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purpose of their association or society; may make bylaws, not inconsistent with the organic act and laws of this territory, or the constitution and laws of the United States, which by-laws shall define the manner and form of electing directors, trustees, or managers and officers of the corporation, association, or society, and the qualifications and duties of the same, with terms of office, not exceeding three years, and also the qualifications and privileges of the members thereof.

Number

of

not less than

SEC. 5. The affairs of all corporations, associations, or societies, organized or doing business under the provisions of this act, shall be managed by not less than five directors, trustees, or managers, a majority of whom shall directors to be be residents of this territory, who shall be elected from five. and by the members at such time and place, and for such period, not exceeding three years, as may be provided for in the by-laws, and may be eligible for re-election : Provided, that, as near as practicable, an equal number shall be elected each year. Whenever directors, trustees, or managers shall be elected a certificate under the seal of the corporation, giving the name and residence of those elected, and the term of their office, shall be recorded in the office of the recorder of deeds where the certificate of organization is recorded. Vacancies in the board of directors, trustees, or managers shall be filled in the manner provided in the by-laws, and upon filling any vacancy a like certificate shall be recorded.

Must

state

for

Sec. 6. Assessment notices sent to members by any association or corporation doing business under the pro-which assess

for visions of this act shall state the object or objects for ment is made. which the money to be collected is intended; and no part of the funds collected for the payment of death benefits shall be applied for any other purpose.

SEC. 7. Any agent, physician, or other person, who shall knowingly secure, or cause to be secured, a certifi- falsely certify: cate of membership on any person, without his knowl-ing, bodily

of apedge or consent, or by means of misrepresentations, false, plicant for

membership. fraudulent, or untrue statements, be instrumental in securing a certificate of membership on any aged or infirm person, or in restoring to membership any person not in an insurable condition, shall be deemed guilty of a misdemeanor, and, upon conviction thereof, shall be fined in a sum not less than one hundred dollars nor more than one

thousand dollars, or be imprisoned in the county jail not less than thirty days nor more than one year, or both, in the discretion of the court; and said certificate or renewal so secured shall be absolutely void.

Sec. 8. All corporations, associations, or societies, transacting business under the provisions of this act, may provide by by-laws for the accumulation of a surplus, general or

guarantee fund, which may be invested only in the corporate Surplus funds, name ofthe association or society, in the United States, state, how invested, territorial, or other first-class convertible bonds or stocks,

upon which interest has not been in default. Such funds, when so set apart and so invested, shall, with the increase thereof, belong to such corporation, association, or society, and not to the directors, trustees, managers, or officers thereof; and shall be used only for mortuary benefits, without assessment, or applied in payment of future assessments, or otherwise used for the promotion of the object or objects for which said funds are specially provided and set apart, and such use shall not be deemed or construed to mean a profit received by members within the meaning of the statutes of this territory.

surance

com

9

SEC. 9. All corporations, associations, or societies, organ

ized under the provisions of this act, or that have heretoNote subject fore been organized within this territory, under any charto governing in

ter, compact, or agreement, or statute of this territory, panies. for the purpose of furnishing life, accident, or permanent

disability indemnity or mortuary benefit on the assessment plan, in accordance with the provisions of the first section of this act, shall not be deemed insurance companies, nor subject to the laws of this territory relating thereto, but shall comply with, and conform to, all the

requirements and provisions of this act; and shall by Statement to their president and secretary, or like officers, make to upon filing said certificate, a fee of twenty-five dollars, and the said auditor shall publish said statement in his annual report: Provided, that nothing herein contained shall be held to apply to any organization of a purely social, religious, or benevolent character, where no commissions are paid, and no salaried officers or agents employed; nor to any local association or society organized under, or subject to, the control of a grand or supreme body; nor to any secret organization having subordinate lodges or councils which has been organized under the laws of this or any other territory, and which is now permitted to do business in this territory.

the territorial auditor annually, on or before the first day of March, in each and every year, a statement, under oath, for the year ending on the thirty-first day of December next preceding, upon blanks furnished by said auditor, which blanks shall be such as will show its financial condition, assets, liabilities, total amount of indemnity in force, number of members, number whose membership has terminated during the year, and cause thereof, total receipts and sources thereof, total expenditures and objects thereof, and the average amount paid on each certificate, and shall pay into the treasury of the territory,

be ally.

SEC. 10.

The territorial auditor shall have authority to appoint an expert to verify the statements aforesaid, by examination of the books and papers of the corporation, and make such other examination as he may deem necessary. The expense of such examination shall be paid by the corporation, association, or society having its books examined, and shall not exceed the necessary traveling and hotel expenses of said expert, and reasonable compensation for such expert while engaged in such examination.

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SEC. II. The territorial auditor shall, at the request of any corporation, association, or society, doing business Territorial under the provisions of this act in this territory on the make examinassessment plan, make an examination of such corpora-cial condition. tion, and shall furnish a certificate of the results of such examination, showing all its assets, and how invested, and such other particulars as may be deemed necessary to show the character and condition of said corporation, and the necessary expense of the said examination shall be paid by the corporation requesting the same. SEC. 12.

Whenever any corporation, association, or society, organized or having transacted business under the provisions of this act, shall neglect or refuse to make its annual staternent as required by this act, or whenever Penalty for the said auditor shall find, upon examination, as provided

requirements in section 10 of this act, that any willfully false or untrue of this act. statements in any material respect have been made, or that the business of the corporation, association, or society has been conducted fraudulently, or in willful violation of any of the provisions of this act, or that the corporation has transacted business different from that

m ance with the

authorized by its certificate of incorporation, he shall communicate the fact to the district attorney, whose duty it shall be to apply to the district court where its principal office is located, for an order requiring the officers or directors, trustees or managers of such corporation to show cause why they should not be removed from office, or its business closed; and the court shall thereupon hear the allegations and proofs of the respective parties, and if it shall appear to the satisfaction of the said court that any one or more of them have been guilty of fraud or any material irregularity or violation of the law to the injury of the said corporation, association, or society, or of non-compliance with any of the provisions of this act, the court shall decree a removal from office of the guilty party or parties, which decree shall forever debar him or them from holding a similar office, and shall substitute a suitable person or persons to serve until the regular annual meeting, or until a successor or successors are regularly chosen or elected; or, if it shall appear to the said court that the interests of its members or the general public so require, the court may decree a dissolution of such corporation, association, or society, and a distribution of its effects.

SEC. 13. Any officer, director, trustee, or manager, or any other person having charge of the books and papers of any corporation conducting business under the provisions of this act, who shall willfully neglect or refuse to comply with the provisions of this act, shall be subject to a fine of not less than ten dollars nor more than one hundred dollars for such offense. Any person who shall act as agent, or be instrumental in securing or inducing any person to become a member of any assessment plan corporation, association, or society, that has not complied with the provisions of this act, shall be deemed guilty of a misdemeanor, and shall be subject to a fine of not less than fifty dollars for each offense, and shall be imprisoned in the county jail located in the county where conviction is secured until such fine is paid, not exceeding thirty days for each conviction.

When first

SEC. 14. The first statement to the territorial auditor, statement shali as required under the provisions of section 9 of this act, be made.

shall be made on or before the first day of July, A. D. 1885, and shall embrace all the facts required by the provisions of this act, from the date of organization, up to the thirty-first of December, 1884. Any corporation, association, or society, failing or refusing to make the statement required by this section within the time specified, shall be proceeded against in the same manner, and shall be subject to the same penalty, as provided in section 12 of this act.

shall be issued

.

SEC. 15. Any corporation, association, or society, organized under the laws of any other territory or government, for the purpose of furnishing life, accident, or permanent disability indemnity upon the assessment plan, where benefits are paid to such as have an insura- When license ble interest only, complying with the provisions of this to do business. act, so far as applicable, and showing that it has deposited with the proper authority or department of the territory or state government under which it is incorporated, not less than fifty thousand ($50,000) dollars as a guarantee fund for the security of its members, shall be licensed by the territorial auditor upon the payment into the territorial treasury of a fee of $100, to do business in this territory, provided such corporation, association, or society shall first deposit with the said auditor a certified copy of its charter or articles of incorporation, a copy of its statement of business for the preceding year, sworn to by its president and secretary, or like officers, showing a detailed account of expenses and income, the amount of life indemnity in force, its assets and liabilities, in detail, number of members, and a certificate, sworn to by the president and secretary, or like officers, setting forth that an ordinary assessment upon its members is sufficient to pay its maximum certificate of membership to the full limit named therein; a copy of its policy or certificate of membership, application and by-laws, which must show that death losses are in the main provided for by assessments upon the surviving members; and it shall legally designate a person or agent residing in the territory to receive service of process for said corporation.

SEC. 16. Such corporations, associations, or societies,

Fee to be paid shall pay into the treasury of the territory, upon filing on filing annueach annual statement, a fee of $25, and in the event of al statement. its failure to make such statement on or before the first day of March of each year, the auditor shall revoke its license, and thereafter, or until such annual statement is made, it shall be deemed to be doing business unlawfully

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