Sec. 12. The right of any association claiming to be organized under this act to do business may be inquired into by quo warranto, at the suit of the attorney general of this state, but not otherwise.

Sec. 13. This act being passed to promote association for mutual welfare, the words "lawful business" shall extend to every kind of lawful effort for business, educational, industrial, benevolent, social, or political purposes, whether conducted for profit or not, and this act shall not be strictly construed, but its provisions must at all times be liberally construed, with a view to effect its object and to promote its purpose.

Sec. 14. This act shall take effect immediately.

Annotation.

Formation-Matter of Contract.-An unincorporated endowment association is the creature of contract created by its written articles of association by which the duties of its officers and members and the scope of its business are to be regulated, and the articles of association correspond to the charter of a corporation and constitutes its fundamental law, in accordance with which all subsequent by-laws, regulations and amendments must be made, and no change or amendment can be made to the original articles without the consent of all members affected thereby. (Hogan v. Pacific Endowment League, 99 Cal. 248, 33 Pac. 924. To same effect: Levy v. Magnolia Lodge, 110 Cal. 310, 42 Pac. 887. Note citation: 52 Am. St. Rep. 572.)

Such associations are subject, as far as applicable, to rules apply. ing to incorporated bodies of same character. (Otto v. Journeyman etc. Union, 75 Cal. 313, 7 Am. St. Rep. 156, 17 Pac. 217; Hogan v. Pacific Endowment League, 99 Cal. 267, 33 Pac. 924. Note citations: 34 Am. St. Rep. 228, 232; 35 Am. St. Rep. 814; 36 Am. St. Rep. 401.)

Interference by Courts.-Courts will interfere for purposes of protecting property rights of members of unincorporated associations in all proper cases, and when they take jurisdiction will follow and enforce, so far as applicable, the rules applying to incorporated bodies of the same character. (Otto v. Journeyman etc. Union, 75 Cal. 308, 7 Am. St. Rep. 156, 17 Pac. 217. Notes: 34 Am. St. Rep. 232; 43 Am. St. Rep. 800; 48 Am. St. Rep. 316.)

Expulsion by Secession of Members. Where by-laws governing an unincorporated association provide a remedy within the association for any offense committed by the officers, the members of the association are not authorized to secede for the purpose of expelling the regularly elected officers, declaring their offices vacant and constitating themselves successors. (McCallion v. Hibernia S. & L. Soc., 70 Cal. 163, 12 Pac. 114. Note citation: 33 Am. St. Rep. 177.)

A member of an unincorporated association may be expelled therefrom for a violation of such of the established rules of the association as have been subscribed or assented to by the members, and as provide expulsion for such violation, or for such conduet as clearly violates the fundamental objects of the association, and if persisted in and allowed would thwart those objects or bring the association into disrepute. (Otto v. Journeyman etc. Union, 75 Cal. 308, 7 Am. St. Rep. 156, 17 Pac. 217. Note citations: 20 Am. St. Rep. 885; 53 Am. St. Rep. 319; 59 Am. St. Rep. 198, 199, 201, 208.)

In matter of expulsion, the association acts in a quasi judicial character, and so far as it confines itself to the exercise of the pow ers vested in it, and in good faith pursues the methods prescribed by its laws, such laws not being in violation of the laws of the land or any inalienable right of a member, its sentence is conclusive, like that of a judicial tribunal. The courts will, however, decide whether the ground for expulsion is well taken. (Otto v. Journeyman ete. Union, 75 Cal. 308, 7 Am. St. Rep. 156, 17 Pac. 217.)

But the expulsion of a member nominally for an offense for which such punishment is proper, but in reality for an offense punishable only by fine, is invalid. (Otto v. Journeyman etc. Union, 75 Cal. 308, 7 Am. St. Rep. 156, 17 Pac. 217. Note citation: 36 Am. St. Rep. 401.)

And an unincorporated association, having a benefit fund in which all of its members are entitled to participate, cannot expel a member for an offense which by the rules of the association is punishable by a fine only. (Otto v. Journeyman etc. Union, 75 Cal. 308, 7 Am. St. Rep. 156, 17 Pac. 217.)

In an action by members of an unincorporated association to exclude from its property rights a majority of its members who had formed another association under the same name, the burden of proof is upon the plaintiffs to show that the defendants had withdrawn and abandoned the property rights. (Strong v. Los Nietos etc. Assn., 137 Cal. 607, 70 Pac. 734.)

Bequest to Association-Subsequent Incorporation.-An unincorporated association for charitable purposes is capable of taking by bequest; and if intermediate the death of the testator and the distribution of the estate the association becomes incorporated with the same members and for the same object, distribution can be made to the corporation. (Estate of Winchester, 133 Cal. 271.)

Assessment-Presumption as to Validity.-In levying assessments the directors act ministerially and not judicially, and no presumption arises in favor of their legality. (Hogan v. Pacific Endowment League, 90 Cal. 248.)

ARTICLE XIII.

CORPORATIONS, GENERALLY.

An act to protect stockholders and persons dealing with corporations in this state.

[Approved March 29, 1878; Stats. 1877-78, 695.]

1. Penalty for publishing exaggerated reports.

Section 1. Any superintendent, director, secretary, manager, agent, or other officer, of any corporation formed or existing under the laws of this state, or transacting business in the same, and any person pretending or holding himself out as such. superintendent, director, secretary, manager, agent, or other officer, who shall willfully subscribe, sign, indorse, verify, or otherwise assent to the publication, either generally or privately, to the stockholders or other persons dealing with such corporation, or its stock, any untrue or willfully and fraudulently exaggerated report, prospectus, account, statement of operations, values, business, profits, expenditures, or prospects, or other paper or document intended to produce or give or having a tendency to produce or give, to the shares of stock in such corporations a greater value, or less apparent or market value than they really possess, or with the intention of defrauding any particular person or persons, or the public, or persons generally, shall be deemed guilty of a felony, and on conviction thereof, shall be punished by imprisonment in the state prison or county jail not exceeding two years, or by a fine not exceeding five thousand dollars, or by both; provided, that this act shall be construed to apply only to corporations whose capital stock has been or shall hereafter be listed at a stock board or stock exchange in this state, or whose shares be regularly bought and sold in the stock

market of this state.

Corporation Laws-45

ARTICLE XIV.

LUNCH HOURS FOR LABORERS.

An act to provide for a lunch hour for laborers in sawmills, shakemills, shingle-mills, and logging-camps.

[Approved February 28, 1901; Stats. 1901, p. 75.]

§ 1. Lunch hours for laborers in lumber camps and mills. § 2. Penalty for violation of act.

Section 1. Every person, corporation, copartnership, or company operating a sawmill, shake-mill, shingle-mill, or loggingcamp, in the state of California, shall allow to his or its employees, workmen, and laborers a period of not less than one hour at noon for the midday meal.

Sec. 2. Any person, corporation, copartnership, or company, his or its agents, servants, or managers, violating any of the provisions of this act shall be guilty of a misdemeanor, and upon conviction thereof shall be punished by a fine of not more than two hundred dollars nor less than one hundred dollars for each violation of the provisions of this act.

Sec. 3. This act shall take effect and be in force on the first day of April, nineteen hundred and one.

ARTICLE XV.

CORPORATIONS TO PREVENT CRUELTY TO ANIMALS.

An act for the more effectual prevention of cruelty to animals. [Approved March 20, 1873-74; Stats. 1873-74, 499. Amended, Stats. 1901, 285; Stats. 1903, 69.]

Section 1. Any three or more citizens of the state of California, who have heretofore, or who shall hereafter, incorporate as a body corporate, under the general laws for incorporations in this state, for the purpose of preventing cruelty to animals, may avail themselves of the privileges of this act; provided, that the corporate body first formed as aforesaid in any county, shall be the only one so entitled to the benefits and privileges of this act in said county.

Sec. 2. The said societies may make and adopt by-laws governing the admission of associates and members, providing for all meetings, and for assistant and district or local officers; providing, also, for means and systems for the effectual attainment of the objects contemplated by this act; for the regulation and management of its business affairs, and for the effectual working of the societies; prescribing, also, the duties of all their officers; for the outlay of all moneys and the auditing all accounts; provided, that such by-laws shall not conflict with the laws of the state of California, or of the United States, or with any provisions of this act.

Sec. 3. Said societies shall elect officers and fill vacancies according to the provisions of their by-laws.