November 2, 1977
Subject:
Escheats; Corporate Dividends
Requested By:
Mr. Harlan E. Boyles State Treasurer
Question:
May a public corporation assess an additional service charge on unclaimed dividends prior to the escheat of the dividends to the State Treasurer?
Conclusion:
No. At the time of the declaration of the dividend the amount becomes a fixed sum which is payable to the stockholders or to the State Treasurer and there is no authority to assess unclaimed dividends differently from all other dividends.
Once a dividend becomes fixed the amount of money is segregated from the general assets of the corporation. "The general rule is that the declaration of a cash dividend . . . creates a debt from the corporation to each of its stockholders who then hold such stock. The effect of the declaration is to segregate the earnings, to the amount of the dividend, from the corporation’s assets or general mass of property represented by the capital stock and to appropriate such amount for the payment of the dividend to the stockholders." 19 Am Jur 2d, Corporations, § 840. There is no authority in Chapter 55 to reduce that amount based upon the costs involved in administering the unclaimed portion of the dividend, therefore the amount due to the stockholder should remain the same. If the dividend has not been claimed by the stockholder within three years from the date the dividend became due and payable the State Treasurer succeeds to the possessory rights in that amount under the provisions of Sec. 10, Art IX of the N.C. Constitution and G.S. 116A-4. The State Treasurer is entitled to possess the same amount that the stockholder would be entitled to possess and any additional costs involved in the administering of the dividend should be considered a general cost of doing business in North Carolina.
Upon general principles of equity it would appear that the corporation and the State Treasurer owe a duty to the stockholder to preserve his property. In the absence of express authority to the contrary it would be a violation of that duty to reduce the property of the stockholder.
Rufus L. Edmisten Attorney General
Charles J. Murray Assistant Attorney General