home building, and savings among the stockholders; the accumulation of savings; the loaning to its stockholders of the funds so accumulated, with the profits and earnings; and the repayment to each stockholder of his savings and profits, when they have accumulated to a certain sum, or at any time when he shall desire the same, as provided in the by-laws, or when the corporation shall desire to repay the same; and shall also state that it is formed for all the purposes specified in this title. En. Stats. 1891, 252. Cal.Rep.Cit. 136, 525.

The sections by this act added to the Civil Code, providing for the examination by the bank commissioners of this state of all building and loan associations, apply to all such corporations, whether organized and doing business before or after the passage of this act: Acts of 1891, p. 252, sec. 1.

Act creating board of commissioners of building and loan associations: See post, Appendix, title Building and Loan Associations.

Annuity or endowment insurance: See post, Appendix, title Insurance.

§ 634. Capital stock. The capital stock of such corporations 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-laws, each stockholder shall pay to the corporation, upon each share of stock held by him, such an amount of dues as the by-laws shall provide; and the payment of dues shall so continue on each share of stock issued till it reaches its matured value, or is withdrawn, canceled, or forfeited. The capital stock shall consist of such accumulated dues, together with the earnings and profits of the corporation, and shall in no case exceed two, million dollars, except as to corporations now existing. It shall be divided into shares of matured or par value of one hundred dollars, or two hundred dollars each, as shall be provided in the articles of incorporation and fixed by the by-laws. Certificates of stock shall be issued to each stockholder on the first payment of dues by him. The shares shall be issued in yearly, half-yearly, or quarterly

series, except in corporations now existing, in such amounts in each series, and at such times, as shall be determined by the board of directors. No share of a prior series shall be issued after the issuing of shares in a new series. Shares which have not been pledged as a security for the repayments of a loan shall be called free shares. Shares that have been so pledged shall be called pledged shares. All stock matured and surrendered or canceled in any series shall become the property of the corporation, and may be issued in any subsequent series. Payment of dues on shares of stock in each series shall commence from the time that shares began to be issued in such series. Any such corporation shall have power by its by-laws to impose and collect a fine from each stockholder not exceeding ten per cent of the defaulted amount, for every neglect or refusal to make his payments of dues, or premium, or interest, when due, and to impose and collect a like fine successively on every regular pay-day during such default. Every such corporation hereafter formed shall also have power to charge an entrance fee upon each share of stock issued, not exceeding ten cents on each share, and may also charge a transfer fee not exceeding ten cents on each share, all of which shall be paid into the treasury and accounted for as all other funds of the association; provided, that building and loan associations heretofore incorporated may continue to charge and dispose of such entrance and transfer fees as are prescribed by the by-laws of such corporation. Payment of dues or interest may be made in advance, but no association shall allow interest on such advance payments at a greater rate than six per cent per annum, nor for a longer period than one year. En. Stats. 1891, 253.

$ 635. Retiring free shares. The directors may, at their discretion, under the regulations prescribed in their bylaws, retire the free shares of any series of stock, at any time after four years from the date of their issue, by enforcing the withdrawal of the same; but whenever there shall remain in any series, at the expiration of five years after the date of its issue, an excess above one hundred free shares of the par value of two hundred dollars each, or two hundred free shares of the par value of one hundred

dollars each, then it shall be the duty of the directors to retire annually twenty-five per centum of such excess existing at said expiration of five years after the date of its issue, so that no more than one hundred free shares shall remain in such series at the expiration of rine years from the date of its issue; provided, that no more than one half the monthly receipts be used for that purpose; and thereafter the directors may, in their discretion, retire such other free shares as they consider to the best interest of the association to retire; provided, that whenever, under the provisions of this section, the withdrawal of shares is to be enforced, the shares to be retired shall be determined by lot, drawn from all free shares in the series, as shall be regulated by the by-laws, and the holders thereof shall be paid the amount actually paid in, and the full amount of earnings at the date of last apportionment of profits. En. Stats. 1891, 254.

§ 636. Maturity of stock. When the stock in any series shall have reached its matured value, payment of dues thereon shall cease, and all of the stockholders in such series who have borrowed from the association shall be entitled to have their securities returned to them, and a satisfaction of the mortgages made by them to the association; and the holders of free shares of stock in such series shall be paid out of the funds of the association the matured value thereof, with such rate of interest as shall be determined by the by-laws, from the time the board of directors shall declare such share to have matured until paid; but at no time shall more than one-third of the receipts of the association be applicable to the payment of matured shares, without the consent of the board of directors. The order of the payment of the matured shares shall be determined by the by-laws. En. Stats. 1891, 254.

§ 637. Loans and installments. The moneys in the hands of the treasurer, and such sums as may be borrowed by the corporation for the purpose, shall be loaned out in open meeting to the member who shall bid the highest premium, or may be loaned at such premium as may be fixed from time to time, by the board of directors; and the premium may be deducted from the amount of the

loan, or such proportion may be deducted as the by-laws shall provide, and in that case the balance of said premium shall be payable in such installments as the by-laws shall determine; provided, however, that where the premium is payable in installments, the number of installments into which the same is divided shall be uniformly applicable to all loans made by the corporation, and shall be payable at the times and in the manner as provided in the by-laws; and provided further, that in no case shall the amount loaned exceed the matured value of the shares pledged to secure the loan. En. Stats. 1891, 254. Cal.Rep.Cit. 136, 526.

§ 638.

Rate of interest. Security. The rate of interest on all loans may be fixed by the by-laws; but in case the by-laws fail to fix the rate, then it shall be fixed from time to time by the board of directors. 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 transfer and pledge to the association of at least one share of stock as collateral security for the repayment of the loan, or in lieu of a mortgage or deed of trust there may be pledged and transferred to the association for the payment of the loan, free shares, the withdrawal value of which under the by-laws at the time of such borrowing shall exceed the amount borrowed and interest thereon for six months. At the discretion of the board of directors the borrower may repay the loan and all arrears and interest and fines thereon at any time upon surrender of the shares pledged for the loan. En. Stats. 1891, 255. Am'd. 1897, 30; 1900-01, 268.

$639. Forfeiture arrears in payments. Whenever any member shall be six months in arrears in the payment of his dues upon free shares, the secretary shall give him notice thereof, in writing, and a statement of his arrearages, by mailing the same to him at the last postoffice address given by him to the association, and if he shall not pay the same 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 borrowing member shall be six months in arrears in the payment of his dues, or interest, or premium, 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 the commencement of the action, of all shares pledged as collateral security for the loan, shall be applied to the payment of the loan, and said shares, from that time, shall be deemed surrendered to the association. En. March 21, 1872. Am'd. 1873-4, 217. Rep. 1891, 252. En. Stats. 1891, 255.

Cal.Rep.Cit. 93, 306; 116, 414; 131, 341.

$640. Purchase of real estate. 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 nave an interest; and may sell, convey, lease, or mortgage the same, at pleasure, to any person or persons. En. March 21, 1872.

Rep. 1891, 252. En. Stats. 1891, 255.

Cal. Rep.Cit. 93, 309; 131, 341.

$ 641. Borrowing money. Any association organized in pursuance of the provisions of this act may borrow money for the purpose of making loans or paying withdrawals. En. March 21, 1872. Rep. 1891, 252. En. Stats. 1891, 255. Cal.Rep.Cit. 131, 341.

$642. Profits and losses. Profits and losses shall be apportioned at least annually, and shall be apportioned to all the shares in each series outstanding at the time of such apportionment, according to the actual value of such shares as distinguished from their withdrawal value. En. March 21, 1872. Rep. 1891, 252. En. Stats. 1891, 255. Cal Rep.Cit. 131, 342.

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