Corporation Laws

SEC. 9. So long as the corporation so depositing shall continue solvent, such corporation shall be permitted to receive from said Treasurer the interest or dividends on said deposit; provided, however, that when it shall appear to the Board of Bank Commissioners, from the semi-annual report of any such corporation, that the value of the personal property and cash held and possessed by such corporation, by virtue of the provisions of this Act and any amendment thereof, exceeds ten times the amount of the deposit aforesaid, said board shall require said corporation to forthwith increase its said deposit to the sum of five hundred thousand dollars in such securities. And whenever it shall appear to said board that the amount of personal property and cash so held by any such corporation has been reduced below ten times the value of its original deposit above provided for, and said corporation is not in any default in its duties and obligations hereunder, they shall allow such corporation to reduce its said deposit to the sum of two hundred thousand dollars, by the withdrawal of such additional deposit until such time as an increase in its holdings shall again require an additional deposit, as herein before provided.

SEC. 10. When any part of such deposit is made in bonds and mortgages, it shall be accompanied by full abstracts of titles and searches, and shall be examined and approved by or under the direction of the said board. The fees for an examination of title by counsel, to be paid by the corporation making the deposit, shall not exceed twenty dollars for each mortgage, and the fee for each appraiser, not exceeding two, besides expenses, shall be five dollars for each mortgage.

SEC. 11. It shall not be lawful for any such corporation to accept any trust or deposit, as hereinbefore provided, after the passage of this Act, without first procuring from the Board of Bank Commissioners a certificate of authority, stating that such corporation has complied with the requirements of this Act in respect to such deposit.

SEC. 12. Such corporation shall file with the said 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 financial condition. Also, a list and brief description of the trusts held by such corporation, the source of the appointment thereto, and the amount of real and

personal estate held by such corporation by virtue thereof, except that mere mortgage trusts, wherein no action has been taken by such corporation, shall not be included in such statement. 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 board may from time to time prescribe and require.

SEC. 13. Such statement shall be verified by the affidavit of one of the managing officers and two of the directors or trustees of such corporation, who shall also state in such affidavit that they have examined the assets and books of such corporation for the purpose of making such statement. Any false swearing in regard to such statement shall be deemed perjury, and shall be subject to the punishment prescribed by law for such offense.

SEC. 14. The said Board of Bank Commissioners are hereby authorized and empowered to address any inquiries to any such corporation or the officers thereof, in relation to its doings and condition, or any other matter connected with its affairs; and it shall be the duty of any such corporation or person so addressed to promptly reply, in writing, to such inquiries; and they may also require reports from any such corporation at any time they may deem desirable. It shall be the duty of one or more of the Bank Commissioners, as designated by the Commissioners, annually, or as often as in their judgment they may deem it necessary, without previous notice, to visit and to make personal examination of the solvency of any such corporation, its ability to fulfill all its obligations, and report its condition to the Attorney-General as soon as may be after such examination.

SEC. 16. Such Commissioners shall have power to administer an oath to any person whose testimony may be required on any such examination, and to compel the appearance and attendance of any such person, for the purpose of examination, by summons, subpœna, or attachment, in the manner now authorized in respect to the attendance of persons as witnesses in courts of record in this State; and all books and papers which may be deemed necessary to examine by the Commissioners shall be produced, and their production may be compelled in like manner.

SEC. 17. Whenever it shall appear to the Board of Bank Commissioners, from any such examination or report, that any

such corporation has committed any violation of law, or is conducting its business in an unsafe or unauthorized manner, they shall, by an order under their hands, direct the discontinuance of such illegal and unsafe or unauthorized practice, and strict conformity with the requirements, of the law, and with safety and security in its transactions; and whenever any such corporation shall refuse or neglect to make any such report as hereinbefore required, or to comply with any such order as aforesaid, or whenever it shall appear to the said board that it is unsafe or inexpedient for any such corporation to continue to transact business, they shall communicate the facts to the Attorney-General, who shall thereupon institute such proceedings against the corporation as the nature of the case may require.

SEC. 18. If the Board of Bank Commissioners shall, at any time, have satisfactory evidence that any semi-annual statement or other report required or authorized by this Act, made or to be made by any officer or officers of such corporation, is false, it shall be the duty of the said board to immediately revoke the certificate of authority granted on behalf of such corporation, and mail a copy of such revocation to said corporation and to the clerk of every court of record in this State. Such revocation shall not be set aside until satisfactory evidence shall be given to said Board of Bank Commissioners that such corporation is in substance and in fact in the condition set forth in such statement or report, and that all the requirements of this Act have been complied with. Such revocation shall be sufficient cause for the removal of such corporation from any appointment held by it under the provisions of this Act.

SEC. 19. Any corporation which desires to retire from business under this Act, shall furnish to the Board of Bank Commissioners satisfactory evidence of its release and discharge from all the obligations and trusts hereinbefore provided for; whereupon they shall revoke their certificate to such corporation, and thereupon the Treasurer of State shall return to said corporation all its securities.

SEC. 20. All laws and parts of laws in conflict with the provisions of this Act are hereby repealed.

SEC. 21. This Act shall take effect and be in force from and after its passage.

SEC. 22. Any corporation exercising the powers and per

forming the duties provided for in said Act, shall keep inviolate all communications confidentially made to it touching the existence, condition, management, and administration of any trusts confided to it; and no creditor or stockholder of any such corporation. shall be entitled to disclosure of any such communication; provided, however, that the president, manager and secretary of such corporation shall be entitled to knowledge of such communication; and provided further, that in any suit or proceeding touching the existence, condition, management or administration of such trust, the court wherein the same is pending may require disclosure of any such communication. [New section; approved March 20, 1903.]

SEC. 23. The use of the word "trust" in combination or in connection with the word "company," "corporation," "incorporation," "association," "society," "organization," or "syndicate" is hereby prohibited to all persons, firms, associations, companies or corporations, other than corporations provided for by a certain Act of the Legislature entitled "An Act authorizing certain corporations to act as executor and in other capacities and to provide for and regulate the administration of trusts by such corporations," approved April 6, 1891, and any person, firm, association, company or corporation which uses the word "trust" in combination with or in connection with the word "company," "corporation," "incorporation," "association," "society," "organization" or "syndicate" as the name under which business is done or transacted, shall be subject to the provisions of the Act last referred to and to the supervision of the Bank Commissioners as required by the said Act. Any person, firm, association, company or corporation making use of the word "trust" in combination or in connection with the word "company," "corporation," "incorporation," "association," "society," "organization" or "syndicate" in the manner hereinabove mentioned in the transaction of business and not subject to the provisions of said Act and the supervision of the Bank Commissioners as in said Act provided shall forfeit for each day the offense is committed, the sum of one hundred dollars, to be recovered by the Bank Commissioners of the State of California in the manner provided by law. [New section; approved March 18, 1905; in effect immediately.]

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Corporation Laws: (with Citation From, Up To, and Including the 145th ...