respect thereto, is punishable by imprisonment in the State Prison not less than three nor more than ten years. (Section 558, Penal Code.)

103. Subscribing Another's Name to Advertisement.

Every person who, without being authorized so to do, subscribes the name of another to, or inserts the name of another in any prospectus, circular, or other advertisement or announcement of any corporation or joint-stock association, existing or intended to be formed, with intent to permit the same to be published, and thereby to lead persons to believe that the person whose name is so subscribed is an officer, agent, member, or promoter of such corporation or association, is guilty of a misdemeanor." (Section 559, Penal Code.)

104. Misconduct of Directors.

Every Director of any stock corporation who concurs in any vote or act of the Directors of such corporation, or any of them, by which it is intended either,

1. To make a dividend, except from surplus profits arising from the business of the corporation, and in the cases and manner allowed by law; or,

2. To divide, withdraw, or in any manner, except as provided by law, pay to the stockholder, or any of them, any part of the capital stock of the corporation; or,

3. To discount or receive any note or other evidence of debt in payment of any installment actually called in and required to be paid, or with the intent to provide means of making such payment; or,

4. To receive or discount any note or other evidence of debt with the intent to enable any stockholder to withdraw any part of the money paid in by him, or his stock; or,

5. To receive from any other stock corporation in exchange for the shares, notes, bonds or other evidences of debt of their own corporation shares of the capital stock of such other corporation, or notes, bonds, or other evidences of debt issued by such corporation-is guilty of a misdemeanor. (Section 560, Penal Code.)

105. Frauds in Keeping Accounts.

Every Director, officer, or agent of any corporation or joint-stock association, who knowingly receives or possesses himself of any property of such corporation or association, otherwise than in payment of a just demand, and who, with intent to defraud, omits to make, or to cause or direct to be made, a full and true entry thereof in the books or accounts of such corporation or association, and every Director, officer, agent, or member of any corporation or joint-stock association who, with intent to defraud, destroys, alters, mutilates, or falsifies any of the books, papers, writings, or securities belonging to such corporation or association, or makes or concurs in making any false entries, or omits or concurs in omitting to make a material entry in any book of accounts or other record or document kept by such corporation or association, is punishable by imprisonment in the State Prison not less than three nor more than ten years, or by imprisonment in the county jail not exceeda For punishment of misdemeanors, see note to No. 96, ante.

ing one year, and a fine not exceeding five hundred dollars, or by both such fine and imprisonment." (Section 563, Penal Code.)

106. Publishing False Reports of Condition.

Every Director, officer, or agent of any corporation or joint-stock association, who knowingly concurs in making, publishing, or posting any written report, exhibit, or statement of its affairs or pecuniary condition, or book or notice containing any material statement which is false, or refuses to make any book or post any notice required by law, such as are mentioned in this chapter, is guilty of a felony. (Section 564, Penal Code.)

107. Refusing to Permit Inspection of Books.

Every officer or agent of any corporation having or keeping an office within this State, who has in his custody or control any book, paper, or document of such corporation, and who refuses to give to a stockholder or member of such corporation, lawfully demanding during office hours [permission] to inspect or to take a copy of the same, or any part thereof, a reasonable opportunity so to do, is guilty of a misdemeanor." (Section 565, Penal Code.)

108. Director of a Corporation Presumed to know its Condition.

Every Director of a corporation or joint-stock association is deemed to possess such a knowledge of the affairs of his corporation as to enable him to determine whether any act, proceeding, or omission of its Directors is a violation of this chapter. [That is, violation of criminal law.] (Section 568, Penal Code.)

109. When a Director is Presumed to Assent.

Every Director of a corporation or joint-stock association who is present at a meeting of the Directors at which any act, proceeding, or omission of such Directors in violation of this chapter occurs, is deemed to have concurred therein, unless he at the time causes, or in writing requires, his dissent therefrom to be entered on the minutes of the Directors. (Section 569, Penal Code.)

110. Concurrence by Directors-When Record Shows Act-If Director Remains Such Six Months, or Causes Dissent to be Entered on Books. Every Director of a corporation or joint-stock association, although not present at a meeting of the Directors at which any act, proceeding, or omission of such Directors in violation of this chapter occurs, is deemed to have concurred therein if the facts constituting such violation appear on the record or minutes of the proceedings of the Board of Directors, and he remains a Director of the same company for six months thereafter, and does not within that time cause, or in writing require, his dissent from such illegality to be entered in the minutes of the Directors. (Section 570, Penal Code.)

An indictment lies against an agent or a corporation for making false entries in the corporation books. (53 California, page 615.)

Felony is punishable by imprisonment in the State Prison not exceeding five years For punishment of misdemeanors, see note to No. 96, ante.

The foregoing provisions of law apply to all Building and Loan Associations, whether organized prior to March 31, 1891, or afterwards. Corporations that were organized prior to March 31, 1891, and which have not elected to come under the laws approved March 31, 1891, are governed by different laws than associations which were organized after the 31st day of March, 1891, or which have elected to come under the laws of March 31, 1891.

Sections 111 to 118, both inclusive, constitute the laws governing corporations organized and incorporated prior to March 31, 1891.

111. Land and Building Corporations.

Prior to the passage of the Act of March 31, 1891, all corporations that were engaged in what is known as Building and Loan Association business, were known under and by the title of "Land and Building Corporations." (See Title 16, Civil Code.)

112. How Organized.

Corporations organized for the erection of buildings and making other improvements on real property, may raise funds in shares not exceeding two hundred dollars each, payable in periodical installments. Such bodies are known as "Land and Building Corporations," and may be organized with or without a capital stock. (Section 639, Civil Code.)

113. Land and Building Corporations May Borrow Money.

Any such corporation may borrow money for the purpose of carrying out its objects, and may give as security therefor its shares or mortgage upon its real estate. (Section 640, Civil Code.)

114. Power and Object of Land and Building Corporations.

Any such corporation may purchase real estate and erect buildings for its members, and make loans to its members for the purpose of aiding them in acquiring and improving real estate. Such loans must in all cases be secured on such real estate. (Section 641, Civil Code.)

115. Land and Building Associations May Insure the Lives of Members and Debtors.

Such corporations may insure, in some life insurance company incorporated under the laws of this State, the lives of its members and debtors. In case of death of a debtor or member so insured, the amount recovered on the policy must be applied to extinguish the indebtedness, including the premium paid, and the residue, if any, must be paid to the legal representative of the decedent. (Section 642, Civil Code.)

116. What Real Estate May be Owned at any One Time by a Land and Building Corporation.

Any such corporation may purchase, hold, and convey real estate, as follows:

All corporations which were organized prior to the passage of the Act approved March 31, 1891, were organized under this section and still continue to exist, but cannot now be organized under the provisions of this section. (Amendment approved March 30, 1874, Amendments 1873 and 1874, page 217; took effect July 1, 1874.)

1. The lot and building in which the business of the corporation is carried on, the cost of which must not exceed twenty thousand dollars. 2. Such as may from time to time be necessary to supply the wants of its members, the cost of which held unalloted to the members thereof at any one time must not exceed the sum of one hundred thousand dollars.

3. Such as shall have been mortgaged, pledged, or conveyed to it in trust to secure money loaned or to secure the purchase price thereof in pursuance of the regular business of the corporation. (Section 643, Civil Code.)

117. What the By-Laws May Provide.

The by-laws of such corporations must specify the amount of the periodical subscriptions or payments to be made by each member, the time and manner in which such payments are to be made; the fines and forfeiture for default; the time and manner of election of Directors and other officers, and their terms of office; the manner in which the real estate may be distributed, alloted, or sold to its members; the terms and conditions upon which loans may be made to its members, and by them repaid to the corporation; the manner in which a person may become and cease to be a member; the conditions on which members may withdraw from the corporation, and the provisions for the payment to withdrawing members of the sums of money due to them, arising from subscriptions or payments, and the proportion of the profits such withdrawing members may receive on withdrawal." (Section 644, Civil Code.)

118. Consolidation and Transfer of Corporation Business and Property. Any two or more such corporations may unite and become incorporated in one body, with or without any dissolution or division of the funds of such corporation, or either of them; or any such corporation. may transfer its engagements, funds, and property to any other such corporation, upon such terms as may be agreed upon by two thirds of the members of each of such bodies present at general meetings of the members convened for the purpose by notice, stating the object of the meeting, sent through the post office to every member, and by general notice appearing daily at least one week, or weekly at least two weeks, in some newspaper published at the place of the principal business of the corporation; but no such transfer can prejudice any right of any creditor of either corporation. (Section 647, Civil Code.)

1184.

Provided, that Building and Loan Associations heretofore incorporated [prior to March 31, 1891] may continue to charge and dispose of

a The by-laws of a corporation are part of the contract under which a stockholder subscribes for stock, and the State cannot pass any law impairing the obligation of contract. (Article 1, Section 10, of the Constitution of the United States.)

If the by-laws of a corporation do not provide for the retirement or the withdrawal of shares at the time that a person subscribes therefor, the Board of Directors cannot force the withdrawal of shares, for the forced withdrawal would be violating the obligation of the contract. (Article I, Section 10, of the Constitution of the United States.)

Section 645 of the Civil Code refers to the making of annual statements. Same is repealed by Section 18 of the Act approved March 23, 1893 (Statutes and Amendments to the Codes of California of 1893, page 233), and is provided for in No. 81, ante, with this exception, that the report of Land and Building corporations so annually made, must be printed and circulated among the members. (Abstract from Section 645, Civil Code.)

such entrance and transfer fees as are prescribed by the by-laws of such corporation. (Abstract from Section 634, Civil Code, as amended by Act approved March 31, 1891, Statutes and Amendments to Codes of California of 1891, page 253.)

1183.

These sections above cited are continued in force as to all Building and Loan Associations organized prior to the passage of the Act approved March 31, 1891. By this Act, Sections 639, 640, 641, 642, 643, 644, 645, and 647, Title 16, Part IV, Division First, of the Civil Code are hereby repealed; provided, however, that so far as the said sections relate to and govern Building and Loan Associations (Land and Building Associations) heretofore incorporated and doing business under the Civil Code, the said sections shall continue in full force and validity. (Abstract from Section 1 of the Act approved March 31, 1891, Statutes and Amendments to the Codes of California of 1891, page 252.)

NEW LAW GOVERNING ASSOCIATIONS ORGANIZED AFTER MARCH 31, 1891, AND NOT APPLICABLE TO LAND AND BUILDING ASSOCIATIONS.

The following laws govern and apply to corporations only which were organized after March 31, 1891, or corporations which were organized after March 31, 1891, and have elected to continue business under the provisions of the Act approved March 31, 1891 (Act repealing sections of Land and Building Associations); Sections 639, 640, 641, 642, 643, 644, 645, and 647 of Title XVI, Part IV, Division First, of the Civil Code are hereby repealed; provided, however, that so far as said sections relate to and govern Building and Loan Associations heretofore incorporated and doing business under the Civil Code, the said sections shall continue in full force and validity." (Abstract from Section 1 of the Act approved March 31, 1891, Statutes and Amendments to the Codes of California of 1891, page 252.)

119. Name-What Words Must be Used.

Corporations may be formed subject to the provisions of this title, with all the rights and powers herein specified. Such corporations shall be known as Mutual Building and Loan Associations, and the words "Mutual Building and Loan Associations" shall form part of the name of every such corporation." (Abstract from Section 633, approved March 31, 1891, Statutes and Amendments to the Codes of California of 1891, page 252.)

120. Dues, and Payment thereof-Shares of Stock, and Size thereofCapital Stock, and Amount thereof-Series, and When Issued-Free Shares-Pledged Shares.

The capital stock of such corporation 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

The remainder of this section, providing for the examination by Bank Commissioners, was repealed by the Act approved March 23, 1893, Statutes and Amendments to the Codes of California of 1893, page 229.

As to what the articles of incorporation shall set forth of associations formed since March 31, 1891, and to be hereafter formed, see No. 4, ante.