Denison, 040632 PAAGO, AGO 44

Case DateApril 06, 1932
CourtPennsylvania
Honorable W. M. Denison
AGO 44
Opinion No. 44
Pennsylvania Attorney General Opinions
Opinion of the Attorney General
April 6, 1932
         School law—Deposit of funds—Right to deposit in trust department of trust company—Act of April 11, 1929.          The Act of April 11, 1929, P. L. 512, permitting trust companies to use in their business trust funds awaiting investment or distribution, upon compliance with certain conditions, does not authorize a school board to deposit its funds in the trust department of a trust company, since such action would constitute a surrender of control over its funds by the school district, which Is forbidden.          Honorable W. M. Denison,          Deputy Superintendent of Public Instruction,          Harrisburg, Pennsylvania.          Sir: You have stated to us the case of a school board whose funds are deposited in a trust company which has been unable to obtain a depository bond with individual or corporate sureties. You say that it has been suggested that the school funds be deposited in the trust department of the company under the provisions of the Act of April 11, 1929, P. L. 512. You have asked us to advise you whether such a deposit would adequately protect both the school district and the individual members of the board.          The Act of April 11, 1929, P. L. 512, is an amendment to the general corporation law of April 29, 1874, P. L. 73. It deals with the fiduciary powers of trust companies. Prior to the amendment of 1929, trust companies were not permitted to use in their general business any funds held by them in fiduciary capacities. The Act of 1929 changed this to the extent of permitting trust funds...

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