to permit anyone or any institution to issue drafts payable out of its deposit with correspondent banks is an attempt to perform and act and permit an arrangement not authorized by law. The bank possesses no authority to extend its credit to any individual or bank in the manner set forth in your communication. Such a practice may operate to the detriment of depositors and may impair the faith and credit of the bank. The practice in question is without authority of law. You possess general power under the statute to prohibit such practice, and it is the duty of the officials of the bank to cancel this arrangement. Very respectfully, JNO. E. BIRD, June 30, 1908. Hon. Henry M. Zimmermann, Commissioner of Banking, Lansing, Michigan: Dear Sir-I am in receipt of yours of the 19th instant in which you state that a certain corporation organized under Act 232, Public Acts of 1903, as the " .. and Trust Company" is engaged in the business of selling various kinds of securities, and request the opinion of this department as to whether it is permissible for such a concern to do business under a name so closely allied to that of institutions organized under Act 108, Public Acts of 1889, under which trust companies are organized. Subdivision 1 of section 2 of Act 232, Public Acts of 1903, contains this proviso: "No name shall be assumed already in use by any other existing corporation of this State, or corporation lawfully carrying on business in this State, or so nearly similar as to lead to uncertainty or confusion." Under the decisions of the courts of this State it seems to be clear that the question of the right to use a corporate name not identical with that of another existing corporation depends upon whether the names 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; Penbertha Injector Co. v. Lee-Penbertha 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 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. July 29, 1908. Hon. Henry M. Zimmermann, Commissioner of Banking, "Capitol," Lansing: cashier Dear Sir-We have carefully examined the letter of.... 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 the General Banking Law, section 6135 of the Complied Laws of 1897. 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 enclosures herewith. JNO. E. BIRD, 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: "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? In 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 busness. In this connection we desire to call your attention to the case ofNew 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 said: "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, COMPARATIVE ABSTRACTS (STATE BANKS). Comparative abstracts, giving the volume of business as shown by the last reports of Michigan State banks called for in the years 1889, 1890, 1891, 1892, 1893, 1894, 1895, 1896, 1897, 1898, 1899, 1900, 1901, 1902, 1903, 1904, 1905, 1906, 1907 and 1908, as made to the Commissioner of the Banking Department. Totals... $47,354,277 90 $56,950,395 68 $65,191,972 53 $82,649,533 48 $73,156,116 80 |