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SEC. 81. A railroad corporation by consent of the stockholders holding a majority of the issued capital stock may mortgage the corporate property and franchises or execute deeds of trust thereof to trustees selected by such stockholders to secure payment of bonds or notes issued by the railroad corporation for the purpose of securing money for its legitimate corporate purposes, including the construction and equipment of its road.
SEC. 82. Before commencing work on any one section or district of the line. The railroad corporation shall file with the Director of Public World a map or plan and profile thereof showing the course, direction, length, and grades of the line in such section or district, accompanied by an explanatory statement as to the route and general conditions in said section or district of the proposed railroad, which map, plan, and profile, with the report of said Directing of Public Works thereto attached, shall be submitted by him to the Philippine Commission.
SEC. 83. At points where the railroad may cross public highways the railroad corporation shall construct and maintain the necessary bridges and crossings so that public communication. shall not be interrupted. Moreover, to avoid accidents, the railroad corporation shall put up at such crossings the necessary notices apprising the public of danger from passing trains; and at crossings of peculiar danger a gate shall be placed or a guard shall be stationed by the railroad corporation whenever the provincial board of the province in which the crossing is situated, or the Municipal Board of the city of Manila, as the case may be, with the approval of the Director of Public Works, shall so direct.
SEC. 84. The railroad corporation shall establish along the whole length of the road a telegraph line for the use of the railroad. The posts of this line may be used for Government wires and shall be of sufficient length and strength and equipped with sufficient cross-pieces to carry the number of wires which the Government may consider necessary for the public service. The establishment, protection, and maintenance of the wires and stations necessary for the public service shall be at the cost of the Government.
SEC. 85. The railroad corporation, before opening the road or any part, thereof for the conveyance of passengers and freight, shall give notice in writing to the Director of Public Works aforesaid that the road or the part thereof proposed to be opened is ready for the safe conveyance of passengers and freight upon receipt of such notification the said Director of Public Works shall himself, or by his assistant, forthwith examine the roadway, bridges, tunnels, and oilier works of the railroad and all locomotive and rolling stock- intended to be used thereon, and if he finds the same to be satisfactory, in accordance with law, and safe for public travel, he shall authorize, the opening of the line or such part thereof as may be duly completed and safe for public travel.
SEC. 86. In addition to other powers conferred by Chapter I, the railroad corporation shall enjoy the following powers, privileges, and exemptions: To occupy, with the prior approval of the Government of: the Philippine Islands, any part of the public domain necessary for the purposes of the enjoyment of its franchises. Private lands may he acquired by the corporation in accordance with the exercise of the power of eminent domain in the manner provided in Act 'Numbered One hundred and ninety, and amendments thereto. To construct, alter, substitute, maintain, and operate the; railway, make or construct all buildings, stations, shops, plants, : tunnels, embankments, aqueducts, bridges, or other structures, wharves, roads, ways, passages, conduits, drains, piers, arches, cuttings, and fences on lands acquired or on which the necessary right has been obtained, and to cross any railway, tramway, river, stream, water course, lake, canal, shore, road, and highway where the necessary right has been obtained from those public or private corporations or individuals whose rights will be affected, also to direct or alter, as well temporarily as permanently, the course of any river, stream, water course, or highway, or raise or sink the level thereof, in order the more conveniently to carry the same across, over, under, or by the side of the railroad, when the consent of the owners of rights or interests- which may he prejudiced, or injured shall have been obtained through contract or when compensation shall have been duly made for tin.' injury after proper condemnation proceedings. For the purposes of the railroad and on lands lawfully acquired, to open quarries, to collect stone to cut timber, to mine for materials, and to build and operate kilns for lime, gypsum, and brick. To conduct water to the railroad for the use of the same and to acquire, by condemnation proceedings or contract, the necessary land for such roads; as may be required to give access to the railroad stations from public roads or streets in the vicinity. In case of refusal, neglect, or failure to pay proper charges for the transportation of freight, goods, or luggage to destination, the railroad corporation shall have the right to detain the freight transported until such time as the amount due shall be paid. If the payment of the rates of transportation on goods carried or transported by the railroad to their destination should not be effected within fifteen days after demand for payment, the corporation may apply to the justice of the peace of the municipality in which such goods are situate for their sale at public auction, and said justice of tin; peace, after giving notice of the application to the owner or consignee of the goods, shall order the sale at public auction of said goods or so much thereof as may be necessary to cover the expenses and costs of transportation and costs and expenses of sale. Notice of the sale shall he posted for at least five clays prior to the sale in three of the most public places in the municipality in which the goods are situate. Freight, goods, or luggage transported to destination by the corporation and not called for by the owner or consignee for a period of two mouths after arrival may be sold at public auction after the making of the application, the securing of the order, and the giving of the notice of sale prescribed by paragraph five of this section. In case of the refusal or failure to pay proper charges for the transportation of goods or freight of a perishable nature or in case the owner or consignee should refuse to receive such goods or can not be found or is unknown, application for their sale may be made to the justice of the pence for the municipality in which they are situate, and after satisfying himself that said goods are perishable and likely to deteriorate if held by the railroad corporation he may order their sale within such time and after giving such notice as to him may seem proper. The proceeds of sales made in accordance with paragraphs five, six, and seven of this section shall be applied first to the payment of the cost and expenses of said sales, and second, to the payment of freight and charges of the railroad corporation on said goods. After payment of costs and expenses of sale and the freight and charges of the railroad, the balance, if any there be, shall be deposited to the credit of the owner or consignee of the goods with the provincial treasurer of the province in which the sale took place, or if the sale took place in the city of Manila, then with the Insular Treasurer.
SEC. 87. The railroad corporation shall provide on its trains proper and adequate accommodations for the transportation of the mails and shall safely transport and carry the mails at such rates and under such terms and conditions as may be agreed upon by the Director of Posts and the railroad corporation. In case the Director of Posts and the corporation shall not agree as to the rate and terms of transportation of the mails, the Chief Executive of the Islands, after giving the corporation opportunity to be heard, shall fix the price, terms, and conditions of such transportation. The price for carrying such mails in the regular passenger trains shall not he more than the reasonable freight charge on a similar quantity of merchandise and a fair compensation for the post-office ear. If the Government of the Islands should require in addition to the ordinary mail service the transport of mail or urgent orders at other hours or at higher speed than the usual speed of passenger train, the transport of troops, ammunition, bullion, or freight, the corporation shall provide, day or night, special conveyance for same and be allowed reasonable extra compensation therefor.
SEC. 88. The roadway and right of way of any railroad corporation may he crossed by other lines of railroad authorized by the Government of the Islands in such manner as may be determined by the Director of Public Works with the approval of the Governor-General and upon the payment of full compensation for any damage which may be caused to the track crossed.
SEC. 89. Toni the time when the whole or any part of the railroad shall he opened to public service the railroad corporation shall establish and publish a time schedule for the arrival and departure of trains and shall run its regular trains for the transportation of passengers and freight as close to said schedule as practicable and shall furnish sufficient accommodations for the transportation of all passengers, who may apply for the same and for all property which may in- offered within a reasonable time prior to the time of departure.
SEC. 90. The corporation shall concede to all passengers holding first-class tickets the free carriage of fifty kilograms of personal baggage and to those holding lower class tickets thirty kilograms of personal baggage. Personal baggage is defined to be ordinary wearing apparel, bicycles, and such articles as may be required by persons practicing any profession or trade. Personal baggage shall be accepted by the corporation only when contained in such receptacle. as will safely retain and hold the same during transportation, and the railroad corporation shall not be liable beyond the extent of three hundred pesos for each fifty kilograms of weight of such baggage unless the owner thereof shall, upon offering the same for transportation, declare the contents thereof and pay therefor a reasonable insurance rate for the additional responsibility assumed by the corporation.
SEC. 91. Each locomotive used in the working of the line shall be furnished with a bell and with a steam whistle. The bell shall be rung and the whistle sounded at a distance of at least three hundred meters from every place at which the railroad passes any highway and the bell shall be kept ringing until the engine has crossed such highway. Each passenger train shall have proper and efficient appliances for making immediate communication with the engineer so that the engineer may be immediately signaled to stop the train.
SEC. 92. It shall be the duty of the railroad corporation to use the most approved appliances to prevent the escape of sparks or live coals from its locomotives and to take such precautions that the operation of said road may not unnecessarily expose properties in the vicinity of the line to danger from fire.
SEC. 93. Where the line is not fenced in or where there are no gates or flagmen at street crossings the speed of trains running through the streets of cities and of centers of population of municipalities shall not exceed fifteen kilometers per hour: Provided, however, That the municipal councils of municipalities in which such streets are situated may prescribe in such cases a maximum speed of less than fifteen kilometers per hour. In case any municipality should fix the maximum speed at less than fifteen kilometers per hour, the company may appeal to the Director of Public Works, who shall either confirm the rate of speed fixed by the municipality or fix such rate as to him may seem proper, not exceeding fifteen kilometers per hour.
SEC. 94. The corporation shall oblige every employee working on a passenger train or at a station for passengers to wear upon his hat or cap a badge which shall indicate his office, and without such badge he shall not be entitled to exercise any of the powers of his office.
SEC. 95. The proper agents and employees of the corporation shall affix a check or tag to every parcel of baggage delivered by any passenger to such agents or employees for transportation, and a duplicate of such check or tag shall be delivered to the passenger delivering the panel, if the agents or employees of the railroad corporation do not comply with the obligation imposed by this section no fare or toll shall be collected from the passenger, and if the passenger has already paid same it shall be returned upon demand.
SEC. 96. The corporation may refuse to transport any package or parcel the transportation of which is prohibited by the Government.
SEC. 97. The tariffs and schedules of rates and charges for the transportation of passengers, baggage, parcels, packages, and freight of all kinds shall be kept posted by the corporation in a prominent place in all of its stations, and before any new tariff or schedule of rates or charges shall go into effect it shall be published for a period of at least ten days in two newspapers of the city of Manila, one of which newspapers shall be printed in English and one in Spanish.
SEC. 98. Every railroad corporation shall, within two years after filing its original articles of incorporation, construct, complete, and operate at least live miles of its road, and at least five miles additional every year thereafter until the whole road is fully constructed and completed. Should any railroad corporation fail, after commencement of construction, to extend, complete, and operate its road for the distance required within the time prescribed, its right to extend its road beyond the point then completed shall ipso facto stand forfeited.
SEC. 99. On or before the first day of March of each year every railroad corporation shall file with the Insular Auditor a report of its operations for the calendar year immediately preceding, which report shall be verified by the president or general manager of the railroad corporation and the secretary or clerk and treasurer of the corporation, and shall set forth in addition to the matters required by the report specified in section fifty-three hereof the following: An itemized statement of the amount expended during said calendar year in the purchase of land, the construction of road, the purchase and construction of buildings, the purchase of engines, cars, and all kinds of rolling stock and other property; A statement showing separately the sums actually expended ; for repairs to engines, cars, and other rolling stock, buildings, roadway, and other property, for salaries and expenses of personnel, and other expenses, so as to. show the entire expense and cost of operating the road and keeping its roadbed, rolling stock, buildings, and other real and personal property in reasonable repair; The receipts from transportation of passengers, property or freight, mails, express matter, and other sources, separately sated; The quantity of freight carried, specified in kilos.
SEC. 100. Every railroad corporation must furnish to every passenger to whom it sells a ticket a seat and sufficient room and accommodation for any one trip.
SEC. 101. If any passenger refuses to pay his fare or to exhibit or surrender his ticket after reasonable opportunity to comply with the demand for fare or the request for his ticket, the conductor and other employees of the corporation may eject from the cars of the corporation the passenger so refusing or failing to pay his fare or to exhibit or surrender his ticket: Provided, however, That no unnecessary force shall be used by the conductor or other employees of the corporation, and that the passenger shall be put oil' the cars at some usual stopping place or near some dwelling house and after bringing the train to a complete stop.
SEC. 102. Every railroad corporation shall have the right to make reasonable and proper regulations for passenger and freight traffic. SAVINGS AND MORTGAGE BANKS.
SEC. 103. Any banking corporation, the principal business of which is the receiving of funds on time deposits, and their investment together with that of its capital, in bonds, or in loans secured by bonds, bullion, or real estate mortgages, as hereinafter provided, or in any combination of the aforementioned forms of investment, shall be known as a savings and mortgage bank for the purposes of this Act. Such a corporation shall not be permitted to file its articles of incorporation with the Chief of the Division of Archives, Patents, Copyrights, and Trade-Marks of the Executive Bureau and shall not receive his certificate of incorporation unless such articles show, under oath of the incorporators, that such corporation has a capital stock of not less than two hundred thousand pesos, that the same has been fully subscribed, and actually paid into the treasury of the corporation.
SEC. 104. A savings and mortgage bank may loan or invest its funds and deposits and collect such loans with interest accrued and repay its depositors with or without interest on their deposits, as may be provided in the by-laws of the corporation, and not in violation of this Act. No loan of a savings and mortgage bank shall be for a longer period than five years.
SEC. 105. No savings and mortgage bank shall loan any of its money or deposits unless secured— By mortgage or deed of trust to the corporation of unencumbered improved real estate in cities and centers of population of municipalities in the Philippine Islands or by mortgage or deed of trust to the corporation of actually cultivated and improved agricultural lands in the Philippine Islands: Provided, however, That the amount loaned shall not exceed forty per centum of the actual cash market value of the real estate which is security for the loan, or of the assessed valuation thereof, whichever may be the smaller; By the pledge to the corporation of gold or silver bullion: Provided, That the loan shall not exceed ninety per centum of the value of the pledge by which the loan is secured: By bonds or evidences of debt of the Government of the United States or of the Philippine Island or of the city of Manila or of any municipality in the Philippine Islands authorized by law to issue bonds: Provided, however; That such loan shall not exceed the face value of such bonds or evidences of debt, or the market value thereof, whichever may be the smaller; By first mortgages transferred to the corporation as collateral security on improved and otherwise unencumbered, real estate in cities and centers of population of municipalities in the Philippine Islands: Provided, however, That the mortgage transferred to the corporation as collateral security with 'interest accrued and due shall not exceed forty per centum of the actual cash market value of the real estate which secures such mortgage; or of the assessed value thereof, whichever may be the smaller.
SEC. 106. No loan on the security of real estate shall be made unless the title to such real estate, free from all incumbrances, shall be in the mortgagor and unless the mortgage shall be a preferred claim on the property therein described as against the whole world.
SEC. 107. The capital stock and assets of every savings and mortgage bank constitute the security of depositors and depositors a have the priority of right over all others to such assets. The directors of a savings and mortgage bank shall not create any debt or liability against the corporation for any purpose whatever other than for deposits made with it and the reasonable and necessary current and running expenses of the corporation.
SEC. 108. Savings and mortgage banks may purchase, hold, and convey real and personal property as follows: The lot with the building thereon in which the bank conducts and carries on its business, which shall not exceed in value seventy-five thousand pesos, or such additional sum as may be fixed by the affirmative vote of the stockholders representing two-thirds of the subscribed capital stock: Such property, real and personal, as may have been mortgaged, pledged, or conveyed to it in good faith in trust for its benefit by reason of money loaned by it in pursuance of the regular business of the bank, and such real or personal property as may have been purchased by it at sales to satisfy pledges, mortgages, or deeds of trust executed to it on account of money loaned by it, and such real and personal property as may have been conveyed to it by borrowers in satisfaction and discharge of loans made by the bank to them; Bonds and other evidences of debt of the Government of the United States or of the Philippine Islands or of the city of Manila, or of any municipality in the Philippine Islands authorized by law to issue bonds, at the reasonable market value thereof, first mortgages secured by improved real estate in cities and centers of population of municipalities in the Philippine Islands, but any mortgage purchased with interest accrued shall not exceed forty per centum of the actual cash market value of the real estate which secures such mortgage, and gold bullion at a valuation not exceeding its market value: Provided, however, That any real estate purchased by said bank in payment or by reason of any loan made by such bank must be sold by the bank within five years after the title thereto has been vested in it: And provided further, That no savings and mortgage bank shall purchase, own, or sell personal property except as may be required and permitted in the transaction of its ordinary business or for its immediate accommodation or the convenient and proper transaction of its lawful business.
SEC. 109. Married women and minors may, in their own right and in their own names, make deposits and receive and receipt for deposits, dividends, and interest: Provided, however, That if any guardian shall give notice in writing to any savings and mortgage bank not to make payment of deposits, dividends, or interest to the minor of whom he is guardian, then such payment shall lie made only to the guardian.
SEC. 110. .Before declaring any dividend, five per centum of the net profits must be deducted and set aside as a part of the reserve fund, and the reserve fund thereby created shall be invested as are oilier funds of the bank. The earnings of the reserve fund, whether created out of capital stock or out of profits, shall constitute a part of the reserve. The reserve fund shall be used exclusively for the, purpose of paying losses sustained by the bank in the pursuit of its lawful business: Provided, That the bank may provide by its by-laws for the disposal of any excess in the reserve fund over twenty per centum of its liabilities, inclusive of stock, and also for tin: final disposal of the reserve fund upon the dissolution of the corporation after the payment of all liabilities.
SEC. 111. Savings and mortgage banks may require by their by-laws that depositors shall give notice, not exceeding ninety days, of the intended withdrawal of their deposits, and any savings and mortgage bank requiring such notice may decline to make payment of any deposit until such notice is given and the time prescribed in its by-laws for such notice has expired.
SEC. 112. Whenever there is a call by depositors for repayment of their deposits and the call so made equals or exceeds the moneys actually available in the bank and disposable for the purpose of paying deposits, the savings and mortgage bank shall not make any new loans or investment of the funds of depositors or of the earnings of such funds until the call of the depositors has been satisfied. Any officer or director of a savings and mortgage bank making or authorizing the making of any loan or investment of funds of depositors or of the earnings of such funds in violation of this section shall be punished by imprisonment for not less than one year nor more than five years and by a fine of not less than one thousand nor more than five thousand pesos.
SEC. 113. No director or officer of any savings and mortgage bank .shall, either directly or indirectly, for himself or as the representative or agent of others, borrow any of the deposits or funds of such bank, nor shall he become a guarantor, indorser, or surety for loans from such bank to others or in any manner be an obligor for moneys borrowed of the bank or loaned by it. The office of any director or officer of a savings and mortgage bank who violates the provision of tin's section shall immediately become vacant and the director or officer shall be punished by imprisonment not exceeding ten years and by a fine of not less than one thousand nor more than five thousand pesos.
SEC. 114. No loan made by any savings and mortgage bank on tin1 security of real estate shall be made unless the title to such real estate shall have been first registered in accordance with the Land Registration Act.
SEC. 115. Any director or officer of any savings and mortgage bank who receives or permits or causes to be received in said bank any deposit or who pays out or permits or causes to be paid out of any funds of said bank or who transfers or permits or causes to be transferred any securities or property of said bank after said bank becomes insolvent shall be punished by a fine of not less than one thousand nor more than ten thousand pesos and by imprisonment for not less than two nor more than ten year. BANKING CORPORATIONS.
SEC. 116. A banking corporation is a corporation which receives the money of others on funeral deposit and uses it, together with its own capital, to form a joint fund which it: makes a business of employing either directly or indirectly in one or more of the following uses: The making of loans; The maintenance of a note circulation : or The purchase, sale, or collection of bills of exchange or other kinds of negotiable paper.
SEC. 117. A banking corporation, in addition to the general powers incident to corporations as set forth in this Act, shall have all such incidental powers as shall be necessary to carry on the business of banking, by discounting and negotiating promissory notes, drafts, bills of exchange, and other evidences of debt; by receiving deposits; by buying and selling exchange, coin, and bullion; and by loaning money on personal security; but it shall make no loans upon real-estate security: Provided, however, That savings and mortgage banks may make loans on the security of real estate as herein before prescribed: And provided further, That banking corporations engaged in the business of making loans secured by real estate, in accordance with their charters and the laws under which they were organized before the passage of this Act, may continue to make such loans on real estate as prescribed by such charters and laws.
SEC. 118. Banking corporations, other than savings and mortgage banks, shall not be permitted to file their articles of incorporation with the Chief of the Division of Archives, Patents, Copyrights, and Trade-Marks of the Executive Bureau, or to receive his certificate of incorporation unless such articles show, under oath of the incorporators, that the capital stock of such corporation is not less than two hundred thousand pesos, that fifty per centum of the whole stock has been actually subscribed; and that fifty per centum of the subscription has been actually paid into the treasury of the corporation.
SEC. 119. The total liabilities to a banking corporation of any person, or of any company, corporation, or firm, for money borrowed, including in the liabilities of the company or firm the liabilities of the several members thereof, shall at no time exceed fifteen per centum of the surplus and capital stock of such bank actually "paid in. But the discount of bills of exchange drawn in good faith against actually existing values and the discount of commercial or business paper actually owned by the person negotiating the same shall not be considered as money borrowed.
SEC. 121. No such bank shall at any time be indebted or in any way liable to an amount exceeding the amount of its capital stock ;it such time actually paid in and remaining undiminished by losses or otherwise, except on account of demands of the following nature: Moneys deposited with or collected by the bank; Hills of exchange or drafts drawn against money actually on deposit to the credit of the bank or due thereto; Liabilities to the stockholders of the bank for dividends and reserve profits.
SEC. 122. Such bank may purchase, hold, and convey real estate for the following purposes and no other: Such as shall be necessary for its immediate accommodation in the transaction of its business; Such as shall be mortgaged to it in good faith by way of security Tor debts previously contracted; Such as shall be conveyed to it in satisfaction of debts previous]v contracted in the course of its dealings; Such as it shall purchase at sales under judgments, decrees, mortgage, or trust deeds held by the bank or shall purchase to secure debts due to it. But no bank shall hold the possession of any real estate under mortgage or trust deeds or the title and possession of any real estate purchased to secure any debts due to it for a longer period than five years.
SEC. 123. No such bank shall loan money to any director or officer thereof, unless such loan shall previously have been approved in writing by a majority of the directors thereof and such approval shall, have been entered upon the records of the bank.
SEC. 124. If losses have at any time been sustained by any such bank equal to or exceeding the undivided profits on hand, no dividend shall be made; and no dividend shall ever be made by any such bank while it continues in banking operations, to an amount greater than its net profits then on hand, deducting therefrom its losses and bad debts. All debts due to any bank, on which interest is past due and unpaid for a period of six months, unless the same are well secured, and in process of collection, shall be considered bad debts within the meaning of this section. SEC:. 125. Every such bank shall at all times have on hand, in lawful money of the Philippine Islands or of the United States, an amount equal to at least twenty per centum of the aggregate amount of its deposits in all respects. The term "lawful money of the Philippine Islands" shall include silver certificates issued under' authority of Act Numbered Nine hundred and thirty-eight, ordinarily called the "Gold Standard Act," and gold certificates should the issue thereof be authorized for the Philippine Islands by the Congress of the United States, and the term "lawful money of the United States" shall include gold and silver certificates of the United States and bank notes issued by national banks in the United States: Provided, however, That in case of a bank having branches as provided in section one hundred and twenty-eight of this Act the provision for a twenty per centum reserve shall be deemed to be complied with if the principal bank and its branches in the aggregate have on hand twenty per centum in lawful money of the aggregate amount of the deposits in the principal bank and all of its branches.
SEC. 126. Whenever the lawful money as defined in the last preceding section of any bank shall be below the amount of twenty per centum of its deposits, such bank shall not diminish the amount of such lawful money by making any new loans or discounts, nor make any dividend of its profits until the required proportion between the aggregate amount of its deposits and its lawful money has been restored. In case of the violation of this provision the business of the bank may be wound up by the appointment of a receiver or in the manner provided by Act .Numbered Five hundred and fifty-six.
SEC. 127. Each such bank, before the declaration of a dividend, shall carry ten per centum of its net profit? accruing since the last preceding dividend to a surplus fund until the same shall amount to twenty per centum of its authorized capital stock; and no part of the surplus fund shall at any time be paid out in dividends, but losses accruing in fix course of business of the bank may be paid from the surplus fund. Nothing herein contained shall prevent the accumulation of a larger surplus fund should the directors so determine.
SEC. 128. It shall be lawful for any such bank having its head office in the city of Manila, and having a paid-up capital of not less than one million pesos, to establish a branch or brandies in any municipality or municipalities in the Philippine Islands, and to conduct its authorized banking business in the city of Manila and in such branch or branches; but the corporation shall be responsible for all the business conducted in its branch or branches to the same extent and in the same manner as though such business had all been conducted in the principal institution at Manila. In the case of the establishment of a branch, or branches, the business shall be treated as an entirety.
SEC. 129. Any director or officer of any banking corporation who receives or permits or causes to be received in said bank any deposit or who pays out or permits or causes to the paid out of any funds of said bank or who transfers or permits or causes to be transferred any securities or property of said bank after said bank becomes insolvent shall be punished by a fine of not less than one thousand nor more than ten thousand pesos and by imprisonment for not less than two nor more than ten years.
SEC. 130. No bank organized under this Act shall make any loan or discount on the security of the shares of its own capital stock, nor be the purchaser or holder of any such shares, unless such security or purchase shall be necessary to prevent loss upon a debt previously contracted in good faith, and stock so purchased or acquired shall, within six months from the time of its purchase, be sold or disposed of at public or private sale, or, in default thereof, a receiver may be appointed to close up the business of the bank in accordance with law.
SEC. 131. Any corporation formed or organized for the purpose of acting as trustee or administering any trust or holding property in trust or on deposit for the use, benefit, or behalf of others shall be known as a trust corporation.
SEC. 132. No trust corporation shall be permitted to file articles of incorporation with the Chief of the Division of Archives, Patents, Copyrights, and Trade-Marks of the Executive Bureau or to receive his certificate of incorporation unless such articles show under oath of the incorporators that the capital stock of such corporation is not less than one million pesos, that fifty per centum of the whole stock has been actually subscribed, and that fifty per centum of the subscription has been actually paid in cash into the treasury of the corporation.
SEC. 133. At least four hundred thousand pesos of the capital stock of any such corporation must be paid in cash into the treasury thereof within one year after filing the articles of incorporation, and for a failure to cause such amount of its capital stock to be paid into the treasury within the time limited, such corporation shall not be permitted to transact any new business other than that required for the administration of the business already undertaken by it. Any officer, official, director, or trustee of the corporation authorizing or transacting any business in violation of this section shall be punished by imprisonment for not less than one year nor more .than live years and by a fine of not less than one thousand nor more than five thousand pesos.
SEC. 134. After filing its articles of incorporation and the issuance to it of the certificate of incorporation by the Chief of the Division of Archives, Patents, Copyrights, and Trade-Marks of the Executive Bureau, any trust corporation, in addition to the powers conferred by general corporation laws, shall have power— To act as trustee on any mortgage or bond issued by any municipality, body politic, or corporation, and to accept and execute any other municipal or corporate trust not inconsistent with law; To act under the order or appointment of any court of record as guardian, receiver, trustee, or depositary of the estate of any minor, insane person, idiot, habitual drunkard, or other incompetent or irresponsible person, and as receiver and depositary of any moneys paid into court by parties to any legal proceedings and of properly of any kind which may be brought under the jurisdiction of the court by proper legal proceedings; To act as the executor of any last will or testament when it is named in the last will and testament as the executor thereof; To act under appointment of a court of competent jurisdiction as administrator of the estate of any deceased person, with the will annexed, or as administrator of the estate of any deceased person when there is no will and when in either case there is no person qualified, competent, willing, able, and entitled to accept such administration; To accept and execute any legal trust confided to it by any court of record or by any person or corporation for the holding, management, and administration of any estate, real or personal, and the rents, issues, and profits thereof; To accept deposits of money or other personal property and to allow to the depositors of money such interest thereon as may be provided by-laws.
SEC. 135. No bond or other security shall be required from any c such trust corporation for the faithful performance of its duties as trustee, executor, administrator, guardian, receiver, or depositary: Provided, however, That the court or officer appointing such corporation as trustee, executor, administrator, guardian, receiver, or depositary may upon proper application .showing special cause therefor, require any corporation which shall seek to be or shall have been so appointed to give adequate security for the protection of the funds or property confided to the corporation, and upon failure of the corporation to give the security required its appointment as trustee, executor, administrator, guardian, receiver, or depositary shall be revoked. The court shall require the corporation to make all reports, render all accounts, perform such duties, and do such acts as might be required by the court of a natural person acting as trustee, executor, administrator, guardian, receiver, or depositary.
SEC. 136. Upon the application of any executor, administrator, guardian, receiver, trustee, or depositary or any other person in o interest, any court having jurisdiction of such officer, trustee, receiver, or depositary and of the subject-matter of the trust or deposit may, upon such notice to the parties in interest as the court shall direct and after hearing the application and all parties in interest desiring to be heard, order said officer, trustee, receiver, or depositary to deposit with some trust corporation lawfully doing business in the Philippine Islands the whole or any part of the moneys or personal property held by such officer, trustee, receiver, or depositary. Upon presentation to the court of the receipt or written acknowledgment of the trust corporation that the deposit of said moneys and personal property has been made in accordance with the order of the court, the court may order that the bond given or required to he given by such officer, trustee, receiver, or depositary for the faithful performance of his duties lie reduced to such sum as to the court may seem proper: Provided however, That the reduced bond shall be sufficient to adequately secure the proper administration and care of any property remaining in the hands or under the control of such officer, trustee, receiver, or depositary and the proper accounting for such property. Property deposited with any trust corporation in conformity with this section shall be held by said corporation under the orders and directions of the court.
SEC. 137. The accounts of all moneys, properties, or securities received by any trust corporation as executor of the will of any deceased person or as administrator, with or without the will annexed, of the estate of any deceased person, or as guardian, receiver, trustee, or depositary of the estate of any minor, insane person, idiot, habitual drunkard, or other incompetent or irresponsible person, or as receiver or depositary under and by virtue of any order or appointment of any court, shall he kept separate and distinct from the accounts of its general business.
SEC. 138. No trust corporation shall have the right to accept any trust whatever which it would be unlawful for any individual to make, accept, or execute, and it shall be the duty of a trust corporation, acting as trustee of any legal trust, to execute such trust in accordance with the lawful terms of the trust.
SEC. 139. Deposits or moneys received by any trust corporation as executor of the will of any deceased person or as administrator, with or without the will annexed, or as guardian, receiver, trustee, or depositary of the estate of any minor, insane person, idiot, habitual drunkard, or other incompetent or irresponsible person, or as receiver or depositary under and by virtue of any order or appointment of any court, or as trustee under any instrument in writing constituting the corporation a trustee, unless otherwise directed by the instrument creating the trust, can he loaned only on unencumbered improved real estate in cities and centers of population of municipalities in the Philippine Islands or on actually cultivated agricultural lands in the Philippine Islands to an amount not exceeding forty per centum of the value of the real estate, or on railroad bonds guaranteed by the Philippine Insular Government or on first mortgages transferred to the corporation as collateral security on improved and otherwise unencumbered real estate in cities and centers of population of municipalities in the Philippine Islands: Provided, That such first mortgages with interest accrued shall not exceed in value forty per centum of the value of the mortgaged property or on the security of gold or silver bullion: Provided, That the amount loaned shall not exceed ninety per centum of the value of the bullion pledged or on the security of United States Government bonds or on the security of bonds of the Philippine Government or of the city of Manila or of any municipality authorized by law to issue bonds. No loan of such deposits on the security of real estate shall be made unless the title to such real estate shall have been first registered in accordance with the Land Registration Act. Any officer or director authorizing or making any loan on security otherwise than provided in this section shall be punished by imprisonment not exceeding fen years and by a fine of not less than one thousand nor more than five thousand pesos.
SEC 140.. The capital stock and funds of the corporation other than those mentioned in section one hundred and thirty-nine may he loaned or otherwise invested as the by-laws may prescribe and the directors authorize.
SEC. 141. The capital stock of any trust corporation shall be security for the faithful performance of all the trust duties of the corporation: Provided, however, That claims against such corporation as executor of the will of any deceased person or as administrator, with or without the will annexed, of any deceased person, or as guardian, receiver, trustee, or depositary of the estate of any minor, insane person, idiot, habitual drunkard, or other incompetent of irresponsible person, or as receiver or depositary under and by virtue of an order or appointment of any court, shall have priority over all other claims.
SEC. 142. Five per centum of the net profits of every trust corporal ion shall be set apart as a reserve fund, which shall be loaned or invested as proscribed in section one hundred and thirty-nine, and the earnings of the reserve fund shall constitute a part of the reserve. The reserve fund shall be used solely for the purpose "f meeting the losses sustained in the lawful transaction of its business: Provided, That the corporation may provide in its by laws for the disposal of any excess of the reserve fund over twenty per centum of its liabilities, inclusive of stock, and for the final disposal thereof on the dissolution of the corporation after the payment of all liabilities.
SEC. 143. No loan shall be made by any trust corporation, directly or indirectly, to any director or officer thereof, except by written approval of the majority of the directors. Any officer or director of a trust corporation authorizing, receiving, or making any such loan without the authority prescribed shall he punished by imprisonment for not less than five years nor more than ten years and by a fine of not less than two thousand nor more than twenty thousand pesos.
SEC. 144. Any director or officer of any trust corporation who receives for said corporation or permits or causes to be received by said corporation any deposit, or who pays out or permits or causes to be paid out any funds of said corporation or who transfers or permits or causes to be transferred any securities or property of said corporation after said corporation becomes insolvent, shall" he punished by a fine of not less than one thousand nor more than ton thousand pesos and by imprisonment for not less than two nor more than ten years.
SEC. 145. The ordinary business of any trust corporation shall he transacted at the place of business specified in its articles of incorporation.
SEC. 146. Savings banks, commercial banks, banks of issue and discount, trust corporations, and banking institutions of every kind shall be subject to all the provisions of Act Numbered Fifty-two, entitled "An Act providing for examinations of banking institutions in the Philippine Islands, and for reports by their officers," as amended by Act Numbered Five hundred and fifty-six. DOMESTIC INSURANCE CORPORATIONS.
SEC. 147. Corporations formed or organized to save any person " or persons or other corporation harmless from loss, damage, or liability arising from any unknown or future or contingent event, or to indemnify or to compensate any person or persons or other corporation for any such loss, damage, or liability, or to guarantee the contractual obligations or debts of others, shall be known as insurance corporations for the purposes of tin's Act.
SEC. 148. No insurance corporation shall be permitted to file articles of incorporation with the Chief of the Division of Archives, Patents, Copyrights, and Trade-Marks of the Executive Bureau or to receive his certificate of incorporation unless such articles show, under oath of the incorporators. that the capital stock of such corporation is not less than five hundred thousand pesos, that fifty per centum of the whole stock has been actually subscribed, and that fifty per centum of the subscription has been actually paid in cash into the treasury of the corporation. The whole subscribed capital stock of any fire or fire and marine insurance corporation must be fully paid up in cash within one year after filing its articles of incorporation, and for a failure to have its subscribed capital stock paid up within the time prescribed the corporation shall not be permitted to take any new risks of any kind or character. Any officer, official, or director of the corporation taking or authorizing the taking of any risk for the corporation in violation of the terms of this section shall he punished by imprisonment for not less than one year nor more than live years and by a fine of not less than one thousand nor more than five thousand pesos.
SEC. 149. No insurance corporation shall loan any of its money or deposits except upon the security of unencumbered improved real estate in cities and centers of population of municipalities in the Philippine Islands, or on actually cultivated real estate in the Philippine Islands when the value of such real estate is at least one hundred per centum more than the amount to he loaned, or upon the security of first mortgages on real estate not otherwise encumbered transferred to it as collateral security when the value of the real estate described in the mortgage is one hundred per centum more than the amount of the mortgage with interest accrued, or upon bonds or of he!' evidence of debt of the Government of the United States or of the Philippine Islands or of the city of Manila or of municipalities in the Philippine Islands authorized by law to issue bonds: Provided, however. That a life insurance corporation may loan its money upon the security of a policy to an amount not exceeding the cash value of the policy.
SEC. 150. No loan by any insurance corporation on the security of real estate shall be made unless the title to such real estate shall have been first registered in accordance with the Land Registration Act.
SEC. 151. Insurance corporations may purchase, hold, own, and convey real and personal property as follows: The lot with the building thereon in which the corporation conducts and carries on its business, which shall not exceed in value one hundred thousand pesos, or such additional sum as may be fixed by the affirmative vote of the stockholders representing two-thirds of the subscribed capital stock; Such property, real and personal, as may have been mortgaged, pledged, or conveyed to it in good faith in trust for its benefit by reason of money loaned by it in pursuance of the regular business of the corporation, and such real or personal property as may have been purchased by it at sales under pledges, mortgages, or deeds of trust for its benefit on account of money loaned by it, and such real and personal property as may have been conveyed to it by borrowers in satisfaction and discharge of loans made by the corporation to them: Provided, however, That any real estate purchased by said corporation in payment or by reason of any loan made by said corporation shall be sold by the corporation within five years after the title thereto has been vested in it; Bonds and other evidences of debt of the Government of the United States or of the Philippine Islands or of the city of Manila or of any municipality in the Philippine Islands authorized by law to issue bonds, at the reasonable market value thereof, and Mich other securities as may be approved by the Secretary of Finance and Justice.
SEC. 152. No insurance corporation shall declare any dividend except from the profits of the transaction of the corporate business, and then only after retaining unimpaired the entire subscribed capital stock, a sum sufficient to pay all expenses incurred by the corporation, inclusive of taxes, and a sum sufficient to pay all losses reported or in the course of settlement.
SEC. 153. No fire or marine insurance corporation shall insure on any one risk to an amount more than one-tenth of its capital stock paid in and intact at the time of taking the risk without reinsuring the excess. RELIGIOUS CORPORATIONS.
SEC. 154. For the administration of the temporalities of any religious denomination, society, or church, and the management of the estates and properties thereof, it shall be lawful for the bishop, chief priest, or presiding elder of any such religious denomination, .society, or church to become a corporation sole unless inconsistent with the rules, regulations, or discipline of his religious denomination, society, or church or forbidden by competent authority thereof.
SEC. 155. In order to become a corporation sole, the bishop, chief priest, or presiding elder of any religious denomination, society, or church must file with the Chief of the Division of Archives, Patents, Copyrights, and Trade-Marks of the Executive Bureau articles of incorporation setting forth the following facts: That he is the bishop, chief priest, or presiding elder of his religious denomination, society, or church and that he desires to become a corporation sole; That the rules, regulations, and discipline of his religious denomination, society, or church are not inconsistent with his becoming a corporation sole and do not forbid it; That as such bishop, chief priest, or presiding elder he is charged with the administration of the temporalities and the management of the estates and properties of his religious denomination, society, or church within his territorial jurisdiction, describing it; The manner in which any vacancy occurring in the office of bishop, chief priest, or presiding elder is required to be filled, according to the rules, regulations, or discipline of the religious denomination, society, or church to which he belongs; The place where the principal office of the corporation sole is to be established and located, which place must be within the Philippine Islands.
SEC. 157. From and after the filing with the Chief of the Division of Archives, Patents, Copyrights, and Trade-Marks of the Executive Bureau of the said articles of incorporation, verified by affidavit or affirmation as aforesaid and accompanied by the copy of the commission, certificate of election, or letters of appointment of the bishop, chief priest, or presiding elder, duly certified as prescribed in the section immediately preceding, such bishop, chief priest, or presiding elder, as the ease may be, shall become a corporation sole, and all temporalities, estates, and properties of the religious denomination, society, or church heretofore administered or managed by him as such bishop, chief priest, or presiding elder shall be held in trust by him as a corporation sole, for the use, purpose, behalf, and sole benefit of his religious denomination, society, or church, including hospitals, schools, colleges, orphan asylums, parsonages, and cemeteries thereof. For the filing of such articles of incorporation the Chief of the said Division of Archives, Patents, Copyrights, and Trade-Marks shall collect twenty-five pesos.
SEC. 158. The successors in office of any bishop, chief priest, or presiding elder incorporated as a corporation sole shall become the corporation sole on accession to office, and shall be permitted to transact business as such on tiling with the Chief of the Division of Archives, Patents, Copyrights, and Trade-Marks of the Executive Bureau a copy of their commissions, certificates of election, or letters of appointment duly certified to be correct by any notary public or clerk of a court of record. For filing every such copy of a commission, certificate, or letters the said Chief of the Division of Archives, Patents, Copyrights, and Trade-Marks shall collect the sum of ten pesos. During a vacancy in the office of bishop, chief priest, or presiding elder of any church incorporated as a corporation sole, the person or persons authorized and empowered by the rules, regulations, or discipline of the religious denomination, society, or church represented by the corporation sole to administer the temporalities and manage the estates and property of the corporation sole during the vacancy shall exorcise all the power and authority of the corporation sole during such vacancy.
SEC. 159. Any corporation sole may purchase and hold real estate and personal property for its church, charitable, benevolent, or educational purposes, and may receive bequests or gifts for such purposes. Such corporation may mortgage or sell real property held by it upon obtaining an order for that purpose from the Court of First Instance of the province in which the property is situated; but before making the order proof must be made to the satisfaction of the court that notice of the application for leave to mortgage or sell has been given by publication or otherwise in such manner and for such time as said court or the judge thereof may have directed, and that it is to the interest of the corporation that leave to mortgage or sell should be granted. The application for leave to mortgage or sell must be made by petition, duly verified by the bishop, chief priest, or presiding elder, acting as corporation sole, and may be opposed by any member of the religious denomination, society, or church represented by the corporation sole: Provided, however, That in cases where the rules, regulations, and discipline of the religious denomination, society, or church concerned represented by such corporation sole regulate the methods of acquiring, holding, selling, and mortgaging real estate and personal property, such rules, regulations, and discipline shall control and the intervention of the courts shall not be necessary.
SEC. 160. Any religious society or religious order, or any diocese, synod, or district organization of any church, unless forbidden by the constitution, rules, regulations, or discipline of the religious order, society, or church of which it is a part, or by competent authority, may, upon the written consent of two-thirds of the membership, or by an affirmative vote of two-thirds of the membership had at a regular meeting, incorporate for the administration of its temporalities or for the management of its properties or states by tiling with the Chief of the Division of Archives, Patents, Copyrights, and Trade-Marks of the Executive Bureau articles of incorporation verified by the affidavit or affirmation of the presiding officer, secretary, or clerk or other member of such religious society, religious order, or diocese, synod, or district organization of tin; church setting forth the following facts: That the religious society or religious order or synod, diocese, or district organization is a religious society or religious order or diocese, synod, or district organization of some church; That two-thirds of its membership have given their written consent or have voted to incorporate at a regular meeting of the body; That the incorporation of the religious society, religious order, or diocese, synod, or district organization of the church desiring to incorporate is not forbidden by competent authority or by the constitution, rules, regulations, or discipline of the society, church, or order of which it forms a part; That the religious society or religious order or diocese, synod, or district organization of the church desires to incorporate for the administration of its temporalities or the management of its properties or estates; The place where the principal office of the corporation is to be established and located, which place must be within the Philippine Islands; The names and residences of the directors or trustees elected by the religious society or order, or the diocese, synod, or district organization of the church to serve for the first year or such other times as may be prescribed by the laws of the society or order, or of the diocese, synod, or district organization of the church, the board of directors or trustees to be not less than five nor more than fifteen. For the filing of such articles of incorporation the Chief of the Division of Archives, Patents, Copyrights, and Trade-Marks of the Executive Bureau shall collect twenty-five pesos.
SEC. 161. By-laws for the government of the corporation not inconsistent with law or with the constitution, by-laws, rules, regulations, or discipline of the religious society, religious order, or church of which the corporation forms a part may be adopted or amended at any regular meeting called for the purpose by the incorporated religious society or religious order or by any convention, synod, or other legal representative body of the church in and for the district.
SEC. 162. The by-laws of the corporation shall be signed and attested by the presiding officer and secretary or clerk of the religious society or order or of the convention, synod, or other representative body of the church adopting the same.
SEC. 163. The right to administer all temporalities and all property held or owned by a religious order or society, or by the diocese, synod, or district organization of any religious denomination or church shall, on its incorporation, pass to the corporation and shall lie held in trust for the use, purpose, behoof, and benefit of the religious, society or' order so incorporated or of the church of which the diocese, synod, or district organization is an organized and constituent part.
SEC. 164. Such corporations shall have the right to purchase, hold, mortgage, or soil real estate for its church, charitable, benevolent, or educational purposes by and with the consent of a majority of its membership. COLLEGES AND INSTITUTIONS OF LEARNING.
SEC. 165. Any number of persons not less than five who have established or who may desire to establish a college, school, or other institution of learning may incorporate themselves by filing with the Chief of the Division of Archives, Patents, Copyrights, and Trade-Marks of the Executive Bureau articles of incorporation setting forth the following facts : The name of the corporation; The purpose for which it is organized : The place where the college, school, or institution of learning is to be conducted; The qualifications of trustees and the number of trustees, which shall not be less than five nor more than fifteen: Provided, however, That the number of trustees shall be some multiple of five; The term for which trustees shall serve and the names and residences of the trustees elected for the first term; The amount of money and description of the property to be devoted to the maintenance and support of the college, school, or other institution of learning.
SEC. 166. Societies or organizations which have established colleges, schools, or other institutions of learning may, unless forbidden by their constitutions or by competent authority exercised over them, incorporate with the written consent of two-thirds of the membership, or by an affirmative vote of two-thirds of the membership had at a regular or at a special meeting called for the purpose, by filing with the Chief of the Division of Archives, Patents, Copyrights, and Trade-Marks of the Executive Bureau articles of incorporation setting forth the facts proscribed for articles of incorporation in section one hundred and sixty-five.
SEC. 167. Societies or organizations so incorporated shall have the power to adopt by-laws not inconsistent with law and may provide in such by-laws for the election of trustees and their terms of office.
SEC. 168. Whenever so empowered in writing by the Secretary of Public Instruction and under such terms and conditions as said Secretary may prescribe, universities and colleges duly incorporated in accordance with this Act may grant diplomas and confer degrees.
SEC. 169. Unless otherwise provided in the by-laws the board of trustees of incorporated schools, colleges, or other institutions of learning shall, as soon as organized, so classify themselves that the term of office of one-fifth of their number shall expire every year. Trustees thereafter elected to fill vacancies occurring before the expiration of term shall hold office only for the unexpired term. Trustees elected thereafter to fill vacancies caused by expiration of term shall hold office for five years. A majority of the trustees shall constitute a quorum for the transaction of business. The office of the corporation shall be at the college, school, or other institution of learning. The powers and authority of trustees shall be defined in the by-laws.
SEC. 170. Any educational society or organization, by a two-thirds vote of its membership had at a regular or at a special meeting called for the purpose, or by the written consent of two-thirds of its members without a meeting, and any existing educational corporation or body claiming to be such may, by a unanimous vote of its trustees present at a regular or special meeting called for the purpose or by the written consent of such trustees without a meeting, convey all or any part of its property, rights, and franchises to a corporation organized for educational purposes in conformity with ibis Act. Any corporation organized for educational purposes in accordance with this Act shall have the right by and with the consent of a majority of its membership to purchase, hold, mortgage, or sell real estate for educational purposes. BUILDING AND LOAN CORPORATIONS.
SEC. 171. All corporations whose capital stock is required or is-permitted to be paid in by the stockholders in regular, equal, periodical payments and whose purpose is to accumulate the savings of its stockholders, to repay to said stockholders their accumulated savings and profits upon surrender of their stock, to encourage industry, frugality, and home building among its stockholders, and to loan its funds and funds borrowed for the purpose to stockholders on the security of unencumbered real estate and the pledge of shares of capital stock owned by the stockholders as collateral security, shall be known as building and loan corporations, and the words "murual building and loan association" shall form part of the name of every such corporation.
SEC. 172. The articles of incorporation shall state the purpose of the corporation as set forth in section one hundred and seventy-one.
SEC. 173. Any person may become a stockholder of any building and loan corporation by subscribing for one or more shares therein and signing the by-laws of the corporation, following his signature with his post-office address.
SEC. 174. The capital stock of such corporations shall be paid in by the stockholders in regular, equal, periodical payments, known as dues, at such times and in such amounts as shall be provided in the by-laws of the corporation. The dues on each share of stock subscribed for by a stockholder shall continue to be paid by the stockholder to tire corporation until the share lips been duly withdrawn, canceled or forfeited, or until the shave has reached its matured value; that is to say, when the dues paid on each share and the net earnings thereof, in accordance with the by-laws, shall amount to the par value of the share, but such corporation may issue and sell at par for cash, paid-up or investment stock, and may pay to the holders of such shares a rate of interest or dividend to be fixed by the board of directors of the corporation, which shall be expressed ill the stock shares and shall not participate further in the profits or accretions of the corporation. Such paid-up or investment stock may be surrendered by the holder at Any time upon the giving of ninety days' notice to the corporation, or such briefer notice as the corporation may fix, and upon such surrender the holder will be entitled to receive only the amount of principal invested together with the accrued interest or earned dividend fixed by the board of directors and expressed in the stock shares. The capital stock still consist of the proceeds of such paid-up or investment stock and of such accumulated dues together with the earnings and profits of the corporation, and shall in no case exceed three million pesos.
SEC. 175. The capital stock shall be divided into shares of the matured or par value of two hundred pesos each.
SEC. 176. Certificates of stock shall be issued to each stockholder on the payment of membership fee and first installment of dues by him. The corporation shall have the power to charge a membership or entrance fee not exceeding one peso upon each share of stock issued and may also charge a transfer fee not exceeding twenty centavos on each share transferred, all of which shall be paid into the treasury and accounted for as funds of the corporation. Shares which have not been pledged as security for the payment of a loan shall be called "free shares." and shares which have been so pledged shall be called pledged shares.
SEC. 177. Payment of dues on shares of stock shall commence from the time that such shares were issued.
SEC. 178. For any neglect, refusal, or failure to make payment of dues or premiums or interest on loans when due, the corporation shall have power by its by-laws to impose and collect a fine on the delinquent or defaulting stockholder not exceeding ten per centum of the defaulted amount due from him and a like fine on every regular pay day during such default. Payments of dues or interest may be made in advance, but the corporation shall not allow interest on such advance payments at a greater rate than six per centum per annum nor for a longer period than one year.
SEC. 179. Whenever any stockholder shall be six months in arrears in the payment of his dues upon five shares, the secretary or clerk of the corporation shall give him notice in writing of his arrearages by mailing to him at the last post-office address given by him to the corporation a statement of all such arrearages. If the stockholder shall not: pay within two months after such notice the full amount of his arrearages the board of directors may, at its option, declare his shares forfeited. At the time of the forfeiture the withdrawal value of the forfeited shares shall be determined and stated by the board of directors, and the defaulting stockholder shall be entitled to receive such value without interest upon such notice as is required of a withdrawing stockholder. In determining the withdrawal value of such forfeited shares the board of directors shall charge such shares with all fines assessed in accordance with this section.
SEC. 180. When the stock shall have reached its matured value, payment of dues thereon shall cease and holders of such matured shares shall lie paid out: of the funds of the corporation the matured value of their shares with interest thereon at the rate determined in the by-laws, from the time the board of directors shall declare such shares to have matured until payment is made. The order of payment of matured shares shall be determined by the by-laws and at no time shall more than one-third of the receipts of the corporation be applied to the payment of matured shares without the consent of the board of Directors: Provided, however, That if shares pledged to the corporation as security for loans shall mature before the loan is repaid the matured value may be paid to the holder in cash as in this section provided or may be credited to the loan at the option of the board of directors.
SEC. 181. The moneys in the hands of the treasurer of the corporation and such sums as may be borrowed by the corporation for the purpose shall be loaned out: in open meeting to the stockholders who shall pay the highest premium for such loan, or said moneys may be loaned at such premium as may be fixed from time to time by the board of directors. The premium may be deducted from the amount of the loan or such proportion may be so deducted as may be prescribed in the by-laws. Where only a part of the premium is deducted the balance thereof must be paid to the corporation in such installments as the by-laws shall determine: Provided, however, That the number of installments into which the premium is divided shall be uniform for all loans made by the corporation, and that the time and manner of payment of such installments shall be prescribed in the by-laws.
SEC. 182. Every loan made by the corporation must be property evidenced by a note or other instrument in writing and must be secured by a first mortgage or deed of trust on unencumbered real estate and also by the pledge to the corporation of shares of stock of the corporation the matured value of which shall at least equal the amount loaned: Provided, however, That loans may be c made on the security of free shares pledged to the corporation for the. repayment of the loan in case, at the time that the loan is made, the withdrawal value of such free shares under the by-laws shall exceed the amount borrowed and interest thereon for six months: And provided further, That no loan on the security off real estate e shall be made unless the title to such real estate shall have been first registered in accordance with the Land Registration Act and unless such real estate shall the situate within the city or municipality in which the principal place of business of the corporation is established.
SEC. 183. In the discretion of the board of directors a loan may be repaid by the surrender of pledged shares whose withdrawal value equals the amount loaned and all interest and lines accrued thereon.
SEC. 184. The rate of interest on all loans may be fixed in the by-laws or may be prescribed from time to time by the board of directors.
SEC. 185. Whenever a borrowing stockholder shall be three months in arrears in the payment of his dues on stock or the interest or premium or installments of premium on any loan, the whole loan, at the option of the board of directors, shall become due and payable and the board may proceed by action to enforce collection upon the securities held by the corporation. The withdrawal value of all shares pledged as collateral security at the time of the commencement of the action shall be applied to the payment of the loan, and such shares from the time of such application shall be deemed to be surrendered to the corporation.
SEC. 186. The corporation may purchase at any sale, public or private, any real estate upon which it may have a mortgage, judgment, lien, or other incumbrance, or in which it may have any interest, and may sell, convey, lease, or mortgage such real estate: Provided, That real estate so purchased must be finally disposed of or sold by the corporation within five years after receiving title to the same. SEC:. 187. Stockholders may surrender their shares and withdraw from the corporation after paying twelve monthly installments of dues and upon giving sixty days' notice in writing to the board of directors, and the withdrawal value of such shares shall be the total sum of the clues paid thereon plus such interest as shall be allowed by the board of directors: Provided, however, Thai not more than one-third of the total receipts of the corporation shall be paid in any one month to retire such shares: And provided further, That payment for such surrendered shares shall be made in the order in which notices of withdrawal have been received by the board of directors: And provided further, That should the business of the corporation during the period such withdrawing member has been a stockholder show a loss, the withdrawal value of stock shall be charged with its proportion of such loss. Except in cases of voluntary or forced liquidation of a building and loan corporation or of forfeiture as provided by section one hundred and seventy-nine of this Act, the board of directors of such corporations shall not have, power to force the surrender and withdrawal of unmatured stock.
SEC. 189. At least once a year profits and losses on all business transacted shall be determined by the board of directors and apportioned to all the shares in each series outstanding at the time of such apportionment on the basis of the actual value of such shares as distinguished from their withdrawal value.
SEC. 190. No foreign building and loan corporation or building and loan corporation not formed, organized, or existing under the laws of the Philippine Islands shall be permitted to transact business in the Philippine Islands. REPEALING PROVISION.
SEC. 191. The Code of Commerce, in so far as it relates to corporations or sociedades anonimas, and all other Acts or parts of Acts in conflict or inconsistent with this Act, are hereby repealed, with the exception of Act Numbered Fifty-two, entitled "An Act providing for examinations of banking institutions in the Philippine Islands, and for reports by their officers," as amended, and Act Numbered Six hundred and sixty-seven, entitled "An Act prescribing the method of applying to governments of municipalities, except the city of Manila, and of provinces for franchises to construct and operate street railway, electric light and power, and telephone lines, the conditions upon which the same may be granted, certain powers of the grantees of said franchises, and of grantees of similar franchises under special Act of the Commission, and for other purposes:" Provided however, That nothing in this Act contained shall be deemed to repeal the existing law relating to those classes of associations which are termed sociedades colectivas, sociedades en comandita, and sociedades de cuentas en participacion, as to which associations the existing law shall be deemed to be still in force: And provided further. That existing corporations or sociedades anonimas, lawfully organized as such, which elect to continue their business as such sociedades anonimas instead of reforming and reorganizing under and by virtue of the provisions of this Act, shall continue to be governed by the laws that were in force prior to the passage of this Act in relation to their organization and method of transacting business and to the rights of members thereof as between themselves, but their relations to the public and public officials shall be governed by the provisions of this Act.
SEC. 192. This Act shall take effect on April first, nineteen hundred and six. Enacted, March 1, 1906.
Provisions on this page are reproduced verbatim from official open data. See the attribution line.
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).