AN ACT

IN RELATION TO

MORTGAGE LOAN AND INVESTMENT COMPANIES.

(Chapter 387, Acts of 1888.)

SECTION 1. Every corporation now or hereafter estab. lished under the laws of this Commonwealth for the special purpose of negotiating or making loans of money secured by deed of trust or mortgage of real estate situated outside of this Commonwealth, may exercise and enjoy all the powers, and shall be governed by the provisions and be subject to the duties, restrictions and liabilities prescribed in this act and any acts which may hereafter be passed in amendment or lieu thereof. such corporations heretofore chartered shall continue to exercise and enjoy their powers and privileges according to their respective charters, and shall be subject to all the liabilities imposed by the same, except so far as said powers, privileges and liabilities are modified and controlled by the provisions of this act.

All

SECT. 2. Every such corporation may make loans of money secured by deed of trust or mortgage of real estate situated in any state, other than this Commonwealth, or territory of the United States to an amount not exceeding fifty per cent. of the appraised value of said property; but no loan shall be made on any property subject to a prior mortgage, encumbrance or lien. Every such corporation may also hold, sell and assign the bonds, notes, mortgages and securities taken for such loans; may guar antee the payment of the interest and principal of any bonds, notes or other evidences of debt secured as aforesaid, and may guarantee the title to the property securing such evidences of debt for the time such debt remains

be construed as authorizing such corporations to engage in the business of title insurance.

SECT. 3. Every such corporation may purchase, hold, guarantee, sell and assign notes or bonds, and the mortgages or deeds of trust securing the same, or other papers securing any loan made by any individual, firm, corporation or association, provided such loan shall have been made in accordance with the conditions under which such corporations can make loans, as prescribed in section two of this act.

SECT. 4. Every such corporation may receive money from any individual, firm, corporation or association, for investment in the securities which such corporations are by this act authorized to sell or issue, and may allow interest on such money from the time of its receipt to the time of its investment as aforesaid, at such rate as may be agreed upon; may receive, care for, manage and sell stocks, bonds and evidences of debt, the avails of which are intended for investment as aforesaid. No such corporation shall receive money on deposit, except as hereinbefore provided, or engage in any form of banking or trust business other than as permitted by the terms of this act.

SECT. 5. Every such corporation may act as agent for the purpose of foreclosing mortgages and collecting claims arising by reason of any evidence of debt deposited with it under the provisions of section four of this act; may purchase real estate at any public auction sale thereof made by virtue of the power contained in any deed of trust or mortgage owned, held or guaranteed by it, or at a private sale thereof made for the purpose of cancelling the debt secured by any such deed of trust or mortgage; may hold, sell, transfer and convey said property: provided, all real estate purchased or acquired under the provisions of this section shall be sold within five years after such purchase or acquisition.

SECT. 6. Every such corporation may issue debentures or bonds, to secure the payment of which, such cor

poration shall from time to time assign, transfer and set over to trustees, none of whom shall be officers of the corporation, or to a trust company established under the laws of this Commonwealth, deeds of trust or mortgages of real estate on which loans have been made in accordance with the provisions of this act, to be held by such trustees or company in trust for the benefit of the holders of said debentures or bonds, whereupon such trustees or company shall indorse their or its certificate of such fact upon debentures or bonds not exceeding in amount the face value of securities so transferred to them or it.

SECT. 7. The total amount of mortgages guaranteed and of debentures or bonds issued by any such corporation shall at no time be in excess of ten times the amount of its capital stock actually paid in and its surplus.

SECT. 8. All bonds, notes and other evidences of debt taken by such corporation for money loaned shall be payable to such corporation at its principal place of business within this Commonwealth, and shall pass by delivery, by transfer on the books of such corporation at its principal place of business within this Commonwealth, or by certificate of its transfer agent at such other place as it may appoint. No transfer except on the books of the corporation or by certificate of its transfer agent, shall be valid unless the last transfer shall have been to bearer. A complete record of such transfer by said transfer agents shall be forwarded to and kept at the principal place of business of such corporation within this Commonwealth.

SECT. 9. Every such corporation may hold real estate within this Commonwealth suitable for the transaction of its business, to an amount not exceeding twenty-five per cent. of its capital actually paid in.

SECT. 10. No such corporation shall be the purchaser or holder of any of the shares of its own capital stock, unless such purchase shall be necessary to prevent loss

so purchased shall, within six months from the time of its purchase, be sold or disposed of at public or private sale.

SECT. 11. The shareholders of every such corporation shall be held individually liable in the same manner and to the same extent, and not otherwise, as stockholders of manufacturing corporations are or may be held liable under the laws of this Commonwealth. The provisions contained in sections sixty-two to seventy-one inclusive of chapter one hundred and six of the Public Statutes shall apply to and regulate the enforcement of this iiability.

SECT. 12. Every such corporation shall set apart as a guaranty fund a sum not less than five per cent. of its paid in capital, and shall thereafter annually add thereto a sum not less than ten per cent. of its net earnings, untii such fund, with the accumulated interest thereon, shall be equal to not less than twenty-five per cent. of its paid in capital. Said fund shall be invested in United States bonds; English consols; first mortgage bonds of any railroad corporation which has paid a dividend on its stock for at least three years next preceding the date of said investment; in the legally authorized bonds for municipal purposes of any city of the United States of not less than thirty thousand inhabitants whose whole indebtedness shall not exceed five per cent. of its last assessed valuation; or in any securities in which savings banks of this Commonwealth are allowed to invest.

SECT. 13. The books of every such corporation shall at all reasonable times be open for inspection to the stockholders and to all holders of bonds and debentures issued by such corporation, or of notes and other evidences of debt guaranteed by such corporation.

SECT. 14. The commissioners of savings banks shall have access to the vaults, books and papers of every such corporation; and it shall be their duty to inspect, examine and inquire into its affairs and take proceedings in regard to them at such times as they shall deem necessary,

in the same manner and to the same extent as if such corporation was a savings bank, subject to all the laws which are now or hereafter may be in force relating to such institutions in this regard: provided, however, said commissioners may cause any examination to be made by an expert under their direction but at the expense of the corporation. Every such corporation shall annually, within ten days after the last business day of October, make a return to said commissioners, which return shall be in the form of a trial balance of its books, and shall specify the different kinds of its 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 such annual returns shall be published in a newspaper of the city or town where such corporation is located, at the expense of such corporation, at such times and in such manner as may be directed by said commissioners. Said commissioners shall annually make report to the general court of such facts and statements. respecting such corporations, and in such forms as they