Source: https://caselaw.findlaw.com/us-supreme-court/379/674.html
Timestamp: 2019-04-25 05:07:02+00:00

Document:
Jurisdiction to escheat abandoned intangible personal property lies in the State of the creditor's last known address on the debtor's books and records or, absent such address or an escheat law, in the State of corporate domicile - but subject to later escheat to the former State if it proves such an address to be within its borders and provides for escheat of such property. Pp. 680-683.
W. O. Shultz II, Assistant Attorney General of Texas, argued the cause for plaintiff. With him on the brief was Waggoner Carr, Attorney General of Texas.
Charles J. Kehoe, Deputy Attorney General of New Jersey, argued the cause for the State of New Jersey, defendant. With him on the brief were Arthur J. Sills, Attorney General of New Jersey, and Theodore I. Botter, First Assistant Attorney General.
Fred M. Burns, Assistant Attorney General of Florida, argued the cause for the State of Florida, intervenor. With him on the brief were James W. Kynes, Attorney General of Florida, and Jack W. Harnett, Assistant Attorney General.
Joseph H. Resnick, Assistant Attorney General of Pennsylvania, argued the cause for the State of Pennsylvania, defendant.
Augustus S. Ballard argued the cause for the Sun Oil Company, defendant.
Invoking this Court's original jurisdiction under Art. III, 2, of the Constitution, 1 Texas brought this action against New Jersey, Pennsylvania, and the Sun Oil Company for an injunction and declaration of rights to settle a controversy as to which State has jurisdiction to take title to certain abandoned intangible personal property through escheat, a procedure with ancient origins 2 whereby a sovereign may acquire title to abandoned property if after a number of years no rightful owner appears. The property in question here consists of various small debts totaling $26,461.65 3 which the Sun Oil Company for periods of approximately seven to 40 years prior to the bringing of this action has owed to approximately 1,730 small creditors who have never appeared to collect them. The amounts owed, most of them resulting from failure of creditors to claim or cash checks, are either evidenced on the books of Sun's two Texas offices or are owing to persons whose last known address was in Texas, or both. 4 [379 U.S. 674, 676] Texas says that this intangible property should be treated as situated in Texas, so as to permit that State to escheat it. New Jersey claims the right to escheat the same property because Sun is incorporated in New Jersey. Pennsylvania claims power to escheat part or all of the same property on the ground that Sun's principal business offices were in that State. Sun has disclaimed any interest in the property for itself, and asks only to be protected from the possibility of double liability. Since we held in Western Union Tel. Co. v. Pennsylvania, 368 U.S. 71 , that the Due Process Clause of the Fourteenth Amendment prevents more than one State from escheating a given item of property, we granted Texas leave to file this complaint against New Jersey, Pennsylvania and Sun, 371 U.S. 873 , and referred the case to the Honorable Walter A. Huxman to sit as Special Master to take evidence [379 U.S. 674, 677] and make appropriate reports, 372 U.S. 926 . 5 Florida was permitted to intervene since it claimed the right to escheat the portion of Sun's escheatable obligations owing to persons whose last known address was in Florida. 373 U.S. 948 . 6 The Master has filed his report. Texas and New Jersey each have filed exceptions to it, and the case is now ready for our decision. We agree with the Master's recommendation as to the proper disposition of the property.
New Jersey asks us to hold that the State with power to escheat is the domicile of the debtor - in this case New Jersey, the State of Sun's incorporation. This plan has [379 U.S. 674, 680] the obvious virtues of clarity and ease of application. But it is not the only one which does, and it seems to us that in deciding a question which should be determined primarily on principles of fairness, it would too greatly exalt a minor factor to permit escheat of obligations incurred all over the country by the State in which the debtor happened to incorporate itself.
In some respects the claim of Pennsylvania, where Sun's principal offices are located, is more persuasive, since this State is probably foremost in giving the benefits of its economy and laws to the company whose business activities made the intangible property come into existence. On the other hand, these debts owed by Sun are not property to it, but rather a liability, and it would be strange to convert a liability into an asset when the State decides to escheat. Cf. Case of the State Tax on Foreign-held Bonds, 15 Wall. 300, 320. Moreover, application of the rule Pennsylvania suggests would raise in every case the sometimes difficult question of where a company's "main office" or "principal place of business" or whatever it might be designated is located. Similar uncertainties would result if we were to attempt in each case to determine the State in which the debt was created and allow it to escheat. Any rule leaving so much for decision on a case-by-case basis should not be adopted unless none is available which is more certain and yet still fair. We think the rule proposed by the Master, based on the one suggested by Florida, is.
We realize that this case could have been resolved otherwise, for the issue here is not controlled by statutory or constitutional provisions or by past decisions, nor is it entirely one of logic. It is fundamentally a question of ease of administration and of equity. We believe that the rule we adopt is the fairest, is easy to apply, and in the long run will be the most generally acceptable to all the States.
The parties may submit a proposed decree applying the principles announced in this opinion.
[ Footnote 1 ] "The judicial Power shall extend . . . to Controversies between two or more States . . . .
"In all Cases . . . in which a State shall be Party, the supreme Court shall have original Jurisdiction."
"(1) All controversies between two or more States . . . ."
[ Footnote 2 ] See generally Enever, Bona Vacantia Under the Law of England; Note, 61 Col. L. Rev. 1319.
[ Footnote 3 ] The amount originally reported by Sun to the Treasurer of Texas was $37,853.37, but payments to owners subsequently found reduced the unclaimed amount.
(d) unclaimed "mineral proceeds," fractional mineral interests shown as debts on the books of the Texas offices.
(d) undelivered fractional stock certificates resulting from stock dividends.
[ Footnote 5 ] Texas' motion for leave to file the bill of complaint also prayed for temporary injunctions restraining the other States and Sun from taking steps to escheat the property. The other States voluntarily agreed not to act pending determination of this case, and so the motion for injunctions was denied. 370 U.S. 929 .
[ Footnote 6 ] Illinois, which claims no interest in the property involved in this case, also sought to intervene to urge that jurisdiction to escheat should depend on the laws of the State in which the indebtedness was created. Leave to intervene was denied. 372 U.S. 973 .
[ Footnote 7 ] E. g., Schmidt v. Driscoll Hotel, Inc., 249 Minn. 376, 82 N. W. 2d 365; Auten v. Auten, 308 N. Y. 155, 124 N. E. 2d 99; Haumschild v. Continental Casualty Co., 7 Wis. 2d 130, 95 N. W. 2d 814. See also Clay v. Sun Insurance Office, Ltd., 377 U.S. 179 ; Watson v. Employers Liability Assurance Corp., 348 U.S. 66 ; cf. Richards v. United States, 369 U.S. 1 ; Vanston Bondholders Protective Committee v. Green, 329 U.S. 156 .
[ Footnote 8 ] Nor, since we are dealing only with escheat, are we concerned with the power of a state legislature to regulate activities affecting the State, power which like court jurisdiction need not be exclusive. Compare Osborn v. Ozlin, 310 U.S. 53 .
[ Footnote 9 ] Texas argues in particular that at least the part of the intangible obligations here which are royalties, rents, and mineral proceeds derived from land located in Texas should be escheatable only by that State. We do not believe that the fact that an intangible is income from real property with a fixed situs is significant enough to justify treating it as an exception to a general rule concerning escheat of intangibles.
[ Footnote 10 ] On this point Florida stresses what is essentially a variation of the old concept of "mobilia sequuntur personam," according to which intangible personal property is found at the domicile of its owner. See Blodgett v. Silberman, 277 U.S. 1, 9 -10.
[ Footnote 11 ] We agree with the Master that since our inquiry here is not concerned with the technical domicile of the creditor, and since ease of administration is important where many small sums of money are involved, the address on the records of the debtor, which in most cases will be the only one available, should be the only relevant last-known address.
[ Footnote 12 ] See, e. g., Baldwin v. Missouri, 281 U.S. 586 ; Farmers Loan & Trust Co. v. Minnesota, 280 U.S. 204 ; Blodgett v. Silberman, 277 U.S. 1 . However, it has been held that a State may allow an unpaid creditor to garnish a debt owing to his debtor wherever the person owing that debt is found. Harris v. Balk, 198 U.S. 215 . But cf. New York Life Ins. Co. v. Dunlevy, 241 U.S. 518 .
[ Footnote 13 ] Cf. Connecticut Mutual Life Ins. Co. v. Moore, 333 U.S. 541 . As was pointed out in Western Union Tel. Co. v. Pennsylvania, 368 U.S. 71, 77 -78, none of this Court's cases allowing States to escheat intangible property decided the possible effect of conflicting claims of other States. Compare Standard Oil Co. v. New Jersey, 341 U.S. 428, 443 ; Connecticut Mutual Life Ins. Co. v. Moore, supra; Anderson National Bank v. Luckett, 321 U.S. 233 ; Security Savings Bank v. California, 263 U.S. 282 .

References: v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.