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

SOGG, EXR., APPELLANT, v. ZURZ, DIR., APPELLEE. 

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

Unclaimed funds — R.C. 169.08(D) — Denial of interest unconstitutional. 

(No. 2007-1452 — Submitted September 16, 2008 — Decided April 8, 2009.) 

APPEAL from the Court of Appeals for Franklin County, 

No. 06AP-883, 2007-Ohio-3219. 

__________________ 

PFEIFER, J. 

{¶ 1} The issue before this court is whether the first sentence of R.C. 

169.08(D), which provides that “[i]nterest is not payable to claimants of 

unclaimed funds held by the state,” is constitutional. We conclude that it is not. 

Background

{¶ 2} Appellee, the director of commerce of the state of Ohio, now 

Kimberly Zurz, supervises and administers the Division of Unclaimed Funds, 

pursuant to R.C. Chapter 169, the Unclaimed Funds Act (“UFA”). Property 

becomes “unclaimed funds” when the owner has not generated any specified 

activity for a prescribed period. R.C. 169.02. A holder of unclaimed 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 Unclaimed 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 and 
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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 claimants 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 filed, or will file, claims for unclaimed funds with the 

Defendant (that is, with the Division of Unclaimed Funds of the Ohio Department 

of Commerce), and who have recovered unclaimed funds but not been paid 

interest on such funds for any period 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 owner’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 moved 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, concluding 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. 
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{¶ 6} The first sentence of R.C. 169.08(D) states, “Interest is not payable 

to claimants of unclaimed funds held by the state.” This declaration is 

breathtakingly bold and strikes at the core 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. Nevertheless, “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 and 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 statute 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 unclaimed 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 UFA. Zurz is apparently relying on the 

state’s “inherent sovereign authority to assume ownership of unclaimed property.” 
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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 appropriation 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 unclaimed funds as forfeited by the owner’s 

inaction.” No authority for this statement 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 intended to treat unclaimed 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 abandonment as do the statutes at issue in 

Indiana, Louisiana, and Pennsylvania.” 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 revert to another after the passage 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 above, 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 individual property rights when interpreting 

forfeiture statutes.” Ohio Dept. of Liquor Control 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 

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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 proprietor has abandoned his rights or his 

property, is usually a question of fact for 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 establish the fact of abandonment”). We 

conclude that the General Assembly has 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 have stipulated the following: “[T]he 

unclaimed monies are held in trust in perpetuity 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 Constitution, states: “Private property 

shall ever be held inviolate, but subservient to the public welfare. When taken in 

time of war or other public exigency, imperatively 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 forfeiture 
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without having a legal investigation.” Because “the General Assembly 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 owner 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 the 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 substantial 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 requires 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 and 
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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 declared 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 compensation, 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 the 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 should 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 this 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. 
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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 abandoned; they are the property of 

their owner. Accordingly, the state may not appropriate for its own use, against 

the owner of the underlying property, interest 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 used to determine how much interest is owed to each 

claimant. 

Judgment reversed 

and cause remanded. 

 MOYER, C.J., and LUNDBERG STRATTON, O’CONNOR, O’DONNELL, and 

CUPP, JJ., concur. 

 LANZINGER, 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 John T. Williams, Assistant Attorneys General, for 

appellee. 

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