Court Opinion

ID: 3984828
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:41:04.843803+00
Date Added: 2024-06-11T07:44:17.734270
License: Public Domain

I concur in the results reached in the prevailing opinion to the effect that the clause contained in section 3, article 10, of the Constitution reading, "all unclaimed shares and dividends of any corporation incorporated under the laws of this State," is not self-executing. The reason it cannot be self-executing is that there is no time fixed by which it can be ascertained when a share or dividend is unclaimed. Certainly, if it were unclaimed for a week or a month, it could not revert to the state. I do not think it should be left to the court to say when a share was unclaimed, for, if so, it would vary according to the court which tried the issue. The Legislature must provide some time during which the share is unclaimed and perhaps machinery which will comply with the requirements of due process, designed to inform the person entitled to the share that it was waiting for him to reduce it to possession before forfeiture proceedings may be effective.
I therefore concur in the results to the effect that the lower court could not decree these so-called unclaimed shares in the Montello Salt Company to the school fund. I further agree with the result reached in the prevailing opinion that the unclaimed shares could not be turned over to those former stockholders of the Montello Salt Company who had claimed their shares.
In my opinion section 3 of article 10 of the Constitution dealt with various methods by which school funds should be augmented. One was by "the proceeds of all property that may accrue to the State by escheat or forfeiture" and another was "all unclaimed shares and dividends of any corporation incorporated under the laws of this State." The latter is not an escheat. Escheat and forfeiture, to my mind, as used in section 3 are technical and have the meaning and content as the same were known in the common law. Escheat in the common law arose where the line of descent failed. It reverted to the original lord or grantor. Since the *Page 292 
original lord under the feudal system was the king, it reverted to him.
"In this country, however, the state steps in, in the place of the feudal lord, by virtue of its sovereignty, as the original and ultimate proprietor of all the lands within its jurisdiction; 4 Kent 424. See [Matthews v. Ward's Lessee], 10 Gill  J. [443], 450; 3 Dane, Abr. 140. And it escheats to the state as part of its common ownership, either by mere operation of law, or upon an inquest of office according to the law of the particular state; [Hamilton v. Brown], 161 U.S. 256 [16 S. Ct. 585,40 L. Ed. 691]; 3 Washb. R.P. (4th Ed.) 47, 48. It is, perhaps, questionable how far this incident exists at common law in the United States generally." Bouvier's Law Dict. 1934 (Baldwin's Cent. Ed.) 362.
Forfeiture also had a special meaning. To escheats and forfeitures, as known in the technical sense, the state added unclaimed shares and dividends in domestic corporations. To my mind, it is a mistake to call these unclaimed shares and dividends escheats, except in the popular use of the word escheat. Consequently it follows that unless we have some statute which provides for the time in which an unclaimed share reverts to the state, no judgment decreeing such unclaimed shares as part of the school fund would be valid.
I cannot agree with the prevailing opinion to the effect that after a corporation is dissolved and its assets are held by the court for the purpose of distribution to the proper parties, each former stockholder's share is not a share in the corporation as meant by section 3, article 10, of the Constitution. The phrase meant something more than a share of stock. A stock certificate is, among other things, the indicia of an owner's aliquot part upon liquidation of a stockholder's share in the corporation. When the corporation is dissolved and its assets held by trustees or in custody of the law for the purpose of distributing to those who are entitled to the corporation's property upon liquidation, each of such person's share in such fund is still in contemplation of the clause in section 3 of article 10 a share in the corporation. *Page 293 
What is meant by that clause is an unclaimed share in the assets of the corporation, or the assets which were the corporation's.
In my opinion, therefore, the statement contained in the prevailing opinion that, "We are of the opinion the fund is neither a share nor a dividend of a corporation in the sense used in that section of the Constitution," is incorrect. I think it is such share, but I think that the Attorney General cannot reach it because machinery has not been provided whereby the courts may say when it is or when it is not an unclaimed share, as meant by the words of that clause. I also concur in the opinion of Mr. Justice FOLLAND regarding the nature of what our judgment should be.