Amendment to Sec. 9 of Act No. 2938 (Charter of the Philippine National Bank) and Repeal of Act No. 3033

December 3, 1934

ACT NO. 4170

AN ACT TO AMEND SECTION NINE OF THE PRESENT CHARTER OF THE PHILIPPINE NATIONAL BANK, CONTAINED IN ACT NUMBERED TWENTY-NINE HUNDRED AND THIRTY-EIGHT, AND TO REPEAL ACT NUMBERED THREE THOUSAND AND THIRTY-THREE

SECTION 1. Section nine of the present Charter of the Philippine National Bank, contained in Act Numbered Twenty-nine hundred and thirty-eight, is hereby amended to read as follows:

"SEC. 9. Said National Bank is hereby authorized to loan, for agricultural purposes, not to exceed sixty per cent of its capital and surplus and all amounts realized from the sale of real estate bonds, as provided in sections eleven and twelve herein, on notes secured by real estate mortgages. Payment of such notes shall be secured by first mortgages on real estate in the Philippine Islands, and in no case shall such loans exceed sixty per cent of the actual value of said real estate, including the value of the permanent improvements thereon, such as buildings and machinery if the same form an integral part of the agricultural development: Provided, however, That whenever the Bank may deem it advisable, the mortgages shall contain a clause obliging the mortgagor to insure to their full value in the name of the National Bank such buildings and improvements. The due date of said mortgages shall not be less than one year from the date thereof, nor more than thirty years. The said mortgages may, by their terms, be made payable at one time or in installments: Provided, That when the due date of the mortgage is five years or more after the date of its execution, the principal and interest of the loan shall be made payable by its terms in equal installments of not more than one year each. Loans made by the National Bank on real estate security shall be made for the purpose of promoting agriculture. Applications for such loans shall be in writing and under oath, and shall contain, among other things:

"(a) A detailed description of the real estate; THIcCA

"(b) An appraisal thereof at its reasonable market value;

"(c) A full statement of the purposes for which the loan is desired.

"It shall be unlawful to use the proceeds of said loan, or any part thereof, for any purpose or purposes except the purpose or purposes set out in said application. Any violation of this clause shall be sufficient cause for the rescission of the contract and the foreclosure of the mortgage." aHICDc

SECTION 2. Act Numbered Three thousand and thirty-three is hereby repealed.

SECTION 3. This Act shall take effect on its approval.

Approved, December 3, 1934.