The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-07-08
THE NEW II. AND l.. LAW.
An Opinion Prepared by Deputy At
tOrneY General MOOres.


Two weeks ago the auditor of state
transmitted to the attorney general a num-
Der of leading questions on the construc-
ton Of the new building and loan law.
These were answered yesterday in
opinion prepared with considerable care by
Deputy Attorney General Moores. The
opinion is as follow:
You ask with regard to the act of March
6, 1897, concerning building and loan assoc
Citations (acts of 1897, Page 2SD the follow
ing questions:
sociations incorporated under the act of
March II, 1885, which authorized the eX-
penSe fund, can continue TO chare1 such
expense fund on its stock sold prior to
July /? An eminent authority on corpora
tons states the law thus There IS moth
ing in the federal or state constitutions
depriVing the legislatures OF the power TO
pass any laws. in the exercise of the police
power of the State which may be neces-
sary or proper for the protection of the
public safety, health, comfort, morals, or
the property Of the citizens; and such laws
are valid, though they may detract from
the powers of existing corporations, or i'm
pose burdens upon them. The Legislature
cannot divest itself of this power. CLARK
on Corporations, Section 49, See also
Thompson on Corporations, Section 647O,
and Cooley on Const Linn, Page 575.
1T has been decided by the Supreme
Court of Indiana and of the United states
that the State of Indiana has a right with
tons with regard to the management OF
corporations already Incorporated as may
Of the citizens of the State. Indianapolis
& Cincinnati Railroad Company VS.. Ker-
cheval, 16 Ind, "a; Chicago Life Insurance
Company VS.. Needles, 113 y. s., $50; Eagle
Insurance Company VS.. Ohio, 153 U. s., 454.
1t was said by the Supreme Court of In
diana, in State vs. Roby 142 Ind, at Page
1853, that "a court will examine the history
of the times in constituting. statute so as
to relieve from the mischief and accomplish
the purpose of the act 1t is a matter of
history that at the time the act of 1897 was
passed it was claimed that certain building
associations Of the State were using the ex-
pense fund permitted by law for the pur-
pose of making excessive charges to stock
holders for the care and management of
money contributed to such associations,
and the act in question was passed with
the purpose of checking such practices and
protecting citizens who might be stock
holders in building associations from I'M
positions of the directors practiced under
cover of the expense fund. Under the de-
cisions referred to this was a proper eXer-
else Of the police power, and the legsla-
tive destruction of the expense fund could
have been, as 1t was, properly applled 10 all
building associations then in exis tence
"Second-You ask with regard to Section
of the act of 1897, how far the PROVISIONS
of this section will affect the withdrawal
value of stock sold prior to July l, 1871 IN
associations having an expense tund? In
answer, 1 have to say that such associa-
tons were entitled to continue and contain
the expense fund until July /, 1891 ana
that deductions made on that account up
to that time belonged to the association
and not to the stockholders.
"Third-'Will suqh associations be re-
ouired to return the expense fund deduc-
tons previously made to Withdrawing
SFourth-'Wiil such associations be re-
uuired to pay the full profits credited prior
to July to Withdrawing members after
the new law becomes operative. even
though their bylaws only require them to
pay per cent. interest TO such Withdraw
ing members, that being all the law of 1885
required them to pay|
1.-THE new law only operates from and
after July /, 1897. In accounting to with
drawing stockholders their rights must be
ascertained up to July /, 1897, according to
the method of calculation provided by the
old law, and since 1897 such calculations
should be made as provided in the new
law. A member, for instance. withdrawing
Aug l. 1897 would be entitled to what he
would be entitled to under the old law up
to July l. 1897, to which must be added
the dues and such increment as the act of
1897 would give him for the month of July,
1897 If, however he should withdraw after
the time fixed for dividends by the bylaws
of the association, he would be entitled
to dividends under the act Of 1897, from
July l, 1897, up to the time of his with
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