Source: http://supreme.justia.com/cases/federal/us/321/233/case.html
Timestamp: 2013-05-18 19:51:51
Document Index: 57238576

Matched Legal Cases: ['§ 393', '§ 393', '§ 393', '§ 393', '§ 393', '§ 5136', '§ 24']

Anderson Nat'l Bank v. Luckett - 321 U.S. 233 (1944) :: Justia US Supreme Court Center
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Case	U.S. Supreme CourtAnderson Nat'l Bank v. Luckett, 321 U.S. 233 (1944)Anderson National Bank v. LuckettNo. 154Argued February 2, 1944Decided February 28, 1944321 U.S. 233APPEAL FROM THE COURT OF APPEALS OF KENTUCKY
(c) Subject to the requirements of procedural due process, the Page 321 U. S. 234 depositors, prior to a judicial decree of actual abandonment, will not be deprived of their property by the surrender of their presumptively abandoned bank accounts into the custody of the State. P. 321 U. S. 241.
(b) The statute is not in conflict with any provision of the national banking laws. P. 321 U. S. 247. Page 321 U. S. 235
Appeal from the affirmance of a judgment which, upon a remand (293 Ky. 735, 170 S.W.2d 350), dismissed the bill in a suit to enjoin the enforcement of a state statute. Page 321 U. S. 236
So far as here relevant, the provisions of the statute may be summarily stated as follows. Demand deposits held by a bank, with accrued interest, are presumed abandoned unless the owner has, within ten years preceding the date for making the report required by § 393.110, negotiated in writing with the bank, or been credited with interest on his passbook at his request, or had a transaction noted upon the books of the bank, or increased or decreased the amount of his deposit (§ 393.060). Non-demand deposits, with accrued interest, are likewise presumed abandoned unless the owner, within the twenty-five years preceding the report, has taken one or more of such enumerated actions (§ 393.070). Page 321 U. S. 237
The Commissioner may institute judicial proceedings to establish conclusively that property in his hands because Page 321 U. S. 238 presumed abandoned is actually abandoned, or that the owner of the property has died and that there is no person entitled to it (§ 393.230(2)). In such an action, the procedure is governed by the Kentucky Civil Code of Practice (§ 393.240(2)).
The statute thus sets up a comprehensive scheme for the administration of abandoned bank deposits. Upon a report by the bank and notice to the depositors, and with an opportunity to be heard, if either wish it, the state takes into its protective custody bank accounts which, having been inactive for at least ten years if demand accounts or at least twenty-five years if nondemand, the statute declares to be presumptively abandoned. The bank is relieved of its liability to the depositors, who receive instead a claim against the state, enforceable at any time until the deposits are judicially found to be abandoned in fact and Page 321 U. S. 239 for five years thereafter. Refusal by the designated state officer to make payment is reviewable by the state courts.
Appellant contends here: (1) that the statute, in requiring payment of the deposit accounts to the state on the prescribed notice, without recourse to judicial proceedings or any court order or judgment, deprives the depositors and appellant of property without due process of law, and (2) that such withdrawal of accounts from a national bank infringes the national banking laws, particularly R.S. § 5136, 12 U.S.C. § 24, which authorize national banks to accept deposits and to do a banking business, and is an unconstitutional interference with the Page 321 U. S. 240 federally authorized function of national banks as instrumentalities of the Federal Government.
Apart from questions which may arise under the national banking laws in the case of national banks, it is no longer open to doubt that a state, by a procedure satisfying constitutional requirements, may compel surrender to it of deposit balances when there is substantial ground for belief that they have been abandoned or forgotten, Security Bank v. California, supra, certainly when the state acquires them subject to all lawful demands of the depositors. Provident Savings Institution v. Malone, 221 U. S. 660. Page 321 U. S. 241
In the present posture of the case, we conclude, subject to the requirements of procedural due process, that, prior to a judicial decree of actual abandonment, the depositors will not be deprived of their property by the surrender of their bank accounts to the state. We need not decide whether the procedure for determining abandonment in fact conforms to due process, for appellant has not attacked this procedure here, and no such proceeding is before us. Prior to such a decree, the present statute merely compels the summary substitution of the state for the bank, as the debtor of the depositors. It deprives Page 321 U. S. 242 the depositors of none of their rights as creditors, preserving their right to demand from the state payment of the deposits, and their right to resort to the courts if payment is refused. True, payment over of the deposits to the state may be the precursor of a decree of abandonment and the shortening of the period within which a claimant may demand payment of his deposit. But, if the notice to depositors is adequate, we cannot say that the period of five years allowed for that purpose after the decree is an infringement of constitutional rights. Terry v. Anderson, 95 U. S. 628, 95 U. S. 632-633, and cases cited; United States v. Morena, 245 U. S. 392, 245 U. S. 397.
Since the bank is a debtor to its depositors, it can interpose no due process or contract clause objection to payment of the claimed deposits to the state if the state is lawfully entitled to demand payment, for, in that case, payment of the debt to the state, under the statute, relieves the bank of its liability to the depositors. Security Bank v. California, supra, 263 U. S. 285-286. But if the statute Page 321 U. S. 243 is deficient in its provisions for notice and opportunity for hearing, so that the depositors would not be bound by any proceedings taken under it, the bank would be entitled to raise the question whether its obligation to the depositors would be discharged by payment of the deposits to the state. Hence, our inquiry must be directed to the question whether the procedure by which the state undertakes to acquire the depositors' right to demand payment of the deposits was upon adequate notice to them and opportunity for them to be heard.
The report of the bank required to be posted on the courthouse door or bulletin board lists the abandoned accounts as defined by the statute, and thus gives notice Page 321 U. S. 244 to the owners of all those accounts which, because of their inactivity for the periods and in the ways specified by the statute, are deemed abandoned and required to be paid to the state. This notice, when read in the light of the knowledge of the statute, with which all persons having such bank accounts within the state are chargeable, is sufficient to advise that the listed accounts are deemed presumptively abandoned and will, at the end of six weeks from the date of filing, be paid over to the state, and that, both before and after that event, the depositors will be afforded opportunity to present their claims and to have them judicially determined, if rejected.
We cannot say that the posting of a notice on the door of the courthouse in a Kentucky county is a less efficacious method of giving notice to depositors in banks of the Page 321 U. S. 245 county than publication in a local newspaper, or that, in the circumstances of this case, it is an inadequate means of giving notice of the summary taking into custody of the designated bank accounts by the state. This is the more so because, in this case, the notice is the immediate prelude to and accompanies the compulsory surrender of the bank balances to the state, unless the depositors in the meantime intervene as claimants. The statutory procedure, so far as it affects depositors, is in the nature of a proceeding in rem, in the course of which property, against which a claim is asserted, is seized or sequestered, and held subject to the appearance and presentation of claims by all those who assert an adverse interest in it. In all such proceedings, the seizure of the property is, in itself, a form of notice of the claim asserted, to those who may claim an interest in the property. See Corn Exchange Bank v. Coler, supra, holding constitutional a statute providing for no notice to the owner of a bank deposit other than its seizure.
Security Bank v. California, supra, was a proceeding to compel the bank to pay over to the state inactive bank accounts as the first step in their sequestration, and, if unclaimed, their possible ultimate escheat. The Court held, 263 U.S. at 263 U. S. 289-290, that publication of notice of the proceeding in a newspaper at the state capital was sufficient notice to absent depositors to meet due process requirements. It supported this conclusion by reference to the proceeding against the bank by which it was required to pay over the deposits to the state "as in personam, so far as concerns the bank; as quasi in rem, so far as concerns the depositors," 263 U.S. at 263 U. S. 287. Since the service of process on the bank personally was equivalent to a seizure of the accounts, it was deemed to supplement the publication as an independent notice, in itself, to the depositors of the seizure, and of their opportunity given by the statute to appear and assert their claims against the state. Page 321 U. S. 246
For this reason also, it is not an indispensable requirement of due process that every procedure affecting the ownership or disposition of property be exclusively by judicial proceeding. Statutory proceedings affecting Page 321 U. S. 247 property rights, which, by later resort to the courts, secure to adverse parties an opportunity to be heard suitable to the occasion, do not deny due process. Familiar examples are the decisions and orders of administrative agencies which determine rights subject to a subsequent judicial review. And such is obviously the case here, where there is full opportunity to the depositors to be heard by the State Commissioner, whose decision is subject to court review. It is difficult to see what right here asserted would have been better preserved by a court procedure whose end was the compulsory surrender of the deposit balances by the bank to the state, which takes subject to the claims of the depositors.
We come now to appellant's second contention -- that the Kentucky statute infringes the national banking laws and unconstitutionally interferes with appellant as an instrumentality of the federal government. But the statute does not discriminate against national banks, cf. 17 U. S. Maryland, 4 Wheat. 316, by directing payment to the state by state and national banks alike of presumptively abandoned accounts. Nor do we find any word in the national banking laws which expressly or by implication conflicts with the provisions of the Kentucky Page 321 U. S. 248 statutes. Cf. Davis v. Elmira Sav. Bank, 161 U. S. 275.
The statute here attacked does not purport to do more than does any other regulation of the devolution of bank accounts of missing persons, a function which is, as we have seen, within the competence of the state. Under the statute, the state merely acquires the right to demand payment of the accounts in the place of the depositors. Upon payment of the deposits to the state, the bank's obligation is discharged. Something more than this is required to render the statute obnoxious to the federal banking laws. For an inseparable incident of a national bank's privilege of receiving deposits is its obligation to pay them to the persons entitled to demand payment according Page 321 U. S. 249 to the law of the state where it does business. A demand for payment of an account by one entitled to make the demand does not infringe or interfere with any authorized function of the bank. In fact, inability to comply with such demands is made a basis in the national banking laws for closing the doors of the bank and winding up its affairs.
Appellant argues that, if the present act is sustained, it will open the door to the exertion of unlimited state discretionary power over the deposits in national banks, and that the act imposes a burden on appellants such as was held to be inadmissible in First National Bank v. California, 262 U. S. 366, which was followed in National City Bank v. Philippine Islands, 302 U.S. 651. As we have seen, the only power sought to be exerted by the state over the depositors' accounts is the assertion of its lawfully acquired right to collect them, in accordance with the obligation, which was both assumed by appellant and is to be performed in conformity with the banking laws of the United States. In this respect, the state's power to make such a demand cannot extend beyond its power under state law and the Federal Constitution to acquire control of deposit accounts from their owners. So long as it is thus limited, and the power is exercised only to demand payment of the accounts in the same way and to the same extent that the depositors could, we can perceive no danger of unlimited control by the state over the operations of national banking institutions. We need not decide whether, within this limit, the state's power over deposits in national banks is as simple as its like power over deposits in state banks. Compare First National Bank v. California, supra, with Security Bank v. California, supra. We are concerned only with the question whether the particular power here asserted is a forbidden encroachment upon the privileges of a national bank. Page 321 U. S. 250
262 U.S. at 262 U. S. 370. Page 321 U. S. 251 And since it was thought that such alterations might be made by that and other states "and, instead of 20 years, varying limitations may be prescribed -- 3 years, perhaps, or 5, or 10, or 15" -- the Court declared that the effect on the national banking system would be incompatible with the statutory purposes of establishing a system of national banks acting as federal instrumentalities. That effect it specifically described as follows (p. 262 U. S. 370):
We have no occasion to reconsider this decision, as appellees urge, for the grounds assigned for it are wholly wanting here. While the seizure and escheat or forfeiture for mere dormancy of a national bank account are unusual, the escheat or appropriation by the state of property in fact abandoned or without an owner is, as we have seen, as old as the common law itself. Here there is no escheat or forfeiture by reason of dormancy. Dormancy, without more, is made the statutory ground for the state's taking inactive bank accounts into its custody, the state assuming the bank's obligation to the depositors. And the deposits Page 321 U. S. 252 need not be surrendered if the depositors or the bank make it appear that abandonment has not occurred. This is not confiscation, or even an attempted deprivation of property. Escheat or forfeiture to the state may follow, but only on proof of abandonment in fact. We cannot say that the protective custody of long inactive bank accounts, for which the Kentucky statute provides, and which in many circumstances may operate for the benefit and security of depositors, see Provident Savings Institution v. Malone, supra, 221 U. S. 664, will deter them from placing their funds in national banks in that state. It cannot be said that it would have that effect more than would the tax laws, the attachment laws, or the laws for the administration of estates of decedents or of missing or unknown persons, which a state may maintain and apply to depositors in national banks.
Since Kentucky may enforce its statute requiring the surrender to it of presumptively abandoned accounts in national, as well as state, banks, it may, as an appropriate Page 321 U. S. 253 incident to this exercise of authority, require the banks to file reports of inactive accounts, as the statute directs. Waite v. Dowley, supra; Colorado Bank v. Bedford, 310 U. S. 41, 310 U. S. 53.