National Safe Deposit Co. v. Stead
232 U.S. 58 (1914)

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U.S. Supreme Court

National Safe Deposit Co. v. Stead, 232 U.S. 58 (1914)

National Safe Deposit Company v. Stead

No. 138

Argued December 16, 1913

Decided January 5, 1914

232 U.S. 58

Syllabus

The word "possession" is more or less ambiguous, and is interchangeably used to describe both actual and constructive possession, and not decided in this case whether the contents of a safe deposit box are in possession of the renter or of the Deposit Company.

The state has power to regulate the incidents of distribution of property within the state belonging to decedents, and can prescribe times and conditions for delivery thereof by safe deposit companies, and a statute operating to seal safe deposit boxes for a reasonable period after the death of the renter is not an unconstitutional deprivation of property without due process of law, and so held as to § 9 of the Inheritance Tax Law of Illinois of 1909.

Such a statute does not impair the obligation of the charter of a safe deposit company if it provides the conditions under which delivery shall be made to the proper parties within a reasonable period.

The prohibition in the Fourth Amendment against unreasonable searches and seizures does not apply to the states. Lloyd v. Dollison,194 U. S. 445.

Contracts for joint rental of safe deposit boxes are made in the light of the state's power to legislate for the protection of the estate of any joint renter, and a statute preventing withdrawal of contents for a reasonable period does not impair the contract between the deposit company and the renters.

The renter of a safe deposit box cannot object to a state statute affecting his right to open the box after death of a joint renter which was in force when the rental contract was made.

250 Ill. 584 affirmed.

By the Act of July 1, 1909, the Illinois Legislature passed an inheritance tax law like that considered in Magoun v. Illinois Trust & Saving Bank,170 U. S. 283. The ninth section of the statute provides in substance:

That no safe deposit company, corporation, or person

Page 232 U. S. 59

having in possession or under control securities or assets belonging to or standing in the name of a decedent, or in the joint name of the decedent and another person, or in the name of a partnership of which he was a member, shall deliver such assets to the legal representative of the deceased or to the survivor of the joint holders, or to the partnership of which he was a member, without ten days' notice to the Attorney General and Treasurer of the state, who were authorized to examine the securities at the time of the delivery. It was further provided that no delivery should be made unless such holder should retain a sufficient portion of the assets to pay the state tax thereafter assessed, unless such state officers gave consent in writing. Failure to give the notice or to retain such amount rendered the deposit company, corporation, or person liable for the tax and to a penalty of $1,000.

On March 15, 1910, the National Safe Deposit Company filed in the Circuit Court of Cook County, Illinois, a bill against the Treasurer and Attorney General alleging that the company was incorporated in 1881 to do a safe deposit business and that, in pursuance of its charter, it had erected a building with large vaults into which 13,291 safe deposit boxes had been built and 9,702 rented -- 317 to partnerships and 4,104 were held jointly by more than one person. That prior, to July 1, 1909, it had made yearly contracts for the rental of said boxes, most of which were still of force. The rent contracts recited that, in consideration of $___ paid, the company "had rented to _____ safe No. ___ in the vaults of this company for the term of one year," and that its liability was limited to the exercise of ordinary diligence in preventing the opening of the safe by any person other than the renter or his duly authorized representative.

"No one except the renter, or his deputy, to be designated in writing on the books of the company, or, in case of death, his legal representative, to have access to the safe. . . . No renter will be

Page 232 U. S. 60

permitted to enter the vaults except in the presence of the vault keeper. In case of loss of key or combination, the lock will be changed at the expense of the renter. . . ."

The bill alleged that the safes could be opened only by two keys, or two combinations, one of which keys or combinations was held by or known only to the renter, the other being held or known only by the company's agents. So that it required the joint act of the customer and the company to secure access to the contents, the company having no right or means of access to the box itself, nor did it possess any knowledge or information as to the ownership of the securities deposited therein.

The bill further alleged that, notwithstanding these facts, the defendants insisted that the Deposit Company had such possession or control of the contents as to make it incumbent upon it to prevent access thereto by all persons for ten days after the death of the sole or joint renter; that this deprived the Deposit Company of the right to do the business for which it had been chartered, made it break its contract that it would allow no one except the renter or his agent or representative to have access to the boxes; interfered with its business by depriving the representative and survivor of their right to use the box and contents; imposed upon the Deposit Company the risk of determining who was the owner of the contents of the box, and imposed the duty of acting as a tax collecting agent for the state. The bill also alleged that the company had been threatened with suits by depositors if it yielded to the command of such void act. In order to prevent a multiplicity of suits, and to avoid the heavy statutory penalties, the company prayed that the defendants be enjoined from enforcing the statute against it.

The defendants' demurrer was sustained. That ruling was affirmed by the Supreme Court of Illinois, three judges dissenting (250 Ill. 584). The case was then brought here by writ of error.

Page 232 U. S. 66

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