Provident Institution for Savings v. Malone
Annotate this Case
221 U.S. 660 (1911)
- Syllabus |
U.S. Supreme Court
Provident Institution for Savings v. Malone, 221 U.S. 660 (1911)
Provident Institution for Savings v. Malone
Argued April 2, 1911
Decided May 29, 1911
221 U.S. 660
The state has power to legislate in regard to the preservation and disposition of abandoned property and to establish presumption of abandonment after lapse of reasonable period. Cunnius v. Reading, 198 U. S. 454.
A statute directing that saving banks turn over to the proper state officer money in accounts inactive for thirty years and where the
depositor cannot be found, with provisions for the payment over to the depositor or his heirs on establishment of right, does not deprive savings banks of their property without due process of law and is not a denial of equal protection of the law because it applies only to savings banks, the classification not being unreasonable, and so held as to the statute of Massachusetts to that effect.
The question of whether a statute allows a depositor or his heirs a lower rate of interest on a deposit turned over to the state as abandoned than allowed by the bank amounts to a deprivation of property without due process of law within the Fourteenth Amendment cannot be raised by the bank as against the state.
There is a special reason for protecting depositors of savings banks, and there is a difference between them and deposits in other banks that affords a reasonable basis for classification in legislation.
Whether the state can require payment of accounts in savings banks without production of the passbook and the rights and relations of parties arising out of the charter and contract of deposit are to be determined by local law and do not present federal questions giving this Court jurisdiction under § 709, Rev.Stat.
In 1907, the General Court of the Commonwealth of Massachusetts passed an act providing that deposits in savings banks which had remained inactive and unclaimed for thirty years, and where the claimant was unknown or the depositor could not be found, should be paid to the treasurer and receiver general.
Under this statute, which is copied in the margin, * the
attorney general, on May 5th, 1908, filed in the Probate Court of Suffolk County a petition, setting out the names and last known addresses of 226 persons who had deposit accounts ranging from $1 to $4,284 in the "Provident Institution for Savings in the Town of Boston." He alleged that, for more than thirty years, no part of the principal or interest had been withdrawn, no interest had been added upon any of the passbooks, and no additional deposits had been made on any of the accounts; that no claimant for any of said deposits was known, and that the depositors could not be found. He thereupon prayed that the court would order the said sums of money, with the increases thereof, to be paid over to the treasurer and receiver general of the commonwealth. A copy of the petition was served on the bank and a citation, addressed to the depositors, was published once in each week for three successive weeks in two newspapers in Boston, requiring them each to show cause on July 16, 1908, why the prayer of the petition should not be granted.
The savings bank alone answered. It admitted the allegations of the petition. It averred, however, that when each deposit was made, an agreement was signed by which the bylaws of the bank, made in pursuance of the charter granted December 11, 1816, were assented to by the depositor. These bylaws provided that regular semiannual dividends of four percent should be declared on all deposits of $5 and over, and should be added to the principal; that no dividends should be paid on sums above $1,600; that no money could be withdrawn without the production of the passbook, and that, by a vote of the
trustees, they might dissolve the institution at any time and divide the whole property among the depositors in proportion to their respective interests therein.
The bank contended that the act requiring deposits to be paid over to the receiver general deprived persons of their property without due process of law, and also impaired the obligation of contracts. After hearing, the probate court directed the bank to pay over and transfer to the treasurer and receiver general of the commonwealth the amounts deposited by the persons named in the petition. On appeal, that order was affirmed by the Supreme Judicial Court of Massachusetts. 201 Mass. 23.