Chapter 1246.
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CHAP. 1246.— An act to provide for the incorporation of trust, loan, mortgage, and certain other corporations within the District of Columbia.October 1, 1890. *Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled*,District of Co1umbia.Corporations authorized. That corporations may be formed within the District of Columbia for the purposes hereinafter mentioned in the following manner: Any time hereafter any number of natural persons, citizens of theMinimum number of corporators.
United States, not less than twenty-five, may associate themselves together to form a company for the purpose of carrying on in the District of Columbia any one of the three classes of business herein specified, to wit: First. A safe deposit, trust, loan, and mortgage business.Safe deposit, etc., business.Title insurance, etc., business.Security, etc., business.*Provisos*.Minimum capital.Storage business. Second. A title insurance, loan, and mortgage business. Third. A security, guaranty, indemnify, loan, and mortgage business: *Provided*, That the capital stock of any of said companies shall not be less than one million of dollars: *Provided further*, That any of said companies may also do a storage business when their capital 626FIFTY-FIRST CONGRESS.
Sess. I. Ch. 1246. 1890. stock amounts to the sum of not less than one million two hundred thousand dollars. Sec. 2. That such persons shall, under their hands and seals, execute,Organization certificate. before some officer in said District competent to take the acknowledgment of deeds, an organization certificate, which shall specifically state— First. The name of the corporation.Contents. Second. The purposes for which it is formed. Third. The term for which it is to exist, which shall not exceed the term of fifty years, and be subject to the alteration, amendment, or repeal by Congress at any time.
Fourth. The number of its directors, and the names and residences of the officers who for the first year are to manage the affairs of the company. Fifth. The amount of the capital stock and its subdivision into shares. Sec. 3. That this certificate shall be presented to the CommissionersDiscretionary power of Commissioners to charter. of the District, who shall have power and discretion to grant or to refuse to said persons a charter of incorporation upon the terms set forth in the said certificate and the provisions of this act.
Sec. 4. That previous to the presentation of the said certificate toAdvertisement of intention to organize, etc. the said Commissioners notice of the intention to apply for such charter shall be inserted in two newspapers of general circulation printed in the District of Columbia at least four times a week for three weeks, setting forth briefly the name of the proposed company, its character and object, the names of the proposed corporators, and the intention to make application for a charter on a specified day, and the proof of such publication shall be presented with said certificate when presentation thereof is made to said Commissioners.
Sec. 5. That if the charter be granted as aforesaid it, together withFiling of charter, etc. the certificate of the Commissioners granting the same indorsed thereon, shall be filed for record in the office of the recorder of deeds for the District of Columbia, and shall be recorded by him. On the Organization.filing of the said certificate with the said recorder of deeds as herein provided, approved as aforesaid by the said Commissioners, the persons named therein and their successors shall thereupon and thereby be and become a body corporate and politic, and as such shall be vested with all the powers and charged with all the liabilities conferred upon and imposed by this act upon companies organized *Proviso*.Trust companies.under the provisions hereof: *Provided, however*, That no corporation created and organized under the provisions hereof, or availing itself of the provisions hereof as provided in section eleven, shall be authorized to transact the business of a trust company, or any business of Certificate from Comptroller of the Currency. a fiduciary character, until it shall have filed with the Comptroller of the Currency a copy of its certificate of organization and charter, and shall have obtained from him and filed the same for record with the said recorder of deeds a certificate that the capital stock of said company has been paid in, and the deposit of securities made with said Comptroller in the manner and to the extent required by this act.
Sec. 6. That all companies organized hereunder, or which shallReports of trust companies. under the provisions hereof become entitled to transact the business of a trust company, shall report to the Comptroller of the Currency [R. S., secs. 5211–5213, pp. 1007, 1008](/us/rs/s5211/5213/pp1007/1008).in the manner prescribed by sections fifty-two hundred and eleven, fifty-two hundred and twelve, and fifty-two hundred and thirteen. Revised Statutes of the United States, in the case of rational banks, and all acts amendatory thereof or supplementary thereto, and with similar provisions for compensating examiners, and shall be subject Powers, etc., of Comptroller of the Currency.[R.
S., sec. 5340, p. 1013](/us/rs/s5340/p1013).to like penalties for failure to do so. The Comptroller shall have and exercise the same visitorial powers over the affairs of the said corporation as is conferred upon him by section fifty-two hundred and forty of the Revised Statutes of the United States in the case of national banks, He shall also have power, when in his opinion it is 627 necessary, to take possession of any such company for the reasons and in the manner and to the same extent as are provided in the laws of the United States with respect to national banks.
Sec. 7. That all companies organized under this act are hereby declaredCorporate powers. to be corporations possessed of the powers and functions of corporations generally, and shall have power, First. To make contracts. Second. To sue and be sued, implead and be impleaded, in any court as fully as natural persons. Third. To make and use a common seal and alter the same at pleasure. Fourth. To loan money. Fifth. When organized under subdivision one of the first sectionTrust companies. of this act to accept and execute trusts of any and every description which may be committed or transferred to them, and to accept the office and perform the duties of receiver, assignee, executor, administrator, guardian of the estates of minors, with the consent of the guardian of the person of such minor, and committee of the estates of lunatics and idiots whenever any trusteeship or any such office or appointment is committed or transferred to them, with their consent, by any person, body politic or corporate, or by any court in the district of Columbia, and all such companies organized under the first subdivision of section one of this act are further authorized to accept deposits of money for the purposes designated herein upon such terms as may be agreed upon from time to time with depositors, and to act as agent for the purpose of issuing or countersigning the bonds or obligations of any corporation, association, municipality, or State, or other public authority, and to receive and manage any sinking fund on any such terms as may be agreed upon, and shall have power to issue its debenture bonds upon deeds of trust or mortgagesMay issue bonds, etc. of real estate to a sum not exceeding the face value of said deeds of trust or mortgages, and which shall not exceed fifty per centum of the fair cash value of the real estate covered by said deeds or mortgages, to be ascertained by the Comptroller of the Currency.
ButSecurities to be deposited with trustees. no debenture bonds shall be issued until the securities on which the same are based have been placed in the actual possession of the trustee named in the debenture bonds, who shall hold said securities until all of said bonds are paid; and when organized under the secondReal estate title insurance companies subdivision of the first section of this act said company is authorized to insure titles to real estate and to transact generally the business mentioned in said subdivision; and when organized underSecurity and guaranty companies. the third subdivision of section one of this act said company is hereby authorized, in addition to the loan and mortgage business therein mentioned, to secure, guaranty, and insure individuals, bodies politic, associations, and corporations against loss by or through trustees, agents, servants, or employees, and to guaranty the faithful performance of contracts and of obligations of whatever kind entered into by or on the part of any person or persons, association, corporation or corporations, and against loss of every kind: *Provided*,*Proviso*.Liability as trustees.
That any corporation formed under the provisions of this act when acting as trustee shall be liable to account for the amounts actually earned by the moneys held by it in trust in addition to the principal so held; but such corporation may be allowed a reasonable compensationCompensation. for services performed in the care of the trust estate. Sec. 8. That in all cases in which application shall be made to anyAppointment by court as trustee, etc. court in the District of Columbia, or wherever it becomes necessary or proper for said court to appoint a trustee, receiver, administrator, guardian of the estate of a minor, or committee of the estate of a lunatic, it shall and may be lawful for said court (but without prejudice to any preference in the order of any such appointments required by existing law) to appoint any such company organized under the first subdivision of section one of this act, with its assent, such trustee, 628 receiver, administrator, committee, or guardian, with the consent of the guardian of*Proviso*.Court to have no interest in company. the person of such minor: *Provided, however*, That no court or judge who is an owner of or in any manner financially interested in the stock or business of such corporation shall commit by order or decree to any such corporation any trust or fiduciary duty.
Sec. 9. That whenever any corporation operating under this actNecessary oath to be taken by officer. shall be appointed such trustee, executor, administrator, receiver, assignee, guardian, or committee as aforesaid, the president, vice-president, secretary, or treasurer of said company shall take the oath or affirmation now required by law to be made by any trustee, executor, receiver, assignee, guardian, or committee. Sec. 10. That when any court shall appoint the said company aLiability of company when appointed ‘trustee, etc. trustee, receiver, administrator, or such guardian, or committee, or shall order the deposit of money or other valuables with said Company, or where any individual or corporation shall appoint any of said companies a trustee, executor, assignee, or such guardian the capital stock of said company subscribed for or taken, and all property owned by said company, together with the liability of the stockholders and officers as herein provided, shall be taken and considered as the security required by law for the faithful performance of its duties, and shall be absolutely liable in case of any default whatever.
Sec 11. That any safe deposit company, trust company, surety orOrganization of existing companies under this act. guaranty company, or title insurance company, now incorporated and operating under the laws of the United States or of the District of Columbia, or any of the States, and now doing business in said District, may avail itself of the provisions of this act on filing in the office of the recorder of deeds of the District of Columbia, or with the Comptroller of the Currency, a certificate of its intention Certificate to be r Wed.to do so, which certificate shall specify which one of the three classes of business set out in section one it will carry on, and shall be verified by the oath of its president to the effect that it has in every respect complied with the requirements of existing law, especially with the provisions of this act: that its capital stock is paid in as *Post*, p. 830.provided in section twenty-one of this act and is not impaired, and thereafter such company may exercise all powers and perform all duties authorized by any one of the subdivisions of section one of this act in addition to the powers now lawfully exercised by such company.
Sec. 12. That any company operating under this act may lease,Maximum amount of real estate to be held. purchase, hold, and convey real estate, not exceeding in value five hundred thousand dollars, and such in addition as it may acquire in satisfaction of debts due the corporation, under sales, decrees, judgments, and mortgages. But no such association shall hold the Foreclosures, etc.possession of any real estate under foreclosure of mortgage, or the title and possession of any real estate purchased to secure any debts due to it, for a longer period than five years.
Sec. 13. That the charters for incorporations named in this actDuration of charters. may be made perpetual, or may be limited in time by their provisions, subject to the approval of Congress. Sec. 14. That the capital stock of every such company shall be atCapital stock. least one million dollars, and at least fifty per centum thereof must Payments.have been paid in, in cash or by the transfer of assets as hereinafter provided in section twenty-one of this act, before any such company shall be entitled to transact business as a corporation, except with its own members, and before any company organized hereunder shall be entitled to transact the business of a trust company, or to become and act as an administrator, executor, guardian of the estate of a minor, or undertake any other kindred fiduciary duty, it shall Deposit with Comptroller of the Currency.deposit, either in money or in bonds, mortgages, deed of trust, or other securities equal in actual value to one-fourth of the capital stock paid in, with the Comptroller of the Currency, to be kept by 629 him upon the trust and for the purposes hereinafter provided; and the said Comptroller may from time to time require an additionalAdditional deposit. deposit from any such company, to be held upon and for the same trust and purposes, not exceeding, however, in value one-half the paid-in capital stock; and the said Comptroller shall not issue to anyCertificate not to issue until deposit. corporation the certificate heretofore provided for until said deposit with him of securities required by this section.
Within one year after the organization of any corporation under the provisions of thisResidue of capital. act, or after any corporation heretofore existing shall have availed itself of the powers and rights given by this act in the manner herein provided for, its entire capital stock shall have been paid in. Sec. 15 That the capital stock of every such company shall beShares of stock. divided into shares of one hundred dollars each. It shall be lawful for such company to call for and demand from the stockholders,Assessments. respectively, all sums of money by them subscribed, at such time and in such proportions as its board of directors shall deem proper, within the time specified in section fourteen, and it may enforce payment by all remedies provided by law; and if any stockholderSale for arrears. shall refuse or neglect to pay any installment as required by a resolution of the board of directors, after thirty days’ notice of the same, the said board of directors may sell at public auction, to the highest bidder, so many shares of said stock as shall pay said installment, under such general regulations as may be adopted in the bylaws of said company, and the highest bidder shall be taken to be the person who offers to purchase the least number of shares for the assessment due.
Sec. 16. That every such company shall annually, within twentyAnnual report. days after the first of January of each year, make a report to the Comptroller of the Currency, which shall be published in a newspaper in the District, which shall state the amount of capital and ofContents. the proportion actually paid, the amount of debts, and the gross earnings for the year ending December thirty-first then next previous, together with their expenses, which report shall be signed by the president and a majority of the directors or trustees, and shall be verified by the oath of the president, secretary, and at least three of the directors or trustees; and said company shall pay to the District of Columbia, in lieu of personal taxes for each next ensuing year,Taxes. one and a half per centum of its gross earnings for the preceding year, shown by said verified statement, which amount shall be payable to the collector of taxes at the times and in the manner that other taxes are payable.
Sec. 17. That if any company fails to comply with the provisionsLiability of officers on failure to report. of the preceding section, all the directors or trustees of such company shall be jointly and severally liable for the debts of the company then existing, and for all that shall be contracted before such report shall be made: *Provided*, That in case of failure of the company in*Proviso*.Exemption. any year to comply with the provisions of section sixteen of this act, and any of the directors shall, on or before January fifteenth of such year, file his written request for such compliance with the secretary of the company, the Comptroller of the Currency, and the recorder of deeds of the District of Columbia, such director shall be exempt from the liability prescribed in this section.
Sec. 18. That any wilful false swearing in regard to any certificateFalse swearing as to certificate, etc., punishable as perjury. or report or public notice required by the provisions of this act shall be perjury and shall be punished as such according to the laws of the District of Columbia. And any misappropriation of any of the money of anyMisappropriations punishable as larceny. corporation or company formed under this act, or any money, funds, or property intrusted to it, shall be held to be larceny, and shall be punished as such under the laws of said District.
Sec. 19. That the stock of such company shall be deemed personalStock deemed personal property.Transfers. estate, and shall be transferable only on the books of such company in such manner as shall be prescribed by the bylaws of the com- 630 pany; but no shares shall be transferable until all previous calls thereon shall have been fully paid, and the said stock shall not be Not taxable.taxable, in the hands of individual owners, the tax on the capital stock, gross earnings of the company hereinbefore provided being in lieu of other personal tax.
All certificates of the stock of any Certificates to show par value.Company organized under this act shall show upon their face the par value of each share and the amount paid thereon. Sec 20. That all stockholders of every company incorporated underAdditional liability of stockholders. this act, or availing itself of its provisions under section eleven shall be severally and individually liable to the creditors of such company to an amount equal to and in addition to the amount of stock held by them, respectively, for all debts and contracts made by such company.
Sec. 21. That nothing hut money shall be considered as paymentNothing but money a payment on stock.Exception as to existing companies. of any part of the capital stock, except that in the case of any Company now doing business in the District of Columbia in any of the classes herein provided for, or under any act of Congress or by virtue of the laws of any of the States, and which company has actually received full payment in money of at least fifty per centum of the capital stock required by this act and which company desires to obtain a charter under this act, all the assets or property may be received Appraisal of assets.*Proviso*.Transfer of assets.and considered as money, at a value to be appraised and fixed by the Comptroller of the Currency: *Provided*, That all such assets and property are also transferred to and are thereafter owned by the company organized under this act.
Sec. 22. That the stock, property, and concerns of such companyNumber and qualifications of directors. shall be managed by not less than nine nor more than thirty directors or trustees, who shall, respectively, be stockholders and at least one-half residents and citizens of the District of Columbia, and shall, Annual elections.except the first year, be annually elected by the stockholders at such time and place and after such published notice as shall be determined by the bylaws of the company, and said directors or trustees shall hold until their successors are elected and qualified.
Sec. 23. That there shall be a president of the company, who shall beOfficers. a director, also a secretary and a treasurer, all of whom shall be chosen *Proviso*.Only one office may be held.by the directors or trustees: *Provided*, That only one of the above-named offices shall be held by the same person at the same time. Subordinate officers may be appointed by the directors or trustees, and all such officers may be required to give such security for the faithful performance of the duties of their office as the directors or trustees may require.
Sec. 24. That the directors or trustees shall have power to makeBy-laws. such bylaws as they deem proper for the management or disposal of the stock and business affairs of such company, not inconsistent with the provisions of this act, and prescribing the duties of officers and servants that may be employed, for the appointment of all officers, and for carrying on all kinds of business within the objects and purposes of such company. Sec 25. That if the directors or trustees of any company shall declareLiability of directors, etc., for wrongfully declaring dividend. or pay any dividend, the payment’ of which would render it insolvent, or which would create a debt against such company, they shall be jointly and severally liable as guarantors for all of the debts of the company then existing, and for all that shall be thereafter contracted, while they shall, respectively, remain in office.
Sec. 26. That if any of the directors or trustees shall object to declaringExemption of directors, etc., objecting. such dividend or the payment of the same, and shall at any time before the time fixed for the payment thereof file a certificate of their objection in writing with the secretary of the company and with the recorder of deeds of the District they shall be exempt from liability prescribed in the preceding section. Sec. 27. That if the liabilities of any company shall at any timeDirectors, etc., personally liable for excess of liabilities over assets. exceed the amount of the fair cash value of the assets, the directors or trustees of such company assenting thereto shall be personally and 631 individually liable for such excess to the creditors of the company after the additional liability of the stockholders has been enforced.
Sec. 28. That no person holding stock in such company as executor,Executors, etc., holding stock, not personally liable. administrator, guardian, or trustee shall be personally subject to any liability as stockholder of such company, but the estate and funds in the hands of such executor, administrator, guardian, or trustee shall be liable in like manner and to the same extent as the testator or intestate or the ward or the person interested in such trust fund would have been if he had been living and competent to act and hold the stock in his own name.
Sec. 29. That any corporation which may be formed under thisIncrease of capital stock. chapter may increase its capital stock by complying with the provisions of this chapter to any amount which may be deemed sufficient and proper for the purposes of the corporation. Sec. 30. That a copy of any certificate of incorporation filed inCertified copy of certificate, presumptive evidence of contents. pursuance of this chapter, certified by the recorder of deeds to be a true copy and the whole of such certificate, shall be received in all courts and places as presumptive legal evidence of the facts therein stated.
Sec. 31. That no bond or other collateral security, except as hereinafterNo bond required of company when appointed trustee, etc. stated, shall be required from any trust company incorporated under this act for or in respect to any trust, nor when appointed trustee, guardian, receiver, executor, or administrator, with or without the will annexed, committee of the estate of a lunatic or idiot, or other fiduciary appointment; but the capital stock subscribed for orCapital stock, etc., considered security. taken, and all property owned by said company and the amount for which said stockholders shall be liable in excess of their stock, shall be taken and considered as the security required by law for the faithful performance of its duties and shall be absolutely liable in case of any default whatever; and in case of the insolvency or dissolution ofPreferences in case of insolvency, etc. said company the debts due from the said company as trustee, guardian, receiver, executor, or administrator, committee of the estate of lunatics, idiots, or any other fiduciary appointment, shall have a preference.
Sec. 32. That the supreme court of the District of Columbia, orSupreme court, District of Columbia may make orders, etc., as to accounts, etc. any justice thereof, shall have power to make orders respecting such company whenever it shall have been appointed trustee, guardian, receiver, executor, or administrator with or without the will annexed, committee of the estate of a lunatic, idiot, or any other fiduciary, and require the said company to render all accounts which might lawfully be made or required by any court or any justice thereof if such trustee, guardian, receiver, executor, administrator with or without the will annexed, committee of the estate of a lunatic or idiot, or fiduciary were a natural person.
And said court, or any justice thereof, at any time, on application of any person interested, may appoint some suitable person to examine into theExamination. affairs and standing of such companies, who shall make a full report thereof to the court, and said court, or any justice thereof, may at any time, in its discretion, require of said company a bond with sureties or other securities for the faithful performance of its obligations, and such sureties or other security shall be liable to the same extent and in the same manner as if given or pledged by a natural person.
Sec. 33. That no corporation or company organized by virtue ofStrict compliance by State corporations, etc. the laws of any of the States of this Union and having its principal place of business within the District of Columbia, shall carry on, in the District of Columbia, any of the kinds of business named in this act without strict compliance in all particulars with the provisions of this act for the government of such corporations formed under it, and each one of the officers of the corporation or company so offending shall be punished by fine not exceeding one thousandPunishment for offenses. dollars, or imprisonment in some State’s prison not exceeding one 632FIFTY-FIRST CONGRESS.
Sess. I. Chs. 1246–1248. 1890. year, or by both fine and imprisonment, in the discretion of the court. This section shall not take effect till six months after the approval of this act. Sec. 34. That Congress may at any time alter, amend, or repealAmendment, etc. this act, but any such amendment or repeal shall not, nor shall the dissolution of any company formed under this act, take away or impair any remedy given against such corporation, its stockholders or officers, for any liability or penalty which shall have been previously *Proviso*.Trustees, etc., of funds, etc., outside District.incurred: *Provided*, That the courts of the District of Columbia shall not have power to appoint any trustee, trustees, guardians, receivers, or other trustee of a fund or property located outside of the district of Columbia, or belonging to a corporation or person having a legal residence or location outside of said District.
Approved, October 1, 1890. Chapter 1247: to confirm certain sales of the Kansas trust and diminished, reserve lands in the State of Kansas. Chapter 1247 26 Stat. 632 1890-10-01 United States Government Publishing Office text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain. Digitization Vendor 2026-02-21 51 1 public
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