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SECTION 100-B
Investments as fiduciary; when interest is to be paid; preference
Banking (BNK) CHAPTER 2, ARTICLE 3
§ 100-b. Investments as fiduciary; when interest is to be paid;
preference. 1. Investments. All investments of money received by any
trust company as executor, administrator, guardian, trustee of a trust
of any kind, receiver, committee, conservator or depositary, shall be at
its sole risk, and for all losses of such money the capital stock,
property and effects of the trust company shall be absolutely liable,
unless the investments are such as are proper when made by an individual
acting as trustee, executor, administrator, guardian, receiver,
committee, conservator or depositary, or such as are permitted in and by
the instrument or words creating or defining the trust. But no corporate
fiduciary shall purchase securities from itself. Any moneys of any such
estate or fund awaiting investment or distribution may be held on
deposit by such trust company in its own name, subject to the provisions
of subdivision four of this section; provided that appropriate entries
showing the share or interest of each such estate or fund in the moneys
so held on deposit shall, at all times, appear upon the records of such
trust company.

2. On and after September first, nineteen hundred thirty-six, no trust
company shall invest in any part interest in a bond and mortgage or note
and mortgage on behalf of any estate or fund held by such trust company
as executor, administrator, guardian, personal or testamentary trustee,
receiver, committee, conservator or depositary except that if the
instrument creating such estate or fund has authorized such trust
company as executor, administrator, guardian, personal or testamentary
trustee, receiver, committee, conservator or depositary to invest in any
part interest in a bond and mortgage or note and mortgage insured by the
federal housing commissioner such trust company may so invest and if the
instrument creating an employee benefit trust has authorized such trust
company to invest in any part interest in a bond and mortgage or note
and mortgage, such trust company may so invest. Any part interest in a
bond and mortgage or note and mortgage heretofore apportioned to any
estate or fund and held by such trust company as executor,
administrator, guardian, personal or testamentary trustee, receiver,
committee, conservator or depositary, and outstanding at any time in the
hands of any estate, fund or person may be repurchased at its face value
by such corporation individually. Such trust company, in any case where
it shall have apportioned or transferred a part interest in any bond and
mortgage or note and mortgage whether to any estate or fund held by it
alone or in conjunction with another person or otherwise, shall be
authorized and empowered, in behalf of all persons interested therein,
to collect the principal and interest and to satisfy and discharge the
mortgage on receiving payment thereof in the amount and in the manner
specified in the bond and mortgage or note and mortgage, to pay the said
principal and interest to the persons entitled thereto and generally to
exercise all of the options reserved to the mortgagee, to enforce in its
own name by appropriate action or proceeding, including foreclosure, any
and all of the covenants in the said bond and mortgage or note and
mortgage, to take such other measures for the protection of the mortgage
loan and the preservation of the security and the management of,
utilization and sale of any real estate which may be acquired on
foreclosure as may be necessary and appropriate and to exercise all
other rights of ownership in respect of the entire bond and mortgage or
note and mortgage. In case any bond, note or mortgage shall be held by,
or in the name of, such trust company and it shall hold any part
interest therein, acting as a fiduciary, whether alone, or in
conjunction with another person or otherwise, it may, prior to April
first, nineteen hundred sixty-nine, waive or modify or agree to waive or
modify, either with or without consideration and prior or subsequent to
maturity, any terms and conditions thereof, including the rate of
interest, and extend or re-extend or agree to extend or re-extend such
bond and mortgage or note and mortgage, for a period of not more than
five years from the time of such extension, by agreement with the owner
of the real property subject to the lien thereof, upon the consent of
the holders of such part interests to the extent of sixty-six and
two-thirds per centum of the whole amount of such bond and mortgage or
note and mortgage, notwithstanding that, at the time of such waiver,
modification, extension or agreement, the value of such real property
may be less than that required by law for an original investment of such
an amount therein by such holder and, in case any such investment is
guaranteed, such trust company may also extend or re-extend or agree to
extend or re-extend the time of payment under the guaranty for a like
period from its due date, and may release or agree to release such
guaranty or from time to time waive or modify or agree to waive or
modify any terms and conditions thereof, including the rate of interest;
provided however, that no such waiver, modification, extension or
agreement shall be made or agreed to unless, at least fifteen days prior
thereto, such trust company shall have notified each holder of such a
part interest in such bond and mortgage or note and mortgage of the
terms and conditions of such contemplated waiver, modification,
extension or agreement. Such notice shall be given by mailing the same
by registered mail to the address or place of residence of each holder
according to the records of such trust company. The notice hereinbefore
provided for shall not be required to be given to any holder of such a
part interest in such bond and mortgage or note and mortgage (1) who, at
the time of the mailing of such notice to holders of part interests in
such bond and mortgage or note and mortgage, was not shown on the
records of such trust company to be such holder, or (2) who, at any time
whether before or after any such waiver, modification, extension or
agreement shall have been made or agreed to, shall have consented to
such waiver, modification, extension or agreement. Any such consent
shall also be binding upon and shall be deemed to be the consent also of
each and every holder of the part interest in such bond and mortgage or
note and mortgage or of any part of such part interest with respect to
which such consent was given who, at the time such consent was given,
was not shown on the records of such trust company to be such holder
whether or not such holder shall have become such holder before or after
such consent was given. Any holder to whom the notice hereinbefore
provided for is required to be given as hereinbefore provided and who
objects to such waiver, modification, extension or agreement shall have
the right to apply, within fifteen days after such notice shall have
been mailed to such holder as hereinbefore provided, to the supreme
court of the county in which the real property securing such mortgage is
located and, subject to the discretion of the supreme court in the
premises, to obtain an order enjoining such waiver, modification,
extension or agreement. In the event of the granting of such an order,
any holder shall have the right to apply to such supreme court and,
subject to the discretion of the supreme court in the premises, to
obtain an order directing a partition of such bond and mortgage or note
and mortgage by a judicial sale thereof. Such sale shall be upon such
notice and advertisement and at such time and place and in such manner
as the court or a justice thereof may direct, but at least fifteen days'
notice thereof shall be given to each holder. The proceeds of the sale
of such bond and mortgage or note and mortgage after deducting the
expenses of such sale, shall be paid into the supreme court and shall be
distributed among such holders according to their respective interests
therein. Such trust companies shall have all the powers heretofore had
under this section or any other provision of law with respect to
investments in part interests in bonds and mortgages or notes and
mortgages for the protection, preservation and liquidation of the trust
property. It is the intent of this subdivision to prohibit after August
thirty-first, nineteen hundred thirty-six, any future apportionments or
investments of any part interests in bonds and mortgages and notes and
mortgages to or investments in part interests of bonds and mortgages and
notes and mortgages for any estate or fund of which such trust company
is executor, administrator, guardian, personal or testamentary trustee,
receiver, committee, conservator or depositary, except as permitted by
this subdivision. Such trust company, however, shall not transfer to any
estate or fund any part interests in bonds and mortgages or notes and
mortgages heretofore purchased, or invested in, from itself or from any
other estate or fund.

Nothing contained in this act shall be construed to affect any
investments in part interest in bonds and mortgages apportioned or
transferred, prior to September first, nineteen hundred thirty-six, to
any estate or fund of which such trust company is executor,
administrator, guardian, personal or testamentary trustee, receiver,
committee, conservator or depositary, nor to affect any action
heretofore taken in accordance with law with respect to such bonds and
mortgages or part interests in said bonds and mortgages; nor to affect
the right of any such trust company to transfer or apportion any such
investment from an estate or fund to a succeeding interest created by
the same instrument under which the investment was made; nor shall it be
construed to impair or otherwise affect the power of such trust company
to apportion to any estate, fund or person interested in such mortgage
its or his proportionate share of the consideration, consisting in whole
or in part of evidences of indebtedness secured by mortgages on real
property received by such trust company on the sale of real property
acquired by foreclosure of such mortgage, or otherwise, and to exercise
with respect to such mortgages on behalf of such estates, funds, or
persons the same powers reserved with respect to the original mortgage.

3. Preference. If dissolved by the legislature or the court, or
otherwise, or liquidated by the superintendent or otherwise, the debts
from any trust company as guardian, trustee, executor, administrator,
committee, conservator or depositary, shall be entitled to priority of
payment from the assets of such trust company on an equality with any
other priority given by this chapter.

4. Interest. On all sums of money not less than one thousand dollars,
which shall be collected, received and held as principal by a trust
company acting as executor, administrator, guardian, trustee, receiver,
committee or conservator 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 paid by such trust company
from sixty days after the receipt thereof until the moneys so received
shall be duly expended or distributed, at a rate equal to the maximum
rate per annum then being paid by such trust company on savings
deposits, except that in the case of a trust company acting as executor
or administrator interest shall not be paid, and the grace period of
sixty days herein provided for shall not be deemed to begin, until five
months after the date of issuance of letters testamentary or of
administration to it; provided however that such trust company shall not
be required to allow any interest upon any such moneys payment of which
is prohibited under any order, regulation or ruling issued under or
pursuant to the "Trading with the Enemy Act" and any amendments thereto,
or under or pursuant to any other law, so long as such prohibition shall
remain in force and effect. If income be accumulated for a minor or
surplus income in excess of expenditures be held for investment by the
committee of an incompetent or the conservator of a conservatee, but not
otherwise, any uninvested balance of such income shall be treated as
principal upon which interest shall be paid as provided in this
subdivision. If interest moneys payable hereunder 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
trust company 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. The word "trustee" as
used in this subdivision shall mean a trustee appointed by will or by
any court, and the words "savings deposits" as used in this subdivision
shall mean time deposits with respect to which the depositor is not
required by the deposit contract, but may at any time be required by
such trust company, to give notice in writing of an intended withdrawal
not less than fourteen days before such withdrawal is made, and which is
not payable on a specified date or at the expiration of a specified time
after the date of deposit. For the purposes of this subdivision only,
moneys on which interest is payable as provided herein shall not be
deemed to be demand deposits.