35-3-107 - Real estate bonds and notes.
35-3-107. Real estate bonds and notes.
Investments may be made in bonds and notes secured by first mortgage or deed of trust on real estate located in this state; provided, that:
(1) The face or principal amount of the bonds or notes does not exceed one half (½) the actual value of the real estate as appraised by one (1) or more licensed real estate dealers acting for unincorporated trustees, guardians or other fiduciaries, and in case of incorporated trustees, guardians or other fiduciaries, the appraisal shall be made by an agent or committee composed of or selected by the board of directors or executive committee of the incorporated trustee, guardian or other fiduciary;
(2) The trustee, guardian or other fiduciary or any institution controlled by that entity or person has not received any commission from the borrower or issuer in the making of the mortgage or deed of trust or the underwriting of the securities secured by the mortgage or deed of trust, unless the commission charged the borrower or issuer does not exceed one percent (1%) per annum of the aggregate principal amount of the bonds or notes; and
(3) Any probate or chancery court of the county where the fiduciary is located, upon the application of any beneficiary of the trust or of any person connected with any beneficiary, by consanguinity or affinity, within the sixth degree as computed by the civil law, may, at any time, either restrain the making of any such proposed investment, if the investment is not consummated, or if consummated, require the fiduciary promptly to dispose of the bonds or notes at the best price then obtainable and otherwise reinvest the funds, and the court may exercise such power to restrain or compel disposal in all cases in which the court may find that action to be necessary to protect the interest of any beneficiary.
[Acts 1931, ch. 100, § 1(f); C. Supp. 1950, § 9596.1(E); modified; T.C.A. (orig. ed.), § 35-307.]