Графични страници
PDF файл
ePub

business here within the meaning of chapter 126 of the Revised Laws. Cf. People v. Horn Silver Mining Co., 105 N. Y. 76.

I do not attempt to pass upon the specific cases submitted, since each case must be determined upon its special facts.

Very truly yours,

DANA MALONE, Attorney-General.

Savings Banks Authorized Investments First Mortgages of

Real Estate - Notes secured by a Mortgage of Real Estate to a Trust Company.

Notes secured by a mortgage of a tract of land with buildings thereon

to a trust company as trustee, as security for an issue of notes made by the owners of the property, of which the notes in question are a part, are not a legal investment for savings banks, since they do not constitute an investment in “ first mortgages of real estate,” within the provisions of St. 1908, c. 590, Ø 68, cl. 1, defining authorized investments for savings banks in this Commonwealth.

Nov. 11, 1909. Hon. ARTHUR B. CHAPIN, Bank Commissioner.

DEAR SIR: - You ask my opinion as to whether it is lawful for a savings bank to invest in notes secured by a mortgage of a tract of land with buildings thereon to a trust company, as trustee, as security for an issue of notes made by the owners of the property of which the notes referred to are a part. These notes amount on the whole to less than 60 per cent. of the value of the real estate subject to the mortgage.

St. 1908, c. 590, § 68, cl. 1, which defines authorized investments for savings banks, is as follows:

First. In first mortgages of real estate located in this commonwealth not to exceed sixty per cent of the value of such real estate; but not more than seventy per cent of the whole amount of deposits shall be so invested. If a loan is made on unimproved and unproductive real estate, the amount loaned thereon shall not exceed forty per cent of the value of such real estate. No loan on mortgage shall be made except upon written application showing the date, name of applicant, amount asked for and security offered, nor except upon the report of not less than two members of the board of investment who shall certify on said application, according to their best judgment, the value of the premises to be mortgaged; and such application shall be filed and preserved with the records of the corporation.

At the expiration of every such loan made for a period of five or more years not less than two members of the board of investment shall certify in writing, according to their best judgment, the value of the premises mortgaged; and the premises shall be revalued in the same manner at intervals of not more than five years so long as they are mortgaged to such corporation. Such report shall be filed and preserved with the records of the corporation. If such loan is made on demand or for a shorter period than five years, a revaluation in the manner above prescribed shall be made of the premises mortgaged not later than five years after the date of such loan and at least every fifth year thereafter. If at the time a revaluation is made the amount loaned is in excess of sixty per cent, or in the case of unimproved and unproductive real estate in excess of forty per cent, of the value of the premises mortgaged, a sufficient reduction in the amount of the loan shall be required, as promptly as may be practicable, to bring the loan within sixty per cent, or in the case of unimproved and unproductive real estate within forty per cent, of the value of said premises.

Savings banks cannot invest in any notes of the kind described unless such investment is authorized by clause 1 of the above section, which authorizes investments in “first mortgages of real estate located in this commonwealth, not to exceed sixty per cent of the value of such real estate.” The question is, therefore, whether the investment described is an investment in “first mortgages of real estate.”

A similar question was considered by Attorney-General Knowlton. (1 Op. Atty.-Gen., 434.) St. 1894, c. 317, $ 21, was then in force. It did not differ materially, so far as this question is concerned, from the present statute. In that opinion the then Attorney-General said:

[ocr errors]

I am of opinion, however, that the purchase of bonds by a savings bank, which are a portion of a larger number secured by a mortgage given by the obligor to a third person as trustee for the benefit of bondholders, is not a “ loan upon mortgage,” within the meaning of the statutes relating to savings banks. ..." Loans upon first mortgages of real estate,” as that expression is used in the statute, are loans made to an individual or a corporation upon the security of a mortgage given by the borrower to the savings bank. Certain rights attach to the holder of a mortgage which do not appertain to the holder of a bond secured by a mortgage in the hands of a trustee. It was, in my opinion, the intention of the statute to authorize savings banks to loan upon mortgages only when the full and unrestricted rights of mortgagees are conferred upon the bank, to the end that the entire control and custody should be in the hands of the bank. (Page 435.)

In an opinion of Attorney-General Parker (2 Op. Atty.Gen., 593) the same provision of statute, then R. L., c. 113, S 26, cl. 1, was under consideration, and it was pointed out that in the case of an assignment of a mortgage to a savings bank the section contemplates one “which should have effect to vest in the latter (that is, the savings bank) the full and unrestricted rights of a mortgagee in the premises."

The general propositions stated in these opinions were clearly correct, and no reason appears for now departing from them.

It is true that certain of the specific objections existing in the case considered in the opinion of the Attorney-General first cited (1 Op. Atty.-Gen., 434) have been done away with. The trustee cannot require indemnity before foreclosing; he has no prior lien on the property for his charges; there is no express exemption from responsibility for the negligence of agents and the trustee has not discretion as to whether or not to foreclose. It is to be noticed, however, that any holder of a note may request foreclosure. The result is that some other person holding a note secured by the mortgage in question might insist upon foreclosure, although the bank did not wish it, and the bank could not prevent such foreclosure. The bank has not, then, entire control and custody as it would have in the case of a mortgage held by it directly.

It is not clear to me that it is contemplated to comply with the provisions of the first clause of section 68, which provides that “no loan on mortgage shall be made except upon written application showing the date, name of applicant, amount asked for and security offered, nor except upon the report of not less than two members of the board of investment who shall certify on said application, according to their best judgment, the value of the premises to be mortgaged.” If this is not done, clearly the loan would not be one authorized by the statute. It is further provided in the second paragraph of the first clause of said section that at the expiration of every such loan there must be a revaluation by the board of investment at intervals of not more than five years so long as they are mortgaged; and also that “ If at the time a revaluation is made the amount loaned is in excess of sixty per cent of the value of the premises mortgaged, a sufficient reduction in the amount of the loan shall be

[ocr errors]

mean

required, as promptly as may be practicable, to bring the loan within sixty per cent of the value of the premises."

The deed of trust, a copy of which is submitted to me, makes no provision for such a contingency; and from a careful consideration of the statute I am of opinion that such a loan was not contemplated by the Legislature, but that the words “so long as they are mortgaged to such corporation

a direct mortgage to the savings bank itself and not to a trustee. therefore, of opinion that such an investment in the case described is not an investment in “first mortgages of real estate." As pointed out in the opinion first quoted, such forms of loans are becoming more frequent, and it may be that the Legislature will authorize savings banks to purchase them; but until such time comes I am of opinion that savings banks cannot legally invest therein.

Very truly yours,

DANA MALONE, Attorney-General.

Trust Company Reserve Time Deposit.
An agreement in writing, payable thirty days after demand or notice,

is a time deposit payable at a stated time, within the meaning of
St. 1908, c. 520, § 8, which provides that “ every trust company
shall at all times have on hand as a reserve an amount equal to at
least fifteen per cent of the aggregate amount of its deposits, ex-
clusive of savings deposits and of time deposits represented by
certificates or agreements in writing and payable only at a stated
time."

Nov. 12, 1909. Hon. ARTHUR B. CHAPIN, Bank Commissioner.

DEAR SIR: – You request my opinion as to whether an agreement in writing, payable thirty days after demand or notice, is a time deposit payable at a stated time, and therefore exempt from the reserve requirements.

St. 1908, c. 520, 8 8, provides that:

Every trust company doing business within the commonwealth shall at all times have on hand as a reserve an amount equal to at least fifteen per cent of the aggregate amount of its deposits, exclusive of savings deposits and of time deposits represented by certificates or agreements in writing and payable only at a stated time, but whenever such time deposits may be withdrawn within thirty days they shall be subject to the reserve requirements of this act;

and every trust company doing business in the city of Boston shall at all times have on hand as a reserve an amount equal to at least twenty per cent of the aggregate amount of its deposits computed in the same manner.

In my opinion, this law requiring a reserve does not apply to deposits of the character described in the question. The deposits in question cannot be withdrawn within thirty days, but only thirty days after demand or notice, and therefore come within the terms of the statute which exempts deposits payable at a stated time from the reserve requirement.

Very truly yours,

DANA MALONE, Attorney-General.

.

Official Bond Surety - Married Woman - Wife of Principal. Under the provisions of R. L., c. 153, Ø 2, that “ a married woman may

make contracts, oral and written, sealed and unsealed, in the same manner as if she were sole, except that she shall not be authorized hereby to make contracts with her husband,” a married woman may, as surety, sign the official bond of her husband.

Nov. 23, 1909.

CHARLES R. PRESCOTT, Esq., Controller of County Accounts.

DEAR SIR:— In answer to your communication, dated November 17, in which you inquire whether or not a wife is eligible as surety upon the official bond of her husband, I beg to refer you to the provisions of R. L., c. 153, § 2, which section is as follows:

A married woman may make contracts, oral and written, sealed and unsealed, in the same manner as if she were sole, except that she shall not be authorized hereby to make contracts with her husband.

This statute "enables a married woman to “ make contracts, oral and written, sealed and unsealed, in the same manner as if she were sole,' and does not require that the consideration of her contracts should enure to her own benefit. The provision that nothing in this act shall authorize her to convey property to, or make contracts with, her husband,' is evidently not intended to impose any new restriction on her capacity, but merely to affirm the rule of the common law, so far as her husband

« ПредишнаНапред »