Standard Oil Co. v. New JerseyAnnotate this Case
341 U.S. 428 (1951)
U.S. Supreme Court
Standard Oil Co. v. New Jersey, 341 U.S. 428 (1951)
Standard Oil Co. v. New Jersey
Argued March 5, 1951
Decided May 28, 1951
341 U.S. 428
APPEAL FROM THE SUPREME COURT OF NEW JERSEY
Under the New Jersey Escheat Act, proceedings were instituted in a state court to escheat to the State certain personal property, including unclaimed shares of appellant corporation's stock and unclaimed dividends. Personal service was made on appellant, and notice identifying the property and the last-known owners was given by publication. Appellant is a New Jersey corporation, but has no office or place of business in the State except a statutory registered office. It has no tangible property in the State except its stock and transfer books. The stock was issued and the dividends held in other states, and the last-known addresses of the owners were chiefly in other states and foreign countries. Over appellant's objection to the validity of the proceedings under the Federal Constitution, it was decreed that the unclaimed stock and dividends had escheated to the State.
Held: the judgment is sustained. Pp. 341 U. S. 429-443.
1. The notice required by the statute, as construed by the Supreme Court of New Jersey, and which was given, was adequate to bind interested persons. Pp. 341 U. S. 432-435.
2. The statute does not impair the obligation of contracts in violation of Art. I, § 10, 1, of the Federal Constitution. Pp. 341 U. S. 435-436.
3. Regardless of theories as to their situs, stock certificates and undelivered dividends may be abandoned property subject to the disposition of the domiciliary state of the corporation when the whereabouts of the owners are unknown for such lengths of time, and under such circumstances, as permit a declaration of abandonment. Pp. 341 U. S. 437-442.
(a) The fact that appellant is a New Jersey corporation, amenable to process through its designated agent at its registered office in New Jersey, gave New Jersey power to seize the res here involved -- i.e., the "debts or demands due to the escheated estate." Pp. 341 U. S. 438-439.
(b) No matter where appellant's assets may be, since it is its obligation to pay to the escheated estate that is taken, personal service on appellant effects a seizure of that obligation. P. 341 U. S. 439.
(c) Since choses in action have no tangible existence, control over them can only arise from control over the persons whose relationships are the source of the rights and obligations. Pp. 341 U. S. 439-440.
(d) Since the New Jersey court had jurisdiction of appellant by personal service and of the owners of the stock and dividends through notice or service by publication, New Jersey had power to act on their rights respecting these choses in action within constitutional limits. Pp. 341 U. S. 440-441.
4. Under the Full Faith and Credit Clause of the Federal Constitution, the debts and demands against appellant represented by the stock and dividends cannot be taken from appellant by another state when they have already been taken from appellant by a valid judgment of New Jersey. Pp. 341 U. S. 442-443.
5 N.J. 281, 74 A.2d 565, affirmed.
A New Jersey court decreed escheat to the certain unclaimed stock of appellant and of unclaimed dividends. 2 N.J.Super. 442, 64 A.2d 386; 5 N.J.Super. 460, 68 A.2d 499. The Supreme Court of New Jersey affirmed. 5 N.J. 281, 74 A.2d 565. On appeal to this Court, affirmed, p. 341 U. S. 443.
MR. JUSTICE REED delivered the opinion of the Court.
The Standard Oil Company, a New Jersey corporation, appeals from a judgment of the Supreme Court of New Jersey insofar as it declares escheated to the New Jersey unpaid dividends declared upon the stock of Standard Oil, and twelve shares of the common stock of the Company.
The New Jersey Escheat Act reads in part:
"If any person, who at the time of his death, has been or shall have been, the owner of any personal property within this State, and shall have died, or shall die, intestate, without heirs or known kindred, capable of inheriting the same, and without leaving a surviving spouse, such personal property, of whatsoever nature the same may be, shall escheat to the State."
"Whenever the owner, beneficial owner, or person entitled to any personal property within this State, has been or shall be and remain unknown for the period of fourteen successive years, or whenever the whereabouts of such owner, beneficial owner or person, has been or shall be and remain unknown for the period of fourteen successive years, or whenever any personal property wherever situate has been or shall be and remain unclaimed for the period of fourteen successive years, then, in any such event, such personal property shall escheat to the State."
N.J.Rev.Stat. 2:53-16, 2:53-17.
In accordance with the procedure prescribed by the Act, a petition in the name of the New Jersey for a decree escheating certain personal property, [Footnote 1] including the property in issue here, was filed in the Chancery Division of the Superior Court of New Jersey. The petition alleged that appellant had in its custody or possession property which was subject to escheat under the Act
for each of the alternative reasons listed in the above provisions: the owners of the property had died intestate without leaving anyone capable of taking the property; the owners had been unknown for fourteen successive years; the whereabouts of the owners had been unknown for fourteen successive years; the property had been unclaimed for fourteen successive years.
The appellant answered the petition and, after notice and hearing, the Chancery Division of the Superior Court entered a final judgment ordering escheat of the personal property. 2 N.J.Super. 442, 64 A.2d 386, 5 N.J.Super. 460, 68 A.2d 499. This judgment was modified and affirmed as modified by the Supreme Court of New Jersey. 5 N.J. 281, 74 A.2d 565.
Standard Oil, appealing from the decision of the Supreme Court of New Jersey, claims that the New Jersey Escheat Act and the judgment thereunder deprived the Company of its property without due process of law in violation of the Fourteenth Amendment. This unconstitutional deprivation is alleged to arise from the fact that the judgment of escheat does not protect Standard Oil from later liability to the stockholders whose claims to stock and dividends are escheated, because: (1) both the notice to the claimants of the property prescribed by the statute and the notice actually published were so inadequate that claimants were afforded no reasonable opportunity to learn of the escheat proceeding and of its effect on their claims, or to appear and protect their rights; (2) the obligation of the contracts of the persons whose property was escheated was impaired by the statute and judgment thereunder in violation of Art. I, § 10,
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