People ex rel. Farnum v. San Francisco Savings Union

Searls, C. This cause was submitted to the court below upon an agreed statement.

Defendant had judgment, from which plaintiff appeals.

The defendant is a banking corporation, existing under and by virtue of the laws of this state, and was incorporated as such on the eighteenth day of June, 1862, under and in accordance with the provisions of an act of the legislature, entitled “ An act' to provide for the formation of corporations for the accumulation and investment of funds and savings,” approved April 11, 1862. (Stats. 1862, p. 199.)

The act provides for the formation of corporations “for the purpose of aggregating the funds and savings of the members thereof and others, and preserving and safely investing the same for their common benefit.” Corporations thereunder are authorized to loan and invest their' funds, receive deposits' of money, loan and invest the same, collect the same with interest, “ repay such deposits without interest, or with so much of the earnings and interest as the by-laws of the corporation may provide.”

They may make by-laws prescribing the conditions upon which deposits shall be received, and the time and manner of dividing the profits.

Section 10 of the same act provides that “it shall not be lawful for the corporation or the directors to make any_dividends, except from surplus profits arising' from the business of the corporation, and the directors shall at such times and in such manner as the by-laws shall [201]prescribe, declare and pay dividends of so much of the profits of the company, and of the interest arising from the capital stock and deposits, as may be appropriated for that purpose by the provisions of the by-laws.”

It is provided and declared by the by-laws of the defendant that “ at the expiration of every six months, ending 30th June and 31st December, each year, the board of directors shall ascertain the net profits of the corporation, and shall determine the amount to be appropriated for a general dividend.”

During the six months commencing June 30, 1883, ■the surplus profits arising from the business of the corporation, including the interest arising from its capital stock and deposits, amounted to the sum of $280,092.

In this amount of surplus profits, and as a part thereof, is included:—