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Legislative History.

For basis of section, see sec, 628, C. C., ante.

AGENT OF CORPORATION MAY INSPECT METERS.

Sec. 631, C. C. Any agent of a gas corporation exhibiting written authority, signed by the president or secretary thereof for such purpose, may enter any building or premises lighted with gas supplied by such corporation, to inspect the gas-meters therein, to ascertain the quantity of gas supplied or consumed. Every owner or occupant of such buildings who hinders or prevents such entry or inspection must pay to the corporation the sum of fifty dollars as liquidated damages. En. March 21, 1872.

Legislative History.

For basis of section, see sec. 628, C. C., ante.

WHEN PERSONS NEGLECT TO PAY, GAS MAY BE SHUT OFF.

Sec. 632, C. C. All gas corporations may shut off the supply of gas from any person who neglects or refuses to pay for the gas supplied, or the rent for any meter, pipes, or fittings provided by the corporation as required by his contract; and for the purpose of shutting off the gas in such case any employee of the corporation may enter the building or premises of such person, between the hours of eight o'clock in the forenoon and six o'clock in the afternoon of any day, and remove therefrom any property of the corporation used in supplying gas. En. March 21, 1872.

Legislative History.

For basis of section, see sec. 628, supra.

TITLE XVI.

LAND AND BUILDING CORPORATIONS.

§ 633. Formation and organization-Articles of incorporation, what

to set forth. § 634. Capital stock. § 635. Retiring free shares. § 636. Maturity of stock, § 637. Loans and installments. § 638. Rate of interest-Security. 8 639. Forfeiture-Arrears in payments. § 640. Purchase of real estate. 8 641. Borrowing money. § 642. Profits and losses. § 643. Membership. $ 644. Annual report. $ 645. Foreign corporations, deposit by. § 646. Electing to continue business. $ 647. Subject to provisions relating to bank commissioners. § 648. Definition of. § 64814. Taxation of.

FORMATION AND ORGANIZATION-ARTICLES OF INCOR

PORATION, WHAT TO SET FORTH. Sec. 633, C. C. Corporations may be formed subject to the provisions of this title, and with all the rights, duties, and powers herein specified. Such corporations shall be known as mutual building and loan associations, and the words “mutual building and loan association” shall form part of the name of every such corporation. The articles of incorporation, in setting forth the purposes for which the corporation is formed, shall state, that it is formed to encourage industry, frugality, home building, and savings among the stockholders; the accumulation of savings; the loaning to its stockholders of the funds so accumulated, with the profits and earnings; and the repayment to each stockholder of his savings and profits, when they have accumulated to a certain sum, or at any time when he shall desire the same, as provided in the by-laws, or when the corporation shall desire to repay the same; and shall also state that it is formed for all the purposes specified in this title. En. Stats. 1891, 252.

Act creating board of commissioners of building and loan associations: See post, Statutes at Large, title “Building and Loan Associations."

Annuity or endowment insurance: See post, Statutes at Large, title "Insurance."

Legislative History.

See sec. 639, infra. The sections by this act added to the Civil Code, providing for the examination by the bank commissioners of this state of all building and loan associations, apply to all such corporations, whether organized and doing business before or after the passage of this act: Act of 1891, p. 252, sec. 1.

Section Cited.

Bay City B. & L. Assn. v. Broad, 136 Cal. 525, 69 Pac. 225.

Annotation.

Generally.— The rights of building and loan associations and their shareholders, including those who have obtained loans therefrom, are governed by the statutes applicable thereto, and the by-laws framed thereunder, and the valid contracts entered into between them. (McNamara v. Oakland etc. Assn., 131 Cal. 336, 63 Pac. 670.)

CAPITAL STOCK.

Sec. 634, C. C. The capital stock of such corporations shall be paid in by the stockholders in regular, equal, periodical payments, at such times and in such amounts as shall be provided in the by-laws. Such periodical payments shall be called dues. And at or before a time to be stated in the by-laws, each stockholder shall pay to the corporation, upon each share of stock held by him, such an amount of dues as the by-laws shall provide; and the payment of dues shall so continue on each share of stock issued till it reaches its matured value, or is withdrawn, canceled, or forfeited. The capital stock shall consist of such accumulated dues, together with the earnings and profits of the corporation, and shall in no case exceed two million dollars, except as to corporations now existing. It

shall be divided into shares of matured or par value of one hundred dollars, or two hundred dollars each, as shall be provided in the articles of incorporation and fixed by the by-laws. Certificates of stock shall be issued to each stockholder on the first payment of dues by him. The shares shall be issued in yearly, half-yearly, or quarterly series, except in corporations now existing, in such amounts in each series, and at such times, as shall be determined by the board of directors. No share of a prior series shall be issued after the issuing of shares in a new series. Shares which have not been pledged as a security for the repayments of a loan shall be called free shares. Shares that have been so pledged shall be called pledged shares. All stock matured and surrendered or canceled in any series shall become the property of the corporation, and may be issued in any subsequent series. Payment of dues on shares of stock in cach series shall commence from the time that shares began to be issued in such series. Any such corporation shall have power by its by-laws to impose and collect a fine from each stockholder not exceeding ten per cent of the defaulted amount, for every neglect or refusal to make his payments of dues, oi premium, or interest, when due, and to impose and collect a like fine successively on every regular pay-day during such de fault. Every such corporation hereafter formed shall also have power to charge an entrance fee upon each share of stock issued, not exceeding ten cents on each share, and may also charge a transfer fee not exceeding ten cents on each share, all of which shall be paid into the treasury and accounted for as all other funds of the association; provided, that building and loan associations heretofore incorporated may continue to charge and dispose of such entrance and transfer fees as are prescribed by the by-laws of such corporation. Payment of dues or interest may be made in advance, but no association shall allow interest on such advance payments at a greater rate than six per cent per annum, nor for a longer period than one year.

En. Stats. 1891, 253.

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Annotation.

Assignment of Shares—Credits.—Under mortgage by a member of a building and loan association, where it is part of the contract that,

when his stock is fully paid up, it shall be applied to discharge the mortgage, and the shares are assigned as collateral security for the loan, and the interest and 'dues are consolidated in the mortgage, the monthly payments are to be regarded as “redemption money,” and an implied agreement is raised that they shall be credited upon the mortgage. (Hale v. Barker, 129 Cal. 419, 62 Pac. 168.)

And when such an association becomes insolvent, and further performance of the contract thereby becomes impossible, the contraet is to be deemed terminated; and, where there is no provision in a mortgage or in the charter or by-laws of the company for the case of insolvency, in an action by a receiver of the insolvent association to foreclose a mortgage against a member, whose shares of stock are pledged as collateral security for the loan, the monthly payment or interest or dues, so far as made, should be credited upon the mortgage. (Hale v. Barker, 129 Cal. 419, 62 Pac. 168.)

RETIRING FREE SHARES.

Sec. 635, C. C. The directors may, at their discretion, under the regulations prescribed in their by-laws, retire the free shares of any series of stock, at any time after four years from the date of their issue, by enforcing the withdrawal of the same; but whenever there shall remain in any series, at the expiration of five years after the date of its issue, an excess above one hundred free shares of the par value of two hundred dollars each, or two hundred free shares of the par value of one hundred dollars each, then it shall be the duty of the directors to retire annually twenty-five per centum of such excess existing at said expiration of five years after the date of its issue, so that no more than one hundred free shares shall remain in such series at the expiration of nine years from the date of its issue; provided, that no more than one-half the monthly receipts be used for that purpose; and thereafter the directors inay, in their discretion, retire such other free shares as they consider to the best interest of the association to retire; provided, that whenever, under the provisions of this section, the withdrawal of shares is to be enforced, the shares to be retired shall be determined by lot, drawn from all free shares in the series, as shall be regulated by the by-laws, and the holders thereof shall be paid the amount actually paid in and the full amount of earnings at the date of last apportionment of profits. En. Stats. 1891, 254.

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