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of those who shall have been selected to manage the affairs of the corporations for the first six months.
SEC. 7. Corporations formed under the provisions of this Act shall be capable in law to lease, purchase, have, hold, use, take possession of, and enjoy, in fee simple, or otherwise, any personal or real estate within this State necessary for the uses and purposes of such corporation, and the same to sell, lease, deed in trust, alien, and dispose of at their pleasure. All real estate owned by the corporation shall be held in the name of the same, and all conveyances made by such corporation shall be signed by the president and secretary, and attested by the corporate seal; provided, that no corporation formed under this Act shall engage in any mercantile, commercial, or mechanical business. [Amendment approved March 10, 1885.]
SEC. 8. The by-laws of all corporations formed under the provisions of this Act without capital stock shall prescribe how members of the corporation shall be admitted, and how expelled, and how officers, agents, and servants shall be elected or appointed; and such provisions in the by-laws of any such corporation shall have full force and effect as between private parties and said corporation.
SEC. 9. Corporations formed under the provisions of this Act shall determine by their by-laws the manner of calling and conducting their meetings, the number of members that shall constitute a quorum, the manner of levying and collecting assessments, the officers of the same, and the manner of their election or appointment, and their tenure of office; and may prescribe suitable penalties for the violation of their by-laws, not exceeding in any case one hundred dollars for any one offense.
SEC. 10. Corporations formed under the provisions of this Act having no board of trustees, or directors, or executive committee, shall have power to levy and collect from the members thereof, for the purpose of paying the proper and legal expenses of such corporation, assessments in the manner which may be prescribed by the by-laws of such corporation, and not otherwise.
SEC. 11. Any existing corporation, association, or institution formed for either of the purposes contemplated by this Act, may, by a vote of a majority of the members voting at a meeting called specially for the purpose, become entitled to the benefit of this Act on filing the certificate required by this Act;. provided, a notice of the meeting and its object shall be published
in a paper of general circulation in the county in which the principal place of business of such corporation, association, or institution is located, for at least ten days previous to the day on which such meeting is to be held; and, provided, further, that the certificate herein provided to be filed shall be signed and acknowledged by at least five of the members of such corporation, association, or institution, and contain a list of the members who desire to become members of the corporation. And upon the filing of such certificate as provided by this Act, the persons signing and acknowledging the same, and those named therein, and such persons as shall thereafter become their associates or successors, shall be a body politic and corporate, with all the powers and privileges conferred by this Act, and shall thereupon succeed and become entitled to all the rights, franchises, and property of such corporation, association, or institution.
SEC. 12. This Act shall be in force from and after its passage; and all corporations formed under it are hereby exempted from the operation of all laws and parts of laws inconsistent with its provisions.
ASSOCIATIONS FOR LENDING MONEY ON PERSONAL PROPERTY.
An Act to provide for the incorporation of associations for lending money on personal property, and regulating the same, and to forbid certain loans of money, property or credit.
[Approved March 21, 1905.]
The people of the State of California, represented in Senate and Assembly, do enact as follows:
SECTION 1. Any corporation which shall be incorporated under the general incorporation laws of this State, and the provisions of this Act, authorized by its articles of incorporation to loan money at interest upon the pledge or mortgage of goods or chattels, or of safe securities, shall be granted all the powers and privileges necessary for the execution of these purposes;
provided, that nothing herein contained shall authorize any such corporation to engage in the business of banking.
SEC. 2. Corporations may be organized under the provisions of this Act, with a capital stock of fifty thousand dollars ($50,000.00), or over, but no business shall be transacted by any such corporation until all the capital stock of such corporation has been actually and in good faith subscribed, and at least fifty per centum thereof shall have actually been paid in, in cash, or in interest-bearing securities, to be approved by the Board of Bank Commissioners.
SEC. 3. Any such corporation, before transacting any business, shall be required to obtain from the Board of Bank Commissioners a license in the form to be prescribed by them, authorizing such corporation to transact business in pursuance of the provisions of this Act.
SEC. 4. Every corporation applying for a license under this Act shall, at the time of making the application, execute and file a bond, to the people of the State, in an amount equal to one twentieth of its capital stock, with the Board of Bank Commissioners, to be approved by them, conditioned for the faithful performance of the duties and obligations pertaining to the business so licensed and for a faithful compliance with the provisions of this Act. Said bond shall be executed by a domestic or foreign corporation authorized by the Insurance Commissioner to transact within this State, the business of surety insurance as surety. Such bond shall be renewed and refiled annually, in January of each year, or the corporation shall, within thirty days thereafter, cease doing business and proceed to close up its affairs.
SEC. 5. Such corporations when they have disposable funds may make advances on all goods, chattels and savings bank deposit books, or on all safe securities offered, embraced within its rules and regulations, but in no case shall the amount loaned to any one person exceed the sum of three hundred dollars ($300.00).
SEC. 6. Such corporation shall be entitled to charge and receive upon each loan made by it upon a mortgage of personal property, which charge shall include all services of every character in connection with said loan, except upon the foreclosure of the security, interest or discount at a rate not exceeding one and one half (12) per centum per month. It may also charge for the first examination of the property to
be mortgaged and for drawing and filing the necessary papers, and for all other expenses, a sum not exceeding five dollars ($5.00) if a loan shall actually be made; but no further charge for examination of the property or for drawing or filing papers, or for any services or expenses, or upon any pretext whatsoever, beyond the said charge for interest or discount, shall be made upon any renewal or extension of the loan, or any transfer or change of the loan, or upon any other occasion, within one year from the date of the original loan, or oftener than once in each period of twelve months thereafter; provided, however, it shall be lawful to charge for any fire insurance that may be at any time effected. It may also charge and receive upon each loan made by it upon the pledge of personal property, which charge shall include all services of every character in connection with said loan, except upon the sale of the security at public auction, as hereinafter provided, interest or discount at a rate not exceeding one and one half (12) per centum per month; provided, however, that all loans shall be subject to one month's interest and no loan shall be settled at a less charge than fifteen cents. A charge of one half (2) of one per centum per month additional may be made upon pledges for storage, burglary and fire insurance. In case of loss by fire or theft, such corporation shall not be liable, however, for more than the amount loaned, and twenty-five (25) per centum thereof in addition.
SEC. 7. Such corporation shall give to each pledgor a memorandum or ticket inscribed with the name of the corporation, mentioning the article or articles, security or securities, pledged, the name of the pledgor, the amount of the loan, the rate of compensation, the date when made, the date when payable, the page of the book where recorded, and a copy of section six (6) and eight (8) of this Act.
SEC. 8. Property pledged to such corporations shall not be sold prior to six (6) months after the day fixed in the contract for payment, and all sales shall be at public auction, and notice of any such sale shall be published at least five (5) days previous thereto in a daily newspaper printed in the city, or city and county, in which any such corporation is located. If upon the sale of any such property at public auction there be any surplus left, after paying the cost of advertising and sale, and the amount of the loan and interest due thereon, the same shall be paid over to the pledgor or his legal representative or
assigns on demand, any time within two years after such sale. It shall not be necessary for such corporation to sell at public auction any savings bank deposit book pledged for a loan, but the corporation may collect the money due thereon or so much thereof as may be necessary to pay the debt, in such manner and at such time as in the judgment of the directors of such corporation will best serve the interest of all parties, holding the net surplus, if any, for the owner, his legal representative or assigns. Loans on pledges may be renewed from time to time, but in no case longer than one year.
SEC. 9. A corporation organized under this Act shall be authorized to borrow money in any amount to be used in its business not exceeding in the aggregate the amount of its capital stock.
SEC. 10. Such corporation shall file with the Board of Bank Commissioners, during the months of January and July of each year, a statement, under oath, of the condition of such corporation at the close of business on the thirty-first day of December, and the thirtieth day of June, respectively next preceding, showing its actual financial condition. The said statement shall also be in such form, and contain such reports, returns, and information as to the affairs, business, condition, and resources of the corporation, as the said Commissioners may from time to time prescribe and require.
SEC. 11. The said Board of Bank Commissioners shall have access to the vaults, books, and papers of any such corporation, and it shall be their duty to inspect, examine and inquire into its affairs and take proceedings in regard to it, in the same manner and to the same extent as if said corporation were a savings bank or a banking corporation.
SEC. 12. No person, firm or corporation, other than corporations organized pursuant to this Act shall, directly or indirectly, charge or receive any interest, discount or consideration greater than at the rate of one and one half (12) per centum per month upon the loan, use or forbearance of money, goods or things in action, less than three hundred dollars ($300.00) in amount or value, or upon the loan, use or sale of personal credit in anywise, where there is taken for such loan, use or sale of personal credit, any security upon any upholstery, furniture or household goods, oil paintings, pictures or works of art, pianos, organs, musical instruments, or sewing machines, plate or silverware, iron or steel safes, professional libraries, or