In reply thereto would state that the language of the Act in question is somewhat confusing. The title of the Act being as follows: "An Act designating the holidays to be observed in the acceptance and payment of bills of exchange and promissory notes, in holding of courts and relative to the continuance of suits." While Section 1, as amended by Act 246 of the Public Acts of 1909, provides, in part, as follows: "Provided, further, That nothing herein contained shall be construed to prevent or invalidate the entry, issuance, service or execution of any writ, summons or confession of judgment or other legal process whatever, holding courts or the transaction of any lawful business except banking on any of the Saturday afternoons herein designated as half holidays, nor to prevent any bank from keeping its doors open or transacting its business on any of the said Saturday afternoons, if by a vote of its directors it elects to do so."

From a reading of the last section it might be implied that there was a legal restriction against keeping a bank open upon a legal holiday. I do not believe, however, that this was the legislative intent, but that on the contrary the intent was, as is set forth in the title of the act itself, namely: the prevention of the acceptance and payment of bills of exchange and promissory notes. Consequently, I am of the opinion that to keep a bank open for purposes other than the ones stated would not be a violation of the law, and that your ruling in the matter has been right.

Very respectfully,

A. B. DOUGHERTY, Deputy Attorney General.

COMMISSIONER MAY REQUIRE INFORMATION TENDING TO SHOW BANK'S CONDITION. March 24th, 1913.

Hon. Edward H. Doyle, Commissioner of Banking, Capitol, Lansing:

Dear Sir-I have your communication of March 17th calling attention to sections 21, 39 and 55 of the General Banking Laws relating to reports to be made by state banks and the furnishing of information to the Banking Commissioner. You state:

"We would appreciate your opinion as to whether or not a state bank has the right to withhold information of any character from the Commissioner, his deputy, or one of the bank examiners, upon being requested to furnish same. To what extent could the Department go in case of refusal to furnish any information affecting the condition of the bank?"

In reply thereto would say section 21 of the general banking law requires every bank to make certain reports "according to the forms which he (Commissioner of Banking) shall prescribe and furnish. This section also provides that "Such reports shall exhibit in detail, and under appropriate heads, the resources, assets and liabilities of the bank at the close of business of any past day by him specified." etc. Also that "Such commissioner shall also have the power to call for special reports from any bank or banks whenever, in his judgment, the same are necessary to inform him fully of the condition of such banks." Section 39 provides:

"It shall be the duty of the commissioner of the banking department, and he shall have power for himself, his deputy, or any examiner he may appoint for that purpose, to examine two or more times in each year, the cash, bills, colaterals or securities, books of account, condition and affairs of each bank under the law, and also when requested by the board of directors of any bank. For that purpose he may examine on oath any of the officers. agents, clerks customers or depositors of such bank, touching the affairs and business of such bank. Any wilful false swearing in any examination shall be deemed perjury. He shall also ascertain whether each bank transacts its business at the place designated in the articles of incorporation, and whether its business is conducted in the manner prescribed by law."

Section 55 of the general banking law provides, among other things, that if the commissioner shall become satisfied that a bank "is conducting its business books and papers and concerns to the inspection of the commissioner, his deputy or any examiner, or if any officer of such bank shall refuse to be examined under oath touching the concerns of the bank, or if from any examination made or report here provided for, the commissioner shall conclude that such bank is in an unsound or unsafe condition to transact the banking business, so that it is unsafe and inexpedient to continue same," he shall in the manner therein prescribed make application for the appointment of a receiver for such bank.

The foregoing sections are the only provisions of statute to which my attention has been called expressly bearing upon your question. The language of the statute seems clearly to confer upon the banking commissioner the right and authority to demand, receive and procure any and all such information as he may require or deem necessary in order to fully understand the condition of a bank, the character or amount of its obligations and the affairs thereof. The commissioner is expressly charged with the duty of determining whether or not a bank is conducting its bank in an unsafe or unauthorized manner. He must also determine whether the bank is in an unsound or unsafe condition to transact the banking business so that it is unsafe and inexpedient to continue the same. He has the right to secure information upon forms prescribed by him, and he may examine on oath any of the officers, agents, clerks, customers or depositors of the bank touching its affairs and its business. The commissioner of banking, and not the bank, is the judge of the information necessary for him to have to place him in a position where he can perform his statutory duty. It will be assumed that the commissioner of banking, or his deputy, or any assistant duly authorized, will not demand or require any information other than such as it is deemed expedient to have in order to determine the exact condition of a bank and its affairs. When information is demanded, it is the duty of the bank to furnish it, and the commissioner's demands are not open to question by the bank. It would be indeed an anomalous condition if notwithstanding all the duties devolving upon the banking commissioner, the bank could determine for itself the character or amount of information it should disclose.

It is therefore my opinion that the bank has not the right to withhold any information which the banking commissioner shall in the exercise of his discretionary authority determine is necessary in order to furnish him with the knowledge to perform his duty.

Said section 55 is very clear and explicit in its terms. When any such condition as is therein referred to exists, it is clearly the duty of the banking commissioner to make application for a receiver. The banking commissioner has no right to assume that because of the failure or refusal of the bank to furnish the information he desires, the bank is in a safe or sound condition. The very fact that information which the banking commissioner may determine is neces sary is refused by a bank is in itself some reason for suspicion. If, therefore, through the refusal of a bank to furnish such information as you may deem necessary you are unable to determine whether it is proper for the bank to continue in the banking business, it is my judgment that you would be clearly authorized to proceed in the manner outlined in said section 55 of the general banking law.

Very respectfully,

GRANT FELLOWS,
Attorney General.

BOARD OF DIRECTORS CANNOT INCREASE OR DECREASE THEIR NUMBER.

April 3, 1913.

Hon. E. H. Doyle, Banking Commissioner, Capitol, Lansing:

Dear Sir-I have your communication of March 27th, in which you state that, "The Department has always held that the board of directors could not increase or decrease the number of stockholders constituting the board, that the only authority delegated to the directors in this regard was that they could indicate the manner in which the members of the board should be elected, and in case of a vacancy occurring on the board between the annual meetings of stockholders, the directors have the right to fill such vacancy." You state, "We would apprehas the right to increase or decrease the number of members constituting the board."

In reply thereto would say it is my opinion that, at least between stockholders' meetings, the number of directors cannot be decreased or increased by the board of directors. Section 12 of the banking law provides in part that, "any vacancy in the board of directors shall be filled by the Board, and the director so appointed shall hold office until the next election." The above quoted language clearly implies a duty devolving upon the board of directors to fill any vacancy that may occur. It is not a discretionary duty with the board of directors. It is a positive requirement that the vacancy "shall be filled by the board." This is a mandatory provision, and the law clearly contemplates a strict compliance there. with.

Very respectfully,

(Signed) GRANT FELLOWS, Attorney General.

DIRECTORS MUST HAVE FULLY PAID FOR TEN SHARES OF STOCK AT ORGANIZATION.

April 3, 1913.

Hon. Edward H. Doyle, Commissioner of Banking, Capitol, Lansing:

My Dear Sir-I have your communication of March 22nd in which you inquire whether as a condition precedent of the right of a person to be elected and act as a director of a bank he must actually pay in full for at least ten shares, or if he subscribes for ten shares of stock and only pays for fifty per cent if he thereby becomes eligible as a director.

In reply thereto would say section five of the banking law requires that at least 50% of the capital stock of every bank shall be paid in before it shall be authorized to commence business. Section 12 of the banking law, which relates to directors, provides in part that: "Every director must own and hold in his own name not less than ten shares of the capital stock of such bank."

The fact that a bank may be authorized to commence business with only 50% of the capital stock thereof paid in has absolutely nothing to do with the statutory provision requiring every director to own and hold in his own name not less than ten shares of the capital stock. The language above quoted means exactly what it says. It means that every director must actually own, that is, that he must have fully paid for at least ten shares of the capital stock of the bank and not that he may actually pay for 50% of the ten shares and subsequently have the right of ownership in the balance thereof when he makes payment therefor.

Hon. Edward H. Doyle, Banking Commissioner, Capitol, Lansing:

Dear Sir-I have before me your communication of April 18th, in which you request an opinion upon the following propositions:

"First. Has the board of directors of an incorporated bank, by proper procedure, the power to authorize the total stock of the bank, to be assessed to the bank by the supervisor where the bank is located, and have the taxes on stock paid by the bank, regardless of where the stockholders are located?

Second. Has the village assessor a legal right to assess the total bank stock to the bank in the village where the bank is located, where a portion is located on one side of the county and a portion outside of the village?"

In reply thereto would say the answer to your inquiries seems to be cortained found on page 27 of the pamphlet of general tax laws, revision of 1907. This subdivision provides that, "All shares in banks shall be assessed to their owners in the township, village or city where the bank is located: Provided, That the shares owned by a person residing in the county where the bank is located shall be assessed in the township or city where he resides."

My attention has not been challenged to any provision of the law that would authorize either the board of directors or the village assessor to change the method prescribed in the above statute. Accordingly, I am inclined to believe that each of the inquiries which you submitted should be answered in the negative.

Very respectfully,

(Signed) GRANT FELLOWS,

Attorney General.

STATE BANKS CONTEMPLATED IN CITIES OR VILLAGES ONLY.

May 10, 1913.

Hon Albert E Manning, Deputy Commissioner of Banking, Capitol, Lansing:

Dear Sir-I have your communication of May 1st in which you state that you are in receipt of an application to organize a state bank with its office and place of business to be located in "the township of Springwells," County of Wayne and State of Michigan, with a capital of $25,000.00. You ask:

First. Can the Department legally accept the articles of incorporation with the location designated, and business to be carried on, as in a township rather than in a city or village?

Second. If so, what construction on the law can be placed with reference to the capital stock requirements?

Third. In other words, would the capital stock be based upon the population of the township as a whole (inclusive, of course, of incorporated cities and villages), or would the capital stock be based upon the population of the settlement, or community, in which the bank actually transacts business?"

In answer to your first inquiry, would say that section 1 of the General Banking Law seems to recognize only cities and villages as the place where a banking business may be conducted. We have, however, held that a bank may be established in an unincorporated village. (See Attorney General's Report for 1905, page 98.)

Section 2 of the General Banking Act requires the persons associating to execute articles of incorporation which shall specify: "2nd. The county and city or village where such bank is to be located and to conduct its business." It is my opinion that it was clearly the intent of the legislature to limit the place where a banking business may be conducted to either a city or village (including unincorporated villages) and that your department would have no authority to accept an application which shows upon its face that the place of business is a designated "township" rather than a city or village.

In answer to your second and third inquiries, would say if a bank is established in an incorporated village the amount for which it may be capitalized depends upon the population of the village. The same rule is applicable in the case of an unincorporated village. I have heretofore held that where a state bank is authorized to do business within an unincorporated village, that it cannot legally establish a branch agency outside of such unincorporated village and in another settlement or unincorporated village. (See opinion to Hon. E. Η. Doyle, Banking Commissioner, under date of February 17, 1913.)

It is therefore my opinion that the capital stock in the case you suggest would be based upon the population of the settlement, community or village, incorporated or otherwise, in which the bank is actually authorized to transact business.

Very respectfully,

(Signed) GRANT FELLOWS,

PROPER RECORD OF REPORT OF DIRECTORS' EXAMINATIONS.

Edward H. Doyle, Commissioner of Banking, Capitol, Lansing:

June 30th, 1913.

Dear Sir-I have your communication of June 25th, which reads in part as follows:

"We desire to call your attention to Section 15 of the law. We have recently been asked by a state bank whether they would be complying with the provisions of this section of the law if they permitted the report of directors' examination to be read at board meeting, and have the minutes of such meeting show as follows: 'The committee appointed on the 8th day of October to make the second examination of the year submitted report of such examination. On motion of Mr. C. report was accepted and ordered placed on file, and report made a part of these records.'"

In reply thereto would say section 15 of the Banking law to which you refer requires the board of directors to appoint an examining committee. The section provides that:

"The examining committee shall report to the board, give in detail all items included in the assets of the bank which they have reason to believe are not of the value at which they appear on the books and records of the bank, and give the value of each of such items as in their judgment they may have determined. The board shall make a proper record of said report in the minute books of the bank, etc."

The material requirement is that the report of the examining committee shall be made to the board, and that the board shall make a proper record thereof. The statements set forth in the minutes as indicated by your letter, show that the report was submitted, accepted, placed on file and made a part of the record. The statute requires the report to be recorded in the minute books of the bank. It is believed, however, that the action in question is a substantial compliance with the law.

Respectfully yours,

(Signed) GRANT FELLOWS, Attorncy General.

AMOUNT OF BONDS OF OFFICERS AND EMPLOYES MUST BE COMMENSURATE WITH SIZE OF BANK, ETC.

Hon. Edward H. Doyle, Commissioner of Banking, Capitol:

August 21, 1913.

Dear Sir-I have your communication of the 20th in which you submit an inquiry under the Fifth subdivision of Section 4 of Act 205 of the Public Acts of 1887, as amended. Your inquiry is as follows:

"Where the directors of a bank accept tonds from officers and employes at a nominal amount only when compared to the cash and securities in their control, would the Department have the right to require bonds of a greater amount which would be more commensurate with the size of the bank, and the opportunity for defaulting or manipulating?

Will you also advise whether or not under said amendment the Department has the right to reject personal bonds of bank officers and employes where officers and banks directors become sureties thereon?"

The amendment to the Act in question is found in Act No. 11 of the Public Acts of 1913. The Fifth subdivision thereof reads as follows:

"To elect or appoint directors, who shall choose from their members a president and one or more vice-presidents, and shall have power to appoint and employ a cashier or treasurer, and other officers, define their duties, dismiss such officers so elected or appointed, or any of them, at pleasure and elect or appoint

1