are so similar that persons would be likely to deal with one concern when they believed in good faith they were dealing with the other. See

Lamb Knit Goods Co. v. Lamb Glove & Mitten Co., 120 Mich. 159;

Penberthy Injector Co. v. Lee-Penberthy Mfg. Co., 120 Mich. 174;

Supreme Lodge Knights of Pythias v. Improved Order Knights of Pythias, 113 Mich. 133;

Great Hive L. O. T. M. v. Supreme Hive, 135 Mich. 392, 415.

It would seem also if the similarity of the name of a corporation organized under Act 232, Public Acts of 1903, to the names of corporations organized under Act 108, Public Acts of 1889, which is the trust company act, was such that people dealing with it would be deceived into believing that they were dealing with a corporation which was under the supervision of the banking department, that the use of such a name could properly be restrained in a proceeding instituted for that purpose.

Very respectfully yours,
JNO. E. BIRD,

Attorney General.

ASSESSMENT IN CASE OF IMPAIRMENT NOT AUTHORIZED.

July 29, 1908.

Hon. Henry M. Zimmermann, Commissioner of Banking, "Capitol," Lansing:

Dear Sir-We have carefully examined the letter of.... . . . . cashier of the..... ...Bank, of date July 18, 1908, together with the enclosures accompanying same.

Section 42 of the General Banking Law, being section 6131 of the Compiled Laws of 1897, gives the Commissioner of Banking authority when he finds the capital of any bank is impaired or reduced below the amount required by law, to require such bank to make good the deficiency within ninety days after a written requisition is made, and in case the impairment is not made good it becomes his duty, with the concurrence of the Attorney General, to institute proceedings for the appointment of a receiver to wind up the affairs of the bank. The law does not prescribe the method by which this impairment is to be made good. It makes no provision for an assessment upon the stockholders of the bank, nor is there any authority under the statutes of this State for the stockholders or directors to make such an assessment. There being no statutory authority for making the assessment, it follows that an assessment made by the stockholders or directors could not be enforced against dissenting shareholders. The only method of making an assessment against the stockholders of a bank is under section 46 of

This assessment can only be made when the bank is in process of liquidation.

It is our view of this statute that it contemplates a voluntary contribution on the part of the shareholders in order to prevent the affairs of the bank being liquidated by order of the Commissioner, and leaves it open to the bank to make good the deficiency in any manner that seems to it feasible. The only alternative in case of the failure of the bank to make good the deficiency is for the Commissioner to proceed as directed by the statute.

We return the letter and enclosure herewith.

Very respectfully yours,

JNO. E. BIRD,

Attorney General.

FOREIGN BANKS NOT PERMITTED TO TRANSACT BUSINESS.

July 29, 1908.

Hon. Henry M. Zimmermann, Commissioner of Banking, "Capitol,” Lansing:

Dear Sir-We are in receipt of yours of the 3d instant in which you enclose a letter from Reginald F. Fennell, under date of June 20, 1908, in which he submits the following inquiry:

In

"Is there any license necessary or other legal form required to be gone through with for banks doing business outside of the State of Michigan, to establish an agency or representative in this State? the event of there being any restriction, kindly advise to what extent." In reply to this inquiry will say that the Legislature has by statute prescribed strict conditions to be complied with by corporations desiring to engage in the business of banking, or in loaning and investing money. There is no statutory provision which permits foreign corporations to come into this State for the purpose of engaging in that kind of business. The fact that the Legislature has seen fit to lay down these conditions for domestic corporations desiring to engage in such business and to place them under the supervision of the State banking department indicates clearly an intention on the part of the Legislature to prohibit foreign corporations from engaging in such business.

In this connection we desire to call your attention to the case of

New York Mortgage Co. v. Sec. of State, 150 Mich. 197, 202.

which was a mandamus proceeding against the Secretary of State to compel the issuance of a license to do business in this State to a corporation desiring to engage in the business of making loans 'secured by mortgages on real estate, to sell such mortgages and bonds of this company secured by mortgages on real estate, but said bonds are not to be sold on the installment plan."

In response to the contention of the relator in that case that it should be admitted to do business under our foreign corporation law, the court

"In other words such construction would operate as to such foreign corporations as a repeal of all the beneficial and protective provisions of Act No. 205, Public Acts of 1877. To hold that such was the Legislative intent would be contrary to every suggestion that arises to the mind, upon the consideration of the proposition. Our construction of the act is that banking corporations and those corporations which are within the contemplation of our banking laws are not within the provisions of the act authorizing foreign corporations to transact business in this State."

In view of the above, we are of the opinion that foreign banks have no right to engage in business in this State, or to establish an agency or representative in this State for the transaction of business. We return Mr. Fennell's letter herewith.

Very respectfully yours,

JNO. E. BIRD,
Attorney General.

INCREASE OF CAPITAL NOT REQUIRED BY BANKS IN EXTENSION OF CORPORATE LIMITS. BRANCH BANKS PERMITTED IN CERTAIN INSTANCES.

May 27, 1909.

Hon. Henry M. Zimmermann, Commissioner of the Banking Department, Capitol, Lansing, Michigan:

Dear Sir-I am in receipt of your letter of the 29th ultimo in which you state that a bank organized with a capital of $20,000.00 in a village adjacent to a large city subsequently became located within the corporate limits of the city by an extension of the boundaries of the city to include the territory formerly embraced within the limits of the village; the bank thus coming into the city with a capital less than is required by statute of banks organized within the city. You also state that it is now suggested that this bank may establish branches within the city and request an opinion upon the following:

First, Whether or not you have authority to require a bank organized in a village, when it becomes located in a city by the extension of the corporate limits of the city, to increase its capital in accordance with the number of inhabitants of the city.

Second, Whether or not a State bank has authority to establish branches in the city or village in which it is authorized by its articles of incorporation to transact business.

In reply will say that Section 1 of the General Banking Law (Sec tion 6090 C. L.) provides for the establishment of commercial and sav ings banks in cities and villages in the state and prescribes the minimum capital that banks may have, based on the population of the city or village in which the bank is to be located.

Section 2 of the act provides that the articles of incorporation shall specify among other things:

"The county and city or village where such bank is to be located and

Section 7 provides that upon compliance with the statute the Commissioner of the Banking Department shall give the bank a certificate under his hand and official seal that the bank has complied with the statute and is authorized to commence business.

The contingency arising in the case of the bank to which you refer apparently was not anticipated by the framers of the General Banking Law as that law contains no provision requiring a bank established within a village which becomes located in a city by reason of the extension of the corporate limits of the city to increase its capital in accordance with the population of that city. Neither is there in the Banking Law any provision requiring a bank after its organization within a city of a certain population to increase its capital as the population of the city increases.

The bank upon complying with the provisions of the statute was given the right by the state to conduct its business within the village. It did not voluntarily remove to the city but became located therein by operation of law through the extension of the corporate limits of the city. The provision of the statute requiring banks to have a certain capital according to the population evidently has reference to the establishment of banks in the first instance. As heretofore stated, a bank once lawfully established with the required capital according to the population of a city is not required to increase its capital although the population of the city may increase to such an extent that a new bank could not be established therein without having a much larger capital. A careful consideration of the provisions of the General Banking Law leads me to the conclusion that a bank once lawfully established in a village with the required capital in accordance with Section 1 of the General Banking Law is not required under the provisions of that law to increase its capital when it becomes located within a city by reason of the extension of the corporate limits of the city to include the village.

For answer to your second question I would say that no authority to establish branches is conferred upon banks by any provision of the laws of this state. In the absence of statute a bank has no authority to establish branches at which a general banking business is conducted.

MaGee on Banks and Banking, page 41,

Atty. Gen. v. Oakland Co. Bank, Walk. page 90.

While a bank has no authority to establish branches unless expressly authorized by statute so to do, it seems that it may have an agency for the transaction of some part of its business in the city or village desig nated in its charter as the place where the bank is to be located and to conduct its business.

In MaGee on Banking, page 41, are compiled the provisions in force. in the different states relating to this subject and of this state it is said:

"There is no law authorizing the establishment of branches. Agencies are permitted which are restricted in their operations to receiving and paying out of deposits and issuing exchange."

and several instances of banks located in the cities of Detroit and Lan

The agencies established by the banks at the cities indicated have been conducted by the banks for some time and the right of the banks to establish such agencies does not appear to have been heretofore questioned by the Banking Department or any officer of the State. In view of the foregoing I am of opinion that a bank may establish agencies of the character of those indicated herein within the limits of the city or village in which the bank is located. Inasmuch as a bank originally located in a village, and which becomes located in a city by the extension of the corporate limits of the city, has authority to conduct its business within the city, it would have the same right to establish agencies of this character as a bank originally organized within the city. Respectfully yours,

(Signed) JNO. E. BIRD, Attorney General.

NOTES AND SECURITIES DEPOSITED WITH TRUST COMPANIES NOT LEGAL SAVINGS INVESTMENTS.

May 27, 1909.

Hon. Henry M. Zimmermann, Commissioner of the Banking Department, Capitol, Lansing, Michigan.

Dear Sir-I am in receipt of your letter of the 29th ultimo in which you ask whether or not notes and securities representing fractional parts of large loans where the security is deposited with a trust company are legal investments for a state bank under Section 27 of the General Banking Law (Section 6116 C. L.) as amended by Act 322 of the Public Acts of 1907.

In reply would say that this section provides in Subdivision (i) that a certain proportion of the savings deposits of the bank shall be invested by the board of directors as follows:

"Upon notes or bonds secured by mortgage lien upon unencumbered real estate worth at least double the amount loaned; the remainder of such deposits may be invested in notes, bills or other evidences of debt, the payment of which is secured by the deposit with the bank, of collateral security consisting of personal property or securities of known marketable value, worth ten per cent more than the amount so loaned and interest for the time of the loan; or may be invested in notes, bills or other evidence of debt, the payment of which is secured by such property or securities deposited in a collateral deposit company organized under the laws of this state;"

It is evident that the notes and securities in question come within the class last referred to in this subdivision, to-wit: "notes, bills or other evidence of debt, the payment of which is secured by such property or securities deposited in a collateral deposit company organized under the laws of this state."

This provision was incorporated in this subdivision of Section 27 by Act No. 322, Public Acts of 1907. The same legislature enacted a law