loan any of its funds upon any of its own guarantee stock as security. Any officer or director of an association who shall make any such loan for and on behalf of any such association shall be personally liable to the corporation for the full amount thereof, and shall also be deemed guilty of a felony. It shall be unlawful for any such corporation to invest any of its funds in, or loan any of its funds upon, any mining shares or mining stocks or the stocks or bonds of any corporation, except as in this title provided. Every officer or director who, on behalf of any such corporation shall make any such investment or loan, or who shall consent thereto, shall be personally liable to the corporation for the whole amount expended by the corporation in such investment or upon such loan, and shall also be deemed guilty of a felony. [New section; approved March 23, 1907; in effect July 1, 1907.]

§ 638. The board of directors may fix from time to time the rate of interest on loans. For every loan made, a note or obligation, secured by a first mortgage or deed of trust upon unincumbered real estate, shall be given, accompanied by a pledge to the association of shares of stock, as collateral security for the repayment of the loan, the matured value of which shall equal the amount of the loan, except that there need be no such pledge in loans made to others than members; or, in lieu of a mortgage or deed of trust, there may be pledged to the association, for the payment of the loan, free shares, but any such loan must not exceed ninety per cent of the withdrawal value of such shares under the by-laws, at the time of such borrowing. At the discretion of the board of directors, a borrower may repay, at any time, the loan with all interest and arrears thereon, upon the surrender of the shares pledged to secure the loan. [New section; approved March 23, 1907; in effect July 1, 1907.]

§ 639.

Whenever any non-borrowing member shall be six months in arrears in the payment of his dues upon free shares, the secretary may give him notice thereof in writing, and a statement of his arrearages, by mailing the same to him at his last postoffice address given by him to the association; and if he shall not pay all arrearages within two months thereafter, the board of directors may, at their option, declare

his shares forfeited, and at the time of such forfeiture, the withdrawal value thereof shall be determined and stated, and the defaulting member shall be entitled to withdraw the same without interest, upon such notice as shall be required of a withdrawing shareholder. Whenever a borrower shall be three months in arrears in the payment of his dues or interest or loan installments, the whole loan shall become due at the option of the board of directors, and they may proceed to enforce collection upon the securities held by the association. The withdrawal value, at the time of exercising such option, of all shares pledged as collateral security, shall be applied to the payment of the loan, and said shares from that time shall be deemed surrendered to the association and canceled. [New section; approved March 23, 1907; in effect July 1, 1907.]

§ 640. Any such association may purchase at any sale, public or private, any real estate upon which it may have a mortgage, judgment, lien, or other incumbrance, or in which it may have an interest, and may sell, convey, lease, or mortgage the same at pleasure to any person or persons. [New section; approved March 23, 1907; in effect July 1, 1907.]

§ 641. Profits and losses shall be apportioned at least annually, and shall be apportioned to all shares in each class at the time of such apportionment, according to the actual or book value thereof. If the guarantee capital herein provided for, if any there be, together with the reserve fund, or if the reserve fund, where there be no guarantee capital, shall not equal five per cent of the outstanding loans at the time of each apportionment of profits, the directors shall set aside, as a reserve fund, not less than five per cent of the net profits accruing since the last prior apportionment, and shall continue so to do until said fund shall amount to at least five per cent of the loans in force, at which figure said fund shall thereafter be maintained. Said reserve fund shall at all times be available to meet losses arising from any source not heretofore provided to be assumed by the guarantee capital. Every such corporation having a paid-in guarantee capital stock, may provide in their by-laws, that an amount not exceeding one per cent per annum on the average loans in force, shall be set aside from and out of the net profits, at each annual distri

bution thereof,‚—or a proportionate amount at each semi-annual distribution, from which to declare dividends on and provide a reserve fund that shall be specially applicable thereto. At least one tenth of the amount so set aside shall be carried to such reserve fund until the same shall amount to at least fifty per cent of the paid-in guarantee stock. [New section; approved March 23, 1907; in effect July 1, 1907.]

§ 642. A stockholder or investor, desiring to withdraw from any such corporation or to surrender a part or all of his stock, or investment certificate, may do so by giving thirty days' notice, in writing, of his intention or desire so to do. On the expiration of such notice, he is entitled to receive the full amount paid in upon the stock or investment certificate surrendered, exclusive of the entrance or withdrawal fee, together with such proportion of the earnings thereon as the by-laws may provide, or as may be fixed by the board of directors; but not more than one half of the monthly receipts in any one month must be applied to withdrawals for that month, without the consent of the board of directors, and no stockholder must be permitted to withdraw whose stock is pledged to the corporation as security for a loan, until such loan is fully paid. All withdrawals must be paid in succession in the order that the notices of intention are given. Whenever the demands of withdrawing stockholders or investors exceed the money applicable to their payment, the notices of intention to withdraw must be registered in the order of filing and payments thereon must be made in succession, in the order that such notices were filed and registered. The board of directors may permit the withdrawal of a part of the accumulations to the credit of a stockholder or member, on shares of installment stock not issued in serial form, without thereby reducing the number of shares held by him. [New section; approved March 23, 1907; in effect July 1, 1907.]

§ 643. Any person of full age and sound mind may become a member of an association by taking one or more shares therein and subscribing to the by-laws, and annexing to his signature his postoffice address. A minor may hold shares in the name of a parent, guardian, or next friend, as trustee. The shares of stock in any such corporation held by any person, to the

extent of one thousand dollars, shall be exempt from execution. [New section; approved March 23, 1907; in effect July 1, 1907.]

§ 644. All building and loan associations, as in this title defined, doing business in this State, shall be under the supervision and control of such official or officials as are by law vested therewith; and except in the manner provided in this title, no corporation, firm, or association shall conduct or carry on the business of accumulating the savings of its shareholders, members, or investors, and loaning such accumulations to them, in the manner of building and loan associations. [New section; approved March 23, 1907; in effect July 1, 1907.]

§ 645. Every association organized under the provisions of this title, and every other association doing a similar business, shall annually make a full report, in writing, of the affairs and condition of such corporation, within thirty days after its annual meeting, to the official or officials vested with powers of State supervision and license. Such reports shall be verified by the oath of the officers making the same, and a copy of the same shall be delivered to every stockholder, from the office of the corporation, who may call for such report. Every association shall make any further reports which the said official or officials may require, and in such form and as to such matters relating to the conduct of the business of the association as such official or officials may designate. Any willfully false statement in making and verifying said report shall be perjury. Any such association which shall fail to furnish the said official or officials any such report required, within thirty days after demand, shall forfeit the sum of ten dollars per day for every day such report shall be delayed or withheld, which may be recovered in an action brought by the Attorney-General in the name of the people of this State; and all moneys so recovered shall be paid to the Treasurer of this State, who shall pay the same into such fund as may be provided by law, for the purposes of the official or officials vested with power of supervision and license. [New section; approved March 23, 1907; in effect July 1, 1907.]

§ 646. No building and loan association, or company, association, or corporation, organized under the laws of any other State or Territory, to carry on a business of a like character to

that authorized by this title, shall be allowed to do business, or to sell their stock in this State, without first having deposited with the State Controller or Treasurer the sum of fifty thousand dollars in money, or in United States bonds or municipal bonds of this State, or in mortgages upon real estate located within this State, as a guarantee fund for the protection and indemnity of residents of the State of California, with whom such companies, associations, or corporations shall do business; the fund so deposited to be paid by the custodian thereof, to the residents of California only, and not then until proof of claim by final judgment has been filed with the custodian of said fund against such foreign company, association, or corporation. Any of the securities so deposited may be withdrawn at any time upon others herein provided for, of like amount, being substituted therefor. Any person or persons who shall be found in this State as agent, or in any other capacity, representing such foreign company, association, or corporation, which has not complied with the provisions of this section, shall be deemed guilty of a misdemeanor, and upon conviction shall be punished by a fine not exceeding one thousand dollars, or by imprisonment in the county jail, not exceeding twelve months, or by both such fine and imprisonment. [New section; approved March 23, 1907; in effect July 1, 1907.]

§ 647. Any building and loan association may invest in or loan upon bonds of the United States, of the State of California, or of the counties or municipalities or school districts of said State, but not to exceed twenty-five per cent of its capital. [New section; approved March 23, 1907; in effect July 1, 1907.]

§ 648.

The name "building and loan association" as used in this title shall include:

First-Corporations formed for the purpose of receiving money from, and loaning money to, their members only.

Second-Corporations, associations, companies, co-partnerships, and individuals transacting the business of issuing or selling bonds, debentures, certificates, shares of stock, or other papers, by whatever names said instrument may be designated, whether said instruments are issued for money paid in advance or for money to be paid in installments; provided, always, that