SCHOOLS: After annual meeting in July, 1924, all Township School districts shall operate under provisions of the General Township School Act.

February 21, 1924.

Mr. Alvin L. Rummel, Mayor, City of Wakefield, Wakefield, Michigan.

Dear Sir: I have your letter of the 1st instant, relative to Section 24 of Act 117 of the Public Acts of 1909 as amended by Act 188 of the Public Acts of 1923; said amendment being as follows: "Provided, that any township school district operating under a Special Act, shall operate under the provisions of this Act, after the annual meeting in July, 1924, without reorganization.”

It appears that the Public Schools of the City of Wakefield are now being operated under the Upper Peninsula Township School Act. The same being Act 176 of the Public Acts of 1891. Act 117 of the Public Acts of 1909 is known as the General Township School Act. Act 188 of the Public Acts of 1923 as amended the General Township School Act as to provide that after the annual meeting in July 1924, all township school districts shall operate under the provisions of the General Act and the amendment is in effect a repeal of the Upper Peninsula Township Act and of all other Special Acts providing for the operation of Township School Districts. Therefore, at the annual meeting on the second Monday in July 1924, the Wakefield Township School District will be required to elect five trustees in the manner and for the term provided in Act 117 of the Public Acts of 1909, and said five trustees shall be the Board of Education of the Wakefield Township School District and said district shall thereafter operate under the provisions of the General Township School Act. Very respectfully,

ANDREW B. DOUGHERTY, Attorney General.

DRAIN LAW: (1) Liability of road district for drainage construction. (2) Payment of engineer and other preliminary expenses in laying out drainage district. (3) Liability of village for assessment at large.

February 21, 1924.

Mr. C. J. Crawford, Drain Commissioner, Pontiac, Michigan.

Dear Mr. Crawford: You recently called at this office and requested an opinion on some drainage matters in your county, and from the data left with us it appears that there are three particular questions involved:

(1) You desire to know if and how a drain assessment may be lawfully spread against a highway or highway district.

From an examination of Act No. 316, Public Acts of 1923, which is the codified drain law, it appears that a highway or a highway district shall be considered as an entity, and liable to apportionment for benefits for drainage purposes in the same manner as are townships and cities. Section 1 of Chapter 6 of the Act directs the drain commissioner to apportion benefits of the cost of construction against any highway under control of the county or district road commissioners and that section directs that the per cent. so apportioned,

when finally approved, shall be assessed against such highways according to the apportionment of benefits. Section 3 of Chapter 10 directs the supervisor to spread drain taxes assessed against a highway by adding to the township, city or highway tax for the year in which the same was assessed, and extending said tax in the same column with the general township or city tax.

Returning to Section 1 of Chapter 6, it appears that: "The board of supervisors at its October meeting of each year shall make provision by proper assessment of the amounts apportioned against any highway under control of district highway commissioners, and any highway under control of county highway commissioners". The matter of raising taxes spread at large against a highway district is a duty devolving upon the board of supervisors. With reference specifically to a covert road, Section 29 of the Covert Act, as last amended by Act No. 22, Public Acts of 1921, authorized a re-assessment against a covert district in the event that the sum ordered raised in the first instance is not sufficient to complete the improvement, or to pay in full outstanding indebtedness thereon. Although special rolls for this purpose are prepared by the board of road commissioners, the highway law provides that the board of supervisors shall order such taxes collected at the same time and in the same manner as state, county and township taxes.

(2) You desire to know if it is permissible to assess a drain tax against a village at large, and if so, if the assessment is made by the board of supervisors, and how does the supervisor spread the same on his rolls?

Chapter 6 of the drainage code, which provides for apportionment of benefits, does not authorize apportionment of benefit against a village at large. There is therefore no method of apportionment or assessment whereby a tax can be collected from a village at large, on the theory that the drainage project benefits all of the property of the village, and it is contemplated that each piece or parcel of land in the drainage district shall be assessed according to the apportionment made on the basis of benefits. If, however, a village owns real estate, such as a public park or other municipal property, and that property is benefited by the construction of the drain, the drain commissioner is authorized to apportion the benefit which that property receives against the property itself, naming the owner of the property, if it be the village municipality. The assessment, therefore, would follow the apportionment, and be made as against the village, solely, however, on the basis of a peculiar and particular benefit to some certain tract or parcel of land.

(3) You desire to know the method of payment for the cost of a preliminary survey in laying out a drainage district.

Chapter II of the act relates to a revolving fund for drains, Section 2 of which provides that it shall be used for the purpose of paying engineer or surveyor for his services in laying out a drainage district, and it may also be used for the payment of all other preliminary expenses down to the entry of the final order of determination. These expenses are paid from the revolving fund, and if a drain is afterwards laid in that district, then the revolving fund is reimbursed for all preliminary expenses incurred in the laying out of the district and the preliminary survey. If the drain is not petitioned for and constructed, then there is no method provided for reimbursing the revolving fund except

from annual appropriations made by the board of supervisors. Section 1 of the Act provides that the board of supervisors shall annually appropriate and collect a sufficient amount to maintain such revolving fund.

Very respectfully,

ANDREW B. DOUGHERTY, Attorney General.

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CORPORATION TAX LAW: New corporations must file an annual report and pay the minimum franchise fee under Act 85 of the Public Acts of 1921 as amended by Act 233 of the Public Acts of 1923.

February 26, 1924.

Hon. Charles J. DeLand, Secretary of State, Lansing, Michigan.

Dear Sir: You have requested the opinion of this Department as to the method of determining the franchise fee under Act 85 of the Public Acts of 1921 as amended by Act 233 of the Public Acts of 1923, in the case of new corporations.

Section 6 of Act 85 of the Public Acts of 1921 which exempted new corporations from the payment of the franchise fee for the first year was repealed by Act 233 of the Public Acts of 1923.

Section 7 of Act 85 of the P. A. of 1921, as amended, requires corporations for profit to file a report showing their condition at the close of business upon the 31st day of December, or upon the date of the close of their fiscal years, next preceding the filing of a report. The amount of the privilege tax is to be computed from this report.

It is apparent that this Section can have no application to new corporations as they were not in existence on the 31st day of December. Neither can they comply with the statutory requirement and file a report upon the date of the close of their fiscal years.

However, in my opinion, such corporation should file a report which complies with the statutory requirements as far as practicable, and pay the minimum franchise fee. Very respectfully,

ANDREW B. DOUGHERTY, Attorney General.

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CORPORATION TAX: Corporations dissolved prior to August 31st are not required to pay the corporation tax for the ensuing year. February 27, 1924.

Hon. Charles J. DeLand, Secretary of State, Lansing, Michigan.

Dear Sir: You have requested my opinion as to whether or not a corporation dissolved prior to August 31st last, is relieved from paying the privilege fee required by Act 84 of the Public Acts of 1921, as amended.

In view of the holding of the Supreme Court in the case of In re: Johnston-Newton Company that the privilege fee is payable in advance and that the yearly period begins on the 31st day of August, it is my opinion that your question should be answered in the affirmative.

Very respectfully,

ANDREW B. DOUGHERTY, Attorney General.

BANKING LAW: Transfers of stock where the stockholder is indebted to the bank, but the indebtedness is not yet due are valid as against the bank.

February 28, 1924.

Hon. H. A. McPherson, State Banking Commissioner, Lansing, Michigan.

Dear Sir: You have recently requested my opinion as to whether or not under Section 7975 of the Compiled Laws of 1915, a bank can refuse to transfer on its books, shares of its stock which have been disposed of by a stockholder who at the time of selling his stock, was indebted to the bank, the indebtedness not being due at the time of the sale.

Section 7975 of the Compiled Laws of 1915 provides in part that no transfer of stock shall be valid against a bank so long as the registered holder thereof shall be liable as principal debtor, surety or otherwise to the bank for any debt that shall be due and unpaid. The language of this section makes the transfer invalid as against the bank so long as the registered holder is liable to the bank for any debt due and unpaid. This language does not render the transfer invalid as against the bank where the stockholder is indebted to the bank and the indebtedness is not yet due. This section was so interpreted in the case of Murray W. Sales & Company v. German-American Savings Bank, 192 Mich., 540.

You are therefore advised that your question should be answered in the negative.

Very respectfully,

ANDREW B. DOUGHERTY, Attorney General.

PUBLIC UTILITIES: Statute governing common carrying by motor vehicles construed. 1. Permits run one year from date of issuance. 2. Privilege Tax on additions and replacements must be assessed in the full amount provided in the statute. 3. No Privilege Tax on Motor Vehicles added during permit year can extend beyond the period for which the permit is issued.

February 29, 1924.

Michigan Public Utilities Commission, Lansing, Michigan.

Gentlemen: Your letter of the 23rd instant, asking for a construction of Act 209 of the P. A. 1923 received. You desire the following information: 1. Can the Commission issue permits for a shorter period of time than one year?

2. Can the Commission assess the privilege tax upon new equipment either for extension or replacement purposes on a basis of less than one dollar for each one hundred pounds in weight?

3. Can the privilege tax on motor vehicles added or acquired during any license year be computed from the date of the addition or acquirement or must it be computed from the issuance of the permit?

It is the opinion of this Department as previously expressed in an opinion of this Department dated June 9th, 1923, that the permit must be issued for a

period of one year. The Language of the statute expressed in Section 8 appears to be mandatory in this particular as follows: "Each permit shall be good for a period of one year from its date."

Answering your second question: It is the opinion of this Department that the Privilege Tax must be assessed on the basis of One ($1.00) Dollar for each one hundred pounds weight of each motor vehicle, irrespective of whether the vehicle is in use during the entire period covered by the permit or only a portion of that time. The language of this statute seems to be specific: "And shall thereafter pay at a similar rate for each one hundred pounds weight of each motor vehicle added or acquired during the license year."

Had the Legislature intended to permit the licensee a reduction in the Privilege Tax, where expensions or replacements were added, after the beginning of the permit year, it would have done so by appropriate language; but in the absence of authority to do so, it is my opinion that you would not be justified in making a reduction in the amount of Privilege Tax.

In answer to your third question: It is my opinion that the Privilege Tax on any vehicle operated under the provisions of Act 209 of the Public Acts of 1923, cannot be extended beyond the year covered by the permit. In other words, the Privilege Tax, irrespective of its time of payment, cannot be extended beyond the expiration of the year for which the permit was issued. Very respectfully,

ANDREW B. DOUGHERTY, Attorney General.

COVERT ROAD BONDS: Computation of interest on assessments for Covert roads considered.

March 4, 1924.

Honorable O. B. Fuller, Auditor General, Lansing, Michigan.

Dear Sir: Some time ago you forwarded to this Department a letter from Mr. David N. Honeywell, county clerk of Barry County, relative to the interest on assessments for Covert roads.

Reference was made to Section 23 of the Covert Road Act, same being Act No. 59, P. A. '15. Said Section 23 provides in part as follows: "The roll prepared for the first year's collection shall contain an interest charge at the rate of six per cent. per annum upon the total assessment, from the date of confirmation of the roll until the taxes carried on said roll are due and payable. The roll for the next year shall contain an interest charge of six per cent. upon the whole amount unpaid, and each succeeding roll shall likewise contain an interest charge of six per cent. for the whole amount unpaid for the preceding year."

Mr. Honeywell refers to a case where the interest on covert bonds becomes due on May 1st, and desires to know whether or not the interest on the first year's roll shall be figured to December 1st, or to May 1st. In reply to this, you are advised that in our opinion the interest must be figured to December Ist, irrespective of the time when the interest on the bonds becomes due and payable. Section 21 of the Covert Act authorizes the commissioners to add not to exceed ten per cent. for contingent expenses, and Section 29 provides that if