Peoples Finance & Thrift Co. v. Daugherty

BARNARD, P. J. The Peoples Finance and Thrift Company of San Diego was organized in 1923 under the Industrial Loan Act of this state (Stats. 1917, chap. 522; Deering’s Gen. Laws, 1937, Act 3603), as amended. Its capitalization was $150,000 and by 1941 it had outstanding investment certificates in the amount of $365,096,43,

On August 13, 1941, after auditing its bocks} the Commissioner of Corporations issued and served an order directing the corporation to make good within sixty days from the daté thereof a deficiency and impairment of its capital in the approximate amount of $125,000, directing the corporation to employ a disinterested certified public accountant to make an audit and to report after determining the exact extent of the impairment of capital, ordering the corporation to cease from certain practices in connection with the making of loans, and further ordering it to show cause, on a certain date, why said order should not be observed and made final. Such a further audit and report was made, followed by a hearing at which findings of fact were made, and on September 30, 1941, the commissioner issued an order making the order of August 13, 1941, final, but amending the same by stating that the amount of the impairment of capital was $143,014.72.

During the month of October, 1941, the corporation applied for a license as a personal property broker and attempted to amend its articles of incorporation by deleting all reference therein to the Industrial Loan Act, by reducing its stated capital from $150,000 to $60,000, and by changing its corporate powers. Nothing further seems to have been done in either of these matters or with respect to eliminating: the outstanding investment certificates which had been issuedi under the authority of the Industrial Loan Act.

On November 10, 1941, the commissioner prepared a written notice of tailing possession of the property and business [13]of the corporation pursuant to section 11 of the Industrial Loan Act, which notice stated that this was being done because the corporation had failed to make good the impairment of its capital within sixty days of the requisition and order served upon it. On the same day, the commissioner designated one of his deputies to assist him in liquidating the affairs of the corporation. When this deputy presented this notice and attempted to take possession, on the afternoon of November 12, 1941, he was informed that in the forenoon of that day the corporation had filed a petition in the Superior Court of San Diego County setting forth that it had elected to voluntarily wind up its affairs and dissolve pursuant to the provisions of section 400 of the Civil Code and asking for court supervision of such dissolution under the provisions of section 403 of that code. The deputy commissioner was then served with a copy of the court order assuming supervision over such liquidation.