notes taken for premium on risks which are undetermined and outstanding at the time of making the dividend must not be treated as profits, nor divided, except as provided in Chapter II. of this title.

§ 418. If any insurance corporation is under liabilities for losses to an amount equal to its capital stock, and the president or directors, after knowing the same, make any new or further insurance, the estates of all who make such insurance, or assent thereto, are severally and jointly liable for the amount of any loss which takes place under such insurance.

$419. Every company, corporation, or association hereafter formed or organized under the laws of this State for the transaction of business in fire, marine, inland navigation, or life insurance, must have a subscribed capital stock equal to at least two hundred thousand dollars, twenty-five per cent. of which must be paid in previous to the issuance of any policy, and the residue within twelve months from the day of filing the certificate of incorporation. No person, corporation, or association organized or formed under the laws of any other State or country, as a stock company, must transact any such insurance business in this State, unless such person, corporation, or association has a paid-up capital stock equal to at least two hundred thousand dollars in available cash assets, over and above all liabilities for losses reported, expenses, taxes, and reinsurance of all outstanding risks, as provided in section six hundred and two of the Political Code of this State. Nor must any person, corporation, or association, organized or formed under the laws of any other State or country as a mutual insurance company, transact any such insurance business in this State, unless such person, corporation, or association possesses available cash assets equal to at least two hundred thousand dollars, over and above all liabilities for losses reported, expenses, taxes, and reinsurance of all outstanding risks, as provided in said section six hundred and two of the Political Code of this State. [In effect April 1, 1878.]

§ 420. Every company, corporation, or association hereafter formed or organized under the laws of this State for the cransaction of business in any kind of insurance not enumer ated in section four hundred and nineteen of the Civil Code must have a subscribed capital stock equal to at least one hundred thousand dollars, which must be paid in at the time

and in the manner prescribed for the payment of the capital stock of a corporation organized under section four hundred and nineteen of said Civil Code. No company, corporation, or association, formed or organized under the laws of any other State or country as a stock company, must transact any such insurance business in this State without a paid-up capital stock of not less than one hundred thousand dollars in available cash assets, over and above all liabilities for losses reported, expenses, taxes, and reinsurance of all outstanding risks, as provided in section six hundred and two of the Political Code of this State. Nor must any company, corporation, or association, formed or organized under the laws of any other State or country as a mutual insurance company, transact any such insurance business in this State unless such company, corporation, or association possesses available cash assets equal to at least one hundred thousand dollars over and above all liabilities for losses reported, expenses, taxes, and reinsurance of all outstanding risks, as provided in said section six hundred and two of the Political Code of this State [In effect April 1, 1878.]

CHAPTER II.

FIRE AND MARINE INSURANCE CORPORATIONS.

SECTION 424. Payment of subscriptions. Capital to be all paid in twelve months.

425. Certificate of capital stock paid up to be filed, and when

426. Property which may be insured.

427. Funds may be invested, how.

428. Rate of risk.

429. Amounts to be reserved before making dividends.

430. Reservation by companies with less than $200,000 capital. 431. Amounts to be reserved by life insurance companies.

§ 424. The entire capital stock of every fire or marine insurance corporation must be paid up in cash within twelve months from the filing of the articles of incorporation, and no policy of insurance must be issued or risk taken until twentyfive per cent. of the whole capital stock is paid up.

$425. The president and a majority of the directors must, within thirty days after the payment of the twenty-five per ent. of the capital stock, and also within thirty days after the

payment of the last instalment or assessment of the capital stock limited and fixed, prepare, subscribe, and swear to a certificate setting forth the amount of the fixed capital and the amount thereof paid up at the times respectively in this section named, and file the same in the office of the county clerk of the county where the principal place of business of the corporation is located, and a duplicate thereof, similarly executed, with the insurance commissioner.

§ 426. Every corporation formed for fire or marine insur ance, or both, may make insurance on all insurable interests within the scope of its articles of incorporation, and may cause itself to be reinsured.

§ 427. Corporations hereafter organized under the laws of this State for the transaction of business in any kind of insurance may invest their capital and accumulations in the following named securities :

1. In the purchase of or loans upon interest-bearing bonds of the United States government;

2. In the purchase of or loans upon interest-bearing bonds of any of the States of the United States not in default for interest on such bonds;

3. In the purchase of or loans upon interest-bearing bonds of any of the counties and incorporated cities and towns of the State of California not in default for interest on such bonds;

4. In loans upon unincumbered real property, or upon merchandise in warehouse, worth at least one hundred per cent. more than the amount loaned.

But no investment in the securities named in subdivisions one, two, and three of this section must be made in amount exceeding the par value of such securities, nor exceeding their market value. [In effect April 1, 1878.]

$428. Fire and marine insurance corporations must never take, on any one risk, whether it is a marine insurance or an insurance against fire, a sum exceeding one tenth part of their capital actually paid in, and intact at the time of taking such risk, without reinsuring the excess love one tenth. [In effect July 1, 1874.]

$429. No corporation formed hereafter under the laws of this State, and transacting fire, marine, inland navigation in、urance business, or insurance provided for by section four

hundred and twenty of this Code, must make any dividends except from profits remaining on hand after retaining unimpaired :

1. The entire subscribed capital stock;

2. All the premiums received or receivable on outstanding marine or inland risks, except marine time risks;

3. A fund equal to one half of the amount of all premium. on all other risks not terminated at the time of making such dividend;

4. A sum sufficient to pay all losses reported or in course of settlement, and all liabilities for expenses and taxes. [In effect April 1, 1878.]

§ 430. No fire or marine insurance corporation, with a subscribed capital of less than two hundred thousand dollars, must declare any dividends, except from profits remaining on hand after reserving:

1. A sum necessary to form, with the subscribed capital stock, the aggregate sum of two hundred thousand dollars; 2. All the premiums received or receivable on outstanding marine or inland risks, except marine time risks;

3. A fund equal to one half the amount of all premiums on fire risks and marine time risks not terminated at the time of making such dividend ;

4. A sum sufficient to pay all losses reported or in course of settlement, and all liabilities for expenses and taxes.

§ 431. No corporation formed under the laws of this State, and transacting life insurance business, must make any dividends, except from profits remaining on hand after retaining unimpaired:

1. The entire capital stock;

2. A sum sufficient to pay all losses reported or in course of settlement, and all liabilities for expenses and taxes;

3. A sum sufficient to reinsure all outstanding policies, as ascertained and determined upon the basis of the American Experience Table of Mortality, and interest at the rate of four and one half per cent. per annum. [In effect April 1 *1878.]

TAX.

An Act imposing a Tax on the Issue of Certificates of Stock Corporations.

SECTION 1. It shall be lawful for the secretary of every corporation in the State of California to demand and receive of any person requiring the issue to him of any certificate of stock in such corporation, a fee of ten cents in coin for each certificate, whether such certificate be the original issue or an issue on transfer, and such certificate shall not be delivered by the secretary until such fee shall be paid.

SEC. 2. It shall be the duty of the secretary of every such corporation, on the first Monday in January, April, July, and October, of each year, to make returns, under oath, to the tax collector, or officer acting as tax collector, of the number of certificates issued by the corporation of which he is secretary, during the quarter preceding, and pay to such tax collector the sum of ten cents in coin for each and every certificate so issued by said corporation, except that in the city and county of San Francisco such returns and payments shall be made to the license collector or officer engaged in the collection of licenses in said city and county.

SEC. 3. Such tax collector, or license collector, is hereby. authorized and empowered to examine such secretary, under oath, as to the truth of said returns, and to examine, if necessary, the books of such corporation, so far as they relate to the transfer of stock, or issue of certificates, and if the returns. are not correct, then he is authorized to commence an action against such corporation in any court of competent jurisdie tion, in the name of the people of the State of California, for a penalty of one hundred dollars for each certificate issued by such corporation and not so returned under oath, and several penalties may be joined in such action.

SEC. 4. Any person violating the provisions of section two of this act shall be deemed guilty of a misdemeanor, and false swearing to any return provided in section two, shall be deemed perjury.

SEC. 5. All moneys collected under the provisions of this act shall be paid by such tax collector, or license collector, into the county treasury, and shall become a part of the goeral fund, or if there shall in any county be no general fund, then the same shall become a part of such fund as the board of supervisors may direct. [Approved April 1, 1878. Took effect first Monday of April. Stats. 1877-8, p. 955.]