[Cite as Sogg v. Zurz , 121 Ohio St.3d 449, 2009-Ohio-1526.]

S OGG , E XR ., A PPELLANT , v . Z URZ , D IR ., A PPELLEE . [Cite as Sogg v. Zurz , 121 Ohio St.3d 449, 2009-Ohio-1526.] Unclaimed funds — R.C. 169.08(D) — De nial of interest unconstitutional.

(No. 2007-1452 — Submitted September 16, 2008 — Decided April 8, 2009.)
A PPEAL from the Court of Appeals for Franklin County, No. 06AP-883, 2007-Ohio-3219.

__________________ P FEIFER , J. {¶ 1} The issue before this court is whether the first sentence of R.C. 169.08(D), which provides that “[i]nteres t is not payable to claimants of unclaimed funds held by the state,” is cons titutional. We conclude that it is not. Background {¶ 2} Appellee, the director of comme rce of the state of Ohio, now Kimberly Zurz, supervises and adminis ters the Division of Unclaimed Funds, pursuant to R.C. Chapter 169, the Uncl aimed Funds Act (“UFA”). Property becomes “unclaimed funds” when the ow ner has not generated any specified activity for a prescribed period. R.C. 169.02. A holder of unc laimed property is required to report the property to the division, R.C. 169.03(A), which sets up an account for the reported property and credits the property to that account. Enough of the property is held in the Uncla imed Funds Trust Fund to pay anticipated claims of owners, R.C. 169.08(D), and the unclaimed funds never become the property of the holder or the state of Ohio. {¶ 3} Appellant, Wilton S. Sogg, the executor of his mother’s estate, filed a claim with the division for the return of two separate amounts: an insurance policy claim payment reported by Blue Cross & Blue Shield Mutual andS UPREME C OURT OF O HIO

2 dividends reported by the Bank of New York. Sogg received a check from the division for $320.72, which represented the total of the two amounts, including interest earned through July 26, 1991, minus a five percent administrative fee. R.C. 169.08. The amount that Sogg received did not include interest earned after July 26, 1991, because R.C. 169.08(D) was amended effective July 26, 1991, to provide, “Interest is not payable to cl aimants of unclaimed funds held by the state.” 1991 Am.Sub.S.B. No. 298, 144 Ohio Laws, Part III, 4038. {¶ 4} Sogg was certified as the representative for the class of “[a]ll persons or entities who file d, or will file, claims fo r unclaimed funds with the Defendant (that is, with the Division of Unclaimed Funds of th e Ohio Department of Commerce), and who ha ve recovered unclaimed f unds but not been paid interest on such funds for any peri od after July 26, 1991.” Sogg’s amended complaint alleged that R.C. 169.08(D) “is unconstitutional and void because it denies the protection of the property owne r’s private property rights afforded by Art. I, § 19 of the Ohio Constitution and the Fifth and Fourteenth Amendments to the United States Constitution.” Sogg m oved for summary judgment, which the trial court granted, ruling that when the state retains interest earned on unclaimed funds, it engages in a taking. Sogg v. White, 139 Ohio Misc.2d 58, 2006-Ohio4223, 860 N.E.2d 163. The court of appeals reversed, concludi ng that unclaimed funds are abandoned property and, therefore, that the state’s retention of interest “does not constitute a taking that requires compensation.” Sogg v. Dir., Ohio Dept. of Commerce, Franklin App. No. 06AP-883, 2007-Ohio-3219, ¶ 34. We accepted Sogg’s discretionary appeal. Analysis {¶ 5} We review the granting of summary judgment de novo. Comer v. Risko , 106 Ohio St.3d 185, 2005-Ohio-4559, 833 N.E.2d 712, ¶ 8.January Term, 2009

3 {¶ 6} The first sentence of R.C. 169.08(D) states, “Interest is not payable to claimants of unc laimed funds held by the state.” This declaration is breathtakingly bold and strikes at the co re of the concept of private property because, at a stroke, the General Assembly severed the link between the owner of an asset and the income produced by that asset. Neverthe less, “the General Assembly may pass any law unless it is specifically prohibited by the state or federal Constitutions.” State v. Warner (1990), 55 Ohio St.3d 31, 43, 564 N.E.2d 18, citing State ex rel. Jackman v. Cuyahoga Cty. Court of Common Pleas (1967), 9 Ohio St.2d 159, 162, 38 O.O.2d 404, 224 N.E.2d 906. {¶ 7} Much is written in the briefs a nd lower court opinions about the common-law trust principle that the “[i]nterest follows the principal.” Ohio City v. Cleveland & Toledo RR. Co. (1856), 6 Ohio St. 489, paragraph three of the syllabus. We need not consider it here because that venerable principle applies only “in the absence of a statute or stipulation to the contrary.” Eshelby v. Cincinnati Bd. of Edn. (1902), 66 Ohio St. 71, 74, 63 N.E. 586. See Thompson v. Indus. Comm. (1982), 1 Ohio St.3d 244, 249, 1 OBR 265, 438 N.E.2d 1167. R.C. 169.08(D) is plainly a stat ute to the contrary. Unclaimed Funds Are Not Abandoned {¶ 8} Even if the General Assembly may exercise its plenary powers to declare that “[i]nterest is not payable to claimants of unclaime d funds held by the state,” it is an entirely different matter for the state to assume ownership of the interest earned. Nothing in the UFA states that the interest earned on the property held by the state becomes the property of the state. In her brief, Zurz states that the UFA “benefits the public by allowing the State to use the unclaimed funds in its possession and draw interest on those assets for public purposes,” though she does not cite a specific provision of the UF A. Zurz is apparently relying on the state’s “inherent sovereign authority to assume ownership of unclaimed property.”S UPREME C OURT OF O HIO

4 See Connecticut Mut. Life Ins. Co. v. Moore (1948), 333 U.S. 541, 547, 68 S.Ct. 682, 92 L.Ed. 863 (“The right of appropriati on by the state of abandoned property has existed for centuries in the common law”). Zurz also states that “the UFA properly treats an owner’s interests in unc laimed funds as forfeited by the owner’s inaction.” No authority for this statem ent is provided. The UFA does not use any form of the words “forfeited,” “abandoned,” or “escheated” except in referring to the laws of other states. R.C. 169.041. Nothing in the UFA indicates that the General Assembly in tended to treat unc laimed funds as if they had been abandoned, forfeited, or escheated. {¶ 9} The court of appeals relied extensively on three cases in other states to conclude that pursuant to the UFA, “unclaimed property is essentially abandoned property.” 2007-Ohio-3219, ¶ 28. Smolow v. Hafer (Pa.Commw.2005), 867 A.2d 767; Smyth v. Carter (Ind.App.2006), 845 N.E.2d 219; Hooks v. Kennedy (La.App.2007), 961 So.2d 425. We find this reliance unpersuasive because, as the court of appeals candidly acknowledged, the “UFA does not contain a presumption of abandonm ent as do the statutes at issue in Indiana, Louisiana, and Pennsylvani a.” 2007-Ohio-3219, ¶ 28. Zurz quotes Texaco, Inc. v. Short (1982), 454 U.S. 516, 526, 102 S.Ct. 781, 70 L.Ed.2d 738, for the proposition that “[s]tates have the power to permit unused or abandoned interests in property to reve rt to another after the passa ge of time.” Although we do not doubt that this is a fair characterization of the law in Texaco , it is irrelevant for present purposes because, as noted a bove, nothing in the UFA indicates an intent to change the ownership of the unclaimed funds, whether due to the passage of time or any other reason. Furthermore, “[f]orfeitures are not favored by the law. The law requires that we favor i ndividual property rights when interpreting forfeiture statutes.” Ohio Dept. of Liquor Contro l v. Sons of Italy Lodge 0917 (1992), 65 Ohio St.3d 532, 534, 605 N.E.2d 368; see also State v. Lilliock (1982),January Term, 2009

5 70 Ohio St.2d 23, 25, 24 O.O.3d 64, 434 N.E.2d 723 (forfeitures are not favored in law or equity); Kiser v. Logan Cty. Bd. of Commrs. (1911), 85 Ohio St. 129, 131, 97 N.E. 52 (“Whether or not a proprie tor has abandoned his rights or his property, is usually a question of fact fo r a jury to answer, and the answer must depend primarily upon an intention by the proprietor to abandon. * * * But mere non-user is not ordinarily sufficient to es tablish the fact of abandonment”). We conclude that the General Assembly ha s not plainly legislated that unclaimed funds are or can be deemed abandoned property. {¶ 10} The parties also agree that unclaimed funds are not abandoned property; otherwise they would not ha ve stipulated the following: “[T]he unclaimed monies are held in trust in perp etuity for the benefit of the owners of the unclaimed property. The funds never become the property of the State of Ohio.” Under the UFA, the unclaimed property remains the property of the original owner. What we are left with is the state’s control over and use of the interest earned on the property of another. The State’s Power to Take Private Property Is Limited by Section 19, Article I, Ohio Constitution {¶ 11} Section 19, Article I, Ohio Cons titution, states: “Private property shall ever be held inviolate, but subservi ent to the public welfare. When taken in time of war or other public exigency, imp eratively requiring its immediate seizure or for the purpose of making or repairing roads, which shall be open to the public, without charge, a compensation shall be made to the owner, in money, and in all other cases, where private property shall be taken for public use, a compensation therefor shall first be made in money, or first secured by a deposit of money; and such compensation shall be assessed by a jury, without deduction for benefits to any property of the owner.” See Cotter v. Doty (1832), 5 Ohio 393, 398, where this court stated, “No man ought to be deprived of his property by forfeitureS UPREME C OURT OF O HIO

6 without having a legal inve stigation.” Because “the General Assemb ly may pass any law unless it is specifically prohibited by the state or federal Constitutions,”
Warner , 55 Ohio St.3d at 43, 564 N.E.2d 18, citing State ex rel. Jackman , 9 Ohio St.2d at 162, 38 O.O.2d 404, 224 N.E.2d 906, we now examine whether the first sentence of R.C. 169.08(D) is specifically prohibited by the Ohio Constitution. Because we conclude that it is, it is immaterial whether it is prohibited or permitted by the Constitution of the United States. {¶ 12} The question becomes: Does the first sentence of R.C. 169.08(D) enable the state to assume ownership of interest earned on unclaimed funds that the state holds for the owne r without violating Section 19, Article I of the Ohio Constitution? The state may limit private property rights through the exercise of its police power when “the interests of th e general public require its exercise and the means of restriction [are not ] unduly oppressive upon individuals.” State ex rel. Pizza v. Rezcallah (1998), 84 Ohio St.3d 116, 131, 702 N.E.2d 81, citing Froelich v. Cleveland (1919), 99 Ohio St 376, 391, 124 N.E. 212, which states that general laws “must be impartial in operation and not unduly oppressive upon individuals, must have a real and substa ntial relation to their purpose, and must not interfere with private rights beyond the necessities of the situation.” See Norwood v. Horney , 110 Ohio St.3d 353, 2006-Ohio-3799, 853 N.E.2d 1115, ¶ 41 (“Section 19, Article I requi res that the taking be necessary for the common welfare”). We conclude that the first sentence of R.C. 169.08(D) violates Section 19, Article I, Ohio Constitution, as to interest earned on unclaimed funds for which a claim is ultimately submitted. {¶ 13} “The argument is made that the constitution emanated from the people and that the welfare of the people is paramount to any private interest. Very true, but written constitutions have heretofore been framed chiefly to protect the weak from the strong and to secure to all the people ‘equal protection andJanuary Term, 2009

7 benefit.’ They have been constructed upon the theory that majorities can and will take care of themselves; but that the safety and happiness of individuals and minorities need to be secured by guaranties and limitations in the social compact, called a constitution. Hence, while it is d eclared in Article I., Section 19, of our Constitution, that private property shall be held ‘subservient to the public welfare,’ it is also declared that it shall ever be held inviolate and shall not be taken for the public use without comp ensation, in most cases compensation first to be made in money. {¶ 14} “It is regrettable that there should be an apparent necessity for restating such familiar principles; but there seems to be a growing disposition to legislate, by ordinance and by general statute, regardless of constitutional limitations, thus imposing upon the courts th e odium of declaring them to be unconstitutional.” (Emphasis sic.) Kiser , 85 Ohio St. at 132-133, 97 N.E. 52. Statute of Limitations {¶ 15} R.C. 169.08(B) states, “No statute of limitations shall bar the allowance of a claim.” This sentence is dispositive as to a claim for underlying property, but it does not speak to a claim for interest. Sogg argues that R.C. 169.08(B) should apply and that there shoul d be no statute of limitations even as to interest. We disagree; R.C. 169.08(B) cannot apply to a claim for interest because the UFA does not allow claims for interest. Zurz argues that the two-year general statute of limitations for unspecified personal-injury actions should apply, R.C. 2305.10(A). We disagree because th is case does not involve a personal injury. R.C. 2305.09 states that a claim “[ f]or the recovery of personal property, or for taking or detaining it” must “be brought within four years after the cause thereof accrued.” We consider this the appropriate statute of limitations because this case and the UFA are concerned with the recovery of personal property.S UPREME C OURT OF O HIO

8 Accordingly, Sogg may recover interest earned on his property in the four years preceding the date of his claim. Conclusion {¶ 16} “Unclaimed funds” are not abandone d; they are the property of their owner. Accordingly, the state may not appropriate for its own use, against the owner of the underlying property, inte rest earned on that property. The first sentence of R.C. 169.08(D) is unconstitutional. We remand to the trial court to determine the method to be us ed to determine how much in terest is owed to each claimant. Judgment reversed and cause remanded.
M OYER , C.J., and L UNDBERG S TRATTON , O’C ONNOR , O’D ONNELL , and
C UPP , JJ., concur.
L ANZINGER , J., concurs in judgment only.

__________________ Thompson Hine, L.L.P., and William C. Wilkinson; Futterman, Howard, Watkins, Wylie & Ashley, Chtd., John R. Wylie, and Charles R. Watkins; and Susman, Heffner & Hurst, L.L.P., Glenn L. Hara, and Arthur T. Susman, for appellant. Richard Cordray, Attorney General, Benjamin C. Mizer, Solicitor General, and William J. Cole and J ohn T. Williams, Assistant Attorneys General, for appellee.

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