Imágenes de páginas
PDF
EPUB

"From our examination of the authorities and the cases referred to, we have come to the conclusion that as a general rule it is the duty of the trustees to invest funds held by them in government or state securities, or in bonds and mortgages or unincumbered real estate. That while this rule is not arbitrary and inflexible so as to admit of no possible exception, it is the basis upon which trustees should usually act; that in any event the trustee is bound to employ such diligence, care and prudence in the management of the trust as diligent, careful, prudent men of discretion and intelligence generally employ in their own like affairs, and that for a neglect to make use of such diligence, care and prudence, the trustee becomes liable."

Of course, the prudence and good faith of the investment must necessarily be determined by the particular facts surrounding each case in which that question is the subject-matter of inquiry.

The expression in the statute "unless the investments are such as the courts recognize as proper when made by an individual acting as trustee, executor, administrator, guardian, receiver, committee or depositary," means such an investment as the court would recognize as proper upon the facts of the particular case, applying the rule stated by Judge Haight, as above.

$191. Official oath not required. Upon the appointment of such corporation as executor, administrator, guardian, trustee, receiver or committee, as provided by this chapter, no official oath shall be required from such corporation or trust company. (Former section 158b, as amended by L. 1907, ch. 612, § 1.)

§ 192. Deposits of minors and trust deposits. -When any deposit shall be made by or in the name of any minor, the same shall be held for the exclusive right and benefit of such depositor, and free from the control or lien of all other persons, except creditors, and shall be paid, together with the dividends and interest thereon to the person in whose name the deposit shall have been made, and the receipt or acquittance of such minor shall be a valid and sufficient release and discharge for such deposit or any part thereof to the corporation. When any deposit shall be made by any person in trust for another, and no other or further notice of the existence and terms of a legal and valid trust shall have been given in writing to such trust company in the event of the death of the trustee, the same, or any part thereof, together with the dividends or interest thereon, may be paid to the person for whom the deposit was made.

(Former section 158a, as added by L. 1907, ch. 612, § 1.)

See section 144, ante.

§ 193. Investments of capital, surplus, undivided profits and deposits. The capital of every such corporation shall be invested in

[ocr errors]

1

bonds and mortgages on unincumbered real property in this state not exceeding sixty per centum of the value thereof, or in the stocks or bonds of this state, or of the United States, or of any county or incorporated city of this state duly authorized by law to be issued. Stocks or bonds constituting a part of the lawful investment of capital of any such corporation shall not be valued upon its books or entered in its reports to the superintendent of banks at a higher price or value than their investment value as determined by amortization, after providing in a manner approved by the superintendent of banks for the gradual extinction of premiums or discounts on all such securities so as to bring them to par at maturity. The moneys received by any such corporation in trust may be invested in its discretion in the securities of the kind in which its capital is required to be invested, or in the stocks or bonds of any state of the United States, or in such real or personal securities as it may deem proper. No such corporation shall hold stock in any private corporation to an amount in excess of ten per centum of the capital, surplus and undivided profits of the corporation holding such stock; nor shall any such corporation hold or own stock of another moneyed corporation the par value of which is in excess of ten per centum of the total amount of the stock of such other moneyed corporation issued and outstanding, provided, however, that this limitation shall not apply to the ownership of capital stock of a safe deposit company the vaults of which are connected with or adjacent to an office of such trust company. Any trust company which, on the thirteenth day of April, nineteen hundred and eight, held stock in another moneyed corporation in excess of ten per centum of the total amount of the stock of such other moneyed corporation issued and outstanding shall sell or dispose of the excess so held on or before April thirteenth, nineteen hundred and eleven. (Former section 159; R. S., 1599, 1601; L. 1887, ch. 546, §§ 20, 27; L. 1890, ch. 439, § 1; L. 1903, ch. 160; amended by L. 1909, ch. 294.)

§ 194. Interest and accumulations. On all sums of money not less than one hundred dollars which shall be collected and received by such corporation acting as executor, administrator, guardian, trustee, receiver or committee under the appointment of any court or officer, or in any fiduciary capacity under such appointment, or as a depositary of moneys paid into court, interest shall be allowed by

such corporation at not less than the rate of two per centum per annum until the moneys so received shall be duly expended or distributed. If such interest moneys, or any part thereof, shall not annually be expended or distributed pursuant to the terms or provisions of the trust under which such moneys are held, the amount thereof not so expended or distributed shall be accumulated by such corporation for the benefit of the parties interested in such trust fund, and shall be added to the principal to constitute a new principal, upon which interest shall thereafter be computed.

(Former section 160; R. S., 1601; L. 1887, ch. 546, §§ 24, 25.)

§ 195. Directors. The affairs of every such corporation shall be managed and its corporate powers exercised by a board of directors of such number, not less than thirteen nor more than thirty, as shall from time to time be prescribed in its by-laws. The number of directors necessary to form a quorum for the transaction of business may be fixed by the organization certificate, or the by-laws; such quorum shall not be less than one-third of such number of directors, and in no case less than seven. No person can be a director who is not the holder of at least ten shares of the capital stock of the corporation; and every person elected to be a director, who after such election shall hypothecate, pledge or cease to be the owner in his own right of the amount of stock aforesaid, shall cease to be a director of the corporation, and his office shall be vacant. The persons named in the organization certificate, or such of them respectively, as shall become holders of at least ten shares of such stock, shall constitute the first board of directors, and may add to their number not exceeding the limit of thirty, and shall severally continue in office until others are elected to fill their respective places. Within six months from the time when such corporation shall commence business, the first board of directors shall classify themselves by lot into three classes, as nearly equal as may be. The term of office of the first class. shall expire on the third Wednesday of January next following such classification; the term of office of the second class shall expire one year thereafter; and the term of office of the third class shall expire two years thereafter. At or before the expiration of the term of the first class, and annually thereafter, a number of directors shall be elected equal to the number of directors whose term will then

expire who shall hold their offices for three years or until their successors are elected. Such election shall be held at the office of the corporation and at such time and upon such public notice not less than ten days, by advertisement in at least one newspaper approved by the superintendent of banks published in the city where such corporation is located, as shall be prescribed in the by-laws. In case of failure to elect any director on the day named, the directors whose terms of office do not that year expire, may proceed to elect a number of directors equal to the number in the class whose term that year expires, or such number as may have failed of re-election. The persons so elected, together with the directors whose terms of office shall not that year expire, shall constitute the board of directors until another election shall be held according to law. Vacancies occurring in the intervals of elections shall be filled by the board. Each director when appointed or elected shall take an oath that he will, so far as the duty devolves on him, diligently and honestly administer the affairs of such corporation and will not knowingly violate, or willingly permit to be violated, any of the provisions of law applicable to such corporation, and that he is the owner in good faith and in his own right, of the number of shares of stock required by this section, subscribed by him or standing in his name on the books of the corporation, and that the same is not phyothecated or in any way pledged as security for any loan or debt and, in case of re-election or reappointment, that such stock was not hypothecated, or in any way pledged as security for any loan or debt during his previous term. Such oath shall be subscribed by the director making it, and certified by the officer before whom it is taken, and shall be immediately transmitted to the superintendent of banks and filed and preserved in his office.

(Former section 161; R. S., 1598, 1599; L. 1887, ch. 546, §§ 14, 15; amended by ch. 510 of 1901.)

See General Corporation Law, §§ 26-32; Stock Corporation Law, §§ 34, 35; Penal Law, §§ 290, 297, 664, 665, 668.

1. May 22, 1907, the attorney-general replied to the question, whether a trust company, in a proceeding for a change in the number of its directors, may elect whether it shall pursue the method prescribed by (then section 161) of the Banking Law, or the method provided for by section 21 of the Stock Corporation Law at its pleasure. He said:

"There appears to be no conflict between the provisions of the Banking Law

and section 21 of the Stock Corporation Law relative to the subject of changing the number of directors.

"While the provisions of the two acts relate to the same subject-matter, yet they are not in conflict with each other, and, therefore, in conformity with the rule laid down in section 33 of the General Corporation Law, the provision in the Banking Law must be deemed to be in addition to the provisions contained in the Stock Corporation Law relating to the same subject-matter, and both provisions must be regarded as applicable to the proceeding to change the number of directors."

§ 196. Liability of stockholders and directors. If default shall be made in the payment of any debt or liability contracted by any such corporation, the stockholders thereof shall be individually responsible, equally and ratably, for the then existing debts of the corporation, but no stockholder shall be liable for the debts of the corporation to an amount exceeding the par value of the respective shares of stock by him held in such corporation at the time of such default. For all losses of money which the capital stock shall not be sufficient to satisfy, the directors shall be responsible in the same manner and to the same extent that directors are now responsible in law or equity.

(Former section 162; R. S., 1602; L. 1887, ch. 546, §§ 29, 30; L. 1889, ch. 558.) See Stock Corporation Law, §§ 28, 35, 56-59; Penal Law, §§ 290, 292-295, 298, 664.

1. Before action can be brought against stockholder to enforce such liability in a case where the trust company has not been dissolved and is subject to suit, a judgment against the trust company must first be had. Gause v. Boldt, 188 N. Y. 546.

197. Powers of specially chartered trust companies. Every trust company incorporated by a special law shall possess the powers of trust companies incorporated under this chapter and shall be subject to such provisions of this chapter as are not inconsistent with the special laws relating to such specially chartered company.

(Former section 163.)

This section grants no new powers. Jenkins v. Neff, 186 U. S. 230, 163 N. Y. 320.

§ 198. Lawful money reserve. Every trust company having its principal place of business or a branch office for the receipt and payment of deposits in a borough in any city in the state which borough had according to the last preceding state or United States census a population of eighteen hundred thousand or over shall at all times.

« AnteriorContinuar »