CHAPTER 226

COURT OF CHANCERY RELATING TO INVESTMENTS OF TRUSTEES, GUARDIANS AND OTHER FIDUCIARIES

AN ACT IN RELATION TO INVESTMENTS OF TRUSTEES, GUARDIANS AND OTHER FIDUCIARIES AND TO PROPERTY TAKEN OVER BY THEM, BEING AN AMENDMENT TO CHAPTER 117 OF THE REVISED CODE OF THE STATE OF DELAWARE, AS AMENDED.

Be it enacted by the Senate and House of Representatives of the State of Delaware in General Assembly met:

Section 1. That Section 35 of Chapter 117 of the Revised Code of Delaware (1935), being Section 4401. of said Code, as amended by Chapter 171, Volume 44, Laws of Delaware, be and the same is hereby further amended by adding a new subdivision at the end of 4401. Section 35. of said Chapter, as follows:

"(f) A bank or trust company shall not purchase with funds held by it as fiduciary any property held by its commercial or banking department, but this prohibition shall not apply to mortgages and their accompanying bonds designated by its commercial or banking department for future trust investment at the time of acquisition by the commercial or banking department and purchased within one year from such time of acquisition with funds held by it in its trust department, provided the interest and taxes are current at the time of purchase by the trust department and an appraisal certificate on the real estate covered by the mortgages being purchased from at least one person competent and qualified to appraise real estate is obtained by the trust department at any time within ten days prior to the purchase by and transfer to the trust department. This exception shall apply to all types of mortgages held by the commercial or banking department, including mortgages covering properties constructed during the one year period from the time the mortgages were acquired by the commercial or banking department, provided with respect to the latter type of mortgages, that an appraisal certificate on the completed property from at least one person competent and qualified to appraise such property, and a certificate from the owner of the property and/or the registered architect who planned the construction of the property, certifying that the construction is complete and satisfactory in every respect, are obtained by the trust department at any time within ten days prior to the purchase by and transfer to said department. The commercial or banking department shall make a report monthly to the Board of Directors of the bank or trust company listing all mortgages designated for trust investment and covering all transactions relating thereto, and such report shall be noted in the minutes of the meeting of the Board. The purchase of mortgages and their accompanying bonds permitted by this subdivision (f) of 4401. Section 35. shall be made subject to the limitations of the standard set forth in the foregoing subdivision (b) of 4401. Section 35."

Approved June 5, 1951.