(f)-Security for Depositors.-All moneys belonging to each department, whether cash on hand or with other banks, and the investments made, shall be held solely for the repayment of the depositors in said department, until all depositors of such department shall have been paid, and the overplus then remaining shall be applied to the other liabilities of such bank. Act of the Legislature, approved March 1, 1909. (g)-Window-signs.-Every individual, firm or corporation doing a banking business in this state must, on all its window-signs and in advertising, and on letter-heads and other stationery on which its business is transacted, use the word "savings" if it conducts a savings business, "trust" if it conducts a trust department, and the word "commercial" if it conducts a commercial department. Act of the Legislature, approved March 1, 1909. Section 902. UNINCORPORATED BANKERS. Every person or number of persons, not being incorporated, engaged in the business of banking or publicly receiving money on deposit, must conduct such business under a name which shows the true name of all persons engaged therein, unless such person or persons are doing business as a special partnership. Act of the Legislature, approved March 1, 1909. Section 903.-DIVIDENDS.-The directors of banks having a capital stock may, at such times and in such manner as the by-laws prescribe, declare and pay dividends to depositors and stockholders of so much of the profits of the bank, and of the interest arising from the capital and deposits, as may be appropriated for that purpose under the by-laws or under their agreements with depositors, but every such bank shall, before the declaration of such dividend, carry at least one-tenth (10) part of the net profits of the stockholders for the preceding half-year to its surplus or reserve fund until the same shall amount to twenty-five per centum of its paid-up capital stock. But the whole or any part of such surplus or reserve fund, if held as the exclusive property of stockholders, may at any time be converted into paid-up capital stock, in which event such surplus or reserve fund shall be restored in manner as above provided until it amounts to twenty-five per centum of the aggregate paid-up capital stock. A larger surplus or reserve fund may be created, and nothing herein contained shall be construed as prohibitory thereof. The capital and the assets of the bank are a security to depositors and stockholders, depositors having the priority of security over the stockholders, but the by-laws may provide that the same security shall extend to deposits made by stockholders. Act of the Legislature, approved March 1, 1909. Section 904.-CHANGE TO CAPITAL STOCK.— Every corporation heretofore created under the laws of this State, doing a banking business therein, and which has no capital stock, may elect to have a capital stock, and may issue certificates of stock therefor; provided, that no such corporation shall use or convert any moneys or funds theretofore belonging to it, or under its control, into capital stock; but such funds or moneys must be held and managed only for the purposes and in the manner for which they were created. Before such change is made, a majority of the members of such corporation present at a meeting called for the purpose of considering the proposition whether it is best to have a capital stock, its amount, and the number of shares into which it shall be divided, must vote in favor of having a capital stock, fix the amount thereof, and the number of shares into which it shall be divided. Notice of the time and place of holding such meeting, and its object, must be given by the president of such corporation by mailing notice of such meeting to each member of such corporation at his last known post office address at least ten days prior to the day fixed for such meeting, and by publication in some newspaper printed and published in the county, or city and county, in which the principal place of business of the corporation is situated, at least once a week for three successive weeks prior to the holding of such meeting. A copy of the proceedings of this meeting, giving the number of persons present, the votes taken, the notice calling the meeting, the proof of its publication, the amount of capital actually subscribed, and by whom, all duly certified by the president and secretary of the corporation, must be filed in the office of the Secretary of State and clerk of the county where the articles of incorporation are filed. Thereafter such corporation is possessed of all the rights and powers, and is subject to all the obligations, restrictions, and limitations, as if it had been originally created with a capital stock. Act of the Legislature, approved March 1, 1909. Section 905.-SAFE DEPOSIT DEPARTMENT.— Any bank may conduct a safe deposit department, but shall not invest more than one-tenth of its capital and surplus in such safe deposit department. Act of the Legislature, approved March 1, 1909. Section 906.-SALE OF ASSETS.-Any bank may sell the whole or any portion of its assets to any other bank which may purchase its assets after obtaining the consent of the stockholders of the selling and of the purchasing bank holding of record at least two-thirds of the issued capital stock of each of such corporations; such consent to be expressed either in writing executed and acknowledged by such stockholders and attached to the instrument of sale, or to a copy thereof, or by vote at a stockholders' meeting of such banks called for that purpose. The selling and purchasing banks may for such purposes enter into an agreement of sale and purchase, which agreement shall contain all the terms and conditions connected with the sale and purchase of its assets. Such agreement shall contain proper provision for the payment of liabilities of the selling bank, and in this particular shall be subject to the approval of the Superintendent of banks; and shall not be valid until such approval is obtained. Such agreement may contain provisions for the transfer of all deposits to the purchasing bank, subject, however, to the right of every depositor of the selling bank to withdraw his deposit in full on demand after such transfer, irrespective of the terms under which it was deposited with the selling bank. Act of the Legislature, approved March 1, 1909. Section 907.-TRUST FUNDS.-Any bank receiving trust funds in accordance with the provisions of this act relating to trust companies must not mingle such trust funds with the other assets of the corporation, and such funds shall not be carried nor counted as any part of the lawful reserve provided for in this act. The officers of any bank who knowingly violate or consent to the violation of this provision shall be guilty of a felony. Act of the Legislature, approved March 1, 1909. OFFICER MAY NOT Section 908. – BORROW BANK FUNDS.-No officer or employee of any bank shall, directly or indirectly, for himself or as the partner or agent of others, borrow any of the deposits or other funds of such bank, nor shall he nor any director become an endorser or surety for loans to others, nor in any manner be obligor for moneys borrowed or loaned by such banks; except that a commercial bank may buy from, or discount, for a director of said bank, bills of lading and bills of exchange drawn in good faith against actually existing value actually owned by the director negotiating the same. The office of any officer or employee who acts in contravention of the provisions of this section shall immediately become vacant, and he shall be guilty of a misdemeanor. Act of the Legislature, approved April 21, 1911. Section 909.-PURCHASE OF CAPITAL STOCK.No bank shall purchase or invest its capital or money of its depositors, or any part of either, in the shares of its own capital stock; nor loan its capital or the money of its depositors, or any part of either, on the shares of its own capital stock, unless such purchase or loan shall be necessary to prevent loss on debts previously contracted in good faith. Stock thus purchased or carried shall, within six months from the time of its purchase, be sold or disposed of at public or private sale. The officers of any bank who knowingly violate or consent to the violation of this provision shall be guilty of a felony. Act of the Legislature, approved Marrch 1, 1909. Section 910.-OFFICER MAY NOT SELL MORTGAGE ON REAL ESTATE TO BANK.-No director, or officer, or employee, or controlling stockholder of any bank shall, directly or indirectly, for his own account, for himself, or as the partner or agent of others, sell or transfer, or cause to be sold or transferred to the bank of which he is a director, officer, employee, or controlling stockholder, any mortgage on real estate or contract arising from the sale of real estate made by any corporation or syndicate in which such director or officer, or employee, or controlling stockholder is personally or financially interested, without the consent in writing of the superintendent of banks. Any director, or officer, or employee, or controlling stockholder of any bank who knowingly violates or consents to the violation of this provision shall be deemed guilty of a felony. Act of the Legislature, approved April 21, 1911. Section 911.-PURCHASE OF BONDS.-No bank receiving deposits of money shall purchase, agree to purchase, underwrite or guarantee any bond issue in excess of five per centum of its assets, except bonds of the United States, of the State of California, of the cities, cities and counties, counties or school districts of this State. Act of the Legislature, approved March 1, 1909. |