The Commissioners from Michigan, appointed by the Governor under the provisions of Section 7983, Compiled Laws of Michigan, 1915, are named in order of appointment: Wade Millis, Detroit; Henry M. Bates, Ann Arbor, and Arthur H. Ryall, Escanaba.

Two years ago the Commercial Law League of America, recognizing the importance of the work of Commissioners on Uniform State Laws, not only appointed committees from its membership in each of the states to work in harmony with your Committee and with the Commissioners, but also appropriated a substantial fund to aid in the general work of the Conference. A joint meeting of the Michigan Commissioners, your Committee and the Michigan Committee of the Commercial Law League was held during the past year for the purpose of harmonizing and coordinating the work. Other joint meetings are planned for the coming winter.

Co-operative relations have also been established between the National Conference of Commissioners on Uniform State Laws and the American Law Institute, the organization that is engaged in the colossal task of "restating the law." As a result of this plan, the Conference now has before it for the first time certain Acts which have not been initiated within the Conference, passed upon by the Scope and Program Committee, or referred to its own Committees but come to the floor direct for consideration by the Conference itself on a first tentative draft. The Acts presented under this plan

are:

I.

An Act to Validate Certain Written Transactions Without Consideration, and to Make Uniform the Law Relating Thereto.

This Act is intended to furnish a substitute for the old method of validating by the attachment of a seal and it would seem to be useful for the purpose of making the law uniform on this subject.

2. An Act to Validate Transactions between a Person Acting on His Own Behalf and the Same Person Acting Jointly With Others, and To Make Uniform the Law Relating Thereto.

This is intended to work out certain legal questions connected with the situation where an individual is acting or interested in different capacities and a note explains the precist situation involved.

3. An Act Concerning the Discharge of Obligors Bound for the Same Debt and to Make Uniform the Law in Regard Thereto.

This Act is intended to do away with the injustices worked under the laws as they now stand in various jurisdictions in reference to

t

joint and several obligations, and a very full note reviews the precise situation in each of the States of the Union with regard to this important subject. This Act seems to be of particular importance. Your committee is strongly impressed with the earnestness, zeal and discriminating effort that is bestowed upon the various and exacting duties that the commissioners have imposed upon themselves. It seems almost incredible that men in the highest ranks of the profession will give so abundantly of their time and effort in advancing this work solely for the benefit of the public, and entirely Without financial reward. Our State at present makes an annual appropriation of $500.00 to defray the actual and necessary exOf the three commissioners, but it will readily appear that this amount usually falls far short of refunding the actual travelling and hotel expenses of three men required to go long distances to the meetings and to expend annually ten or more days in such service, to say nothing of necessary clerical hire and office expenses incident to their work throughout the year. Your Committee earnestly recommends the co-operation of the state bar in procuring an increased appropriation for this very valuable work.

penses

annual

In

closing, your Committee begs leave to quote from the annual

address of the President of the Conference delivered at Philadelphia

in July, 1924:

"The Movement for Uniform State Laws is historically correct, traditionally true, economically sound, democratically American and nationally efficient. Any movement, so organized and so based, may ultimately count upon adequate public support and the National

Conf

erence of Commissioners on Uniform State Laws, I am con

fident, will continue through the years to arouse ever increasing interest in and support of the movement for Uniform State Laws. In we may count upon the public generally recognizing, as The

time

President of the United States has stated, that our movement is not merely legally desirable but is governmentally indispensible if our Nation, as we know it, is to continue to function in its historic form under the Constitution of the United States."

Respectfully submitted,

PHILIP T. COLGROVE
WADE MILLIS

ARTHUR H. RYALL

Committee.

OPINIONS BY THE ATTORNEY GENERAL OF THE STATE OF MICHIGAN

BANKS AND BANKING-DEPOSIT OF STATE FUNDS--LIEN UPON INSOLVENCY OF BANK.-Securities pledged with the State Treasurer by a bank as security for the deposit of state funds cannot be reclaimed by a receiver of the bank without redeeming them. Taking such security on the part of the treasurer is in compliance with the Statute, Sec. 289, C. L. 1915. The pledge having been made, it cannot be recovered either by the pledgor or receiver, in the event of insolvency, except by redeeming it. Such a pledge is provided for, on the part of the bank, under Sec. 9002, C. L. 1915. Authorities cited: 21 R. C. L. 652; Tiffany v. Savings Institution, 21 U. S. (L. Ed.) 888; Yeatman v. N. O. Sav. Inst. 24 U. S. (L. Ed.) 389; Hancock v. Varick Bank, 51 U. S. (L. Ed.) 955; Banking Commr. v. Chelsea Sav. Bank, 161 Mich. 691. Opinion rendered Hoyt Woodman, Deputy State Treasurer, Oct. 31, 1924.

CARRIERS-DEMURRAGE-PRIMARY ELECTION DAY AS DAY FOR WHICH DɛMURRAGE IS EXCLUDED.-While the Michigan Public Utilities Commission has authority under Sec. 8116, C. L. of 1915, to make reasonable regulations governing demurrage charges and would be authorized to designate a primary election day as a day on which demurrage would be excluded, in the absence of such regulation primary election day is not now such a day. Sec. 65 of Act 169, P. A. 1911, provides primary election day "shall not be deemed ✶✶✶ holiday for any purpose except as indicated in this section", and the present regulation (Mich. P. U. C. 301) excludes from time in computing demurrage charges Sundays and "legal holidays". Opinion rendered Mich. Public Utilities Commission, Lansing, Aug. 27, 1924.

CONSTITUTIONAL LAW-INTERGOVERNMENTAL RELATIONS-IMPORT DUTIES ON MATERIAL USED IN GOVERNMENTAL OPERATIONS OF STATES.-The federal government is without authority to impose an import duty on goods brought into the country for the use of the University of Michigan. The means and instrumentalities employed in carrying on the governmental operations of the States are exempt from federal taxation. The Board of Regents in operating the University of Michigan is exercising a governmental function. Citing Flint v. Stone-Tracy Co. 220 U. S. 107, 157; Michigan Constitution Art. 11; Robinson v. Washtenaw Circuit Judge, 228 Mich. 225. Opinion rendered Shirley W. Smith, Secretary, University of Michigan, Ann Arbor, Oct. 2, 1924.

CONSTITUTIONAL LAW-TAXATION-EFFECT OF INCOME TAX AMENDMENT ON PRIMARY SCHOOL FUND.-The adoption of the proposed income tax amendment would have had the effect that "taxes can no longer be levied and collected on the property of railroad companies, telegraph companies, telephone companies, et cetera, at the average rate levied upon other property for state, county, township, school and municipal purposes, but that this class of

situated.

property must be taxed at the same rate as other classes of property similarly Citing Section 11, Art. XIV, Constitution of 1850; Act 168, P. A. 1881; Pingree v. Auditor General, 120 Mich. 95; Amendment to Sec. 11, Art. XIV, Constitution of 1850; Sec. 3, Art. 4, Constitution of Michigan. Opinion Thomas E. Johnson, Supt. of Public Instruction, Lansing, Oct. 20,

rendered

1924.

CORPORATIONS-DIRECTORS MEETING-MEETING OUTSIDE THE STATE.-The first meeting of the directors of a corporation not for profit, organized under the laws of Michigan, may be held outside the state. To avail themselves of this privilege, however, the incorporators must designate in the articles of association the principal place of business, at which such meetings are to be held, without he state. Citing Subdiv. a, Sec. 5, Chapt. 2, Part 1, of Act 84, P. A. 1921, and Sec. 6, same. Opinion rendered Hinchcliff & Miller, Rockford, Ill.,

Oct. 29,

holders

1924.

CORPORATIONS-POWERS OF STOCKHOLDERS DISPOSAL OF ASSETS.-StockOf a bank, at a special meeting, adopted a resolution reducing the capital stock from $1,000,000 to $800,000. The resolution further provided that the $200,000 surplus thus created be used to furnish the capital stock of a Company to be operated in connection with the bank, and the shares

trust

were to

shares

A

This as of all

be apportioned pro rata to the stockholders of the bank, and that such hould not be transferred except as the bank stock was transferred. Foting trust agreement was drafted to carry this resolution into effect. reement provided that the voting trust shall continue during the lives Persons who are now stockholders of the bank and of any child or

children now in being, of said present stockholders and the life of the sur

vivor,

Dlus twenty-one years, unless sooner terminated by the bank ceasing to

do business or by the affirmative request in writing of at least two-thirds interest

of the

owners of record of the capital stock of said bank. The agreement

further provided that the stock is to be held in the name of the trustees and

voted

by them as they deem best, unless the stockholders of the bank, by a two-thirds vote, direct otherwise. The beneficial interest of each stockholder shares of stock in the trust company, held by the trustees, was to be

in the

endorsed on the certificate of stock of each stockholder of the bank and the same was not transferable except by transfer of the stock in the bank, it being expressly stipulated that the beneficial interest in the stock of the trust company should not be capable of being severed from the ownership of the stock of said bank. The foregoing plan was declared invalid. The reasons are set out

in extenso.

"First: The reduction of the capital stock of the bank from one million

dollars to eight hundred thousand resulted in creating a surplus of two hundred thousand dollars, which sum the stockholders voted to use to furnish the capital stock of the trust company. This surplus which was created as a result of the stockholders' action is the property of the corporation and not the property of the stockholders and can only be used for conducting the business of the corporation. The property of a corporation is not subject to the

control of individual members, whether acting separately or jointly. They can neither encumber or transfer their property nor authorize others to do So. The corporation, the artificial being, holds the property and none of the individuals who compose it has any right of ownership in the corporate assets, nor can he dispose of any part of them. It follows that the attempt of the stockholders of the bank to transfer a portion of its property to the trust company, is ineffectual.

"As heretofore pointed out, the terms of the voting trust restrain the alienation of the stockholder's share in the trust company during the lives of all present stockholders, their children and the survivor, plus twenty-one years, unless the trust is sooner terminated by either of the methods provided in the agreement. The alienation of this stock is further restrained by the terms of the trust agreement which provides that the beneficial interest of the stockholder in the corpus of the trust fund (his shares of stock) cannot be transferred except by the stockholder transferring his stock in the bank. In other words, the beneficial interest cannot be transferred separate from the stock in the bank.

"These provisions in my judgment, impose an unreasonable restraint upon the alienation of the shares of stock in the trust company, which is contrary to the public policy of this state."

Opinion rendered H. A. McPherson, State Banking Commr., Aug. 6, 1924.

SCHOOLS AND SCHOOL DISTRICTS-POWERS OF SCHOOL Boards-BorroWING MONEY. A District Board in 1923 voted the amount of taxes necessary to be raised for the expenses of the school. The taxes were collected by township treasurers. Before the money was turned over to the school district a bank in which part of the fund was deposited failed. Under $5676 C. L. 1915, as amended by Act 315, P. A. 1921, authorizing District Boards to borrow money when a tax has been voted but the money is needed before it can be collected, the Board may borrow money for the running expenses of the school. The taxes in this case have never been received, hence not "collected" by the district. Opinion rendered Fractional School District No. 3, Evart, June 14, 1924.

TAXATION CORPORATION TAX-TRUSTEE CORPORATION.-Questions of taxation under Act 85, P. A. 1921, as amended, are considered in the opinion the essential parts of which are given in full.

"In the technical sense in which the term is ordinarily used, trustee corporations have no authorized capital stock. The assets of such corporations consist of the property held by the trustees, which property constitutes the corpus of the trust fund. The amount of this fund is fixed by the instrument creating the trust. The interests of the cestui que trust in this fund are represented by certificates of beneficial interest, of no par value, which represent their respective interests therein.

"Two questions are presented: First, the method of computing the organization tax; Second, the method of computing the annual specific tax. Generally speaking in the technical sense, the capital stock of the corporation is the