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of others that must be cared for in addition to its own securities and records. If only one vault is erected, that part used by the banking department should be separated by a grill from the portion used by the trust department. If a safety deposit department is to be conducted, of course a special equipment is necessary.
ORGANIZATION OF TRUST COMPANIES BY SPECIAL CHARTer.
As already stated, trust companies in some States are incorporated only by special charter granted by the Legislature. In these States, after it has been decided to apply for a charter, a committee of the persons interested is appointed to draw up, under legal advice, an act of incorporation involving such provisions as are wanted (being sure to specify a wide range of powers), and to arrange for the introduction of the bill to the Legislature by some member thereof. If the Legislature sces fit to grant the charter, either as presented or amended by the Legislature, the company is usually authorized to begin business as soon as it wishes after the passage of the act.
Such special acts, in the absence of general laws regulating the business of trust companies, define the powers and limitations of the company. If general laws for such regulation of trust companies exist in the State, then the special act merely names the corporators, creates them a corporation under the name chosen, and confers upon them the authority to transact a trust company business under the general laws in force relating to such corporations.
The charters of companies established in the early years of the trust company movement have had added to them numerous amendments granting larger powers, as the Legislatures became more liberal in such matThe amendments are passed by the Legislature in the form of special acts, and become part of the charter upon their formal acceptance by the company. In cases where general laws regulating the business of trust companies have been passed subsequent to the granting of special charters, such general laws, or parts of them, become part of the charter of the company upon their acceptance by the latter. The following charter of a large Boston company,* doing both a banking and a trust business, will illustrate the usual form and scope of these special charters and of acts amending same:
COMMONWEALTH OF MASSACHUSETTS.
THE NEW ENGLAND TRUST COMPANY.
ACT OF INCORPORATION, GRANTED APRIL 22, 1869.
SECTION 1. Nathaniel Thayer, John C. Lee, Benjamin T. Reed, their associates and successors, are hereby made a corporation by the name of "The New England Trust Company," to be located in the City of Boston, for the purpose of holding property in trust, and for other purposes hereinafter set forth; and
Trust companies in Massachusetts were formerly incorporated only by special act. They may now be incorporated under the general incorporation law for trust companies, signed by the Governor May 25, 1904.
subject to all the duties, restrictions and liabilities set forth in all general laws which now are or may hereafter be in force in relation to such corporations.
SECTION 2. The capital stock of said corporation shall be an amount not exceeding in the whole the sum of one million dollars (as amended March 30, 1871), divided into ten thousand shares of one hundred dollars each, and the same shall be paid for at such time and in such manner as the board of directors shall decide; provided, that no business shall be transacted by the corporation until the whole amount is subscribed for, and at least one hundred thousand dollars shall have been actually paid in and invested according to law, and no shares shall be issued nor dividends made until the par value of such shares shall have been actually paid in cash.
SECTION 3. The said corporation shall have power to receive and hold moneys or property in trust or on deposit from courts of law or equity, including courts of probate and insolvency, executors, administrators, assignees, guardians, trustees, corporations or individuals, upon such terms or conditions as may be obtained or agreed upon.
SECTION 4. Any court of law or of equity, including courts of probate and insolvency of this State, may, by decree or otherwise, direct any moneys or property under its control, or that may be paid into court by the parties to any legal proceedings, or which may be brought by reason of any order or judgment in equity or otherwise, to be deposited with said corporation upon such terms and subject to such instructions as may be deemed expedient by said court; provided, however, that said corporation shall not be required to assume or execute any trust without its own assent.
SECTION 5. It shall be lawful for said corporation to invest its capital and all the moneys intrusted to it, or in any way received by it, in the authorized loans of the United States, or of any of the New England States, or cities or towns of this Commonwealth; in the stock of national banks organized within this Commonwealth; in the first mortgage bonds of any railroad company which has earned and paid regular dividends for two years next preceding such investment, or in the bonds of any such railroad company as is unincumbered by mortgage, or in the stock of such railroad companies incorporated by this State; and the said corporation may make loans upon mortgages on real estate within this Commonwealth, or upon the notes of corporations created under the laws of this Commonwealth, and the notes of individuals, with a sufficient pledge as collateral, of any of the aforesaid securities; but all real estate acquired by foreclosure of mortgages, or by levy of execution, shall be sold at public auction within two years of such foreclosure or levy.
Amended Charter-Section 2. It shall be lawful for the said corporation to invest its capital, and all moneys held by it in trust, in the authorized loans of any of the counties, cities, or towns in any of the New England States, or to loan the same to this Commonwealth, or to any county, city or town therein; and said corporation may also invest such capital and moneys in any other securities in which savings banks now are or hereafter may be allowed to invest, and shall be subject to and governed by the provisions concerning savings banks which are contained in sections one hundred and forty-three and one hundred and forty-six of chapter 57 of the General Statutes.*
* General Statutes, Chapter 57.
Section 143. "No such corporation shall hold, both by way of investment and as security for loans, more than one-half the capital stock of any bank, nor have more than seventy-five per cent. of its deposits invested in mortgages of
SECTION 6. Said corporation may hold real estate in the City of Boston, suitable for the transaction of its business, to an amount not exceeding two hundred thousand dollars.
EXAMINATION BY SAVINGS BANK COMMISSIONER.
SECTION 7. The said corporation shall semi-annually make a return to the Commissioner of Savings Banks of this Commonwealth, on or before the second Mondays of May or November, which shall be signed and sworn to by a majority of its board of directors, stating the full amount of its capital stock and of all moneys and property, in detail, in the possession or charge of said company, as deposits, trust funds, or for purposes of investment; and the Commissioner of Savings Banks shall have the same access to the vaults, books, and papers of this corporation, and it shall be his duty to inspect, examine and inquire into its affairs, and to take proceedings in regard to them in the same manner and to the same extent as if this corporation were a savings bank, subject to all the general laws which now are or hereafter may be in force in relation to such institutions in this regard.
SECTION 8. Repealed by the amended charter, and the following substituted: Section 8. Said corporation shall be subject to the provisions of chapter two hundred and eighty-three of the acts of the year eighteen hundred and sixtyfive, and any acts now existing, or which may hereafter be passed in amendment or lieu thereof; it shall also, annually, between the first and tenth days of May, return to the tax commissioner a true statement, attested by the oath of some officer of the corporation, of all personal property held upon any trust on the first day of May, which would be taxable if held by an individual trustee residing in this Commonwealth, and the name of every city or town in this Commonwealth where any beneficiary resided on said day, and the aggregate amount of such property then held for all beneficiaries resident in each of such cities and towns, and also the aggregate amount held for beneficiaries not resident in this Commonwealth, under the pains and penalties provided in section fourteen of chapter two hundred and eighty-three of the acts of the year eighteen hundred and sixtyfive, and acts in amendment thereof, for corporations failing to make the returns provided by said act. Said corporation shall annually pay to the Treasurer of the Commonwealth a sum to be ascertained by assessment upon an amount equal to the total value of such property at a rate to be ascertained and determined by the tax commissioner, under section five of chapter two hundred and eighty-three of the acts of the year eighteen hundred and sixty-five and acts in amendment thereof.
No taxes shall be assessed in any city or town for state, county, or town purposes, upon or in respect of any property held in trust as aforesaid; but such proportion of the sum so paid by said corporation, as corresponds to the amount of such property held for beneficiaries resident in this Commonwealth, shall be credited and paid to the several cities and towns where it appears, from the returns, or other evidence, that such beneficiaries resided on the first day of May next preceding, according to the aggregate amount so held in trust for beneficiaries residing in such cities and towns respectively; and, in regard to such tax so to be assessed and paid as aforesaid, said corporation shall be subject to sections eleven, twelve, thirteen, the last paragraph of section fifteen, and section seventeen, of chapter two hundred and eighty-three of the acts of the year eighteen hundred and sixty-five and acts in amendment or lieu thereof, so far as the same are applicable thereto.
real estate, nor invest more than ten per cent. thereof, and not to exceed one hundred thousand dollars, in the capital stock of any corporation."
Section 146. "No member of a committee or officer of such corporation charged with the duty of investing its funds, shall borrow or use any portion thereof, be surety for loans to others, or in any manner, directly or indirectly, be an obligor for money borrowed of or loaned by the corporation."
SECTION 9. The said corporation is also authorized to act as agent for the purpose of issuing, registering, or countersigning the certificates of stock, bonds, or other evidences of indebtedness of any corporation, association, municipality, state or public authority, and to receive and make payments on account of the same, on such terms as may be agreed upon.
SECTION 10. This act shall take effect upon its passage, and shall continue in force fifty years, unless sooner modified or terminated by the Legislature. Amended as follows-Section 4. Section eight, and so much of section ten, of chapter one hundred and eighty-two of the acts of the year eighteen hundred and sixty-nine, as limits the existence of said corporation to fifty years, is hereby repealed.
Amended Charter-Section 5. This act shall take effect whenever it shall be accepted by a vote of said corporation, at a meeting warned for the purpose. Within thirty days after such acceptance, a copy of the vote accepting the same, certified by and attested by the oath of the President, or one of the VicePresidents of the corporation, and the Secretary thereof, shall be filed in the office of the Secretary of State, and such certificate shall be conclusive evidence of such acceptance.
The amended charter was duly accepted April 15, 1871, and the proper certificate filed.
TO AMEND THE CHARTER OF THE NEW ENGLAND TRUST COMPANY. Be it enacted by the Senate and House of Representatives, in General Court assembled, and by the authority of the same, as follows:
SECTION 9. The New England Trust Company may be appointed trustee under any will or instrument creating a trust, for the care and management of property, under the same circumstances, in the same manner, and subject to the same control by the court having jurisdiction of the same, as in the case of a legally-qualified person. The capital stock of said corporation, with the liabilities of the stockholders existing thereunder, shall be held as security for the faithful discharge of the duties undertaken by virtue of this act, and no surety shall be required upon the bonds filed by said corporation. In all proceedings in the probate court or elsewhere, connected with any authority exercised under this act, all accounts, returns, and other papers may be signed and sworn to in behalf of the corporation, by any officer thereof duly authorized by it; and the answers and examinations, under oath of such officer, shall be received as the answers and examinations of the corporation, and the court may order and compel any and all officers of said corporation to answer and attend said examinations in the same manner as if they were parties to the proceedings or inquiry instead of the corporation; provided, however, that said corporation shall not be required to receive or hold any property or moneys or to execute any trust contrary to its own desire.
SECTION 2. In the management of money and property held by it as trustee under the powers conferred in the foregoing section, said corporation shall invest the same in the general trust fund of the company; provided, that it shall be competent for the authority making the appointment to direct, upon conferring the same, whether such money and property shall be held separately or invested in the general trust fund of the company; and provided, also, that said corporation shall always be bound to follow, and be entirely governed by all directions contained in any will or instrument under which it may act.
SECTION 3. No money, property, or securities received or held by said company under the provisions of this act shall be mingled with the investments of the capital stock or other moneys or property belonging to said corporation, or be liable for the debts or obligations thereof.
SECTION 4. The returns of said corporation required to be made to the Commissioners of Savings Banks shall be in the form of a trial balance of its books, and shall specify the different kinds of liabilities, and the different kinds of its assets, stating the amount of each kind, in accordance with a blank form to be furnished by said commissioners. And these returns shall be published
in a newspaper of the City of Boston, at the expense of said corporation, and in the annual report of said commissioners.
SECTION 5. This act shall take effect upon its acceptance by said corporation, which acceptance, with the date thereof, shall within ten days thereafter be certified by the President of the corporation to the Secretary of the Commonwealth.
Approved May 16, 1877.
[Accepted by the corporation at special meeting, June 1, 1877.]
TO ALLOW THE NEW ENGLAND TRUST COMPANY TO MAKE ADDITIONAL INVESTMENTS. Be it enacted, etc., as follows:
SECTION 1. The New England Trust Company, incorporated under chapter one hundred and eighty-two of the acts of the year eighteen hundred and sixtynine, may, in addition to the investments which it is authorized to make, invest the moneys intrusted to it, or in any way received by it, in the notes of manufacturing corporations created by the laws of any of the New England States, the property of which is unincumbered by mortgage, and which have paid a dividend for the two years next preceding such investment; also to take as collateral upon the notes of individuals, citizens of this state, for a period not exceeding four months, the bonds of cities in the United States containing at least one hundred thousand inhabitants, whose net indebtedness does not exceed five per cent. of the valuation of the taxable property therein, to be ascertained by the last preceding city valuation for the assessment of taxes, and selling in the market above par; provided, that said bonds shall be taken at not over eighty per cent. of the market value thereof.
SECTION 2. This act shall take effect upon its acceptance by the New England Trust Company. Approved March 16, 1882.
[Accepted April 10, 1882.]
Where general laws regulating the trust company business are in force, the special act, as stated above, may not recite the powers and limitations of the company in detail, but merely refer to the general law covering the case. The following is an illustration of such a special act:
CHARTER OF THE FEDERAL TRUST COMPANY.
COMMONWEALTH OF MASSACHUSETTS.
IN THE YEAR ONE THOUSAND EIGHT HUNDRED AND NINETY-NINE.
To Incorporate the Federal Trust Company.
(Chapter 92, Acts of 1899.)
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
SECTION 1. James W. Kenney, Thomas B. Fitzpatrick, Josiah S. Dean, James M. Morrison, Charles J. Connelly, John W. Horne, William J. Emerson, Thomas L. Jenks, Joseph B. Horton, Jeremiah C. Spillane, John J. Johnston, William