Court Opinion

ID: 9704640
Source: CourtListenerOpinion
Date Created: 2023-08-26 00:41:42.565473+00
Date Added: 2024-06-11T18:22:03.853077
License: Public Domain

NIX, Justice,
dissenting.
Appellee, Charles E. O’Connor, escheator for the Commonwealth of Pennsylvania, sought to escheat the value of about Three Million ($3,000,000.00) Dollars of unredeemed trading stamps issued through retail outlets in Pennsylvania before and during 1962 by appellant, Sperry and Hutchinson Co. (S & H), a New Jersey corporation. After the Petition in Escheat was filed in the Court of Common Pleas for Philadelphia, S & H Co. filed preliminary objections purportedly raising questions of jurisdiction. The Court of Common Pleas dismissed the preliminary objections and an interlocutory appeal was filed in the Commonwealth Court pursuant to the Act of March 5, 1925, P.L. 23, Section 1, as amended, 12 P.S. § 672 (1953) (Act). The Commonwealth Court agreed that jurisdictional questions had been properly raised under the Act, but, nevertheless, decided these questions on the merits against S & H Co. This Court granted review because of the importance of the issues presented in this appeal. Regrettably, rather than clarifying the questions that are presented, the majority has seen fit to adopt an unreasonably restrictive interpretation of the Act, contrary to prior precedent and failed to address the most critical *357issue before us. It is for these reasons that I must register my dissent.
The question of jurisdiction over controversies in rem, in which rights to property are determined, was formerly decided under the rules of Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565 (1878), and Harris v. Balk, 198 U.S. 215, 25 S.Ct. 625, 49 L.Ed. 1023 (1905). Under those decisions, the territorial question of the “situs” of the res controlled. However, this test has been replaced by a test based upon the fundamental fairness of subjecting parties claiming rights in the res to the jurisdiction of the forum. Shaffer v. Heitner, 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977).1 It is quite possible that more than one State may have sufficient contact to allow their courts jurisdiction, albeit not exclusive, over the res. In Western Union Telephone Co. v. Penna., 368 U.S. 71, 82 S.Ct. 199, 7 L.Ed.2d 139 (1961), the U. S. Supreme Court determined that the same property cannot be constitutionally escheated by more than one State. Thus, the Court set up a test for determining which State had the claim to escheat superior to all others. Texas v. New Jersey, 379 U.S. 674, 85 S.Ct. 626, 13 L.Ed.2d 596 (1965). The threshold issue is whether under the Act we are limited to a determination of the court’s power pursuant to the test set forth in Shaffer v. Heitner, or whether we may also determine whether this State’s claim to escheat is superior to all others. Texas v. New Jersey, supra. The majority concludes that the Act does not allow inquiry into the questions presented by the Texas decision. This view fails to perceive the true nature of the bar set up in that case and attributes to the Act a restrictive and consistent interpretation that is not justified under prior precedent.
*358The majority attempts to suggest that our decision in Studio Theaters, Inc. v. City of Washington, 418 Pa. 73, 209 A.2d 802 (1965) has provided a neat and clear distinction as to what is and what is not jurisdictional for purposes of the Act. They would further suggest that subject matter jurisdiction has been consistently limited, in our cases discussing the scope of the Act, to a question of the competency of a court to hear a particular type of case.
First, if we were to accept the majority’s narrow view of the scope of the Act, I am still of the opinion that a Texas v. New Jersey challenge would fall within its parameters. Although as a general rule a court may have jurisdiction or competency in in rem matters where the requirements of Shaffer v. Heitner have been satisfied, the Texas v. New Jersey ruling made an exception in escheat cases and added an additional jurisdictional requirement. The power to es-cheat flows from the sovereignty of the State. Texas v. New Jersey provides a basis for determining which sovereign has the power, where there are competing claims of sister States. Thus a determination that a State lacks the power to escheat because of a superior claim relates to the competency of the court in the same manner as a finding that a court was acting without statutory authority. The court’s powers are derived from the State, see Arrott v. Allegheny County, 328 Pa. 293, 194 A. 910 (1937); see also Melnick v. Melnick, 147 Pa.Super. 564, 570 n.2, 25 A.2d 111 (1942); Cf. Osborn v. United States Bank, 22 U.S. 326, 381, 6 L.Ed. 204 (1824), thus if the State does not possess the power it cannot confer what it does not have to its courts.2
*359Second, it is clear that our decisions have been far from consistent in determining what is appealable under the Act. Nor has there been consistency in our decisions determining the nature of the complaints that properly fall within the purview of the Act. For instance, we have held the absence of indispensable parties to be jurisdictional under the Act and yet we have concluded that the incapacity of the plaintiff to sue is not jurisdictional. Smith Estate, 442 Pa. 249, 275 A.2d 323 (1971); Dozor Agency, Inc. v. Rosenberg, 403 Pa. 237, 169 A.2d 771 (1961); County Construction Co. v. Livengood Construction Corp., 393 Pa. 39, 142 A.2d 9 (1958). We have stated that venue does not affect the competency of the court to act, yet we have held that objections to venue are cognizable under the Act. Helsel v. Rodgers, et al., 440 Pa. 516, 269 A.2d 917 (1970). The timeliness of an appeal from the report of the Borough’s auditor to the Court of Common Pleas was held not to be jurisdictional, see Appeal of Washcalus, 170 Pa.Super. 20, 84 A.2d 220 (1951), but the timeliness of an appeal from the Municipal Court of Philadelphia to the Court of Common Pleas was found to be cognizable under the terms of the Act. City of Philadelphia v. Goldstein, 24 Pa.Cmwlth. 434, 357 A.2d 260 (1976).
From the foregoing, it is apparent that the bar established in Texas v. New Jersey meets the test of raising a question of subject matter jurisdiction, when that term is used in its purest sense. It is equally as apparent that our case law has not been consistent in a strict adherence to the pure subject matter jurisdictional standard. Further the decisions in this area evidence a tendency to allow interlocutory review of matters raising a fundamental limitation on the court’s power to act even though the limitation does not amount to a lack of competency in the purest sense.3 I therefore agree *360with the Commonwealth Court that the question of the application of Texas v. New Jersey is properly before us at this time and should have been addressed by the majority.
I am satisfied with the majority’s conclusion that the requirements of Shaffer v. Heitner were satisfied under the facts of this case. I am troubled by the problems presented by Texas v. New Jersey when applied to these facts. I do not believe that the analysis of the majority of the Commonwealth Court on this latter question fully comprehends the complexities of the problems presented. In Texas v. New Jersey the U. S. Supreme Court repeatedly stressed the necessity for clarity, predictability and fairness in this area.
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.
Id. at 379 U.S. at 683, 85 S.Ct. at 631.
This case falls within the grey area expressly delineated in Texas v. New Jersey. See Id. at 682, 85 S.Ct. at 631. Because of the uniqueness of the facts, the mandated solution for situations, falling within this area, is difficult to apply.4 To postpone our responsibility to meet the issue at this time and to provide guidance for the courts of this *361jurisdiction represents the height of irresponsibility. I dissent.

. The case for applying to jurisdiction in rem the same test of “fair play and substantial justice” as governs assertions of jurisdiction in personam is simple and straightforward. It is premised on recognition that “[t]he phrase, ‘judicial jurisdiction over a thing’ is a customary elliptical way of referring to jurisdiction over the interests of persons in a thing.” (Citations omitted). This recognition leads to the conclusion that in order to justify an exercise of jurisdiction in rem, the basis for jurisdiction must be sufficient to justify exercising “jurisdiction over the interest of persons in a thing.” (Footnotes omitted). Shaffer v. Heitner, supra at 207, 97 S.Ct. at 2581.

. Mr. Justice Larsen oversimplifies the inquiry when he attempts to limit the test of subject matter jurisdiction to encompass only the nature of case being considered. For example, the courts of common pleas of this Commonwealth have subject matter jurisdiction over prosecutions for homicide. Yet, even if a Pennsylvania trial court had jurisdiction over the parties through their consent, a Pennsylvania court could not try a person for a homicide that occurred in California. In such an instance the Pennsylvania court would lack subject matter jurisdiction because the crime did not occur in Pennsylvania and Pennsylvania therefore lacked sufficient contacts or interest in the case. Similarly, the Pennsylvania courts have been given the authority to hear escheat matters but in the present case, it *359is asserted that the contacts and interest are insufficient to allow Pennsylvania courts to hear and decide this case. In each instance the power of the court to enter upon the inquiry is called into question.

. From a jurisprudential point of reference, it is more expedient to give the broader scope to the Act, particularly in a case such as the one at bar where the resolution of this preliminary issue may elimi*360nate a protracted and expensive litigation only to ultimately reach the same result.

. Judge Rogers, in a provocative dissent to the majority opinion in the Commonwealth Court, identified some of the questions that should have been considered and resolved in the majority opinion of this Court. Sperry & Hutchinson Co. Appeal, 32 Pa.Cmwlth. 599, 607, 379 A.2d 1378, 1382 (1977) (Rogers, J., dissenting). Specifically, Judge Rogers questions the determination that the State of New Jersey does not have a competing claim. Since the requirement of the assertion of a competing claim by a sister State is one of the factors in determining the applicability of the Texas v. New Jersey standard, this then becomes a jurisdictional issue.