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two daily newspapers, one published in the city of San Fran-
cisco and the other in the city of Sacramento. En. Stats.
1873-74, 271. Amd. 1877-78, 82; 1880, 91.
Legislative History.

The original section is follows: Every policy of in. surance upon life issued hereafter within the limits of the state of California, whether by a person or corporation, organized under the laws of this state, or under those of any other state or country, or by the agent of such person or corporation, must contain written evidence that it was issued in this state. And any such policy issued in this state, which shall not contain such written evidence, is at the option of the holder null and void. And the person or corporation issuing such policy, without the evidence hereinbefore required, shall forfeit to the people of the state of California, for each and every policy so issued, the sum of one hundred dollars in United States gold coin, to be collected by the insurance commissioner, as provided by section 598 of the Political Code.”

The amendment of 1877-78 is as follows: “Every policy of insurance upon life, hereafter issued and delivered within the limits of the state of California, whether by a person, or corporation organized under the laws of this state or under those of any other state or country, or by the agent of such person or corporation, must contain written evi. dence that it was issued in this state. And the person or corporation, and the agent thereof, issuing and delivering such policy, without the evidence hereinbefore required, shall forfeit to the people of the state of California the sum of one hundred dollars for cash [each] and every policy so issued, to be recovered by the insurance commissioner by suit in the name of the people of the state of California, in any court of competent jurisdiction. [In effect, April 1, 1878.]'

Section Cited.

Straube v. Pacific M. L. Ins. Co., 123 Cal. 679, 680, 56 Pac. 546; Rife v. Union Cent. Ins. Co., 129 Cal. 455, 62 Pac. 48.

Annotation.

Construction of Section. The provision of this section requiring conrestic companies insuring residents by policies delivered here, to contain a stipulation that after three years' annual premiunrs have been paid, the net reserve shall be applied as a premium, and imposing as a penalty for failure to do so, the cessation of the right of the company to do business in this state, is not made a part of the contract of insurance, in the absence of such stipulation, and does not make the required stipulation a part of the policy as ratter of law. (Straube v. Pacific M. L. Ins. Co., 123 Cal. 677,56 Pac. 546. To same effect: Rife v. Union Cent. Ins. Co., 129 Cal. 458, 62 Pac. 48.)

And when such stipulations are inserted in the policy, they are Dere matters of agreement, which may be waived by the consent of the parties. After payment of more than three years' premiums where a cash loan upon the policy of nearly the full amount of the net reserve, and the note given therefor stipulates that, if the policy shall at any time thereafter lapse for nonpayment of premium, all provisions in the policy for the issue of a paid-up or a term policy shall become null and void, such stipulation is a reasonable and valid protection of the note, and operates as a waiver of the terms of the policy. (Rife v. Union Cent. Ins. Co., 129 Cal. 455, 62 Pac. 48.)

FRATERNAL SOCIETIES EXEMPT FROM INSURANCE LAWS.

Sec. 451, C. C. All associations or secret orders, and other benevolent or fraternal co-operative societies, incorporated or organized for the purpose of mutual protection and relief of its members, and for the payment of stipulated sums of money to its members, or to the family of deceased members, and not for profit, are declared not to be insurance companies in the sense and meaning of the insurance laws of this state, and are exempt from the provisions of all existing insurance laws of this state. En. Stats. 1873-74, 271. Amd. 1877-78, 82. Rep. 1880, 92. En. Stats. 1885, 221.

Legislative History.

The original section, 451, provided for a “surrender value," and its determination and payment upon the surrender or cancellation of a policy.

Section Cited.

Perkins v. Fish, 121 Cal. 321, 53 Pac. 901; Marshall v. Grand Lodge A. 0. U. W. of Cal., 133 Cal. 691, 66 Pac. 25.

Annotation.

Construction of the Section.- An insurance association formed as an association without profit of persons as members thereof, for the purpose of equalizing the risk of death, and to pay to the nominees of such members as may die, stipulated sums of money, to be collected from surviving members, is an insurance company within the provisions of the Civil Code. (Perkins v. Fish, 121 Cal. 317, 53 Pac. 801.)

A corporation organized under the laws of this state for fraternal, social, and beneficial purposes, and with subordinate lodges subject to its control, issuing to each full-rate workman degree member of each subordinate lodge a certificate entitling the beneficiary named there. in to the sum of two thousand dollars upon the death of the insured, is not an insurance company, as contemplated by the general insurance laws. (Marshall v. Grand Lodge etc., 133 Cal. 691, 66 Pac. 25.)

POLICIES CONTINUED IN FORCE. (Repealed.)

Sec. 452, C. C. En. 1877-78, 83. Rep. 1880, 92.

Legislative History.

This section provided for the determination of che net value of policies, and the continuance of policies in force.

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TITLEIII.

RAILROAD CORPORATIONS.

Chapter I. Officers and Corporate Stock, $$ 454-459.

II. Enumeration of Powers, 88 465-478.
III. Business, How Conducted, $$ 479-494.

CHAPTER I.

OFFICERS AND CORPORATE STOCK.

$ 454. Directors to be elected, when.
$ 455. Additional provisions in assessment and transfer of stock.
$ 456. Corporations may borrow money and issue bonds-Limitation

of amount.
$ 457. To provide a sinking fund to pay bonds.
$ 458. Capital stock to be fixed.
$ 459. Certificate of payment of fixed capital stock.

DIRECTORS TO BE ELECTED, WHEN.

Sec. 454, C. C. Directors of railroad corporations may be elected at a meeting of the stockholders other than the annual meeting as a majority of the fixed capital stock may determine, or as the by-laws may provide; notice thereof to be given as provided for notices of meetings to adopt by-laws in article II , chapter I, title I, of this part. En. March 21, 1872. For election of directors and notice: See secs. 301, 302, C. C., ante.

Section Cited

Railroad Commissioners v. Market Street Ry. Co., 132 Cal. 678,

64 Pac. 1065.

Annotation.

Construction of Section. The provisions of sections 454-491 of this
code have reference to steam or commercial railroads as distinguished
from street railroads. (Railroad Commissioners v. Market St. Ry.
Co., 132 Cal. 678, 64 Pac. 1065.)
For provisions relating to street railroads, see secs. 497-511, C. C.,

post.

ADDITIONAL PROVISIONS IN ASSESSMENT AND TRANSFER

OF STOCK Sec. 455, C. C. No stock in any railroad corporation is transferable until all the previous calls or installments thereon have been fully paid in; nor is any such transfer valid, except as between the parties thereto, unless at least twenty per cent has been paid thereon and certificates issued therefor, and the transfer approved by the board of directors. En. March 21, 1872,

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CORPORATIONS MAY BORROW MONEY AND ISSUE BONDS

LIMITATION OF AMOUNT. Sec. 456, C. C. Railroad corporations may borrow, on the credit of the corporation, and under such regulations and restrictions as the board of directors thereof, by unanimous concurrence, may impose, such sums of money as may be necessary for constructing and completing their railroad, with its equipments, and for the purchase of all necessary rolling stock and all else relative thereto, and may issue promissory notes therefor, or may issue and dispose of bonds to raise moneys necessary to pay therefor, at a rate of interest not exceeding ten per cent per annum; and may also issue bonds, or promissory notes, at the same rate of interest in payment of any debts or contracts for constructing and completing their road, with its equipments and rolling stock, and all else relative thereto, and for the purchase of railroads and other property within the purpose of the corporation. The amount of bonds, or promissory notes, issued for such purposes must not exceed in all the amount of their capital stock; and to secure the payment of such bonds, or notes, they may mortgage their corporate property and franchises, or may secure the payments of such bonds, or notes, by deed of trust of their corporate property and franchises. Any person or corporation formed under the laws of this state, or of any other state within the United States, that the directors of the railroad corporation may, by unanimous concurrence, select, may be trustees in such deed of trust. En. March 21, 1872. Amd. 1880, 10; 1897, 73; 1899, 57.

Debt exceeding available means, penalty: See Pen. Code, sec. 566.

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