# The Attorney General of Texas
June 4. 1980 MARK WHITE Attorney General
Honorable Warren G.Harding State Treasurer P. 0. Box 12608,Capitol Station Austin, Texas 78711 Opinion No. ~~-18 6 Re: Whether article l581h, V.T.C.S., relating to unclaimed funds held by a county, is constitutional. Dear Mr.Hard@ You ask whether article 1581h,V.T.C.S., isconstitutional. This statute applies to unclaimed funds in the custody cr control ofa county or precinct officer, including a court. The officer holding the funds is required to give written notice to the owner that the funds will become county property ifhe does not claim them within the time prescribed bylaw. Sec. 3. Ifthe funds are not claimed within four years after notice is given, they become the property ofthe county. Sec. 4. Article 1581h,V.T.C.S., vests ownership of the funds in the county without any judicial proceedings It is in the nature of an escheat statute, because it provides for the transfer of unclaimed property to the county. See State ofTexas v.State ofNewJersey, 379U.S.674 (1965). It, however, mers in a constitutionally significant way from the other Texas es&eat statutes. Article 3272, V.T.C.S., provides for the escheat of real estate through ajudicial proceeding. Branham v. Minear, 199S.W.2d 841(Tex. Civ. App. - Eastland 1947, writ ref’d n.r.e.); Robinson v. State, 87 S.W.2d 297 (Tex. Civ. ADD. - El Paso 1935.writ dism’dl. Article 3272a. V.T.C.S.. which applies to personal property, is custodial in nature. State v. Liquidating Trustees of Republic Petroleum Co., 510 S.W.2d 311(Tex. 1974). See Comment, 29SW.L.J. 575 (1976). The state never actually takes title tothe property, since the owner may claim the property or its-value at any time. Sec. 6. Article 3272b, V.T.C.S., provides for the escheat of bank accounts, also subject to future claims of owners. Article 4.08 of the Insurance Code applies to unclaimed funds of life insurance companies. Again, there is provision for reimbursement when aclaimant appears. Sec. 8. Article 1581h,V.T.C.S., vests title to unclaimed property inthe county four years following notice to the owner. There isnojudicial proceeding to determine whether the facts exist which would support an escheat under article 1581h,V.T.C.S., nor may the owner claim the property after four

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years have elapsed. Inour opinion, article 1581h,V.T.C.S., deprives the owner ofproperty without &e process of law because it vests title in the county without a judicial proceed@. The Supreme Court of California has stated that ajudicial procedure isnecessary to perfect the escheat of an estate. State v.Savings Union Bank &Trust Co., 199P. 26(Cal. 19211.Ifastatute orovided for an immediate escheat without iudicial oroceedims it would deprive the owner- of property without due process of law. Id. Sek also M&nheim v. Superior Court ofLos Angeles County, 478 P.2d 17(Cal. 1970)(i&uiiUnited States Supreme Court has held that the state mav take custodv of unclaimed bank denosits end later institute judicial proceedixs to estabiish conclusively that the property wasactually abandoned. Anderson National Bank v. Luckett, 321U.S. 233 (1943). The court stated as follows: The fundamental requirement ofdueprocess is an opportunity to be

beard won such notice ‘and proceedings as are adequate to safeguard the right for which the constitutional protection is invoked. If that is preserved, the demands of due process are fulfilled..

.. For this reason also it is not an indispensable requirement ofdue process that every procedure affecting the ownership or disposition of property be exclusively by judicial proceeding. Statutory proceedings affecting property rights, which, bylater resort to the courts, secure to adverse parties an opportunity to be heard, suitable to the occasion, donot deny dueprocess. Id. at 246-247, article 1581h,V.T.C.S., does not provide any judicial proceeding at’any pint to determine whether funds are actually unclaimed funds within its terms. Nor is there any provision for determining whether a claimant who comes forward within four years is the actual owner of the funds. In our opinion, article 1581h,V.T.C.S., would unconstitutionally deprive owners of property without due process of law, in violation of the 14th amendment of the United States Constitution and article I, section 19of the Texas Constitution. SUMMARY

Article 1581h, V.T.C.S., authorizes the county to take title to unclaimed property without ajudicial proceeding. It is therefore unconstitutional as permitting the deprivation of property without due process oflaw.

MARK WHITE Attorney General ofTexas

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JOHN W.FAINTER, JR. First Assistant Attorney General TEDL.HARTLEY Executive Assistant Attorney General Prepared by Susan Garrison Assistant Attorney General APPROVED: OPINION COMMITTEE C. Robert Heath, Chairman Jim Allison Jon Bible Susan Garrison Rick Gilpin Bruce Youngblood

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