[The provisions of the original chapter XIII were taken from the New York Penal Code, §§ 645-668, and were new to the California laws.] CHAPTER XIII. FRAUDULENT INSOLVENCIES BY CORPORATIONS, AND OTHER FRAUDS IN THEIR MANAGEMENT. § 557. FRAUD IN SUBSCRIPTIONS FOR STOCK OF CORPORATIONS. Every person who [1] signs the name of a fictitious person to any subscription for or agreement to take stock in any corporation existing or proposed, and [2] every person who signs to any subscription or agreement the name of any person, knowing that such person [a] has not means or [b] does not intend in good faith to comply with all the terms thereof, or [3] under any understanding or agreement that the terms of such subscription or agreement are not to be complied with or enforced, is guilty of a misdemeanor. Enacted February 14, 1872. As to frauds in keeping accounts in books of corporation, see post, § 563. § 558. FRAUDS IN PROCURING ORGANIZATION OF CORPORATION, OR INCREASING ITS CAPITAL. Every officer, agent, or clerk of any corporation, or of any persons [1] proposing to organize a corporation, or [2] to increase the capital stock of any corporation, who [3] knowingly exhibits any false, forged, or altered book, paper, voucher, security, or other instrument of evidence to any public officer or board authorized by law to examine the organization of such corporation, or to investigate its affairs, or to be allowed an increase of its capital, with intent to deceive such officer or board in respect thereto, is punishable by imprisonment in the state prison not less than three nor more than ten years. Enacted February 14, 1872. As to civil liability for false certificate notice, or report of officer of corporation, see Kerr's Small C. Č., § 316. As to increasing capital stock of corporation, see Kerr's Small C. C., § 359. As to organization of corporation, generally, see Kerr's Small C. C., §§ 283-300a. As to records of corporation and how kept, see Kerr's Small C. C., §§ 377, 378. § 559. UNAUTHORIZED USE OF NAME IN PROSPECTUS, ETC. Every person who, without being authorized so to do, subscribes the name of another to or inserts the name of another in any prospectus, circular, or other advertisement, or announcement of any corporation or joint stock association, existing or intended to be formed, with intent to permit the same to be published, and thereby to lead persons to believe that the person whose name is so subscribed is an officer, agent, member or promoter of such corporation or association, is guilty of a misdemeanor. Enacted February 14, 1872. As to fraud in procuring organization of corporation, see ante, § 558. § 560. MISCONDUCT OF DIRECTORS OF STOCK CORPORATIONS. Every director of any stock corporation who concurs in any vote or act of the directors of such corporation or any of them, by which it is intended, either: 1. To make any dividend, except from the surplus profits arising from the business of the corporation, and in the cases and manner allowed by law; or, 2. To divide, withdraw, or in any manner, except as provided by law, pay to the stockholders, or any of them, any part of the capital stock of the corporation; or, 3. To discount or receive any note or other evidence of debt in payment of any instalment actually called in and required to be paid, or with the intent to provide the means of making such payment; or, 4. To receive or discount any note or other evidence of debt, with the intent to enable any stockholder to withdraw any part of the money paid in by him, or his stock; or, 5. To receive from any other stock corporation, in exchange for the shares, notes, bonds, or other evidences of debt of their own corporation, shares of the capital stock of such other corporations, or notes, bonds, or other evidences of debt issued by such other corporation; -is guilty of a misdemeanor. Enacted February 14, 1872. As to bank officers making illegal investments or loans, see Kerr's Small C. C., § 581. As to bank officers advertising or making statements without showing capital paid up, see Kerr's Small C. C., § 583a. As to persons engaged in banking business being required to show true name, see Kerr's Small C. C., § 582. As to dividends being required to be made from surplus profits, only, see Kerr's Small C. C., § 309. § 561. BANK OFFICER, ETC., OVERDRAWING HIS ACCOUNT, ETC. An officer, director, agent, teller, clerk or employee of any bank, who, either, 1. Knowingly overdraws his account with such bank and thereby obtains the money, notes or funds of any such bank; or, 2. [Asking, etc., commission, etc.] Asks for, receives, or consents or agrees to receive, any commission, emolument, gratuity or reward, or any promise of any commission, emolument, gratuity or reward, or any money, property or thing of value or of personal advantage for procuring or endeavoring to procure for any person, firm or corporation, any loan from, or the purchase or discount of any paper, note, draft, check or bill of exchange by any such bank, or for permitting any person, firm or corporation to withdraw any account with such bank, is guilty of a felony. Enacted February 14, 1872; amendment by Code Commission, Act March 16, 1901, Stats. and Amdts. 1900-1, p. 468; Act held unconstitutional, see History, ante § 5; amendment approved May 17, 1917, Stats. and Amdts. 1917, p. 579. In effect July 27, 1917. § 561a. BANK officer, ETC., ABSTRACTING OR WILFULLY MISAPPLYING MONEY. Any officer, director, trustee, employee or agent of any bank in this state, who abstracts or wilfully misapplies any of the money, funds or property of such bank, or wilfully misapplies its credit, is guilty of a felony. Nothing in this section shall be deemed or construed to repeal, amend or impair any existing provision of law prescribing a punishment for any such offense. Enactment approved May 17, 1917, Stats. and Amdts. 1917, p. 579. In effect July 27, 1917. § 561b. FRAUDS BY DIRECTOR OF BANK. Every director of a bank in this state who 1. In case of the fraudulent insolvency of such bank, shall have participated in such fraud; or 2. Wilfully does any act as such director which is expressly forbidden by law or wilfully omits to perform any duty imposed upon him as such director by law, is guilty of a misdemeanor. The insolvency of a bank is deemed fraudulent unless its affairs appear upon investigation to have been administered clearly, legally and with the same care and diligence that agents receiving a compensation for their services are bound, by law, to observe. Enactment approved May 17, 1917, Stats. and Amdts. 1917, p. 579. In effect July 27, 1917. § 561c. GUARANTY IN SUM BEYOND LEGAL AMOUNT. An officer or agent of any bank in this state, who makes or delivers any guaranty or endorsement on behalf of such bank, whereby it may become liable upon any of its discounted notes, bills or obligations, in a sum beyond the amount of loans and discounts which such bank may legally make, is guilty of a misdemeanor. Enactment approved May 17, 1917, Stats. and Amdts. 1917, p. 580. In effect July 27, 1917. § 561d. LOAN TO DIRECTOR. A director of a bank, organized under the laws of this state, who concurs in any vote or act of the directors of such corporation, or any of them, by which it is intended to make a loan or discount to any director of such corporation, or upon paper upon which any such director is liable or responsible to an amount allowed by the statutes; or [Deposit with corporation to make loan.] Any director, trustee, officer or employee of any such bank who makes or maintains, or attempts to make or maintain, a deposit of such bank's funds with any other corporation on condition, or with the understanding, express or implied, that the corporation receiving such deposit make a loan or advance, directly or indirectly, to any director, trustee, officer or employee of the corporation so making or maintaining or attempting to make or maintain such deposit; or [Concealing accounts or loans.] Any officer or employee of any such bank who intentionally conceals from the directors or trustees of such bank any discounts or loans made by it between the regular meetings of its board of directors or trustees, or the purchase of any securities or the sale of its securities during the same period, or knowingly fails to report to the board of directors or trustees when required to do so by law, all discounts or loans made by it and all securities purchased or sold by it between the regular meetings of its board of directors or trustees, is guilty of a misdemeanor. Nothing in this section shall render any loan made by the directors of any bank, in violation thereof, invalid. Enactment approved May 17, 1917, Stats, and Amdts. 1917, p. 580. In effect July 27, 1917. § 562. RECEIVING DEPOSITS IN INSOLVENT BANK. Every officer, agent, teller, or clerk of any bank, and every individual banker, or agent, teller, or clerk of any individual banker, who receives any deposits, knowing that such bank, or association, or banker is insolvent, is guilty of a misdemeanor. Enacted February 14, 1872; amendment by Code Commission, Act March 16, 1901, Stats. and Amdts. 1900-1, p. 468; act held unconstitutional, see History, § 5 ante. § 563. FRAUDS IN KEEPING ACCOUNTS IN BOOKS OF CORPORATIONS. Every director, officer, or agent of any corporation or joint stock association, who knowingly receives or possesses himself of any property of such corporation or association, otherwise than in payment of a just demand, and who, with intent to defraud, omits to make, or to cause or direct to be made, a full and true entry thereof in the books or accounts of such corporation or association, and every director, officer, agent, or member of any corporation or joint stock association who, with intent to defraud, destroys, alters, mutilates, or falsifies any of the books, papers, writings, or securities belonging to such corporation or association, or makes, or concurs in making, any false entries, or omits, or concurs in omitting to make any material entry in any book of accounts, or other record or document kept by such corporation or association, is punishable by imprisonment in the state prison not less than three nor more than ten years, or by imprisonment in a county jail not exceeding one year, and a fine not exceeding five hundred dollars, or by both such fine and imprisonment. Enacted February 14, 1872: amendment by Code Commission, Act March 16, 1901, Stats. and Amdts. 1900-1, p. 468; act held unconstitutional, see History. § 5 ante. As to frauds in procuring organization of a corporation or in increase of capital stock, see ante, § 558. § 563a. FALSE ENTRY BY OFFICER, ETC., OF BANK. Any officer, director, trustee, employee or agent of any bank organized under the laws of this state, who makes a false or untrue entry in any book or any report, tag or statement, of the business, affairs or condition, in whole or in part, of such corporation, with intent to deceive any officer, director or trustee thereof, or any agent or examiner, private or official, employed or lawfully appointed to examine into its condition or into any of its affairs, or any public officer, office or board to which such bank is required by law to report, or which has authority by law to examine into its affairs or into any of its affairs, or who, with like intent, wilfully omits to make a new entry of any matter particularly pertaining to the business, property, affairs, assets or accounts of such bank in any book, report, statement, or tag of such bank made, written or kept, or required to be made, written or kept by him or under his direction, is guilty of a felony. Enactment approved May 17, 1917, Stats. and Amdts. 1917, p. 580. In effect July 27, 1917. § 563b. CIRCULATING FALSE RUMORS REGARDING BANK. Any person who wilfully and knowingly makes, circulates or transmits to another or others any statement or rumor, written, printed or by word of mouth, which is untrue in facts and is directly or by inference derogatory to the financial condition or affects the solvency or financial standing of any bank, doing business in this state, or who knowingly counsels, aids, procures or induces another to start, transmit or circulate any such statement or rumor, is guilty of a misdemeanor punishable by a fine of not more than one thousand dollars or by imprisonment for not more than one year, or both. Enactment approved April 11, 1917, Stats. and Amdts. 1917, p. 92. In effect July 27, 1917. § 564. OFFICERS OF CORPORATION PUBLISHING FALSE REPORTS, STATEMENTS, ETC., OF ITS CONDITION. Every director, officer, or agent of any corporation or joint-stock association, who knowingly concurs in making, publishing, or posting either generally or privately to the stockholders or other persons, any written report, exhibit, or statement of its affairs or pecuniary condition, or book or notice containing any material statement which is false, or any untrue or wilfully or fraudulently exaggerated report, prospectus, account, statement of operations, values, business, profits, expenditures, or prospects, or any other paper or document intended to produce or give, or having a tendency to produce or give, the shares of stock in such corporation a greater value or a less apparent or market value than they really possess, or refuses to make any book or post any notice required by law, in the manner required by law, is guilty of a felony. Enacted February 14, 1872; amendment approved January 27, 1876, Code Amdts. 1875-6, p. 113; by Code Commission, Act March 16, 1901, Stats. and Amdts. 1900-1, p. 168; act held unconstitutional, see History, § 5 ante; amendment re-enacted March 21, 1905, Stats. and Amdts. 1905, p. 683. As to frauds and false reports, see ante, § 558; Kerr's Small C. C., § 316. § 565. OFFICER OF CORPORATION TO PERMIT AN INSPECTION OF ITS BOOKS. Every officer or agent of any corporation, having or keeping an office within this state, who has in his custody or control any book, paper, or document of such corporation, and who refuses to give to a stockholder or member of such corporation, lawfully demanding, during office hours, to inspect or take a copy of the same, or of any part thereof, a reasonable opportunity so to do, is guilty of a misdemeanor. Enacted February 14, 1872. As to records of corporation, what to contain and how kept, see Kerr's Small C. C., §§ 377, 378. § 566. OFFICER OF RAILROAD COMPANY CONTRACTING DEBT IN ITS BEHALF EXCEEDING ITS AVAILABLE MEANS. Every officer, agent, or stockholder of any railroad company, who knowingly assents to or has any agency in contracting any debt by or on behalf of such company, unauthorized by a special law for the purpose, the amount of which debt, with other debts of the company, exceeds its available means for the payment of its debts, in its possession, under its control, and belonging to it at the time such debt is contracted, including its bona fide and available stock subscriptions, and exclusive of its real estate, is guilty of a misdemeanor. Enacted February 14, 1872. § 567. DEBT CONTRACTED IN VIOLATION OF LAST SECTION NOT INVALID. The last section does not affect the validity of debt created in violation of its provisions, as against the company. Enacted February 14, 1872. § 568. DIRECTOR OF A CORPORATION PRESUMED TO HAVE KNOWLEDGE OF ITS AFFAIRS. Every director of a corporation or joint stock association is deemed to possess such a knowledge of the affairs of his corporation as to enable him to determine whether any act, proceeding, or omission of its directors is a violation of this chapter. Enacted February 14, 1872. § 569. DIRECTOR PRESENT AT MEETING, WHEN PRESUMED TO HAVE ASSENTED TO PROCEEDINGS. Every director of a corporation or joint stock association who is present at a meeting of the directors at which any act, proceeding, or omission of such directors, in violation of this chapter occurs, is deemed to have concurred therein, unless he at the time causes or in writing requires his dissent therefrom to be entered in the minutes of the directors. Enacted February 14, 1872. |