2023 New York Laws › BNK - Banking › Article 3 - Banks and Trust Companies › 100-B - Investments as Fiduciary; When Interest Is to Be Paid; Preference.

§ 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.