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your duties in that connection are the same as your duties in relation to trust companies organized under the laws of this state.

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Mr. Joseph Conway, Deputy State Banking Commissioner, Lansing, Michigan:

Dear Sir-We refer to yours of the 19th instant in which you ask this Department's opinion on the following:

are

"In the assets of banks under our supervision, we frequently find loans which secured by assignments of vendors' equities in land contracts. The question on which we would apprecitae your opinion pertains to what may be considered a proper legal assignment of a vendor's equity in a land contract as collateral."

We know of no agreement or arrangement that can be made referring to the vendee's contract or the vendor's equity in a contract that will have the result of placing a lien upon the property sold by the vendor. Such agreements can be enforced as agreements and under some circumstances it probably would be true that an equitable lien against property involved could be enforced, but this could only be done after a determination by proper legal procedure. Whenever it is deemed advisable to have the security of the land itself back of the loan that is made, it is necessary that some conveyance be given whereby the land becomes security for the loan. This can be done either by deed or mortgage, and if by deed the same should be recorded as a mortgage. The condition that exists does not differ in any way from that where a loan is asked by the owner of lands not subject to land contract. A quit claim deed conveys the same interest as a warranty deed, the only difference in the two being that in a warranty deed the vendor guarantees or warrants the title, while no warranty exists with the quit claim deed, but so far as the interest conveyed it is the same in either instance. Trust the above opinion gives you the information desired. Yours very truly,

A. B. DOUGHERTY,
Deputy Attorney General.

(69)

BANKS LIABILITY WHERE DEPOSIT BOXES ARE RENTED TO TWO INDIVIDUALS JOINTLY.

Hon. Hugh McPherson, Lansing, Michigan:

June 11, 1921.

Dear Sir-Your letter of recent date received as follows: "State banks often rent safety deposit boxes to husband and wife, the name of both appearing as lessees and each having access to the box, where, presumably, each has deposited their individual papers, and others.

"The question has arisen, whether a bank, in the case of the death of one or the other of the lessees, has the right to permit the survivor to have access to the box? We shall appreciate an expression of opinion from you in this regard.

"Also, in reference to a question as to the duty of the bank under section nine of the Inheritance Tax Law, being Section 14532 of the Compiled Laws, as amended. This section seems to require that notice be given to the county treasurer before safety deposit boxes of deceased persons may be opened. The question has arisen in some banks as to whether they should deny the right of the survivor to have access to the box until notice has been given to the county treasurer, in instances where the box is rented to two persons and the name of each appears as a lessee."

Under the facts as stated in your letter, the death of one of the lessees of the safety deposit box would not terminate the right of the other lessee, unless there has been an agreement to that effect. However, the mere fact that the box had been rented jointly would have no necessary bearing upon the question of the title to the contents of the box after the death of one of the lessees. Ordinarily, there is no survivorship in personal property in this State excepting as created by statute. It is true that a species of such survivorship may be created by making a gift causa mortis.

Johnson v. State Bank, 151 Mich. 538.

Ludwig v. Bruner, 203 Mich. 556.

As to the liability of the bank under Section 9 of the Inheritance Tax Law, that would largely depend upon the facts; and most of all upon what degree of control the bank retains over the deposit box. Many banks make a practice of retaining a key which must be used in opening the safety deposit box, and where that is the case it would seem that the bank has sufficient control over the box to bring it within the provisions of Section 9. In any event, prudence would dictate that the bank protect itself by notifying the county treasurer, or by obtaining instructions from the court, before permitting the possible assets of the decedant from being taken from the box.

Owing to the variety of circumstances under which these questions may arise, it would be difficult, if not impossoble, to make any ruling that would apply in every case, and I would prefer to leave the matter that way.

(70)

Very truly yours,

MERLIN WILEY,
Attorney General.

LAND CONTRACTS NOT LEGAL INVESTMENTS FOR STATE BANKS.

July 13, 1921.

Hon. Hugh McPherson, Commissioner of Banking. Lansing, Michigan:
Dear Sir-I have your request of the first instant for an opinion upon the following

"We have several letters from a state bank in which they contend that it is legal for them to invest their funds in land contracts, purchasing the same from the original vendors by means of a warranty deed recorded as a deed only, conveying title to the property sold under the contract and subject to any prior existing mortgage liens that may be upon the property. Supporting their contention that this action is legal, they refer to an opinion of former Attorney General Kuhn, rendered this Department December 7, 1911, and to Supreme Court decisions mentioned therein.

"It has been our position that land contracts do not constitute proper investments for state banks as contemplated by the banking law. The acceptance of a warranty deed from the vendor, conveying his interest appears to us to amount to the outright purchase of real estate, subject to the interest of the vendee. Section 11 of the banking act seems to specifically prohibit such transactions.

"Kindly advise as to your opinion as to the legality of investments of this kind."

In reply thereto would say that I have examined the opinion of Attorney General Kuhn, dated December 7, 1911, found on page 197 of the Attorney General's Report for 1912, and it seems to me that this opinion fully sustains the position taken by your department with reference to land contracts as investments for savings banks, and fails to sustain the position taken by the bank, to which you refer, that a state bank may purchase for investment the vendor's interest in land contracts.

As I understand the position which has for many years been taken by your Department, a bank may loan money upon the security of the vendor's interest in a land contract and in connection therewith may take by deed the vendor's title to the land itself by way of mortgage security, but that where a bank attempts to purchase the vendor's interest outright and takes along with such purchase the vendor's title to the land itself, such a transaction is not deemed to be within any of the provisions of Section 27 of the General Banking Law.

We do not seem to have any decisions in this state squarely in point and the matter has heretofore rested upon construction by your department and this Department. I see no reason at this time for disagreeing with the opinion of former Attorney General Kuhn who has stated the matter very clearly in the opinion first above referred to. In other words, I think you would be safe in advising the bank in question that the purchase outright of land contracts out of funds of the bank for pure purposes of investment or speculation is not permitted by the banking laws of this state. Respectfully yours,

(71)

MERLIN WILEY,
Attorney General.

BANKS NOT REQUIRED ΤΟ FILE STOCKHOLDERS LIST WITH SECRETARY OF STATE.

February 17, 1922.

Hon. Hugh McPherson, State Banking Commissioner, Lansing, Michigan:

Dear Sir-We have your letter of the 15th instant, requesting an opinion as to whether or not Section 15082 of the Compiled Laws of 1915 requiring corporations to file lists of their stockholders with the Secretary of State applies to banks organized under the general banking laws of this State.

In reply thereto, you are advised that Section 15082 reads as follows:

"Every banking, insurance, mining, plank road, or other incorporated company, which issues script or shares, shall within ninety days after the passage of this act, file with the secretary of state a list of the number of shares issued by said corporation, and the names of the owners thereof and their post office addresses, with the number of shares owned by each; and annually thereafter shall file with said secretary of state during the months of January or February, in each and every year, a statement similar to that above required, showing the ownership of the shares of said corporation at the day of the date of said statement; all of which statements, including the first, shall be made by one of the officers of said company, under oath, Provided, That corporations which file an annual report with the secretary of state containing a list of stockholders with the post office addresses and the number of shares held by each, shall not be required to file a separate list under this act."

Your attention is particularly called to the proviso in this section.
Section 35 of the General Banking Law provides as follows:

"There is hereby established in the state department a separate and distinct bureau which shall have charge of the execution of the laws relating to banks, trust, loan, mortgage security, or safety deposit companies formed and transacting business under the laws of this state, to be designated as the state banking department.'

Section 15 of the banking law requires banks to file lists of stockholders with the Commissioner annually. While it is true that the Banking Department is operated independently of the State Department, yet the provision of Section 35 quoted above, and which has never been repealed or modified, distinctly makes the Banking Department a bureau of the State Department and, in my opinion, the filing of a list of stockholders with the Commissioner is equivalent to filing the same with the Secretary of State. follows, therefore, that banks are not required to comply with Section 15082.

Very truly yours,

It

(72)

IN RE: BORROWERS RIGHT TO SET-OFF.

MERLIN WILEY,
Attorney General.

June 14, 1922.

Bank of

the

Hon. Hugh McPherson, State Banking Commissioner, Lansing, Michigan: Dear Sir-Your recent letter received as follows: "In the liquidation of the affairs of the question will undoubtedly arise as to the right of a depositor in the savings department to offset his loan which may be carried in the commercial department. We respectfully ask your opinion as to the rights of the depositor in such a case and as to the duty of the

"It should be remembered that when a customer deposits money in the bank he determines for himself whether his deposit shall be a commercial or a savings deposit, but when a customer negotiates a loan from the bank he is not in position to make such a determination. In the latter case at least it is customary for the bank to determine for itself whether the customer's loan shall be carried as a commercial or a savings asset. Your early advice in this matter will be appreciated."

In reply thereto, would state that the right of set-off in any case results from the relation of debtor and creditor as between the bank and its borrowers or depositors. In the absence of statute, and as applied to private banks in this State, this Department has held that the right of set-off exists regardless of whether the loan was made on the commercial or savings side of the bank. Attorney General's Report for 1913, page 548.

With regard to banks organized under the General Banking Law, however, I am of the opinion that a clear distinction must be made. In Peters v. Union Trust Company, 131 Mich. 322, it was held that the securities and deposits in the savings department of a bank having both a commercial and savings business must be segregated and held for the benefit of the savings depositors. It seems clear from the decision in the above case that securities for loans made out of the savings deposits could not be surrendered by way of set-off to a commercial deposit without at the same time taking from the savings side of the bank an asset which belongs to it for the benefit of its depositors.

In the final liquidation of a State bank after the savings depositors have been satisfied, or after their claims have been paid, the remainder of the assets on the savings side of the bank would, of course, be available for general creditors. Trusting this makes the matter clear,

am,

Very truly yours,

MERLIN WILEY,

Attorney General.

(73)

COMMISSIONER'S AUTHORITY RE: CONSOLIDATIONS.

October 24, 1922.

Hon. Hugh A. McPherson, State Banking Commissioner, Lansing, Michigan:

Dear Sir-Your letter of the 23rd instant received as follows: "Section 54 A of Act 205 of the Public Acts of 1887, commonly known as the general banking law, provides for the consolidation of state and national banks. We have before us the proposition of the consolidation of a Michigan national bank The statute does not appear to be clear regarding the authority of the Commissioner of this Department to prevent this action by his disapproval. We will appreciate your opinion regarding the authority of the Commissioner to maintain a separation of the assets of two institutions, providing that in his opinion the creditors of the state bank might be defeated or defrauded by the consolidation.

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In answer to your letter we call your attention to the following provision appearing in Section 54 A:

"It shall also be the duty of the commissioner of the banking department, to cause an examination of each bank and no such consolidation shall be made without the consent of the commissioner of the banking department, and not then to defeat or defraud any of the creditors of either of the banks parties to such consolidation."

In

Under this provision the State Banking Department has authority to withhold its consent to the consolidation for the protection of the creditors of the state bank, and, in my opinion, also for the protection of the stockholders of the state bank it may require, and it is its duty to require an examination to be made of the national bank as well as the state bank prior to final action upon the consolidation. In case the national bank should refuse to permit an examination, then it would be the duty to withhold its consent. other words, we are of the opinion that the statute referred to in your letter gives you all of the power and authority necessary to prevent a consolidation until the commissioner is satisfied that neither bank, nor the creditors of either bank, will be harmed by the transaction. Yours very truly,

A. B. DOUGHERTY,

STATE BANKS.

1922.

Abstracts of reports made by the state banks of Michigan to the Commissioner of the Banking Department, the reports being called for on the past days unknown to bank officers, viz., December 31, 1921, March 10, May 5, June 30, and September 15, 1922. For reports of individual state banks and trust companies see succeeding pages.

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Totals

262,116 65

$974,035,378 70 $969,684,875 73 $975,576,100 93 $1,003,009,469 87 $1,038,561,839 05

367,530 85

124,424 89

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NATIONAL BANKS.

1922.

Figures given by the Comptroller of the Currency in even thousands. Abstracts of reports made by the National banks of Michigan to the Commissioner of the Banking Department, December 31, 1921, March 10, May 5, June 30, and September 15, 1922. For reports of individual national banks see succeeding pages.

Re ources

Report of December 31, 1921, 118 national banks.

Report of
March
10, 1922,
120 national
banks.

Report of
May
5, 1922,
119 national
banks.

Report of
June
30, 1922,
119 national
banks.

Loans and discounts.

Customers liability account of accept

ances

Report of September 15 1922, 119 national banks.

$202,145,000 00 $208,818,000 00 $210,813,000 00 $217,573,000 00 $216,601,000 00

231,000 00 125,000 00

523,000 00

739,000 00

604,000 00

518,000 00

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116,000 00

95,525,000 00

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108,743,000 00

bank.

17,807,000 00

21,932,000 00

18,407,000 00

20,411,000 00

23,937,000 00

Due from Federal Reserve bank (Not available as reserve)

8,864,000 00

5,109,000 00

5,480,000 00

5,503,000 00

6,384,000 00

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9,928,000 00

10,233,000 00

5,006,000 00

23,602,000 00

764,000 00

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2,975,000 00 33,526,000 00 612,000 00 12,232,000 00 841,000 00 645,000 00 1,045,000 00

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5,528,000 00

28,576,000 00
723,000 00
13,496,000 00

41,565,000 00

823,000 00

13,853,000 00

613,000 00
643,000 00

620,000 00

643,000 00

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2,038,000 00

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