Montana Attorney General Opinion 15-598

Opinion No. 598 Building and Loan Associations -Withdrawals-Dividends. HELD: A withdrawing member of a building and loan association is en- titled to such dividends as have been declared at the time 'of his withdrawal. August 24, 1934. You have asked my opinion on the question whether members of Montana building and loan associations who re- quest withdrawals, and whose requests ha\'e been registered, are entitled to dividends during the time of such re- quest and registration. Neither the Constitution nor by-laws nor other specific facts are presented and hence our consideration will be addressed to the general question whether a member who has requested a withdrawal is en- titled to future dhidends. I believe the answer to this question is found in Section 12, Subdivision 8. Chapter 57, Laws of 1927, as amended by Chapter 11, Laws of 1933, which reads in part as follows: "Any mem- ber who withdraws his stock or whose stock is matured, shall be entitled to receive all dues paid in and all divi- dends declared less interest, if any, as provided in subsection 7, less a reason- able membership fee not exceeding two (2) per centum of the par value of each share of stock and less a pro rata share of all losses, if any, which have occurred, and no other fine or assessments shall be made against such stock." It is my opinion that the legislature. OPINIOXS OF THE ATTORNEY GENERAL 411 in using this language, intended to de- finitely fix the status of a withdraw- ing member so that from the time of his \yithdrawal he would not only be released from all future losses but also deprived of future profits of the asso- ciation. He would be entitled to the dividends which have been "declared" and would be liable for the losses "which have been incurred". This being my construction of the statute, which, I helieve, is the reasonable and ,proper construction thereof, nothing further need be added. This declared policy of the legislature, however, seems to be fair. As soon as the member has de- clared 'his intention to withdraw, the processes of the association are set in motion to pay him and all future earn- ings, as well as losses, are thereby restricted. The law generally is stated in 9 C. J. 942, Section 46: "If a withdrawing shareholder is entitled to any part of the profits, it is by virtue of some statute or by- law governing such withdrawals. Such statutes and by-laws are generally so worded and construed as to allow the withdrawing shareholder his propor- tionate share of dividends or profits already earned and declared or ad- justed and apportioned, but none ac- cruing thereafter, as this would be contrary to the general rule that a shareholder who withdraws is not liable for future losses nor entitled to future profits." See also: Agnew Y. Macomb etc., Association, 96 Ill. App. 665, 64 N. E. 2HO; Kellenberger Y. Dskaloosa etc., As- SOCiation, 129 Ia. 582, 105 N. W. 83H; Letorneau Y. Berlin etc., Association, (;8 N. H. 3HH, 368, 44 AU. 532; Synnott v. Iron Belt etc., Association 89 FecI. 292. It is my opinion, therefore, in the absence of constitution or by-laws di- recting otherwise, that a withdrawing member is entitled to such dividends as have been declared at the time of his withdrawal.