Approved June 3. In effect Aug. 7, Approved June 3. In effect Aug. 7, Approved June 3. In effect Aug. 7, 1915. 1915. 1915. 1915. SvTTH COMPLETE INDEX REVISED EDITION ISSUED BY m\t (9) or (i) of subdivision 3 of this section, unless such notes, 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 ; provided, however, that notes, bonds or other securities, the payment of which is secured by any mortgage or deed of trust executed on or before Septem- ber 1, 1913, and now owned by any savings bank in this state, if otherwise in full conformity with the requirements of this section, need not be so certified by the superintendent of banks, in order to be legal as investments for savings banks. The legality of investments heretofore lawfully made pur- suant to the provisions of this section, or of any law of this 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 invest- ments once lawfully made under this act. Any bonds authorized by this section as a legal investment 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 superintendent of banks shall require any or all of the bonds which may there- after 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 amortization to be deter- mined by him, require such gradual extinction of premium as will bring such bonds to par at maturity. No savings bank shall hereafter purchase or loan money upon any bond, note or other evidence of indebtedness, issued by any "public utility," subject to the jurisdiction, regulation or control of the railroad commission of this state under the provisions of the "Public Utilities Act," approved December CALIFORNIA BANK ACT 55 23, 1911, and acts amendatory thereof or supplemental thereto, unless each such bond, note or other evidence of indebtedness was either: (a) Issued prior to the taking effect of the ' ' Public Utilities Act"; or (b) 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 subdivision ( b) of section fifty-two of said act. No provision of this act, and no act, or deed, done or per- formed under or in connection therewith, and no finding made or certificate issued under any provision thereof, shall be held or construed to obligate the State of California to pay, or be liable for the payment of, or to guarantee in any manner what- soever, 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 conformity with the re- quirements of any paragraph of subdivision 3 of this section. It shall not be lawful for any individual, firm, association, bank, trust company, stock company, copartnership or corpo- ration to advertise by newspaper or circular or in any other manner that any bonds are legal investments for savings banks in this state or to use any advertisement which might lead the public to believe that any bonds conform to the requirements of law relating to investments by savings banks unless such bonds are such as are specified in paragraph (a), (b), (c), (d), (e), (j), or (k) of subdivision 3 of this section or shall, in the manner provided in this act, have been certified by the super- intendent of banks to come within and fully conform to the requirements of one or the other of paragraphs (f), (g), (k), or (i) of subdivision 3 of this section or unless such advertise- ment shall have been approved in writing by the superinten- dent of banks prior to publishing, circulating or otherwise issuing the same. Any individual, firm, association, bank, trust company, stock company, copartnership or corporation who shall advertise any bonds in violation of the provisions of this 56 CALIFORNIA BANK ACT paragraph shall be guilty of a misdemeanor and shall be pun- ishable by a fine not exceeding one thousand dollars or by im- prisonment in a county jail not exceeding one year or by both such fine and imprisonment. Sec. 61a. The superintendent of banks shall have power, when any issue of bonds or securities is presented to him for that purpose, to investigate and ascertain whether such bonds or securities come within and fully conform to all the require- ments of paragraphs (f), (g), (h), or (i) of subdivision 3 of section sixty-one of this act, or of either of said paragraphs. He may also investigate and ascertain for what period of time, and upon what conditions, any franchise granted to or held by any corporation issuing any such bonds or securities will re- main in force, and any other facts or conditions bearing upon the value or sufficiency of such bonds. The actual expense of investigating any issue of bonds or securities so presented shall be paid by the person or corporation presenting the same for investigation, and the superintendent of banks, before making such investigation, may require a cash deposit of such amount as he may deem necessary to cover such expense. The superin- tendent of banks may accept and act upon the opinions and appraisements of any attorneys or appraisers which may be presented by such person or corporation so applying, and the reports of any of the executive officers of the corporation issu- ing 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 condi- tion of the corporation issuing the same. In lieu of or in addi- tion to such opinions, appraisements and reports, the superin- tendent of banks may, if he deems proper, have any or all such matters passed upon and certified to him by attorneys, ap- praisers or accountants of his own selection at the expense of the applicant. If the superintendent of banks shall find from such investigation that the bonds or securities so presented come within and fully conform to all the requirements of any of said paragraphs of subdivision 3 of section sixty-one of this act, and is satisfied from such investigation as to such franchise conditions, he shall so certify unless for any reason he shall be CALIFORNIA BANK ACT 57 of the opinion that such bonds are not a safe or proper invest- ment for savings banks, and in such event or if such bonds shall fail to meet the requirements of this act such certificate must be refused. Any bonds certified by the superintendent of banks as in this section provided shall thereafter be deemed to be legal as investments for savings banks until three months after the end of the then current fiscal year of such corpora- tion unless for any reason the superintendent of banks shall have revoked such certificate and during such time but not thereafter bonds so certified may be purchased by savings banks without further certification. The superintendent of banks shall keep an official list of all bonds and securities cer- tified by him. Sec. 62. No savings bank shall, directly or indirectly, deal or trade in real or personal property in any other case or for any other purpose than is authorized by this act, and shall not contract any debt or liability for any purpose whatever other than for deposits, except as in this section provided. Savings banks may pay regular depositors, when requested by them, by draft upon deposits to the credit with their banks, and charge current rate of exchange for such drafts. No savings bank shall borrow money, or pledge or hypothe- cate any of its securities, except to meet the immediate de- mands of its own depositors, and then only in pursuance of a resolution adopted by a vote of a majority of its board of directors, duly entered upon their minutes, wherein shall be recorded the ayes and nays upon each vote; also with the 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 with- out 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. 58 CALIFORNIA BANK ACT Sec. 63. Savings banks may issue general certificates of de- posit, which are transferable, as in other cases, by indorsement and delivery ; may issue, when requested by the depositor, spe- cial 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 certifi- cate was issued, shall discharge the bank from all further lia- bility on account of the money so paid. All time certificates of deposit, issued by a savings bank, shall be subject to the same limitations and conditions as ap- plied to other deposits, and notice thereof shall be given by the words "Subject to conditions of agreement with depositors" printed on the face of the certificate issued. Sec. 64. Each savings bank must prescribe by its by-laws, or by contract with its depositors, the time and conditions on which repayment is to be made to depositors, except as in this act otherwise provided. In all cases the by-laws or contracts shall provide that notice of at least thirty days may, at the option of any such bank, be required to be given of intention to withdraw any deposit or part thereof, but whenever there is any call by depositors for repayment of a greater amount than the bank may have disposable for that purpose, the directors or officers thereof must not make any new loan or investment of the funds of the depositors or of earnings thereof until such excess of call has ceased. The directors of any such bank hav- ing no capital stock shall, before the declaration of any divi- dend, 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 con- tained shall be construed as prohibitory thereof. The assets of CALIFORNIA BANK ACT 59 any such bank are a security to its depositors. Any such bank organized without capital stock, may provide by its by-laws for the disposal of any amount in its reserve fund in excess of the amount required by section nineteen of this act and may also provide for final disposal upon the dissolution of the bank of its reserve fund or the balance thereof remaining after pay- ment of any losses of such bank. Sec. 65. No loan shall be made, for himself or as agent or partner of another, directly or indirectly, to any director or officer of any savings bank by such bank, or on the endorse- ment, surety or guaranty of any such officer or director, ex- cept that loans may be made to any corporation in which any director or officer of such savings bank may own or hold a mi- nority number of shares of stock, upon authorization of a ma- jority 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, however, that such loan shall in all other respects conform to and comply with all other provisions of this act. Such interested director or officer shall not vote or participate in any manner in the action of the board on such loan. Such authorization shall be entered upon the records or minutes of such savings bank. The fact of making such loan, the names of the directors authoriz- ing such loan, the corporate name of the borrower, the name of each director or officer of such bank who is a member, stock- holder, officer, or director of the corporation to which such loan is made, the amount of stock held by him in such borrowing corporation, 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 therefor and the fact of final payment, when made, shall be forthwith reported in writing by the cashier or secretary of such savings bank to the superintendent of banks. No loan may be made to any cor- poration, a majority of the stock of which is owned or con- trolled by any one or more of the directors or officers of such savings bank, except with the previous consent of the superin- tendent of banks. A loan may be made to any agent or employee, other than an officer or director, of any savings bank by such bank upon 60 CALIFORNIA BANK ACT 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, however, that such loan shall in all respects conform to and comply with all other provisions of this act. Such authoriza- tion shall be entered upon the records or minutes of such sav- ings bank. The fact of making such loan, the names of the directors authorizing such loan, the name of the borrower, the nature of his employment, the amount of such 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 final 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. In case of the neglect or failure of the secretary or cashier of any such bank, to report to the superin- tendent of banks, as herein provided, any of the facts so re- quired to be reported, 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. This section shall not apply to any loan made to a religious corporation, club, or other membership corporation of which one or more directors, officers, agents or employees of such sav- ings bank may be members or officers, but in which they have no financial interest. Sec. 66. No savings bank shall hereafter make any loans to any person, firm, copartnership or corporation to an amount exceeding fifty per centum of the actual paid-up capital stock and surplus of such bank, or in the case of a bank organized without capital stock, to an amount exceeding fifty per centum of the reserve fund of such bank ; provided, however, that any savings bank having a paid-up capital and surplus of less than fifty thousand dollars, but not less than twenty-five thousand dollars, may make any such loan on real estate security to an amount not exceeding twenty-five thousand dollars ; and pro- CALIFORNIA BANK ACT 61 vided 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 exceed- ing its paid-up capital and surplus, if each such loan in all other respects conforms to the provisions of this act. The re- newal or extension of any loan heretofore legally made by any savings bank shall not be construed to be a "loan hereafter made" within the meaning of the provisions of this section. The legality of investments heretofore lawfully 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 sec- tion. For the purposes of this section an endorser or guarantor shall be deemed to be a borrower. Sec. 67. 1. No savings bank shall loan money except on ade- quate security of real or personal property, and no such loan shall be made for a period longer than ten years. No such loan shall be made on unsecured notes; provided, that a savings bank may, under such conditions and regulations as the super- intendent of banks may prescribe, discount or purchase com- mercial paper of the kind and character made eligible under the federal reserve act and the then current regulation of the federal reserve board for re-discount or for purchase in the open market by a federal reserve bank; provided, however, that no savings bank shall at any time acquire by discount or purchase an amount of such commercial paper greater than five per centum of its deposits nor shall any savings bank ac- quire, directly or indirectly, by discount or purchase, any such commercial paper of or from any person, firm, copartnership or corporation in an amount which shall exceed five per centum of the capital and surplus of such bank. 2. No savings bank shall invest or loan an amount greater than fifty per centum of its actual paid-up capital and surplus on any one bond issue of the class specified in paragraph (h) of subdivision 3 of section sixty-one of this act, nor more than five per centum of its assets on any one bond issue of any other class, except bonds of the United States, of the State of Cali- fornia, bonds for which the faith and credit of the United States or of the State of California are pledged, or bonds of 62 CALIFORNIA BANK ACT 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 : (a) On bonds of the character specified in paragraphs (a), (~b), (c), and (d) of subdivision 3 of section sixty-one of this act, unless such bonds shall have a 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 3 of section 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 exceed 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 pre- viously 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 immediately CALIFORNIA BANK ACT 63 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 per centum of the market value of the real estate covered by said mortgage or deed of trust. 5. No savings bank shall loan to any one borrower on the security of the capital stock of any corporation an amount ex- ceeding ten per centum of the capital stock and surplus of such savings bank ; provided, that all loans on the capital stock of any one corporation shall not exceed in the aggregate twenty- five per centum of the capital stock and surplus of such sav- ings bank. No savings bank shall purchase, invest or loan its capital, surplus or the money of its depositors, or any part of either, in mining shares or stock. Any president or managing officer who knowingly consents to a violation of any provision of this section shall be guilty of a felony. Sec. 68. Every savings bank or savings department of a bank, shall at all times maintain total reserves equivalent to five per centum of the aggregate amount of its deposits; at least two and one-half per centum of such deposits shall be maintained as reserves on hand, one-half of which shall consist of gold coin, gold bullion, United States gold certificates or United States notes and one-half of which shall consist of gold coin, gold bullion, United States gold certificates, United States notes or any other form of currency authorized by the laws of the United States and two and one-half per centum of such de- posits may be maintained as reserves on hand and may consist of bonds of the United States or of gold coin, gold bullion, United States gold certificates, United States notes or any other form of currency authorized by the laws of the United States or may be maintained as reserves on deposit subject to call with any reserve depositary provided for in section twenty of this act ; provided, however, that no savings bank or savings 64 CALIFORNIA BANK ACT department shall be required to maintain reserves on hand in excess of four hundred thousand dollars, and when such re- serves on hand reach that amount, the balance of total reserves necessary to make up the five per centum may be kept as re- serves on deposit subject to call with any reserve depositary provided for in section twenty of this act. No new loan shall be made during any deficiency in the total reserves. Deposits with any commercial bank, or commercial department of a bank, on open account, as provided in this section, shall be permitted, and shall not be construed as loans. Not more than five per centum of the deposits of any savings bank shall be deposited with any one bank, except with the consent of the superinten- dent of banks. Not more than fifteen per centum of the de- posits 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 of the reserves on deposit of such depositing bank; provided, that the sum so deposited shall not exceed ten thousand dollars. Sec. 68^2. Where a decedent, at the time of his or her death, left moneys on deposit with a savings bank, it shall be lawful for any public administrator, who shall become the administra- tor of the estate, to allow such deposit to remain in said sav- ings 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 administration. Such deposit, whether made by the decedent or a public ad- ministrator, shall relieve the public administrator from depos- iting the same with the county treasurer. Moneys so deposited, whether by the decedent or by a public administrator, 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 administration or otherwise. Sec. 69. Every savings bank, and the business of every savings department of every other bank, must be conducted under and in accordance with the provisions of this act. CALIFORNIA BANK ACT * 65 ARTICLE III. COMMERCIAL BANKS. Sec. 80. No commercial bank shall make any loans, directly or indirectly, to any person, firm, co-partnership or corpora- tion, in an amount which, including therein any extension of credit to such person, firm, co-partnership or corporation, by means of letters of credit, or by acceptance of drafts for, or the discount or purchase of the notes, bills of exchange or other obligations of, such person, firm, co-partnership or cor- poration, shall exceed the following percentage of its capital and surplus. 1. Ten per centum without security, except where such cap- ital stock and surplus is not more than twenty-five thousand dollars, in which event an amount not to exceed twenty per centum of such capital stock and surplus may be loaned with- out 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 dol- lars may be loaned without security. Nothing herein shall prohibit any commercial bank from taking or receiving any kind, character or amount of security whatsoever, either real or personal, for the protection of any loan made under the pro- visions of this subdivision, but no such loan or any part thereof shall be considered or construed as a 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 may be loaned under the provisions of subdivision one of this sec- tion, upon security worth at least fifteen per centum more than the amount of such loan so secured ; provided, the total amount which can be loaned under subdivisions one and two hereof can not exceed twenty-five per centum in all ; provided, how- ever, that a separate note or notes shall be taken for the unse- cured loans and a separate note or notes shall be taken for the secured loans, and the secured and unsecured loans shall not be combined in any way within one note, or notes ; or, 66 CALIFORNIA BANK ACT 3. Twenty-five per centum upon security worth at least fif- teen per centum more than the amount of its loans so secured ; 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; or, 4. Forty per centum, provided such loans are upon com- mercial or business paper actually owned by the person nego- tiating the same to such bank, and are endorsed by such person without limitation ; provided, however, that in addition to the amounts permitted to be loaned by subdivisions one, two or three of this section, an amount may be loaned on the securities fixed by subdivision four of this section, which taken with the amounts so permitted by said subdivisions one, two or three will not exceed forty per centum; provided, also, that the restrictions under this section shall not apply to bills of exchange or drafts, with bills of lading attached, drawn in good faith against actual existing values; provided, further, that any commercial bank, having first obtained in writing the consent of the superintendent of banks so to do and under such conditions and regulations as may be prescribed by him, may accept drafts or bills of exchange drawn upon it running for a period not longer than six months, but no commercial bank shall accept such drafts or bills of exchange in an amount greater at any time in the outstanding aggregate than one-half of its capital and surplus ; but such acceptance or acceptances must be drawn by a person, firm, co-partnership or corporation engaged in agricultural, industrial or commercial business directly connected with the production, manufacture, purchase, sale or consignment of the goods involved in the transaction in which the acceptance originated; provided, however, that no such acceptance or acceptances to any one person, firm, co-partnership or corporation shall exceed ten per centum of the capital and surplus of such bank. In computing the total liabilities of any person to a commer- cial bank there shall be included all liabilities to the bank of any co-partnership or unincorporated association of which he is a member, and any loans made for his benefit or for the CALIFORNIA BANK ACT 67 benefit of such co-partnership or unincorporated association; of any firm, co-partnership or unincorporated association to a commercial bank there shall be included all liabilities of its individual members and all loans made for the benefit of such co-partnership or unincorporated association or any member thereof; and of any corporation to a commercial bank there shall be included all loans made for the benefit of the cor- poration. Sec. 81. No loan shall be made by any commercial bank upon the securities of one or more corporations, the payment of which is undertaken, in whole or in part, severally, but not jointly, by two or more individuals, firms, or corporations : (a) If the borrowers 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. Sec. 82. Every commercial bank hereafter organized must have paid up in cash a capital stock of not less than, (a) Twenty-five thousand dollars if its principal place of business is located in any locality the population of which does not exceed five thousand persons; ( b) Fifty 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 exceed twenty-five thousand persons; 68 CALIFORNIA BANK ACT (c) 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 exceed one hundred thousand persons ; (d) 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 exceed two hundred thousand persons; (e) 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. The foregoing classification shall not apply to any commer- cial bank already in existence which has received its certificate to do a banking business from the superintendent of banks; nor to any bank the location of which shall have 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 consolida- tion 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 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 twenty-three of this act, as to population, shall apply to any bank organized under the provisions of this section. Sec. 83. No loan shall be made for himself or as agent or partner of another, directly or indirectly, to any officer of any commercial bank by such bank or on the endorsement, surety, or guaranty of any such officer ; provided, that a loan may be CALIFORNIA BANK ACT 69 made to a corporation of which any officer of a commercial bank, proposing to make such loan, is a minority stockholder, director, officer, agent or employee. Loans to any director, agent or employee, other than an officer, or to any firm, co-part- nership or corporation of which any director, agent or em- ployee other than an officer is a member, stockholder, director, officer, agent or other employee, or to any person, firm, co- partnership or corporation on the endorsement, surety, or guaranty of any such director other than an officer, agent or other employee, can be made by any commercial bank. Loans herein authorized can be made only on authorization of or con- firmation within thirty days after making such loan, by a majority of all the directors of such bank and the affirmative vote of all directors of such bank present at the meeting au- thorizing or confirming such loan. Such interested director shall not vote or participate in any manner in the action of the board on such loan. The board of directors of any such bank may fix the total amount of credit that may at any one time during the twelve months next succeeding be given to any director, agent, or other employee, other than an officer, or to any firm, co-partnership or corporation in which any director, agent, or other employee other than an officer is a member, stockholder, director, officer, agent or other employee or to any corporation of which any officer of a commercial bank, propos- ing to fix such total amount of credit, is a minority stockholder, director, officer, agent or employee, and any or all loans made within or up to the total amount of such authorized credit may at any time during said twelve months, be renewed from time to time, in whole or in part, by the officers of the bank without any further vote or action on the part of the board of directors. Each such authorization shall be entered upon the records or minutes of said bank. No director shall vote or participate in any manner in such action of the board fixing the total amount of credit that may at any one time be given to himself or to any firm, co-partnership or corporation in which he is a mem- ber, stockholder, director, officer, agent or other employee. The fact of making such loan, the names of the directors authoriz- ing such loan, the name of the director, agent or employee, 70 CALIFORNIA BANK ACT obtaining such loan, or the name of the firm, co-partnership or corporation in which such director, agent or employee is interested or the name of the corporation, of which any officer of a commercial bank is a minority stockholder, director, officer, agent or employee, obtaining such loan, 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 therefor, if any, and the fact of final payment when made shall forthwith be reported in writing by the cashier or secre- tary of such bank to the superintendent of banks.. In case a loan is made to a corporation there shall be reported in the same manner the name of each director and officer of such bank who is a member, stockholder, director, officer or employee of such borrowing corporation and the amount of stock held by him in such borrowing corporation. All the provisions of this section relating to reports shall apply to the granting of credit and all loans made under any credit given and payments made thereon shall also be reported immediately after the same are made. In case of a loan made without the previous authoriza- tion of the directors, the fact of making such loan shall forth- with be reported and the action of the board of directors, in confirming or refusing to confirm such loan within thirty days thereafter, and the fact of final payment when made shall be reported in the same manner as herein required for loans made under previous authorization. Any officer, director, agent, or employee of a commercial bank, who knowingly procures a loan from such commercial bank contrary to the provisions of this section, shall be guilty of a felony. In case of the 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, the bank shall be liable there- for 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. This section shall not apply to any loan made to a religious corporation, club, or other membership corporation of which one or more directors, officers, agents or employees of such commercial bank may be members or officers but in which they have no financial interest. CALIFORNIA BANK ACT 71 Sec. 84. No commercial bank shall invest an amount ex- ceeding its paid-up capital and surplus in the lot and building in which the business of the bank is carried on, furniture and fixtures, vaults and safe deposit vaults and boxes necessary or proper to carry on its banking business ; and hereafter the authority of a two-thirds vote of all the directors shall be necessary to authorize the purchase of such lot and building or the construction of such building. Sec. 85. The superintendent of banks shall have power to limit the amount of funds that may be deposited by any com- mercial bank with any other commercial bank. ARTICLE IV. TRUST COMPANIES. Sec. 90. Any corporation which has been or shall be incorporated under the general corporation laws of this state, which is authorized by its articles of incorporation to act as executor, administrator, guardian of estates, assignee, receiver, 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, which has its principal place of business in a city in which the population does not exceed one hundred thousand persons and which has a capital of not less than one hundred thousand dollars actually paid in, in cash, assigned to or available for the purpose of conducting business in any such capacity, or trust business of any charac- ter permitted by law, and which has made with the state treasurer the deposit of money or securities of the character and in the amount required by the terms of section ninety-six of this act, and which has received from the superintendent of banks the certificate of authority required by the terms of section one hundred and twenty-seven of this act, to transact such business, and any corporation which has been or shall be incorporated under the general corporation laws of this state, which is authorized by its articles of incorporation to act as 72 CALIFORNIA BANK ACT executor, administrator, guardian of estates, assignee, receiver, 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, which has its principal place of business in a city in which the population exceeds one hundred thousand persons and which has a capital of at least two hundred thou- sand dollars actually paid in, in cash, assigned to or available for the purpose of conducting business in any such capacity, or trust business of any character permitted by law, and which has made with the state treasurer the deposit of money or securities of the character and in the amount required by the terms of section ninety-six of this act, and which has received from the superintendent of banks the certificate of authority required by the terms of section one hundred twenty-seven of this act, to transact such business, may act, or may be appointed by any court to act, in any such capacity in like manner as an individual and when so qualified shall be known as a trust company. Any such trust company may, as pro- vided in this act, accept or receive any deposit of money or personal property authorized, directed or permitted to be made with any such corporation by any court or law of this state, and may accept and execute any trust provided for in this act, or permitted by any law of this state, to be taken, accepted or executed by an individual. Any such trust company, if located in a city the population of which does not exceed one hundred thousand persons must segregate that portion of its capital and surplus assigned to or available for its trust busi- ness and must apportion and set aside at least fifty thousand dollars of such paid-up capital as security for the faithful performance and execution of all private trusts accepted by it and must also apportion and set aside at least fifty thousand dollars of such paid-up capital as security for the faithful per- formance and execution of all court trusts accepted by it and whenever such trust company shall, under the provisions of sections ninety-six and ninety-eight of this act, be required to make the first additional deposit of securities with the state treasurer, such trust company must also apportion and set aside an additional fifty thousand dollars of paid-up capital as security for the faithful performance and execution of all pri- CALIFORNIA BANK ACT 73 vate trusts accepted by it and must also apportion and set aside an additional fifty thousand dollars of paid-up capital as secur- ity for the faithful performance and execution of all court trusts accepted by it, and any trust company, if located in a city, the population of which exceeds one hundred thousand persons, must segregate that portion of its capital and surplus assigned to or available for its trust business and must appor- tion and set aside at least one hundred thousand dollars of such paid-up capital as security for the faithful performance and execution of all private trusts accepted by it and must also ap- portion and set aside at least one hundred thousand dollars of such paid-up capital as security for the faithful performance and execution of all court trusts accepted by it ; provided, that no such trust company shall at any time be required to appor- tion and set aside any portion of its surplus as security for the faithful performance of such private trusts, nor shall it be pro- hibited from so doing ; and provided, further, that the respect- ive amounts of capital or capital and surplus so apportioned and set aside shall be treated in all respects as the separate cap- ital or capital and surplus of each respective kind or class of business, as though the same were conducted by separate and distinct corporations, and each shall be kept, held, used and disposed of wholly for the exclusive benefit, protection and security of the respective classes of trust business to which the same were respectively so apportioned and set aside. In all cases in which it is required that an executor, administra- tor, guardian of estates, assignee, receiver, depositary or trustee, shall qualify by taking and subscribing an oath, or in which an affidavit is required, it shall be sufficient qualification by such corporation if such oath be taken and subscribed or such affidavit made by the president, vice president, secretary, manager, trust officer, assistant trust officer or regularly em- ployed attorney thereof, and such officer or employee shall be liable for the failure of such trust company to perform any of the duties required by law to be performed by an individual acting in like capacity and subject to like penalties; provided, any such appointment as guardian shall apply to the estate only, and not to the person. No foreign corporation shall have or exercise in this state the power to act as trustee under any 74 CALIFORNIA BANK ACT mortgage, deed of trust, or other instrument securing notes or bonds issued by any corporation, excepting that a foreign cor- poration may be authorized to act, outside of the State of California, as co-trustee with any qualified trust company organized and doing business under the laws of this state, for the following purposes with reference to bonds secured by mortgage or deed of trust of property in this state, and none other : (1) To deliver bonds, and receive payment therefor. (2) To deliver permanent bonds in exchange for temporary bonds of the same issue. (3) To deliver refunding bonds in exchange for those of a prior issue or issues. (4) To register bonds, or to exchange registered bonds for coupon bonds, or coupon bonds for registered bonds. (5) To pay interest on such bonds, and to take up and can- cel coupons representing such interest payments. (6) To redeem and cancel bonds when called for redemp- tion, or to pay and cancel bonds when due. (7) The certification of registered bonds for the purpose of exchanging registered bonds for coupon bonds. Sec. 91. Any court having jurisdiction of any executor, administrator, guardian, assignee, receiver, depositary or trustee, upon the application of any such officer or trustee, or upon the application of any person having an interest in the estate or property administered by such officer or trustee, after such notice to the other parties in interest as the court may direct, and after a hearing upon such application, may author- ize such officer or trustee to deposit any moneys then in his hands, or which may come into his hands thereafter, until the further order of said court, with any such trust company, and upon deposit of such money, and its receipt and acceptance by such trust company, the said officer or trustee shall be dis- charged from further care or responsibility therefor. Such deposit shall be paid out only upon the order of said court. Sec. 92. Any public administrator may deposit any or all moneys of any estate upon which he is administering, not CALIFORNIA BANK ACT 75 required for the current expenses of such administration, with any such trust company having its principal place of business in the county, or city and county in which he is acting as such administrator. Any court having jurisdiction of an estate being administered by a public administrator, may direct such administrator to deposit all or any part of the moneys of said estate with any such trust company. Such deposit shall relieve the public administrator from depositing with the county treasurer the moneys so deposited with such trust company. Moneys so deposited by a public administrator may be drawn, upon the order of such administrator, countersigned by a judge of the superior court, when required for the purposes of administration, or otherwise. Sec. 93. Any court having jurisdiction of any estate in process of administration, or any other proceeding, may, on application of any person interested therein, or the person who has been selected by said court, or a judge thereof as executor, administrator, guardian, assignee, receiver, deposi- tary or trustee, after such notice to the parties in interest as the court shall direct, or without notice if all parties in interest consent thereto, and a hearing on such application, order any executor, administrator, guardian, assignee, re- ceiver, depositary or trustee so selected or appointed, whether such person has duly qualified or not to deposit with any such trust company, for safe-keeping, such portion or all of the personal assets of said estate as the court shall deem proper, and upon such deposit being made, the court shall by an order of record reduce the bond to be given or theretofore given by such officer or trustee, so as to cover only the estate remaining in the hands of said officer or trustee; and the property so deposited shall thereupon be held by such trust company, under the order and direction of said court. Sec. 94. Such trust company shall not be required to give any bond or security in case of any appointment or deposit of moneys or other personal assets hereinbefore provided for, except as provided in this act, but shall be responsible for all investments which shall be made by it of the funds which may 76 CALIFORNIA BANK ACT be entrusted to it for investment by such court, and shall be liable to the same extent as an individual, and as hereinafter provided. Sec. 95. Such trust company shall pay interest upon all moneys so deposited with it at such rate as may be agreed upon at the time of its acceptance of any such deposit, or as shall be provided by the order of court and agreed to by such trust company. Sec. 96. Any such trust company, if its principal place of business is situated in a city the population of which does not exceed one hundred thousand persons, before accepting any such appointment or deposit, shall deposit with the state treasurer, as herein provided, at least fifty thousand dollars as security for the faithful performance and execution of all court trusts accepted by it, and shall also deposit with the state treasurer at least fifty thousand dollars as security for the faithful performance and execution of all private trusts accepted by it; and whenever any such trust company shall under the provisions of section ninety-eight of this act be required to make the first additional deposit of securities with the state treasurer such trust company must also deposit with the state treasurer an additional fifty thousand dollars as security for the faithful performance and execution of all pri- vate trusts accepted by it ; and any trust company if its prin- cipal place of business is situated in a city the population of which exceeds one hundred thousand persons, before accepting any such appointment or deposit, shall deposit with the state treasurer, as herein provided at least one hundred thousand dollars, as security for the faithful performance and execution of all court trusts accepted by it, and shall also deposit with the state treasurer at least one hundred thousand dollars as security for the faithful performance and execution of all private trusts accepted by it. Any such deposit may be made either in lawful money of the United States, or in securities of either or any of the following classes : ( a) Bonds issued by the United States or by this state or by any county, city and county, city or school district of this CALIFORNIA BANK ACT 77 state, or bonds of any irrigation district such as are legal for investment by savings banks ; (b) Bonds for the payment of which the faith and credit of the United States or of this state are pledged ; (c) Notes or bonds secured by mortgage or deed of trust constituting a first lien on improved and productive real estate in the State of California; such improved real estate being worth at least double the amount of such lien. (d) Notes or bonds secured by mortgage or deed of trust, payment of which is guaranteed by a policy of mortgage insur- ance, and mortgage participation certificates, issued by a mort- gage insurance company in accordance with the provisions of chapter VIII of title II of part IV of division first of the Civil Code ; provided, that such notes or bonds shall constitute, and such mortgage participation certificates shall evidence the ownership of, or participation in, notes or bonds which consti- tute, a first lien on improved and productive real estate in the State of California, such improved real estate being worth at least double the amount of such lien. Such money or securities shall be first approved by the superintendent of banks and, upon his written order, deposited with the state treasurer for the respective purposes herein specified, and said treasurer shall give his receipt therefor, and thereafter, subject to the provisions of this act, shall hold such deposits of money or securities separately, each for the sole benefit of the beneficiaries of the class of trust business, for the security and protection of which the same was de- posited, and said treasurer shall give his receipt therefor and the state shall be responsible for the custody and safe return of any money or securities so deposited. Said securities or money so deposited may with the approval of the superin- tendent of banks, be withdrawn or exchanged from time to time for other like securities, or lawful money, receivable as aforesaid, and so long as the trust company so depositing said money or securities shall continue solvent, it shall have the right and shall be permitted by the state treasurer to receive the interest and dividends on any securities so deposited. Said securities and money shall be subject to sale and transfer, 78 CALIFORNIA BANK ACT and to the disposal of the proceeds by said state treasurer, only on the order of a court of competent jurisdiction and for the benefit respectively of the beneficiaries of that class of trust business for the security and protection of which the same were deposited. Sec. 97. Any such trust company, having a capital and surplus of two hundred thousand dollars or more apportioned and set aside as security for the faithful performance and execution of all court trusts accepted by it, as provided in this act, and which is wholly or in part invested in the lot and building in which its business is carried on, may be permitted by the superintendent of banks to mortgage such lot and building to the state treasurer for such sum, up to its full market value, as the superintendent of banks may determine, and such mortgage may be deposited with said treasurer, and when so deposited it shall be included in the amount of securi- ties herein required to be deposited with said treasurer as security for the faithful performance of all such court trusts. Sec. 98. "Whenever any trust company, the principal place of business of which is located in a city the population of which does not exceed one hundred thousand persons, receives from court trusts accepted by it, trust funds, as herein defined, to the amount of five hundred thousand dollars, it shall forthwith notify in writing the superintendent of banks of such fact, and within thirty days thereafter shall deposit with the state treasurer additional money or securities of the character men- tioned and defined in section ninety-six of this act, approved as therein provided, in the amount of fifty thousand dollars; and whenever any trust company receives from court trusts such funds to the amount of one million dollars it shall further notify in writing the superintendent of banks of such fact and within thirty days thereafter shall deposit with the state treasurer additional money or securities of the character men- tioned and defined in section ninety-six of this act, approved as therein provided, in the amount of fifty thousand dollars; and for each additional five hundred thousand dollars of such trust funds thereafter received by any trust company from court trusts a similar notification in writing shall forth- CALIFORNIA BANK ACT 79 with be given to the superintendent of banks, and a further deposit in the amount of twenty-five thousand dollars of such money or securities, or of securities provided for in section ninety-seven of this act likewise approved, shall be made, within thirty days thereafter, by such trust company with said state treasurer, until five hundred thousand dollars of such securities have been so deposited; and for each addi- tional one million dollars of such trust funds thereafter received by any trust company from court trusts a similar notification in writing shall forthwith be given to the superin- tendent of banks, and a further deposit in the amount of twenty-five thousand dollars of such money or securities, or of securities provided for in section ninety-seven of this act like- wise approved, shall be made, within thirty days thereafter, by such trust company with said state treasurer. The treas- urer shall give his reecipt for any money or securities so de- posited and each and all of such deposits of money or securi- ties, shall be held by said state treasurer for the sole benefit of the beneficiaries of the class of business for the security and protection of which same were deposited. The state shall be responsible for the custody and safe return of any money or securities so deposited with said state treasurer. The term "trust funds" when used in this section shall be deemed to mean and shall mean personal property and cash, whether received with the original trust property or as rent, income or proceeds thereof, or otherwise, in connection with the trust, and shall not be deemed to include and shall not include real property. Any trust company failing to comply with the provisions of this section shall forfeit to the State of Cali- fornia one hundred dollars a day for each day during which such failure or default shall continue. Upon making a request in writing to the superintendent of banks, any such trust company shall be entitled to withdraw from the state treasurer, from time to time, a sufficient amount of such securities so that at all times the amount of such securities so deposited shall conform to the requirements of this act, and so that at no time shall such trust company be required to have on deposit with the state treasurer an amount of securities in excess of 80 CALIFORNIA BANK ACT the requirements of this act. Upon receiving such request in writing, and satisfactory proof of the facts warranting such withdrawal, it shall be the duty of the superintendent of banks to forthwith deliver to the state treasurer a written order directing the withdrawal of said securities so as to conform with the provisions of this section, and it shall be the duty of the state treasurer to comply with such written order. The validity or legality of any act or proceeding done or taken by any such trust company, relating to or in connection with the administration of any such trusts, shall not be affected or im- paired by the neglect or failure of such trust company, or of any officer or employee thereof, to comply with any of the *provisions of this act, but all such acts and proceedings done or taken prior to the revocation of its certificate of authority to do such business by the superintendent of banks, under the provisions of this act, or the revocation by any court or judge thereof of the appointment, order or decree theretofore en- tered in such trust matter shall be as valid and effective for all purposes as if any such neglect or failure had not occurred. Sec. 99. When any part of the securities so deposited with the state treasurer consists of notes, bonds or participation certificates secured by mortgage or deed of trust, it shall be accompanied by a policy of mortgage insurance or a complete abstract of title or an unlimited certificate of title or a policy of title insurance prepared or issued by a person, company or corporation designated or approved by the superintendent of banks and authorized by law or otherwise found by the superintendent of banks to be competent to issue such evidence of title, which shall be examined and approved by or under the direction of said superintendent of banks. The fees for an examination of such policy or evidence of title by counsel to be paid by the trust company making the deposit shall not exceed twenty dollars for each policy or title examined, and the fee for each appraiser, not exceeding two, shall not exceed five dollars for each mortgage or deed of trust. (Sec. 100. Eepealed 1913.) Sec. 101. For the purposes of this act, all trusts permitted to be accepted or executed by any such trust company, under CALIFORNIA BANK ACT 81 any provision of this act are hereby classified and defined as either : (a J Court trusts; or ( b) Private trusts. A court trust is one in which any such trust company acts under appointment, order or decree of any court, as executor, administrator, guardian, assignee, receiver, depositary or trustee, or in which it receives on deposit from a public admin- istrator, under any provision of this act, or from any executor, administrator, guardian, assignee, receiver, depositary or trustee, under any order or decree of any court, money or property. Any other trust is a private trust ; provided, that the creator of any private trust of which a trust company shall be made, or at any time come to be, the trustee, may, at the time of the creation of such trust, or the creator of any such private trust, or his successors in interest, and the beneficiaries thereof may, at any time, by their joint consent, direct that such trust shall be subject to and entitled to the benefit of all of the provisions of this act relating to court trusts and thereafter such trust shall for all the purposes of this act be deemed to be a court trust and wherever in this act the words "court trust" are used they shall be deemed to include private trusts which are subject to supervision except in so far as any of the provisions of this act relating to court trusts'* may, by their nature, be inapplicable to such private trust. Such direction shall be in writing addressed to the trustee and a copy thereof, certified by the trustee, delivered to the superintendent of banks. In case such direction shall be made after the acceptance of the trust, the trustee shall have the right to resign as such and a new trustee shall be appointed as provided in the trust instrument or by law. The inspection and supervision of the superintendent of banks shall extend only to court trusts as herein defined and to private trusts subjected to the provisions of this act relating to court trusts as above provided. Private trusts, except as in this section provided, shall not be subject to the inspection or supervision of the superintend- ent of banks, his attorneys, examiners or other assistants. 82 CALIFORNIA BANK ACT In making the reports to the superintendent of banks required by this act, every trust company shall, in addition to the other facts to be reported by it, furnish only a list and brief description of the court trusts and private trusts, which are subject to supervision, held by it, the source of appoint- ment thereto, the authority by which* the appointment or deposit was made, and the amount of real or personal property held by such trust company by virtue thereof. Nothing in this act contained shall make it unlawful for any person or corporation not subject to the supervision of the superintendent of banks to engage in the business of receiving and holding in escrow money or its equivalent pending invest- ment in real estate or securities for or on account of his or its principal, or of acting as trustee under deeds of trust given solely for the purpose of securing obligations for the repay- ment of money, other than corporation bonds. Sec. 102. Any corporation which desires to withdraw from and discontinue doing a trust business shall furnish to the superintendent of banks satisfactory evidence of its release and discharge from all the obligations and trusts hereinbefore provided for, and thereupon the superintendent of banks shall revoke his certificate of authority to do a trust business there- tofore issued to such corporation, and the state treasurer shall return to said corporation all the securities deposited by such corporation and shall cancel any mortgage made by such corporation to said state treasurer as a part of such securities, and thereafter such corporation shall not be permitted to use and shall not use the word "trust" in its corporate name or in connection with its business. Sec. 103. Any trust company exercising the powers and performing the duties provided for in this act, shall, except as herein otherwise provided, keep inviolate all communica- tions and writings made to or by said trustee touching the existence, condition, management and administration of any private trust confided to it ; and no creditor or stockholder of any such trust company shall be entitled to disclosure or knowledge of any such communication or writing; provided, however, that the president, vice-president, manager, trust CALIFORNIA BANK ACT 83 officer, secretary or regularly employed attorney of any such trust company shall be entitled to knowledge of any such communication or writing ; and provided further, that in any suit or proceeding touching the existence, condition, manage- ment or administration of any such trust, the court wherein the same is pending may require disclosure of any such com- munication or writing. (Sec. 104. Repealed 1913.) Sec. 105. Every trust company shall, except as otherwise provided by law, invest its capital and surplus and any trust funds received by it in connection with its trust business, in accordance with the laws relative to the investment or loan of funds deposited with savings banks, unless a specific agree- ment to the contrary is made between the trust company and the party creating the trust, or unless it is otherwise ordered by the court, in connection with any court trust. Sec. 106. Any such trust company desiring to do, or doing, a commercial banking business or a savings bank business, or both, in addition to its trust business shall have actually paid up, in cash, the amount of capital provided in section twenty- three of this act. Any title insurance company authorized by its articles of incorporation to do, or doing a trust business, in addition to its title insurance business, shall comply with all the require- ments of any law governing trust companies, and shall have a capital stock actually paid in, in cash, of not less than two hundred thousand dollars, and in addition thereto, the capital stock required by law for doing a title insurance business. Such capital for each such department or class of business shall be increased from time to time in the same manner and to the same extent as though each such department or class of business was conducted by a separate bank, trust company or title insurance company, instead of as separate departments or classes of business. Any trust company and any title insur- ance company doing a departmental business as above pro- vided shall comply with the provisions of this act governing each of such departments and with the provisions of any law 84 CALIFORNIA BANK ACT governing each such class of business as to its deposits, reserve, surplus, investments and loans. Sec. 107. Any corporation doing a departmental business as a title insurance company and as a trust company, shall, as to its trust department, be subject to the supervision and inspection of the superintendent of banks, and as to its trust department must make all reports to the superintendent of banks required to be made by trust companies by the provi- sions of this act, and as to its trust department such corpora- tion shall also be subject to, and shall have the benefit of all other provisions and requirements of this act applicable to trust companies, and shall also be subject to and shall have the benefit of all of the banking laws and rules and regulations of the banking department of this state applicable to trust companies. The proportionate part of the state banking fund provided for by section one hundred and twenty-three of this act, that shall be payable by such corporation, shall be based on the amount of capital and surplus of such corporation apportioned to its trust department. ARTICLE V STATE BANKING DBPAETMENT. . Sec. 120. There is hereby created a state banking depart- ment. The chief officer of such department shall be the superintendent thereof, and be known as the superintendent of banks. He shall be appointed by the governor, and shall hold office at the pleasure of the governor. He shall not, either directly or indirectly, be interested in any commercial bank, savings bank or trust company, or as an individual banker. He shall receive an annual salary of ten thousand dollars, to be ]5aid monthly out of the state treasury on a warrant of the controller. He shall, within fifteen days from the time of notice of his appointment, take and subscribe to the constitutional oath of office, and file the same in the office of the secretary of state, and execute to the people of the state CALIFORNIA BANK ACT 85 a bond in the penal sum of fifty thousand dollars, with cor- porate surety or two or more sureties to be approved by the governor of the state, conditioned for the faithful discharge of the duties of his office. Sec. 121. The superintendent of banks shall employ a chief deputy, attorney and such examiners and other assistants as he may need to discharge in a proper manner the duties imposed upon him by law, none of which examiners or assist- ants or attorney shall be interested in any bank in this state as director, stockholder, officer or employee, and they shall perform such duties as he shall assign to them. He shall fix the compensation of the chief deputy, attorney, examiners and other assistants, which compensation shall be paid monthly on his certificate and on the warrant of the controller out of the state treasury. The chief deputy shall within fifteen days from the time of his appointment take and subscribe to the consti- tutional oath of office and file the same in the office of the sec- retary of state. No person shall be appointed a chief deputy who has not had at least three years' active banking experience, either as an executive officer or employee of some bank in this state. In case of the absence or inability to act, or vacancy in the office of the superintendent of banks for thirty consecutive days, the chief deputy shall execute to the people of the state a bond in the penal sum of fifty thousand dollars, with cor- porate surety or two sureties to be approved by, the controller and treasurer of the state, conditioned for the faithful dis- charge of the duties of the superintendent while such deputy acts as superintendent, and upon filing such bond such deputy shall have all the power and duties of superintendent of banks, until the inability of the superintendent shall be removed, or until a new superintendent of banks shall have been appointed by the governor. No superintendent of banks, chief deputy, or bank examiner, shall be or shall become indebted, directly or indirectly, either as borrower, endorser, surety, or guarantor, to any bank under his supervision or subject to his examination. Sec. 122. The superintendent of banks shall have his prin- cipal office in the city of San Francisco, and may also have suitable rooms in the city of Los Angeles, wherein to conduct 86 CALIFORNIA BANK ACT the business of the state banking department. The superinten- dent shall, from time to time, obtain the necessary furniture, stationery, fuel, lights, and other proper conveniences for the transaction of such business ; the expense of which shall be paid out of the state treasury on the certificate of the superin- tendent and the warrant of the controller. Sec. 123. A fund is hereby created to be known as the state banking fund, and out of said fund shall be paid all the ex- penses incurred in and about the conduct of the business of the banking department, including the salary of the superinten- dent, chief deputy, attorney, examiners and other assistants, traveling expenses, furnishing of rooms and rent. Each bank shall pay annually its share of eighty-seven thousand five hun- dred dollars, to be determined by the proportion which the capital and surplus which shall include all reserve and contin- gent funds, of any incorporated bank or the surplus, reserve and contingent funds of any bank organized without a capital stock bear to the capita^ surplus, reserve and contingent funds in the aggregate of all such banks receiving certificates of au- thorization from the superintendent of banks, as shown by the last report of such bank to the superintendent of banks. All moneys collected or received by the superintendent of banks, under and by virtue of the provisions of this act, shall be by him delivered to the treasurer of the state, who shall deposit the same to the credit of said banking fund, and the unex- pended balances of all moneys heretofore paid into the state treasury by any of the bank commissioners or the superinten- dent of banks, shall be retained and become a part of said fund; provided, however, that the superintendent shall have authority to retain in his possession and under his control the sum of five hundred dollars to be used by him as a revolving fund for the benefit of the state banking department until the end of the fiscal year at which time he shall make full settle- ment with the treasurer of the state. If any such bank shall fail to pay such charges as are herein required, the superinten- dent shall forthwith cancel the certificate of said bank. Sec. 124. Every bank and the trust department of every title insurance company doing a trust business, shall be subject to CALIFORNIA BANK ACT 87 the inspection of the superintendent of banks. The superinten- dent of banks, the chief deputy, or some competent person or persons to be appointed by the superintendent of banks, to be known as examiners, shall visit and examine every bank at least once each fiscal year. On every such examination in- quiries shall be made by him as to the condition and resources of the bank, the mode of conducting and managing its affairs, the action of its directors, the investment and disposition of its funds, the safety and prudence of its management, the se- curity afforded to those by whom its engagements are held and whether the requirements of its articles of incorporation and the law have been complied with in the administration of its affairs, and as to such other matters as the superintendent may prescribe. Whenever, in the judgment of the superintendent of banks, the condition of any bank renders it necessary or ex- pedient to make an extra examination or to devote any extraor- dinary attention to its affairs the superintendent of banks shall have authority to make any and all necessary extra examina- tions and to devote any necessary extra attention to the con- duct of its affairs ; and such bank shall pay for all such extra services rendered by the superintendent of banks at a price to be fixed by the superintendent of banks but not to exceed twenty dollars per day. The superintendent of banks shall also have power to examine, or cause to be examined, every agency located in this state of any foreign bank or banking corporation, for the purpose of ascertaining whether it has complied with the laws of this state, and for such other pur- poses and as to such other matters as the superintendent may prescribe. The superintendent, chief deputy, and every such examiner shall have the power to administer an oath to any person whose testimony he may require on the examination of any bank, or on the examination of any agency of any foreign bank or banking corporation, and to compel appearance and attendance of any such person for the purpose of any such examination. When a bank shall have been examined by any examiner, and he finds securities therein which are, in his judgment, of doubtful value, he shall report the same to the superintendent of banks, who thereupon shall be authorized to OO CALIFORNIA BANK ACT employ appraisers at the expense of such bank to appraise said securities, at a compensation to be fixed by the superin- tendent of banks. The superintendent of banks shall, when- ever requested to do so by any bank, provide an auditor to make an audit of the affairs of such bank. The compensation for making such audit shall be paid by the bank direct to the person making the audit. Nothing herein shall be deemed to authorize or require the superintendent of banks to inspect or supervise the private trust business or title insurance business of any corporation doing a trust business. Sec. 125. Every examiner appointed by the superintendent of banks shall, before entering upon the discharge of his duties, take the constitutional oath of office and cause the same to be filed in the office of the secretary of state. No such examiner shall be appointed receiver of any bank whose books, papers and affairs he shall have examined pursuant to his appoint- ment. Sec. 126. If the chief deputy or any examiner shall m have knowledge of the insolvency or unsafe condition of any bank mentioned in this act, and that it is unsafe or inexpedient to permit said bank to continue business, and shall neglect to forthwith report such fact in writing over his signature to the superintendent of banks, he shall be guilty of felony. Sec. 127. When any number of persons desire to organize a corporation to conduct any one or more or all of the busi- nesses mentioned in divisions (a), (b), and (c) of section two of this act or to circulate stock subscription lists for any such proposed corporation the previous written consent of the su- perintendent of banks to such proposed organization must be obtained. No bank shall transact any business in this state without the written approval of the superintendent of banks, and without his written certificate stating that it has complied with the provisions of this act, and all the requirements of law, and that it is authorized to transact, within this state, the busi- ness specified therein; which certificate may be withheld by the superintendent of banks whenever he has reason to believe that the bank is being formed for any other than the legitimate objects contemplated by this act, or whenever he has reason to CALIFORNIA BANK ACT 89 believe that the public convenience and advantage will not be promoted by the opening of such bank, or whenever he has reason to believe that the corporate name assumed by such bank resembles, so closely as to be likely to cause confusion, the name of any other bank previously formed under the laws of this state. Before issuing such certificate the superintendent of banks shall examine, or cause an examination to be made, in order to ascertain whether the requisite capital of such bank has been paid up in cash or the requisite reserve or surplus fund has been accumulated. The superintendent of banks shall not authorize such bank to commence business until it appears from such examination, or other evidence satisfactory to him, that the requisite capital has been, in good faith, sub- scribed and paid in, in cash, or that the requisite surplus or reserve fund has been accumulated or paid in, in cash, and until said bank shall have paid a fee of fifty dollars for each department to be operated by said bank. Sec. 128. When the certified copy of articles of incorpora- tion of any bank shall have been filed with the secretary of state, and application made for the issuance of a certificate to do business as a bank, the superintendent of banks, provided he has not withheld granting his certificate for any of the rea- sons set forth in section one hundred twenty-seven hereof, shall ascertain, from the best sources of information at his command, whether the character and general fitness of the per- sons named as stockholders are such as to command the confi- dence of the community in which such bank is proposed to be located, and, if so satisfied, he shall, within sixty days after such application has been made to him, issue, under his hand and official seal, the certificate of authorization required by this act. The superintendent of banks shall transmit a dupli- cate of such certificate of authorization to the county clerk of the county in which the principal place of business of such bank is located, and he shall file the same in his office. The superintendent of banks shall also file a duplicate of such cer- tificate in his own office. Sec. 129. Every bank doing a departmental business shall render to the superintendent of banks for each department 90 CALIFORNIA BANK ACT conducted by it, a separate report showing in detail as required by section one hundred thirty of this act, the actual financial condition of such department and shall at the time of furnish- ing said report separately publish the statement for each de- partment as provided in section one hundred thirty-two of this act. Sec. 130. Every bank, organized under the laws of this state, shall, whenever required by the superintendent of banks, make a report in writing to him, verified by the oath of its president and its secretary or cashier, or two principal officers. Such reports shall show the actual financial condition of the bank making the report, at the close of any past day designated by the superintendent, and shall specify the following : 1. The amount of its capital stock and the number of shares into which it is divided. 2. The names of the directors and the number of shares of stock held by each. 3. The total amount of capital actually paid in, in cash, and the total amount of surplus, reserve and any other funds. 4. The total amount due the depositors. 5. The total amount and character of any other liabilities it may have. 6. The amount at which the lot and building occupied by the bank for the transaction of its regular business stands debited on its books; also the market value of all other real estate held, whether acquired in settlement of loans or other- wise, the original cost to the bank, the date when acquired, the amount at which it stands debited on the bank books, in what counties situated, and in what name the title is vested, if not in the name of the bank itself. 7. The amount loaned on real estate, specifying the amount secured on real estate in each county separately ; also specify- ing the name of the person in whose name the property is held in trust or as security, in case it is held in any name other than that of the bank and the instrument creating the security does not itself disclose the name of the bank. 8. The amount invested in bonds, designating the name and amount of each particular kind. CALIFORNIA BANK ACT 91 9. The amount loaned on stocks and bonds, designating each particular class and the amount thereof. 10. The amount of money loaned on other securities, with a particular designation of each class and the amount loaned on each. 11. The amount and kind of money on hand or deposited in any other bank or place, with the name of the place where de- posited and the amount in each place. 12. Any other property held, or any amount of money loaned, deposited, invested or placed, not otherwise herein enumerated, and the place where situate and the value of said property, and the amount so loaned, deposited or placed. 13. The date on which examination of the bank was last made by its board of directors and the date on which report of such examination was filed, as required by section one hundred thirty-nine of this act. 14. The outstanding and unpaid amounts of any loans made by the bank, which under the provisions of either section sixty- five or eighty-three of this act are required to be reported to the superintendent of banks. 15. Any overdrafts and any loans, investments, acts or omissions violative of or not in conformity with any provision of this act which may be specifically called for. Every foreign corporation transacting the business of bank- ing in this state shall make the report herein required as far as such report may relate to the affairs of such corporation in this state, and every foreign corporation must particularly render the report required by subdivisions three, four, five, six, seven, eight, nine, ten, eleven, twelve, thirteen, fourteen, and fifteen of this section. Such report shall be made in writ- ing and verified by the oath of one of its duly authorized officers or managers residing in this state. The oaths of the officers and the statements above required shall state that they and each of them have a personal knowledge of the matters therein contained, and that they believe every allegation, state- ment, matter, and thing therein contained is true. Any wilful false statement in the premises shall be perjury and shall be punished as such. 92 CALIFORNIA BANK ACT Sec. 130a. In addition to the information obtained from the report required by the provisions of section one hundred thirty of this act, the superintendent of banks shall also have the power to require any bank to furnish a special report in writ- ing, verified as required by section one hundred thirty of this act, whenever in his judgment such special report is necessary to inform him fully of the actual financial condition and af- fairs of such bank. Any wilful false statement in the premises shall be perjury and shall be punished as such. Sec. 131. The superintendent of banks shall call for the re- ports specified by section one hundred thirty of this act at least three times each year. The ' ' past day designated by the super- intendent" of banks under the provisions of section one hun- dred thirty of this act shall be as nearly as possible the day designated by the comptroller of currency of the United States for reports of national banking associations. Sec. 132. At the time of furnishing such report to the super- intendent of banks, every bank shall also publish a condensed statement of its financial condition, at least once, in some news- paper of general circulation, published in the city or town where its principal place of business is located, and, if no paper is published in such town, then in some newspaper of general circulation in the county where its principal place of business is located. Such published statement shall show the total amount of loans, the total amount of overdrafts, the total amount invested in bonds and other securities, the total amount due from banks, the total amount of checks and other cash items, the total amount of cash on hand, capital paid in, surplus funds ; undivided profits, less expenses and taxes paid ; due to other banks and bankers, due to trust companies and savings banks; individual deposits subject to checks; demand certifi- cates of deposit; time deposits; certified checks; cashier's checks outstanding; and such other items as will show the actual financial condition of the bank making the report. Sec. 133. "Whenever it shall appear from the report of any bank, or the superintendent of banks shall have reason to be- lieve that the capital of any bank is impaired or reduced below CALIFORNIA BANK ACT 93 the amount required by law, it shall be the duty of the super- intendent of banks and he shall have the power to examine said bank and ascertain the facts, and in case he finds such impairment or reduction of capital, he shall require such bank to make good the deficiency so appearing within sixty days after the date of such requisition. The directors of every such bank, upon which such requisition shall have been made, shall levy an assessment upon the stock thereof to repair such de- ficiency, and shall cause notice of such requisition to be given to each stockholder of the bank and of the amount of the as- sessment which he must pay for the purpose of making good such deficiency, by a written or printed notice mailed to such stockholder at his last known address or served personally upon him. If any stockholder shall refuse or neglect to pay the assessment specified in such notice within thirty days from the date of mailing or serving such notice as aforesaid, the direct- ors of such bank shall have the right to sell to the highest bid- der at public auction the stock of such stockholder, after giving a previous notice of such sale for ten days in a newspaper of general circulation published in the county where the principal place of business of such bank is located, and a copy of such notice of sale shall also be served on the owner of such stock by being served personally on him or by mailing to his last known address ten days before the day fixed for such sale ; or such stock may be sold at private sale and without such public notice ; provided, however, that before making such private sale thereof an offer in writing shall first be obtained and a copy thereof served upon the owner of record of the stock sought to be sold, either personally or by mailing a copy of such offer to his last known address; and if, after service of such offer, such owner shall still refuse or neglect to pay such assessment within two weeks from the time of the service of such offer, the said directors may accept such offer and sell such stock to the person making such offer, or to any other person or persons making a larger offer than the amount named in the offer submitted to the stockholder ; but such stock shall in no event be sold for a smaller sum than the valuation put on it by the superintendent of banks in his determination and requi- 94 CALIFORNIA BANK ACT sition as to said assessment, nor for less than the amount of said assessment so called for and the expense of sale. Out of the avails of the stock so sold, the directors shall pay the amount of assessment levied thereon, and the necessary costs of sale, and the balance, if any, shall be paid to the person or persons whose stock has thus been sold. A sale of stock as herein provided shall effect an absolute cancellation of the out- standing certificate or certificates evidencing the stock so sold, and shall make the same null and void, and a new certificate shall be issued by the bank to the purchaser thereof. Sec. 134. If it shall appear to the superintendent of banks that any bank has violated or failed to comply with the pro- visions of its articles of incorporation, or any law of this state, he may, by an order under his hand and official seal, which seal must be adopted by him, addressed to such bank, direct such bank to discontinue such violation and to comply with the law ; or, if it shall appear to the superintendent of banks that such bank is conducting business in an unsafe or injurious manner, he may, in like manner direct the discontinuance of any such unsafe or injurious practices. Such order shall require such bank to show cause, before the superintendent of banks, at a time and place to be fixed by him, why said order should not be observed. If upon such hearing it shall appear to the super- intendent of banks that such bank is conducting business in an unsafe or injurious manner, or is violating or failing to comply with the provisions of its articles of incorporation, or any law of this state, then the superintendent of banks shall make such order final, and such bank shall immediately comply with such order made by the superintendent of banks. Such bank shall have ten days after any such order is made final in which suit may be commenced to restrain enforcement of such order, and unless such action be so commenced and enforcement of said order be enjoined within ten days, by the court in which such suit is brought, then such bank shall comply with such order. Sec. 135. Whenever the superintendent of banks shall deem it expedient he may call a meeting of the stockholders of any bank organized under the laws of this state, by a personal no- CALIFORNIA BANK ACT 95 tice of such meeting for fifteen days previous thereto. All nec- essary expense incurred in the serving of such notice shall be borne by the bank whose stockholders are required to convene. Sec. 135a. If the capital of any bank shall be impaired, or if any bank shall refuse to submit its books, papers and concerns to the inspection of any examiner, or if any officer thereof shall refuse to be examined upon oath touching the concerns of such bank, or if such bank shall violate the provisions of its articles of incorporation, or any law of this state, or if such bank shall suspend payment of its obligations, or if such bank shall conduct its business in an unsafe or unauthorized man- ner, or if from any examination or report provided for by this act the superintendent of banks shall conclude that such bank is in an unsound or unsafe condition to transact the business for which it is organized, or that it is unsafe and inexpedient for it to continue business, an action to procure a judgment dissolving such corporation may be maintained by the super- intendent of banks. Sec. 136. Whenever it shall appear to the superintendent of banks that any bank has violated the provisions of its articles of incorporation or any law of this state, or is conducting its business in an unsafe or unauthorized manner, or if the capital of any bank is impaired, or if any bank shall refuse to submit its books, papers and concerns to the inspection of any exam- iner, or if any officer thereof shall refuse to be examined upon oath touching the concerns of any such bank or if any bank shall suspend payment of its obligations, or if from any ex- amination or report provided for by this act the superinten- dent of banks shall have reason to conclude that such bank is in an unsound or unsafe condition to transact the business for which it is organized, or that it is unsafe and inexpedient for it to continue business, or if any bank shall neglect or refuse to observe any order of the superintendent of banks specified in sections one hundred thirty-three or one hundred thirty-four of this act, the superintendent of banks may forthwith take possession of the property and business of such bank and re- tain such possession until such bank shall resume business, or 96 CALIFORNIA BANK ACT its affairs be finally liquidated as herein provided. On taking possession of the property and business of any such bank the superintendent of banks shall forthwith give notice of such fact to any and all banks, trust companies, associations and individuals, holding or in possession of any assets of such bank. No bank, trust company, association or individual knowing of such taking possession by the superintendent of banks, or noti- fied as aforesaid, shall have a lien or charge for any payment, advance or clearance thereafter made, or liability thereafter incurred against any of the assets of the bank of whose prop- erty and business the superintendent of banks shall have taken possession as aforesaid. Such bank may, with the consent of the superintendent of banks, resume business upon such con- ditions as may be approved by him. Upon taking possession of the property and business of any such bank the superintendent of banks shall have authority to collect moneys due to such bank and do such other acts as are necessary to conserve its assets and business, and shall proceed to liquidate the affairs thereof as hereinafter provided. The superintendent of banks shall collect all debts due and claims belonging to it, and upon the order of the superior court may sell or compound any bad or doubtful debts. If a purchaser for any bad or doubtful debts can not be obtained and it appears improbable that re- covery thereon can be had and that the costs of actions to en- force collection of the same would probably be lost, the court may direct that suits thereon need not be brought. On like order he may sell any real or personal property of such bank on such terms as the court shall direct ; and may, if necessary to pay the debts of such bank, enforce the constitutional indi- vidual liability of stockholders by action to be brought within three years after the date of his taking possession of the af- fairs of such bank. The superintendent of banks shall deter- mine the necessity of such action and the amount necessary to recover from the stockholders to fully pay all liabilities of such bank. Such action may be in equity and against all stock- holders upon whom service of process in the State of Califor- nia can be had, and the court may therein determine and pro- vide for any equities as between the stockholders including the CALIFORNIA BANK ACT 97 proportions of each stockholder to any surplus of money or assets that may remain after the payment of all liabilities and the expenses of liquidation. The superintendent of banks may also maintain an action against any stockholder residing out of the state or upon whom service of process can not be had within the state, in any court of the United States or of any state or country. Any judgment so obtained by the superin- tendent of banks against such or any of such stockholders which is of doubtful value may be compromised and com- pounded by the superintendent of banks on such terms and conditions as the superior court may direct or authorize. The superintendent of banks shall file a notice of pendency of ac- tion in the county recorder's office of the county where such action is brought. At any time prior to the trial of any such action, any creditor may serve upon the superintendent of banks and file with the court wherein such action is pending, notice that he elects to maintain an action against the stock- holders or any of them, in his individual capacity and there- upon the amount sued for in such action shall be reduced ac- cordingly and such creditor shall not be entitled to share in the proceeds resulting from such action brought by the superin- tendent of banks. For the purpose of executing and perform- ing any of the powers and duties hereby conferred upon him, the superintendent of banks may, in the name of the delin- quent bank or in his own name, prosecute and defend any and all suits and other legal proceedings and may, in the name of the delinquent bank or in his own name as trustee execute, ac- knowledge and deliver any and all deeds, assignments, releases and other instruments necessary and proper to effectuate any sale of real or personal property or sale or compromise or com- pound authorized by order of the court as herein provided; and any deed or other instrument, executed pursuant to the authority hereby given, shall be valid and effectual for all pur- poses, as though the same had been executed by the officers of the delinquent bank by authority of its board of directors. In case any of the real property so sold is located in a county other than the county in which the application to the court for leave to sell the same is made, the superintendent of banks shall yo CALIFORNIA BANK ACT cause a certified copy of the order authorizing or ratifying such sale to be filed in the office of the recorder of the county in which the said real property is located. The superintendent of banks may, under his hand and official seal, appoint one or more special deputy superintendents of banks, as agent or agents, with the powers specified in the certificate of appoint- ment hereinafter mentioned, to assist him in the duty of liqui- dation and distribution, the certificate of appointment to be filed in the office of the superintendent of banks, and a certified copy in the office of the clerk of the county in which the prin- cipal 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 certi- fied 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 employ such counsel and procure such expert assistance and advice as may be necessary in the liquidation and distribution of the assets of such bank, and for that pur- pose 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 cause notice to be given by advertisement, in such news- papers as he may direct, weekly for three consecutive months, calling 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 bank. If the superintendent of banks doubts the justice and validity of any claim, he may reject the same, and serve notice CALIFORNIA BANK ACT^ 99 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 superinten- dent of banks. Any action upon a claim so rejected must be brought within six months after such service. Claims pre- sented after the expiration of the time fixed in the notice to creditors shall be entitled to share in the distribution only to the extent of the assets in the hands of the superintendent of banks equitably applicable thereto. Upon taking possession of 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 office of the clerk of the county in which the principal office of such bank is located ; upon the expiration of the time fixed for the presentation of claims the superintendent of banks shall make in duplicate a full and complete list of the claims presented, including and specifying such claims as have been rejected by him, one to be filed in the office of the superintendent of banks, and one with the papers in said proceeding in the office of the clerk of the county in which the principal office of such bank is located. Thereafter he shall make and file in said offices as above provided at least fifteen days before each application to the court for leave to declare a dividend a supplemental list of the claims presented since the last preceding list was filed, in- cluding 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 reasonable times to inspection. The compensation of the special deputy superintendents, coun- sel and other employees and assistants, and all expenses of supervision and liquidation, shall be fixed by the superinten- dent of banks and shall upon the certificate of the superinten- dent 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 100 CALIFORNIA BANK ACT court of the county where the principal place of business of such bank is located and settled by such court upon notice to such bank. The moneys collected 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 insolvency of the depositary, such de- posits shall be preferred before all other deposits. At any time after the expiration of the date fixed for the presentation of claims the superior court may by order authorize the superin- tendent of banks to declare out of the funds remaining in his hands after the payment of expenses one or more dividends, and after the expiration of one year from the first publication of notice 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 lo- cated. Objections to any claim not rejected by the superinten- dent of banks may be made by any party interested by filing a copy of such objections with the superintendent of banks, who shall 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 or may order a reference for that purpose, and should the objections to any claim be sustained by the court or by the referee, such claim shall not be allowed by the superin- tendent 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 un- claimed deposits. Should any bank at the time the superintendent of banks takes possession of its property and business, have in its pos- session, as bailee for safekeeping and storage, any jewelry, 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 thereof for the storage of property of any kind, the superin- tendent of banks may at any time thereafter cause to be mailed to the person claiming to be or appearing upon its books to be CALIFORNIA BANK ACT 101 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, all such personal property and upon the date fixed by said notice, the 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 shall become a debt of the bank to said person. If the property be not removed within the time fixed by the notice, the superintendent of banks may make such disposition of said property as the superior court, upon application thereto, shall direct. And the superintendent of banks may cause any safe, vault or box to be opened in his presence or in the presence of one of the special deputy super- intendents of banks, and of a notary public not an officer or in the employ of the bank or of the superintendent of banks, and the contents thereof, if any, to be sealed up by such notary public in a package upon which such notary public shall dis- tinctly 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 attach thereto a list and description of the property therein; and the package so sealed and addressed, together with the list and description, may be kept by the superinten- dent 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 disposed of as directed by the court. Whenever any such bank of whose property and business the superintendent of banks has taken possession as aforesaid, deems itself ag- grieved thereby, it may, at any time within ten days after such taking possession, apply to the superior court in the county in which the principal office of such bank is located to enjoin fur- ther proceedings ; and said court, after citing the superinten- dent of banks to show cause why further proceedings should not be enjoined, and hearing the allegations and proofs of the parties and determining the facts may, upon the merits, dis- 102 CALIFORNIA BANK ACT miss such application or enjoin the superintendent of banks from further proceedings, and direct him to surrender such business and property to such bank. An appeal as above pro- vided shall 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 such bank, a bond shall be given, as required by section nine hun- dred forty-three of the Code of Civil Procedure. Whenever the superintendent of banks shall have paid to each and every de- positor and creditor of such bank whose claim or claims as such creditor or depositor shall have been duly proved and allowed, the full amount of such claims, and shall have made proper provision for unclaimed and unpaid deposits or dividends, and shall have paid all the expenses of the liquidation, the superin- tendent 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 superintendent of banks shall be con- tinued as liquidator and shall wind up the affairs of such bank, or whether an agent or agents shall be elected for that pur- pose, and in so determining the said stockholders shall vote by ballot, in person or by proxy, each share of stock entitling the holder to one vote, and the majority of the stock shall be neces- sary to a determination. In case it is determined to continue the liquidation under the superintendent of banks, he shall complete the liquidation of the affairs of such bank, and after paying the expenses thereof, shall distribute the proceeds among the stockholders in propor- tion 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 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 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 CALIFORNIA BANK ACT 103 of banks, conditioned for the faithful performance of all the duties of his or their trust, and thereupon the superintendent of banks shall transfer and deliver to such agent or agents all the undivided and uncollected or other assets of such bank then remaining in his hands ; and upon such transfer and de- livery, the said superintendent of banks shall be discharged from any and all further liability to such bank and its credit- ors. Such agent or agents shall convert the assets coming into his or their possession into cash, and shall account for and make distribution of the property of said bank as is herein pro- vided 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 juris- diction. 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 elected. Dividends and unclaimed deposits remaining unpaid in the hands of the superintendent of banks for six months after the order for final distribution shall be by him deposited with the state treasurer in the same manner and subject to the same dispo- sition as provided for in section one thousand two hundred thirty-four of the Code of Civil Procedure. The superinten- dent of banks may pay over the moneys so held by him to the persons respectively entitled thereto upon being furnished sat- isfactory 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. Sec. 136a. Any bank which has ceased to do a banking busi- ness whether through voluntary action on its part or through expiration of its corporate existence, shall immediately liqui- date its affairs and any unclaimed deposits or dividends shall be paid into the state treasury in the manner and for the pur- poses provided in section one hundred thirty-six of this act within six months after the date such bank ceased to conduct 104 CALIFORNIA BANK ACT a banking business, and in case the superintendent of banks shall have reason to conclude that the liquidation of such bank is not being safely or expeditiously conducted, he may take pos- session of the property of such bank and liquidate its affairs in the same manner as provided in section one hundred thirty-six of this act. Whenever any bank of whose property the super- intendent of banks has taken possession as aforesaid, deems itself aggrieved thereby, it may within the time and in like manner and effect as provided in section one hundred thirty- six of this act apply to the superior court to enjoin further proceedings. Sec. 136b. In any action or proceeding brought under any provision of this act, exclusive original jurisdiction shall be vested in the superior court of the county in which is located the principal place of business of the bank affected 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 proceedings, 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 proceeding, without the payment of any addi- tional fees therefor, and in any such action no damage may be awarded, but the action otherwise shall be tried and deter- mined according to the provisions of the Code of Civil Pro- cedure. Sec. 137. 1. Any bank shall have the right, on application of the stockholders or members to apply to the superior court of the county wherein its principal place of business is situ- ated, 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 of the final account of the receiver of any bank appointed prior to July 1, 1909, any dividends due depositors, or other cred- itors, or stockholders of such bank and remaining unpaid or uncalled for and in the hands of such receiver may be paid by CALIFORNIA BANK ACT 105 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 or who are entitled thereto and thereupon such receiver shall be entitled to his discharge. 3. The moneys referred to in subdivision two of this sec- tion shall be paid out on the order of the court appointing such receiver. 4. All moneys paid under subdivision two of this section, 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. 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. Sec. 138. If any bank shall fail to make any report re- quired by the provisions of section one hundred thirty or one 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 pro- visions 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 the event of the failure of any such bank to make any such report required from it, the superintendent of banks may, in his discretion, immediately cause the books, papers and affairs of such bank to be examined at the expense of such bank. 106 CALIFORNIA BANK ACT Sec. 139. It shall be the duty of the board of directors of 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 security, if any given, in connection therewith, and into such 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 shall have power to employ such assistance in making such examinations as they may deem necessary. Within ten days after the completion of such examination, a report in writing thereof, sworn to by the directors making the same, shall be made by the board of directors of such bank, and placed on file with the records of said bank, and shall be subject to exam- ination by the superintendent of banks. Such report shall particularly contain a statement of the 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- ination or fail to cause it to be made, or shall fail to file such report of such examination in the manner and within the time 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. CALIFORNIA BANK ACT 107 Sec. 140. The superintendent of banks shall report during the month of October of each year, to the governor, for sub- mission to the next ensuing session of the legislature : 1. A summary of the state and condition of every bank required to report to him, and from which reports have been received the preceding year, with an abstract of the whole amount of capital returned by them, the whole amount of their debts and liabilities, and the total amount of means and resources, specifying the amount of specie held by them at the time of the last report to him, and such other information in relation to such banks as, in his judgment, may be useful. 2. A statement of all banks authorized by him to do busi- ness during the previous year, with their names and locations and dates of incorporation, and particularly designating such as have commenced business during the year. 3. A statement of the banks whose business has been closed during the year. 4. Any amendments to the banking law, which, in his judgment, may be desirable. 5. The names and compensation of all persons employed by him, and the whole amount of the receipts and expenses of the department during the year. 6. The names of banks placed in his hands in process of liquidation, and the amount of dividends paid thereon. Such report, and the usual number of copies for the use of the 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. Sec. 141. 1. The superintendent of banks shall keep in his office, in a place accessible to the general public, a bulletin 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 of his absence 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: 108 CALIFORNIA BANK ACT (a) The name of every bank that has filed in the banking department an' application for authorization to commence business, its location and the date of filing of such application. (b) The name and location of every bank authorized by the superintendent of banks to commence business, its capital, surplus, and the date of authorization. (c) The name of every bank to which a certificate of authorization has been refused by the superintendent of banks, and the date of notice of refusal. (d) The name and residence of every person appointed by 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 issued by the superintendent of banks, and the day designated as the day with reference to which such report should be made. (f) The name and location of every bank whose creditors or depositors have been paid in full by the superintendent of 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 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 for approval of a change of name, and the name proposed. 2. Every such bulletin, after having been posted as afore- 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 and every report duly verified of an examination made, shall be prima facie evidence of the facts therein stated, for all purposes in any action or proceedings wherein such bank is a party. CALIFORNIA BANK ACT 109 (Sec. 143. Repealed 1913.) Sec. 144. Whenever by the terms of this act a penalty or 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. Any fine or pecuniary penalty, which may be incurred by any bank on account of the violation of any provision of this act, may be compromised and a less amount than that prescribed by this act accepted by the superintendent of banks at any time prior to the institution of action to recover the same. Sec. 145. The powers, privileges, duties and restrictions conferred and imposed upon any corporation or individual existing and doing business under the laws of this state are hereby abridged, enlarged or modified as each particular case may require to conform to the provisions of this act, notwith- standing anything to the contrary in their respective articles of incorporation or charters. All the provisions of this act shall apply with equal force and effect to all corporations which are now doing or which may hereafter do a banking business in this state, except where express exception or exemp- tion may be made herein, and to such other persons, associa- tions, co-partnerships or corporations who shall, by violating any of its provisions, become subject to the penalties provided herein. The legality of investments heretofore made, or title to property heretofore acquired or conveyed through transac- tions heretofore had by any bank pursuant to any provision of law in force when such investments were made or transac- tions had, shall not be affected by the provisions of this act, except that any such investments made prior to July 1, 1909, when not complying with the provisions hereof, shall be changed to conform hereto; but such change shall be made gradually and in such manner as to prevent loss or embarrass- ment in the business of such bank, or unnecessary loss or in- jury to the borrowers on such security ; provided, further, that in any event, all investments and securities and excess in in- 110 CALIFORNIA BANK ACT vestments made prior to July 1, 1909, which are not in con- formity 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 investments or securities acquired prior to July 1, 1909, shall, after July 1, 1918, be permitted to pay any dividends to its stockholders until it shall have writ- ten off all such non-conforming investments or securities ; and provided, further, that the legality of any investments hereto- fore lawfully 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. Sec. 146. All acts, or parts of acts, in conflict with this act are hereby repealed. Sec. 147. This act shall take effect July first, 1909. Statutes of 1909: Chapter 76, Approved March 1. In effect July 1, 1909. Amended by Statutes of 1911: Chapter 11, Approved Feb. 6. In effect Feb. 6, 1911. Chapter 488, Approved Apr. 21. In effect June 20, 1911. Chapter 494, Approved Apr. 21. In effect June 20, 1911. Chapter 495, Approved Apr. 21. In effect June 20, 1911. Amended by Statutes of 1911 (Special Session): Chapter 2, Approved Dec. 18. In effect Feb. 16, 1912. Chapter 24, Approved Dec. 24. In effect Feb. 22, 1912. Amended by Statutes of 1913: Chapter 104, Approved May 6. In effect Aug. 10, 1913. Chapter 192, Approved May 31. In effect Aug. 10, 1913. Amended by Statutes of 1915: Chapter 140, Approved April 28. In effect Aug. 7, 1915. Chapter 608, Approved June 3. In effect Aug. 7, 1915. Chapter 611, Approved June 3. In effect Aug. 7, 1915. Chapter 612, Approved June 3. In effect Aug. 7, 1915. 112 CALIFORNIA BANK ACT ATTENTION IS CALLED TO THE FOLLOWING : Section 290a of the Civil Code in reference to banking cor- porations and particularly to the last paragraph thereof : ' ' Sec. 290a. * # * Before the secretary of state shall issue any certificate of incorporation to any corporation specified in this section and before he files any amended articles of incorporation or other certificate increasing or decreasing the capital stock, extending or shortening the corporate existence or increasing or decreasing the number of directors of any such corporation there must be attached to said certificates or amendments the approval of the superintendent of banks. ' ' Section 1278 of the Code of Civil Procedure providing for the change of name of banking corporations : "Sec. 1278. Such application must be heard at such time as the court may appoint, and objections may be filed by any person who can, in such objections, show to the court good reason against such change of name. On the hearing, the court may examine on oath any of the petitioners, remonstrants, or other persons, touching the application, and may make an order changing the name, or dismissing the application, as to the court may seem right and proper; provided, that if the applicant for a change of name be a corporation, such appli- cant shall file in court at the time of hearing the application, the certificate of the secretary of state that the name desired to be used by the applicant, is not the corporate name of any cor- poration existing at said time, and that said name does not so closely resemble the name of any such existing corporation as will tend to deceive; provided, further, that if the applicant for a change of name be a banking corporation, such applicant shall file in court at the time of hearing the application, the certificate of the superintendent of banks that the name desired to be used by the applicant does not resemble so closely as to be likely to cause confusion, the name of any other bank pre- viously formed under the laws of this state. ' ' Index to California Bank Act Section Acceptances, by commercial banks, how limited 80 relation to loans in commercial banks 80 Act, applicable to certain corporations 1 applicable to violators of provisions of 1-145 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 1366 for sale of real estate, when 54 may be maintained by superintendent of banks to dissolve bank 135 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 bank 12 capital, must show amount paid up 14 for deposits, prohibited when 12 liabilities must show separate 14 of banks, how regulated 28 of bonds, limited when 61 of branch offices, how regulated 28 of merger 31a of sale of bank 31 of unauthorized banking prohibited , 12a of unauthorized trust company prohibited 12a 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 guardian- ship 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 Agent, liability for fraud 38 of commercial bank, loan to 83 of foreign bank, must take oath 11 of savings bank, may borrow funds 65 overdraft 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.. 13ft 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 of articles of incorporation see Sec. 290a Civil Code 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 134-136 114 CALIFORNIA BANK ACT Section Applications to do banking business, investigation of 127-128 Appointment of appraisers 61a-99-124 of special deputy superintendent of banks 136 of superintendent of banks 120 Apportionment of capital and surplus to court trust business.... 9,0 of capital and surplus to departments 23-60-90 of capital and surplus to private trust business 90 Appraisal of property mortgaged to state treasurer by trust company 99 of securities 61a-99-124 Appraisers, appointment of 61a-99-124 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 31a 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 133 when capital stock impaired 133 effect on first lien on real estate 57 Assets, commercial bank may pledge for "borrowed money" to what extent 21a how may be reached in merger 31a 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 21a 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 21a Assignee, deposits by 51-91-93 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 127-128 certificate for foreign bank 7 certificate for limited banking functions 13 certificate for savings bank 127-128 certificate for trust company 127-128 of loans to directors, agents and employees 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 Acceptances, how limited 80 Bank, annual report of superintendent of banks 140 application to do business 127-128 INDEX 115 Section articles of incorporation must be filed 128 as a borrower 21a as member of federal reserve bank, subject to state laws.... 56 assessed for state banking fund 123 banking corporation, how organized 3 bond investment limited 36-46 branch office 9 capital impaired 133 ceasing business, must take what action 136a classified as to capital by population 23 commercial, purposes of 5 conducting business in unsound manner 134-135a 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 deposit with, does not create debt, when 55 dissolution of, by process of law 135a dissolved, funds of 137 distribution of funds of insolvent 136 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 federal reserve, exempt from examination 48 fines, may be compromised before action instituted 144 foreign, inspection of 124 foreign, see Corporations, foreign forfeitures, how recovered 144 forfeitures, may be compromised before action instituted.... 144 funds, when deposited with other banks 43-68-85 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 36-46 investments, changed to conform to act 145 investments in own stock prohibited 34 license to foreign corporation 7 limited time to repair capital 133 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 made to directors 83 mutual, may have capital stock 29 name, change of, see Sec. 1278 Code of Civil Procedure 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 employees 41 116 CALIFORNIA BANK ACT Section organization of, previous consent of superintendent required. . 127 penalties imposed, how recovered 144 penalties pecuniary, may be compromised before action in- stituted 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 135a-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, minimum par value, except 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 135a Bank Act, annual report of superintendent of banks, as to 140 applicable to all violators of provisions of 1-145 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 what applicable to 1-145 Banking; business, conducted in unsafe manner. 134-135a certificate to be posted 50 defined 2 departmental 22 regulation of 7-9-12-12a-13-90 unlawful unless duly authorized 2 when advertised must have certificate 12a state banks may join 56 Banking- Corporations, see Corporations, Banking Banking Department, 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 company 105 trust company may mortgage to state treasurer, when 97 Bills of Exchange, commercial bank may accept 80 commercial banks may buy or discount 80 not construed to create debt, when 55 relation to loans in commercial bank 80 Bond of deputy superintendent of banks 121 of special deputy superintendent of banks 136 of superintendent of banks 120 Bonds, advertisement of, limited, when 61 available for deposit by trust company 96 commercial banks limited in investing in 36-46 certified, official list to be kept 61a cost of investigation of 61a for deposits by court order, not required 94 guaranteed by mortgage insurance as investments, when 61-105-106 guaranteed by mortgage insurance, available for deposit by trust companies, when 96-99 legal as investment for savings banks 61 must be certified, when 61-61a penalty for illegal advertisements of 61 power of superintendent of banks to investigate 61a savings banks limited in investing in 67 savings banks may loan on 67 INDEX 117 Section 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 21a 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 regulations governing advertising and stationery 28 shall not be permitted to open, when 23 Building: and L.oan Association, advertising, how restricted 12-12a 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 9-13-127 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 Report, failure of bank to make, penalty 138 from bank, how often 131 of bank, publication of 132 time limited for bank to make 138 to contain what 130-130a Capital, advertising of, must show what 14 apportioned to departments 23-60-90 assigned by foreign corporation 7 impairment of 133-136 increase or decrease of 23 increase or decrease of, see Sec. 290a Civil Code 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 of foreign corporation 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 reapportionment 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 of domestic must hold 10 may be sold for assessment 133 mutual banks may issue, how 29 of title insurance company doing trust business 106 reduction of 55 required according to classification 23-60-82 required by trust company 90 requirements pertaining to 53 savings bank, amount required 60 118 CALIFORNIA BANK ACT Section Certificate, for limited form of banking 13 mortgage participation, legality of for savings banks 61 mortgage participation, when available for deposit by trust company 96-99 necessary before transaction of business 24 necessary for new department 24 of deposit, not construed to create debt, when 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 31a 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 7-9-13-127 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 can not 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 Change 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, assessment by, effect on first lien 57 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 Cluh, loans to, exemptions in favor of 65-83 Collateral, commercial bank may pledge assets to what extent... 21a directors to receive report on 139 Collateral Trust, bonds, when legal for savings banks 61-61a Collections of deposits by survivors 16 Commercial Bank, advertising, how regulated 28 bond investment limited 36-46 capital and surplus, their relation to deposits 19 capital required 82 classified as to capital by population 23 definition of 5 deposit with another commercial bank, regulated 85 how organized to conduct 3 investment in bank premises 84 loans of, limited 80-81 loans to corporations 80-83 loans to directors and employees 83 loan to officers prohibited 83 may accept drafts or bills of exchange, when 80 may borrow money to what extent 21a may pledge assets to what extent 21a must be duly authorized 2 overdrafts limited to ninety days as assets 21a 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 loans on, by commercial banks, how governed 80 savings bank may discount or purchase, when 67 INDEX 119 Section superintendent of banks may authorize purchase or discount of, by savings banks 67 Commission to officers, directors and employees prohibited 39 Common Carrier, may be licensed for limited banking 13 Condition, must be published 132 Consolidation, approval of stockholders 31a approval of superintendent of banks required 31a articles of incorporation and consolidation 31a how assets of merged banks may be reached 31a liability of banks in 31a of banks 31a of cities, effect on branch offices 23-60-82 rights of creditors in 31a Construction, all preceding or conflicting acts repealed 146 create debt 55 Contract, real estate, not to be sold to bank, when 35 with officers, directors or employees 42 with savings depositor 64 Corporate Existence, obligations of bank after expiration 136a Corporations, club, exemptions in favor of loaning 65-83 consolidated 31a doing title insurance and trust business 107 for banking, how organized 3 loans of, when officers, directors or employees of bank interested 65-83 may deal in exchange or letters of credit, when , 13 membership, exemptions in favor of loaning 65-83 mortgage insurance, securities of, as deposit by trust com- pany 96-99 mutual, may issue capital stock 29 powers and privileges must conform to act 145 religious, exemptions in favor of loaning ....65-83 sale and purchase . . . 31 shall not use word "savings," when 12-12a-12c-49 shall not use word "trust," when 12-12a-126-12c-102 stock of, as collateral, limited 44-67 stock of, banks shall not . own 37 Corporations, Banking, may do departmental business, when 22 must file certain papers 8 organization of 127 Corporations, Foreign, as fiscal agents 90 can not 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, assessment by, effect on first lien 57 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 when deemed to include private trust 101 120 CALIFORNIA BANK ACT Section 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 Deeds of Trust, legal for deposit by trust companies 96 Definition of bank 2 of commercial bank 5 of "electrical corporation" 61 of "gas corporation" 61 of "net earnings" 61 of "pipe line corporation" 61 of "public utility" 61 of "railroad corporation" 61 of "reserve depositary" ,. 20 of "reserves on deposit" 20 of "reserves on hand" 20 of savings bank 4 of "street railroad corporation" 61 of "telegraph corporation" 61 of "telephone corporation" 61 of "total reserves" 20 of trust company 6 of "water corporation" 61 Departmental Bank, application for permission to conduct 23 apportionment of capital and surplus 23-60-90 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 building 26 deposits, conditions of repayment 27 investments, how held 27 may transfer assets, when 25 new department must have certificate 24 re-apportionment of capital and surplus 23 relation of departments 26 shall make separate reports of departments 129 shall publish statements of departments separately 129 statement of segregation of capital and surplus 23 total reserves required 25 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 trust department with commercial department of same corporation 25 by trust department with savings department of same cor- poration 25 by trustees 51 certificate of, savings bank may issue 63 in federal reserve bank, by state bank 48 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 federal reserve bank, for state bank 48 national bank acting as 48 reserve, how nominated and designated 20 INDEX 121 Section Depositor, contract with, in savings bank 64 deceased 15 repayment to, by savings banks 64 . saving's, may be paid by draft 62 unknown 15 Deposits, additional to be made by trust company, when 98 advertising- for, prohibited when 12 by trust department with other departments of same bank. ... 25 collected by survivors, when 16 escheat of 15 joint 16 must not be increased, when 19 not construed to create debt, when 55 of a commercial bank with another commercial bank, regu- lated 85 of banks 43 of deceased persons, how collected 16 of foreign corporation 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, documents and appraisal 99 of trust funds 16 reserve required for 20-68-105 savings, advertised 49 savings bank, in what invested 61-67 savings bank, repayment of 64 state, county, municipal and postal, in savings banks 62 trust company, in what invested 105-106 unclaimed 15 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 Deputy of superintendent of banks, qualifications of 121 of superintendent of banks, salary 121 of superintendent of banks, shall execute bond, when 121 Designation of depositary 43 of reserve depositary, how made 20 Directors, eligibility of 10 examination of bank by 139 increase or decrease of, see Sec. 290a Civil Code 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 monthlv meetings 11 oath of * 11 of commercial bank, loans to 83 of savings bank, in relation to corporation loans 65 of savings bank, 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 exchange, amount of 80 on commercial or business paper, amount of 67-80 relation to loans in commercial banks ,.-. 80 122 CALIFORNIA BANK ACT Section 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 receiver's hands, how disposed of 137 of savings banks, how restricted 64 of suspended banks 136a 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 commercial bank may accept 80 Earnings, 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 bank, 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 of deposits, duty of county clerk, in action 15 Escrow-Holder, not subject to supervision of superintendent of banks acting as trustee, when 101 Examination, at expense of bank, when 138 causes for dissolution 134-136 federal reserve bank exempted 48 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 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 Exchange, dealers in, must have license 13 Execution, deposits of married women or minors 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 Express Company may deal in exchange or letters of credit, when. 13 Federal Reserve Hank, exempted from examination 48 state banks may join 56 state members subject to state laws 56 Federal Reserve Hoard, regulations of, on commercial paper 67 Fee for appraisal of trust company securities 99 for branch office 9 INDEX 123 Section for certificate to do banking- business 9-13-24 for examination of documents accompanying- trust company securities 99 for filing proceedings in liquidation 136ft 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 8-127 of list of unclaimed deposits 15 of proceedings in liquidation 136ft Fine, bank, may be compromised before action instituted 144 First Lien on real estate, effect of certain assessments 57 Fiscal Agent, foreign corporation as 90 Foreign Banks, inspection of 124 Foreign Corporations, see Corporations, Foreign Forfeiture, causes for dissolution 134-136 of bank, pecuniary, how may be compromised 144 of bank, recovered how 144 unauthorized banking prohibited 12-12a-49 unlawfully opening branch office 9 Funds, of commercial bank with another commercial bank, regu- lated 85 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 Corporation, definition of 61 Government bonds available for deposit by trust company 96 legality of bonds of 61 Governmental Lien, not prior incumbrance, when 57 Governor, annual report of superintendent of banks to be made to 140 superintendent of banks appointed by 120 Gratuities to officers prohibited 39 Guaranteed Policy of mortgage insurance, legality of, for savings banks 61 Guarantor deemed to be borrower 66 Guardian, affidavit of, must be accompanied by letters of guar- dianship 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 95 124 CALIFORNIA BANK ACT Section overdue one year, debt considered bad 21a trust company may receive, on securities deposited 96 Inventory, liquidation of delinquent banks 136 Investigation of bonds and securities by superintendents of banks 61a of bonds and securities, cost of 61a of fitness of stockholders 128 Investment Certificates, building and loan associations may issue 12a 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 off 145 in bonds by commercial bank 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 Irrigation District, assessment by, effect on first lien 57 bonds of, available for deposit by trust company 96 bonds of, legality of 36-46-61-96 Joint Deposits, savings bank deposit in name of two or more per- sons 16 Judgment dissolving bank, superintendent of banks may procure. .135a Jurisdiction in actions brought under bank act 136& Law, banking, effective when 147 governing banks joining national reserve association 56 Legality of bonds or notes for savings banks 61 of investments prior to this act 145 Letters of Administration, certain heirs need not procure, when.. 16 Letters of Credit, dealers in must have license 13 relation to loans in commercial bank 80 Liabilities, advertising to be separate 14 shall not be increased, when 20 total of one borrower how computed 80 Liability for making false statement 38 of directors, officers or employees for fraud 38 of stockholders, can not be waived 40 License, forfeiture of 7-13-98-134-136 to banks 127 to begin business, fee for 24 to buy or sell exchange or issue letters of credit 13 to foreign corporations 7 to open branch offices 9 to trust companies . 127 when may be refused or withheld 7-9-13-127 Lien, governmental not prior, when 57 Life Insurance Companies, use of word "trust" by foreign 12& Limit, "borrowed money" amount of 21a of amount of real estate loans 47-57-67-105 of deposit liabilities 19 of deposit of banks in a savings bank 68 of deposit of commercial bank with another commercial bank, regulated 85 of deposit of savings bank in any one bank 68 of investment in commercial paper by savings bank 67 of investment in safe deposit department 30 of loans by commercial banks 46-47-80 of loans by savings banks 66-67 of loans by trust companies 105 of loans on bank or corporation stock 44-67 of purchase of bonds by commercial bank 36-46 of time for holding real estate 54 on deferred payment of interest 21a superintendent of banks may extend, on money borrowed.... 21a Liquidation, banks in, claims against 136 banks in, names to be posted 141 compensation of counsel in 136 costs in 136 INDEX 125 Section filing of proceedings in 1366 of banks by superintendent of banks 136 of banks, voluntary 136a- 13.7 proceeding's, notice to banks 136 voluntary, superintendent of banks may take possession 136a 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 directors, agents and employees 83 by commercial banks, to officers prohibited 83 by foreign corporations 7 by savings banks, how limited 57-66-67 by savings banks, prohibited, when 68 by savings banks, renewal of 66 by savings banks, to directors or officers prohibited 65 on corporation or bank stock, limited 44-67 on first lien on real estate, effect of certain assessments 57 real estate 47-57 savings bank, effect of public utilities act 61 shall not be increased, when , 20 to clubs, religious or membership corporations, application of law 83 to corporations, directors or officers interested 65-83 to directors, agents or employees 65-83 trust company, how governed 105-106 when savings banks must not make new 64 Location, 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 Losses may be charged to surplus, when 21 reserve fund may be charged with 64 shall be written off when 21a Manager, of foreign bank must take oath 11 Market Value of oil, mineral or timber land, how determined 61 Married Women, deposits of 16 Meeting of directors once a month 11 of members of mutual bank to capitalize 29 of stockholders, superintendent of banks may call 135 Members of bank may make application to dissolve 137 of mutual bank may elect to capitalize 29 Membership Corporations, loans to, exemptions in favor of 65-83 Merger, see Consolidation Mining Stock, loans on, by savings banks, prohibited 67 Mineral Land, fixing market value of 61 Minor, deposits of 16 trust company guardian of estate only 90 Mortgage, deposited by trust company with state treasurer 97 of trust company deposited, title and appraisement 99 restriction as to loans on 47-57-67 sale to banks by officers, etc., permitted when 35 Mortgage Insurance, guaranteed policy of, legality of, for savings banks 61 policy to accompany participation certificates deposited by trust company 99 Mortgage Participation Certificates available for deposit by trust company, when 96-99 legality of for savings banks 61 Municipal assessment, effect of, on first lien 57 Municipal Deposits in savings banks 62 Mutual Bank, how reserve fund shall be increased 64 may have capital stock, when 29 payment of losses out of reserve fund, when 64 relation of reserve fund to deposits 64 Name, change of, see Sec. 1278 Code of Civil Procedure restrictions on 12-12a-12&-12c-49-127 National Bank, examination of as depositary 48 National Reserve Association, state banks may join 56 126 CALIFORNIA BANK ACT Section Net Earnings, definition of 61 Notes, guaranteed by mortgage insurance as investments, when.. 61-105-106 guaranteed by mortgage insurance, available for deposit by trust companies 96-99 legal for savings banks, when 61 Notice of assessment on stock 133 of liquidation to all banks 136 required by savings banks from depositors 64 Oath of bank examiner 125 of directors 11 of managers or agents of foreign bank 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 commercial bank in relation to corporation loans. ... 83 of commercial bank shall not be endorser 83 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 oath 135a-136 restriction on purchase of obligations of bank, by 41 shall not receive commission 39 Offices of state banking department 122 Official Reports of superintendent of banks, prima facie evidence. 142 Oil Land, fixing market value of 61 Order, refusal of bank to observe 136 to show cause, issued by superintendent of banks 134 Organization of bank, examination of documents 8-127 of bank, previous consent of superintendent required 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 39 Participation Certificates, mortgage, legality of, for savings banks 61 mortgage, when available for deposit by trust company 96-99 Par Value of capital stock, minimum, except 53 Payment of expenses of banking department 123-124 suspended by bank, cause for dissolution 135a-136 Payment of Deposits by savings banks, notice required, when.... 64 of two name 16 to married women 16 to minor 16 Penalties for encroachment on reserves 20 for illegal advertisement of bonds 61 pecuniary, may be compromised before action instituted 144 recoverable how 144 to be paid into state banking fund 144 violators of bank act subject to 1-145 Per Diem charged for special examinations 124 Personal Property, savings banks may loan on 67 Petition of stockholders for dissolution 137 Pipe Line Corporation, definition of 61 Place of Business, see Location Pledged, stock of directors of domestic bank must not be 11 Policy, Guaranteed of mortgage insurance, legality of for savings banks 61 Political Lien, not prior incumbrance, when 57 Population governing ratio of reserve required 20 in relation to capital, governed by federal census 23 see Location INDEX 127 Section Postal Savings deposited in savings banks 62 deposits of, shall not be construed as "borrowed money" 21a Powers, building 1 and loan associations, restrictions on 12-12a of banks 2-4-5-6 of commercial banks 5 of saving's bank 4 of trust companies 6 Preferred Claims, deposits by order of court are 51 deposits of banks in liquidation by superintendent of banks. 136 deposits of postal savings are 62 deposits of public moneys are 62 Preferred Creditors, banks shall not pledge assets, except 21a Preferred Stock unlawful for banks, except 53 President, loans to prohibited 65-83-105 publication of unclaimed deposits 15 verification of reports 130-130 Principal Office 26 Prior Incumbrance, political or governmental not such, when.... 57 Private Trust, definition of 101 not subject to inspection of superintendent of banks, except. 101 officers entitled to knowledge of 103 shall be deemed to be court trust, when 101 subject to supervision, when 101 to be separately secured 96 trustee shall not disclose, what 103 Proceedings against bank, reports are prima facie evidence 142 in dissolution 136-137 in liquidation, filing of 136?> to enjoin superintendent of banks 134-1 36 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 21a 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 15 of false statement, penalty for 38 of notice by county clerk in escheat proceedings 15 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 Deposits, reserve against, not required in commercial banks 20 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 of, when legal for savings banks 61-61a definition of 61 Purchase of assets of banks by officers, directors, etc 42 of banks 31 of departments of banks 31 of obligations of bank by directors, etc 41 Purposes of commercial banks 5 of savings banks 4 of title insurance and trust company restricted 22 of trust company 6 128 CALIFORNIA BANK ACT Section Railroad, bonds of, when legal for savings banks 61-61a Railroad Corporation, definition of 61 Ratio of capital and surplus to deposit liabilities 19 of reserve to deposit liabilities 20-68-105-106 Real Estate consisting of oil, mineral or timber land, how valued. 61 contract not to be sold to bank, when 35 held longer than five years, proceedings for sale of 54 loans on, by commercial bank 47 loans on, by savings bank 67 loans on, by trust company 105-106 loans on, effect of governmental liens 57 mortgaged as deposit by trust company 96 when second mortgages on, permitted 47-67-80 Reapportionment of capital and surplus to departments 23 Receiver appointed prior to July 1, 1909 137 bank examiner shall not act, when 125 deposits by 51 funds of, escheat to state, when 137 funds of, held in county treasury, when 137 trust company, oath required 90 Reclamation District, assessment by, effects on first lien 5 7 Release, savings bank, payment to one of two or more persons. . . 16 Religious Corporation, loans to, exemptions in favor of 65-83 Report, annual, of superintendent of banks to governor 140 failure of bank to make, penalty 138 loans to agents or employees of savings bank 65 loans to directors and employees of commercial bank 83 of banks, called for, how often 131 of banks, publication of 132 of banks, shall contain what 130 of bank, 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 of loans to co-partnerships in which directors, agents or em- ployees are interested 83 of loans to corporations in which officers, directors or em- ployees are interested 65-83 of unclaimed deposits 15 special, to superintendent of banks 130a trust company must report, what 98-101 weekly bulletin by superintendent of banks 141 Reserve for departmental bank 20-25-68-106 how shall be restored 20 not to be carried against public deposits in commercial banks 20 of commercial banks, relation to deposits 20 of departments to be kept separate 25 of savings banks 68 of savings banks, relation to deposits 19 penalty for encroachment on, in commercial banks 20 percentage may be kept in eastern cities, when 20 ratio required governed by population 20 required for commercial banks 20 trust company, how governed 106 trust funds not to be carried as 32 Reserve Depositary, how nominated and designated 20 Reserve Fund, mutual savings banks, amount required 60 of mutual savings bank, may be used how 64 Resources, advertising to be separate 14 Revolving Fund, superintendent of banks may retain 123 Rulings on commercial paper by superintendent of banks 67 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 INDEX 129 Section Sale of banks or departments 31 Savings 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 contract 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 organized to conduct 3 investment in bank premises 61 investments, effect of public utilities act 61 investments, legality of .61-66 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 may purchase or discount commercial paper, when 67 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 organized without capital stock 60 purposes of 4 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 Savings Department investments to be separate 26 Savings Deposits advertising for, prohibited when 12-12a School District assessment by, effect on first lien 57 bonds of, available for deposit by trust company 96 legality of bonds of 61 School Savings how deposited 9 regulations concerning 9 Seal of superintendent of banks 134 Second Mortgage when bank may loan on 47-67 Secretary of State see section 290a of Civil Code 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 61a 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 136 130 CALIFORNIA BANK ACT Section Special Report of banks, superintendent of banks may require 130a State assessment by, effect on first lien 57 law of, violated by banks 134-135a-136 legality of bonds of 61 shall be responsible for securities deposited by trust com- pany 96 State Banking; 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, qualifications 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 office 141 officials of, cannot borrow from state banks 121 provision for offices 122 special report to 130a State Banking: Fund, amount of 123 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 31 Stock as collateral, limited 44-67 impairment of 133-136 investment in, prohibited 37 number of shares held by directors to be posted 17 par value, minimum, except 53 preferred, prohibited, except 53 subscription lists of bank subject to previous consent of su- perintendent of banks 127 Stockholders controlling, may sell note, bond or contract to bank when 35 fitness of, investigation of 128 information for 17 liability of, cannot be waived 40 liability of, in sale 31 may elect receiver, when 136 may make application to dissolve 137 meeting of, may be called by superintendent of banks 135 must be notified of assessment 133 must confirm consolidation 31c 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 Subscription Lists, for organization stock of bank, must be approved 127 Summons, service on foreign corporation 7 Superintendent of Banks, action by, to procure judgment of dis- solution 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 INDEX 131 Section authority to liquidate bank 136 bond required 120 bulletin to be posted in office of ., 141 certificate of 9-13-127-128 certificate of, to be posted 50 consent necessary to do departmental business 23 consent of, necessary to organize banking corporations 127 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 acceptance of drafts and bills of exchange by commercial banks 80 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 the purchase or discount of commercial paper by savings banks 67 may authorize withdrawal of trust company deposits, when.. 98 may call meeting of stockholders 135 may compromise pecuniary penalties or forfeitures imposed. . 144 may enforce ' stockholders liability 136 may examine national banks, when 48 may limit deposits by commercial banks with other commer- cial banks 85 may make extra examinations 124 may require special report 130a may retain revolving fund 123 may take possession of unsound bank 136 must designate reserve depositary 20 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 previous consent to circulate stock lists for bank 127 reports of banks to 130 report to, by banks how often 131 report to by banks to be published 132 rulings on commercial paper 67 salary 120 shall be appointed attorney of foreign corporations, when.. 7 shall direct discontinuance of unsound practices 134 shall employ chief deputy, attorney, examiners and other as- sistants 121 shall file copy of license with county clerk 128 shall give notice of liquidation proceedings 136 shall not be connected with banks 120 shall not inspect private trusts, except 101 shall provide auditor, when 124 shall require banks to repair capital, when 133 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 23-60-90 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 Surviving Relatives, may collect deposit, when 16 Survivor, joint deposit, to be paid to. ... . 16 Taxes, effect on first lien on real estate 57 Telegraph Company, may deal in exchange or letters of credit, when 13 Telegraph Corporation, definition of 61 132 CALIFORNIA BANK ACT Section Telephone Corporation, definition of 61 Timber Land, fixing market value 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 Total Reserves, definition of 20 trust funds not to be carried as any part of 32 Town, assessment by, effect on first lien 57 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 certain documents to accompany mortgage deposited with state 99 court trusts 96-101 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 organized to conduct 3 interest or dividends on securities deposited 96 investment of trust funds 94 knowledge of private trusts confidential 103 liquidation of 136 may act as executor 6-90 may mortgage premises to state treasurer, when 97 may resign as trustee under private trust when 101 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 t 6 private trusts 96-101 private trusts, confidential, except 101-103 private trust shall be deemed to be court trust, when 101 provisions for ceasing business 102 purposes of 6 qualifications 90 reserve of 106 restriction on investments 105-106 revocation of certificate shall not affect trusts 98 securities deposited may be exchanged 96 shall pay interest on deposits 95 trust funds, meaning of term 98 trusts classified 101 use of term restricted 12-12a-126 Trust Department, may deposit with commercial department of same corporation when 25 may deposit with savings department of same corporation.. 25 operated by title insurance company 106-107 INDEX 133 Section Trustee, deposits by 51 foreign corporations, prohibited to act as, except 90 when acting as escrow-holder 101 Trust Funds, deposits of 16-25 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 Trusts, how classified 101 Unclaimed Deposits, escheat of 15 publication of 15 report of 15 Undivided Profits, one-tenth to be carried to surplus before dividend 21 shall not be combined with surplus in advertising 14 United States, assessment by, effect on first lien 57 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 act, penalty for, may be compromised 144 of any law of state 134-135a-136 of bank act by others than banking corporations 1-145 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