Source: http://supreme.nolo.com/us/368/71/case.html
Timestamp: 2019-04-18 14:56:51+00:00

Document:
Pennsylvania law provides that "any real or personal property within or subject to the control of this Commonwealth . . . shall escheat to the Commonwealth" whenever it "shall be without a rightful or lawful owner," "remain unclaimed for the period of seven successive years" or "the whereabouts of such owner . . . shall be and remain unknown for the period of seven successive years." [Footnote 1] These proceedings were begun under that law in a Pennsylvania state court to escheat certain obligations of the Western Union Telegraph Company -- alleged to be "property within" Pennsylvania -- to pay sums of money owing to various people who had left the monies unclaimed for more than seven years and whose whereabouts were unknown. The facts were stipulated.
delivery of the notice, or fails to call for the draft within 72 hours, the office of destination notifies the sending office. This office then notifies the original sender of the failure to deliver and makes a refund, as it makes payments to payees, by way of a negotiable draft which may be either cashed immediately or kept for use in the future.
In the thousands of money order transactions carried on by the company, it sometimes happens that it can neither make payment to the payee nor make a refund to the sender. Similarly, payees and senders who accept drafts as payment or refund sometimes fail to cash them. For this reason, large sums of money due from Western Union for undelivered money orders and unpaid drafts accumulate over the years in the company's offices and bank accounts throughout the country. It is an accumulation of this kind that Pennsylvania seeks to escheat here -- specifically, the amount of undisbursed money held by Western Union arising out of money orders bought in Pennsylvania offices to be transmitted to payees in Pennsylvania and other States, chiefly other States.
"We take this opportunity of stating that we do not recognize New York's authority to escheat that money, but, since it has been done, we have no jurisdiction over this sum."
73 Dauphin County Rep. 160, 173. Both the Pennsylvania trial court and the State Supreme Court rejected the contentions of Western Union and declared the unclaimed obligations escheated. 73 Dauphin County Rep. 160; 74 Dauphin County Rep. 49; 400 Pa. 337, 162 A.2d 617. Since the record showed substantial questions as to the jurisdiction of the Pennsylvania courts over the individual owners of the unclaimed monies and as to the power of the State of Pennsylvania to enter a binding judgment that would protect Western Union against subsequent liability to other States, we noted probable jurisdiction. 365 U.S. 801.
We find it unnecessary to decide any of Western Union's contentions as to the adequacy of notice to and validity of service on the individual claimants by publication. For, as we view these proceedings, there is a far more important question raised by this record -- whether Pennsylvania had power at all to render a judgment of escheat which would bar New York or any other State from escheating this same property.
Pennsylvania does not claim and could not claim that the same debts or demands could be escheated by two states. See Standard Oil Co. v. New Jersey, 341 U. S. 428, 341 U. S. 443. And our prior opinions have recognized that, when a state court's jurisdiction purports to be based, as here, on the presence of property within the State, the holder of such property is deprived of due process of law if he is compelled to relinquish it without assurance that he will not be held liable again in another jurisdiction or in a suit brought by a claimant who is not bound by the first judgment. Anderson National Bank v. Luckett, 321 U. S. 233, 321 U. S. 242-243; Security Savings Bank v. California, 263 U. S. 282, 263 U. S. 286-290. Applying that principle, there can be no doubt that Western Union has been denied due process by the Pennsylvania judgment here unless the Pennsylvania courts had power to protect Western Union from any other claim, including the claim of the State of New York that these obligations are property "within" New York, and are therefore subject to escheat under its laws. But New York was not a party to this proceeding, and could not have been made a party, and, of course, New York's claims could not be cut off where New York was not heard as a party. Moreover, the potential multi-state claims to the "property" which is the subject of this escheat make it not unlikely that various States will claim in rem jurisdiction over it. Therefore, Western Union was not protected by the Pennsylvania judgment, for a state court judgment need not be given full faith and credit by other States as to parties or property not subject to the jurisdiction of the court that rendered it. Pennoyer v. Neff, 95 U. S. 714; Riley v. New York Trust Co., 315 U. S. 343.
the same debts or demands against appellant [Standard Oil] cannot be taken by another state. The Full Faith and Credit Clause bars any such double escheat."
"The claim of no other state to this property is before us and, of course, determination of any right of a claimant state against New Jersey for the property escheated by New Jersey must await presentation here."
Here, unlike Standard Oil, there is in reality a controversy between States, possibly many of them, over the right to escheat part or all of these funds.
force Western Union to pay a single debt more than once, and thus take its property without due process of law.
Our Constitution has wisely provided a way in which controversies between States can be settled without subjecting individuals and companies affected by those controversies to a deprivation of their right to due process of law. Article III, § 2 of the Constitution gives this Court original jurisdiction of cases in which a State is a party. The situation here is in all material respects like that which caused us to take jurisdiction in Texas v. Florida, 306 U. S. 398. There, four States sought to collect death taxes out of an estate. The tax depended upon the domicile of the decedent, and this Court said that, "[b]y the law of each state, a decedent can have only a single domicile for purposes of death taxes. . . ." Id. at 306 U. S. 408. Thus, there was only one tax due to only one State. The estate was sufficient to pay the tax of any one State, but the total of the claims of the four States greatly exceeded the net value of the estate. For this reason, as we said, the risk of loss to the state of domicile was real and substantial unless we exercised our jurisdiction. Under these circumstances, we exercised our original jurisdiction to avoid "the risk of loss ensuing from the demands in separate suits of rival claimants to the same debt or legal duty." Id. at 306 U. S. 405. The rival state claimants here, as in Texas v. Florida, can invoke our original jurisdiction.
"The claim of no other state to this property is before us, and, of course, determination of any right of a claimant state against New Jersey for the property escheated by New Jersey must await presentation here."
the disclaimer, and now strongly asserts its claim to these funds under its new law.
308 U. S. 1, 308 U. S. 18-20. Nor need we, at this time, attempt to decide the difficult legal questions presented when many different States claim power to escheat intangibles involved in transactions taking place in part in many States. It will be time enough to consider those complicated problems when all interested States -- along with all other claimants -- can be afforded a full hearing and a final, authoritative determination. [Footnote 6] It is plain that Pennsylvania courts, with no power to bring other States before them, cannot give such hearings. They have not done so here; they have not attempted to do so. As a result, their judgments, which cannot, with the assurance that comes only from a full trial with all necessary parties present, protect Western Union from having to pay the same single obligation twice, cannot stand. When this situation developed, the Pennsylvania courts should have dismissed the case.
Act of July 29, 1953, P.L. 986, § 1 (27 Purdon's Statutes, § 333).
In its answer, Western Union did claim these monies, but it has since abandoned this ground.
Section 1309, Abandoned Property Law, McKinney's Consol.Laws c. 1.
The magnitude of the problem involved is illustrated by the fact that, since 1946, at least 20 States have enacted legislation to bring or enlarge the coverage of intangible transactions under their escheat laws. Florida, 1961; Idaho, 1961; Illinois, 1961; Kentucky, 1960; Virginia, 1960; California, 1959; New Mexico, 1959; Louisiana, 1958; Oregon, 1957; Utah, 1957; Arizona, 1956; Washington, 1955; Pennsylvania, 1953; Massachusetts, 1950; Arkansas, 1949; Connecticut, 1949; New York, 1949; Michigan, 1947; North Carolina, 1947; New Jersey, 1946. Of these, 10 -- Arizona, California, Florida, Idaho, Illinois, New Mexico, Oregon, Utah, Virginia, and Washington -- have adopted the Uniform Disposition of Unclaimed Property Act promulgated by the National Conference of Commissioners on Uniform State Laws in 1955. In addition, legislation has been under consideration by other States. For discussion of this and a general description of the growing importance of these laws, see Ely, Escheats: Perils and Precautions, 15 Bus.Law. 791.
In Texas v. Florida, 306 U. S. 398, 306 U. S. 405, we held that individual claimants "whose presence is necessary or proper for the determination of the case or controversy between the states are properly made parties. . . ."
The appellant is a New York corporation, with its principal office in that State. The funds representing these unpaid money orders are located there. I think only New York has power to escheat the property involved in this case. For that reason, while disagreeing with the Court's opinion, which for me creates more problems that it solves, I join in the judgment of reversal.

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