Compiled from an official source version. Later amendments or repeals may not be reflected; the official text prevails.・Read the official text ↗
SEC. 56. Any corporation formed or organized for the purpose of acting as trustee or administering any trust or holding property in trust or on deposit for the use, benefit, or behoof of others, shall be known as a trust corporation or company.
SEC. 57. A trust company may, with the approval of the Monetary Board, do a commercial banking business but such business must be kept separate and distinct from its trust business. All relevant provisions of Chapter IV of this Act governing the business of commercial banking corporations shall be held to apply to the commercial banking activities of a trust company. A commercial banking corporation may, with the approval of the Monetary Board, be authorized to engage in the business of a trust company, but shall be subject to the provisions of this Chapter as regards its trust business.
SEC. 58. A trust company, in addition to the general powers incident to corporations, shall have power: (a) To act as trustee on any mortgage or bond issued by any municipality, corporation, or any body politic and to accept and execute any other municipal or corporate trust not inconsistent with law; (b) To act under the order or appointment of any court of records as guardian, receiver, trustee, or depositary of the estate of any minor, insane person, idiot, habitual drunkard, or other incompetent or irresponsible person, and as receiver and depositary of any moneys paid into court by parties to any legal proceedings and of property of any kind which may be brought under the jurisdiction of the court by proper legal proceedings; (c) To act as the executor of any last will or testament when it is named in the last will and testament as the executor thereof; (d) To act under appointment of a court of competent jurisdiction as administrator of the estate of any deceased person, with the will annexed, or as administrator of the estate of any deceased person when there is no will, and when in either case there is no person qualified, competent, willing, able and entitled to accept such administration. (e) To accept and execute any legal trust confided to it by any court of record or by any person or corporation or the holding, management, and administration of any estate, real or personal, and the rents, issues, and profits hereof.
SEC. 59. Except as may otherwise be provided in this Act, no bond or other security shall be required from any trust company for the faithful performance of its duties as trustee, executor, administrator, guardian, receiver, or depositary: Provided, however, That the court officer appointing such company as trustee, executor, administrator, guardian, receiver, or depositary may, upon proper application, showing special cause therefor, require any corporation which shall seek to be or shall have been so appointed to give adequate security for the protection of the funds or property confided to the corporation, and, upon failure of such corporation to give the security required, its appointment as trustee, executor, administrator, guardian, receiver or depositary shall be revoked. The court shall require such trust company to make all reports, render all accounts, perform such duties, and do such acts as might be required by the court of a natural person acting as trustee, executor, administrator, guardian, receiver, or depositary.
SEC. 60. Upon the application of any executor, administrator, guardian, trustee, receiver, or depositary or any other person in interest, any court having jurisdiction over such officer, trustee, receiver, or depositary and over the subject matter of the trust or deposit may, upon such notice to the parties in interest as the court shall direct and after hearing the application and all parties in interest desiring to be heard, order said officer, receiver, trustee, or depositary to deposit with some trust company lawfully doing business in the Philippines the whole or any part of the moneys or personal property held by such officer, receiver, trustee, or depositary, Upon presentation to the court of the receipt or written acknowledgment of the trust company that the deposit of said moneys and personal property has been made in accordance with the order of the court, the court may order that the bond given or required to be given by such officer, trustee, receiver or depositary for the faithful performance of his duties be reduced to such sum as the court may deem proper: Provided, however, That the reduced bond shall be sufficient to secure adequately the proper administration and care of any property remaining in the hands or under the control of such officer, trustee, receiver, or depositary, and the proper accounting for such property. Property deposited with any trust company in conformity with this section shall be held by said company under the orders and direction of the court.
SEC. 61. All moneys, properties, or securities received by any trust company as executor of the will of any de-ceased person or as administrator, with or without the will annexed, of the estate of any deceased person, or as guardian, receiver, trustee, or depositary, of the estate of any minor, insane person, idiot, habitual drunkard, or other incompetent or irresponsible person, or as receiver or depositary under and by virtue of any order or appointment of any court, shall be kept separate and distinct from all other funds, properties, and assets of its general business. The accounts of all such moneys, properties, or securities shall likewise be kept separate and distinct from the accounts of its general business.
SEC. 62. No trust company shall have the right to accept any trust whatever which it would be unlawful for any individual to make, accept, or execute, and it shall be the duty of a trust company, acting as trustee of any legal trust, to execute such trust in accordance with the lawful terms of the trust.
SEC. 63. The lending or investment of deposits or moneys received by any trust company as executor of the will of any deceased person or as administrator, with or without the will annexed, or as guardian, receiver, trustee, or depositary of the estate of any minor, insane person, idiot, habitual drunkard, or other incompetent or irresponsible person, or as receiver or depositary under and by virtue of any order or appointment of any court, or as trustee under any instrument in writing constituting the company a trustee, unless otherwise directed by the instrument creating the trust, shall be limited to the loans and investments enumerated in section thirty-one of Chapter V (Savings and Mortgage Banks). Any officer or director of any trust company authorizing or making any loan on security otherwise than as provided in this section shall be punished by imprisonment of not less than one year nor more than ten years and by a fine of not less than one thousand nor more than ten thousand pesos.
SEC. 64. The capital stock and funds of a trust company may be loaned or otherwise invested as its by-laws prescribe; if it does a commercial banking business in addition to its trust business, the investment of its funds other than trust funds shall be governed by the relevant provisions of Chapter IV of this Act. Real estate acquired by a trust company, in whatever manner and for whatever purpose, shall likewise be governed by the relevant provisions of section twenty-five of this Act.
SEC. 65. As security for the faithful performance of its trust duties, every trust company, before transacting trust business, shall carry on deposit with the Central Bank of the Philippines, cash or securities approved by the Monetary Board in an amount equal to not less than two hundred and fifty thousand pesos: Provided, however, That the Monetary Board shall require any trust company to increase the amount of its securities on deposit with the Central Bank whenever in the judgment of the Monetary Board such increase is necessary by reason of the growth of the trust business of the company: And provided, further, That the paid-in capital and surplus of the company must be at least equal to the amount required to be deposited with the Central Bank in accordance with the provisions of this paragraph. Should the capital and surplus fall below said amount, the Monetary Board shall have the same authority as that granted to it under the provisions of the last paragraph of section twenty-two of this Act. A trust company, so long as it shall continue solvent and comply with the laws of the Philippines, shall have the right to collect the interest earned on any securities so deposited and, from time to time, with the approval of the Monetary Board, to exchange such securities for others. All claims arising out of the trust business of a trust company shall have priority over all other claims as regards the securities deposited as above provided. The Monetary Board may not permit the securities deposited in accordance with the provisions of this section to be reduced below the minimum amount of two hundred and fifty thousand pesos until the depositing company shall discontinue its trust business and shall satisfy the Monetary Board that it has complied with all of its obligations in connection with such business. No assets held by a trust company in its capacity as trustee shall be subject to any claims other than those of the parties interested in the specific trusts.
SEC. 66. Every trust company, before the declaration of a dividend, shall carry to surplus ten per cent (10%) of its net profits accruing since the last preceding dividend until the surplus shall amount to twenty per cent (20%) of its authorized capital stock and no part of the surplus shall at any time be paid out in dividends, but losses accruing in the course of its business may be charged against the surplus. Nothing herein contained shall prevent the accumulation of a larger surplus than that above prescribed should the directors so decide.
SEC. 67. The ordinary business of a trust company shall be transacted at the place of business specified in its articles of incorporation, But any trust company may, with the prior approval of the Monetary Board, establish branches in the Philippines, and the said company shall be responsible for all business conducted in such branches to the same extent and in the same manner as though such business had all been conducted in the head office. For the purposes of this Act, the company and its branches shall be treated as a unit.
Provisions on this page are reproduced verbatim from official open data. See the attribution line.
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).