1. As applied to policies of insurance issued by foreign
corporations for delivery in New York on the lives of residents of
New York, where the insured persons continue to be residents of New
York and the beneficiaries are residents at the maturities of the
policies, Article VII of the Abandoned Property Law of New York,
requiring payment to the State of the monies held or owing by life
insurance corporations and remaining unclaimed for seven years by
the persons entitled thereto, does not impair the obligation of
contracts within the meaning of Art. I, § 10 of the Constitution.
Pp. 333 U. S.
2. Nor does it deprive foreign insurance companies of their
property without due process of law contrary to the Fourteenth
Amendment, since the relationship between New York and its
residents who abandon claims against foreign insurance companies
and the relationship between New York and foreign insurance
companies qualifying to do business in New York are sufficiently
close to give New York jurisdiction. Pp. 333 U. S.
3. The problem of what another state may do as to custody of
abandoned insurance monies of companies incorporated therein is not
presented in this case, and is not passed upon. P. 333 U. S.
4. Decision is reserved as to instances where insured persons,
after delivery of the policies, cease to be residents of New York
or where the beneficiaries are not residents of New York at the
maturities of the policies. P. 333 U. S.
5. A decision of the highest court of a state sustaining
generally the validity of a state abandoned property law and having
the effect of requiring appellants to comply with the state law is
reviewable in this Court on an appeal under § 237(a) of the
Judicial Code when precise questions arising under the Federal
Constitution are presented, even though the decision arises out of
a suit for a declaratory judgment presenting the questions
abstractly, and not out of a concrete case involving particular
funds and facts. Pp. 333 U. S.
29 N.Y. 1, 74 N.E.2d 24, affirmed.
Page 333 U. S. 542
In a suit for a declaratory judgment, the Supreme Court of New
York sustained (with certain exceptions) the validity of Article
VII of the Abandoned Property Law of New York, as applied to
foreign insurance companies. 187 Misc. 1004, 65 N.Y.S.2d 143. The
Appellate Division affirmed. 271 App.Div. 1002, 69 N.Y.S.2d 323.
The Court of Appeals affirmed with modification. 297 N.Y. 1, 47
N.E.2d 24. On appeal to this Court, affirmed
except as to
issues specifically reserved, p. 551.
MR. JUSTICE REED delivered the opinion of the Court.
We are asked in this suit to consider the validity of the New
York Abandoned Property Law as applied to policies of insurance
issued for delivery in New York on the lives of residents of New
York by companies incorporated in states other than New York.
Article VII of the Abandoned Property Law, headed "Unclaimed
Life Insurance Funds," was enacted in 1943. In 1944, the law was
amended so as to cover insurance companies incorporated out of
state. [Footnote 1
] Section 700
Page 333 U. S. 543
that "any moneys held or owing" by life insurance companies in
the following three classes of policies issued on the lives of
residents of New York shall be deemed abandoned property: (1)
matured endowment policies which have been unclaimed for seven
years; (2) policies payable on death where the insured, if living,
would have attained the limiting age under the mortality table on
which the reserves are based (an age varying from 96 to 100), as to
which no transaction has occurred for seven years, and (3) policies
payable on death in which the insured has died and no claim by the
person entitled thereto has been made for seven years. [Footnote 2
] Other sections
Page 333 U. S. 544
of Art. VII provide that insurance corporations doing business
in New York shall make an annual report of abandoned property
falling within the definitions of § 700, the lists shall be
advertised, and, if the abandoned property advertised remains
unclaimed, the amounts due and owing shall be paid to the state
comptroller so as to be in the care and custody of the state. Art.
VII, § 703, Art. XIV, § 1402; State Finance Law, § 95. Upon payment
to the state, the companies are discharged of any obligation, and
any person subsequently setting up a claim must file a claim with
the comptroller. A penalty of $100 a day is provided for failure to
file the required report. Art. XIV, § 1412.
The present suit was brought by nine insurance companies,
incorporated in states other than New York, in the Supreme Court of
New York for a declaration of the invalidity of the Abandoned
Property Law of New York, as applied to the plaintiffs, and to
enjoin the state comptroller and all other persons acting under
state authority from taking any steps under the statute. The
Supreme Court ruled that the Abandoned Property Law was void
insofar as it applied to policies of life insurance issued for
delivery outside of New York by foreign life insurance companies.
As no appeal from this ruling was taken by the state, it is not
before us. The Supreme Court reserved to the appellant insurance
companies the right to assert the invalidity of the Abandoned
Property Law or any application thereof insofar as such law or
state action thereunder sought to deprive them of any defense
against any claim under any life insurance policy.
Page 333 U. S. 545
With the above exceptions, the Supreme Court upheld the life
insurance sections of the Abandoned Property Law against
appellants' attack. The Appellate Division affirmed, and the Court
of Appeals reversed the judgment of the Supreme Court insofar as it
reserved to the companies further right to assert defense against
claims under the policies. The Court of Appeals, by its
interpretation of the New York statute, left open to the insurance
companies all defenses except the statute of limitations,
noncompliance with policy provisions calling for proof of death or
of other designated contingency, and failure to surrender a policy
on making a claim. 297 N.Y. 1, 74 N.E.2d 24. With this
modification, it affirmed the trial court's judgment. [Footnote 3
] Appeal to this Court was
perfected under § 237(a) of the Judicial Code, and probable
jurisdiction noted. 332 U.S. 788.
In addition to objections under New York law, appellants raised
in their complaint and have consistently maintained that the
statute impairs the obligation of contract within the meaning of
Art. I, § 10, of the Constitution, and deprives them of their
property without due process of law under the Fourteenth Amendment.
Their argument under the Contract Clause is that the statute
transforms into a liquidated obligation an obligation which was
previously only conditional. Their argument under the Due Process
Clause is that New York has no power to sequester funds of these
life insurance companies to meet the companies' obligations on
insurance policies issued on New York residents for delivery in New
I. In support of their first contention, appellants note that
the policy terms provide that the insurer shall be under no
obligation until proof of death or other contingency
Page 333 U. S. 546
is submitted and the policy surrendered. They contend that, in
dispensing with these conditions, the statute transforms an
obligation which is merely conditional into one that is liquidated.
They further claim that, unless proof of death or other contingency
is submitted, they will have difficulty in establishing other
complete or partial defenses, such as the fact that the insured
understated his age in his application for insurance, that the
insured died as a result of suicide, military service, or aviation,
and that the insured was not living and in good health when the
policy was delivered. We assume that appellants may find it more
difficult to establish other defenses, but we do not regard the
statute as unconstitutional because of these enforced variations
from the policy provisions.
Unless the state is allowed to take possession of sums in the
hands of the companies classified by § 700 as abandoned, the
insurance companies would retain moneys contracted to be paid on
condition and which normally they would have been required to pay.
We think that the classification of abandoned property established
by the statute describes property that may fairly be said to be
abandoned property and subject to the care and custody of the state
and ultimately to escheat. The fact that claimants against the
companies would under the policies be required to comply with
certain policy conditions does not affect our conclusion. The state
may more properly be custodian and beneficiary of abandoned
property than any person.
We think that the state has the same power to seize abandoned
life insurance moneys as abandoned bank deposits, Anderson
National Bank v. Luckett, 321 U. S. 233
Security Bank v. California, 263 U.
, and abandoned deposits in a court registry,
United States v. Klein, 303 U. S. 276
There are, of course, differences between the steps a depositor
must take to withdraw a
Page 333 U. S. 547
bank deposit and those that a beneficiary of a policy must take
to collect his insurance. Each, however, must make appropriate
representations according to the requirements of his contract with
bank or insurance company. When the state undertakes the protection
of abandoned claims, it would be beyond a reasonable requirement to
compel the state to comply with conditions that may be quite proper
as between the contracting parties. The state is acting as a
conservator, not as a party to a contract. Abandoned Property Law,
Art. XIV, § 1404; State Finance Law, § 95; Anderson National
Bank v. Luckett, supra,
at 321 U. S.
We see no constitutional reason why a state may not proceed
administratively, as here, to take over the care of abandoned
property, rather than adopt a plan through judicial process as in
Security Sav. Bank v. California, supra.
There is ample
provision for notice to beneficiaries and for administrative and
judicial hearing of their claims and payment of same. [Footnote 4
] There is no possible injury
to any beneficiary. The right of appropriation by the state of
abandoned property has existed for centuries in the common law.
See Anderson National Bank v. Luckett,
Page 333 U. S. 548
at 321 U. S. 240
and 321 U. S. 251
We find no reason for invalidating the statutory plan under the
II. Nor do we agree with appellants' argument that New York
lacks constitutional power to take over unclaimed moneys due to its
residents on policies, issued for delivery in the state, by life
insurance corporations chartered outside the state. The appellants
claim that only the state of incorporation could take these
abandoned moneys. They say that only one state may take custody of
a debt. [Footnote 5
statutory reference to "any moneys held or owing" does not refer to
any specific assets of an insurance company, but simply to the
obligation of the life insurance company to pay. The problem of
what another state than New York may do is not before us. That
question is not passed upon. To prevail, appellee need only show,
as he does as to policies on residents issued for delivery in New
York, that there may be abandoned moneys over which New York has
power in the hands of appellants. The question is whether the New
York has sufficient contacts with the transactions here in question
to justify the exertion of the power to seize abandoned moneys due
to its residents. Appellants urge that the following considerations
should be determinative in choosing the state of incorporation as
the state for conservation of abandoned indebtedness, if such
moneys are to be taken from the possession of the corporations. It
is pointed out that the present residence of missing policyholders
is unknown; that, with our shifting population, residence is a
changeable factor; that, as the insured chose a foreign corporation
as his insurer, his choice should be respected; that moneys should
escheat to the sovereignty that guards them at the time of
abandonment. As a practical matter, it is urged that restricting
escheat or conservancy to the state of
Page 333 U. S. 549
incorporation avoids conflicts of jurisdiction between states as
to the location of abandoned property and simplifies the
corporations' reports by limiting them to one state with one law.
Attention is called to presently enacted statutes in Pennsylvania,
] New Jersey,
] and Massachusetts.
] None of these
statutes applies to corporations chartered outside of the
respective states. Furthermore, it is argued that the analogous
bank deposit cases have upheld escheat or conservancy by the state
of the bank's incorporation. [Footnote 9
] Finally, reliance is placed on the undisputed
fact that the policies are payable at the out-of-state main offices
of the corporations, the evidences of their intangible assets are
there located, and there claims must be made and other transactions
These are reasons which have, no doubt, been weighed in
legislative consideration. We are here dealing with a matter of
constitutional power. Power to demand the care and custody of the
moneys due these beneficiaries is claimed by New York, under Art.
VII of the Abandoned Property Law as construed by its courts, only
where the policies were issued for delivery in New York upon the
lives of persons then resident in New York. We sustain the
constitutional validity of the provisions as thus interpreted with
these exceptions. We do not pass upon the validity in instances
where insured persons, after delivery, cease to be residents of New
York, or where the beneficiary is not a resident of New York at
maturity of the policy. As interests of other possible parties not
represented here may be affected by our conclusions, and
Page 333 U. S. 550
as no specific instances of those types appear in the record, we
reserve any conclusion as to New York's power in such situations.
The appellants sought a declaration pursuant to New York procedure
of the invalidity of Art. VII of the New York Abandoned Property
Law, directed at unclaimed life insurance funds. The Court of
Appeals refused to accept appellants' arguments for invalidation of
the law on federal constitutional or any other grounds. This
decision compelled the appellants to comply with Art. VII, except
as their defenses were saved by the opinion of the Court of
Appeals, unless this Court reviewed the federal constitutional
issues and decided them in appellants' favor. Consequently, a case
or controversy arising from a statute interpreted by the state
court is here with precise federal constitutional questions as to
policies issued for delivery in New York upon the lives of persons
then resident therein where the insured continues to be a resident
and the beneficiary is a resident at the maturity of the policy. A
judgment on that class of policies should be reviewed by this
Court. Nashville, C. & St.L. R. Co. v. Wallace,
288 U. S. 249
288 U. S. 259
Nashville, C. & St.L. R. Co. v. Walters, 294 U.
. See Alabama State Federation of Labor v.
McAdory, 325 U. S. 450
325 U. S.
-463. We pass only upon New York's power to take over
the care of abandoned moneys under those circumstances.
There have been, over the years, a close supervision and
regulation by states of the business of insuring the lives of their
citizens. There has been complete recognition of this relationship.
See Prudential Insurance Co. v. Benjamin, 328 U.
] New York has practiced such regulation. [Footnote 11
] Foreign corporations must
obtain state authority to do business, segregate securities, submit
Page 333 U. S. 551
examination and state process. The business activities connected
with the purchase of insurance by New York residents normally take
place in New York. It is the beneficiary of the policy, not the
insurer, who has abandoned the moneys. Undoubtedly the relationship
is very close. [Footnote 12
Certainly the relationship between New York and foreign insurance
companies as to policies here under discussion is as close as that
between the company and its state of incorporation. [Footnote 13
] The Court of Appeals on this
"For the core of the debtor obligations of the plaintiff
companies was created through acts done in this State under the
protection of its laws, and the ties thereby established between
the companies and the State were, without more, sufficient to
validate the jurisdiction here asserted by the Legislature."
We agree with this statement, and hold that New York had power
to take over these abandoned moneys in the hands of appellants.
The judgment of the Court of Appeals of New York is affirmed
except as to issues specifically reserved.
The first statute which included insurance policies as abandoned
property was enacted in 1939, ch. 923 of the Laws of 1939. That
statute applied only to companies incorporated in New York, but
covered all policies issued by such companies. Chapter 602 of the
Laws of 1940 amended the statute so as to apply only to policies
issued on the lives of residents of New York. Chapter 697 of the
Laws of 1943 reenacted the principal features of the earlier
statutes as Art. VII, and cc. 497 and 498 (§ 2) of the Laws of 1944
made the statute applicable to foreign insurance companies. Chapter
452 of the Laws of 1946 amended Art. VII so as to provide that a
life insurance company which had paid the proceeds of a policy to
the state could subsequently pay a second time to a claimant and
acquire the rights of the claimant against the comptroller.
"§ 700. Unclaimed life insurance corporation moneys."
"1. The following unclaimed property held or owing by life
insurance corporations shall be deemed abandoned property:"
"(a) Any moneys held or owing by any life insurance corporation
which shall have remained unclaimed for seven years by the person
or persons appearing to be entitled thereto under matured life
insurance policies on the endowment plan issued on the lives of
residents of this state."
"(b) Any moneys held or owing by any life insurance corporation
which are payable under other kinds of life insurance policies
issued on the lives of residents of this state where the insured,
if living, would, prior to the thirty-first day of December next
preceding the report required by section seven hundred one, have
attained the limiting age under the mortality table on which the
reserves are based, exclusive of"
" (i) any policy which has within seven years been assigned,
readjusted, kept in force by payment of premium, reinstated or
subjected to loan, or"
" (ii) any policy with respect to which such corporation has on
file written evidence received within seven years that the person
or persons apparently entitled to claim thereunder have knowledge
"(c) Any moneys held or owing by any life insurance corporation
due to beneficiaries under policies issued on the lives of
residents of this state who have died, which moneys shall have
remained unclaimed by the person or persons entitled thereto for
"2. Any such abandoned property held or owing by a life
insurance corporation to which the right to receive the same is
established to the satisfaction of such corporation shall cease to
be deemed abandoned."
187 Misc. 1004, 65 N.Y.S.2d 143; 271 App.Div. 1002, 69 N.Y.S.2d
323; 297 N.Y. 1, 74 N.E.2d 24.
Abandoned Property Law, Art. XIV, § 1404:
"1. The care and custody, subject only to the duty of conversion
prescribed in section fourteen hundred two of this chapter, of all
abandoned property heretofore paid to the state, except"
"(i) abandoned property in individual amounts of less than one
dollar so paid pursuant to chapter one hundred seven of the laws of
nineteen hundred forty-two, and of all abandoned property paid to
the state comptroller pursuant to this chapter, is hereby assumed
for the benefit of those entitled to receive the same, and the
state shall hold itself responsible for the payment of all claims
established thereto pursuant to law, less any lawful deductions,
which cannot be paid from the abandoned property fund."
"* * * *"
§§ 702, 1402, 1406(1)(a) and (b), and
Anderson National Bank v. Luckett, supra
at 321 U. S.
Compare State Tax Commission v. Aldrich, 316 U.
; Northwest Airlines v. Minnesota,
322 U. S. 292
322 U. S. 293
Purdon's Penna.Stat., Title 27, §§ 434-437.
N.J.Rev.Stat. § 17:34-49-34-58 (Cum.Supp., Laws of
Ch. 455, Mass. Acts and Resolves (1946).
See Anderson National Bank v. Luckett, supra; Security Sav.
Bank v. California, supra; In re Rapoport's Estate,
291, 26 N.W.2d 777.
An old provision makes New York law applicable to policies
issued for delivery in New York. Insurance Law § 143(2).
New York Insurance Law, §§ 42, 59, 103, 143, 208(5), 216(6).
See Greenough v. Tax Assessors, 331 U.
; Curry v. McCanless, 307 U.
. Compare International Shoe Co. v.
Washington, 326 U. S. 310
326 U. S.
"It is evident that these operations establish sufficient
contacts or ties with the state of the forum to make it reasonable
and just, according to our traditional conception of fair play and
substantial justice, to permit the state to enforce the obligations
which appellant has incurred there."
See New England Mutual Life Insurance Co. v. Woodworth,
111 U. S. 138
Ex parte Schollenberger, 96 U. S. 369
96 U. S. 377
Morgan v. Mutual Benefit Life Insurance Co.,
189 N.Y. 447,
82 N.E. 438.
MR. JUSTICE FRANKFURTER, dissenting.
My brother JACKSON's opinion, with which I substantially agree,
persuades me that we should decline to exercise jurisdiction in
this case. The wise practice governing
Page 333 U. S. 552
constitutional adjudication requires it. For this proceeding
poses merely hypothetical questions, all of which are intertwined
and concern interests not represented before us. Circumstances not
more compelling, surely, than this record discloses led us in a
series of recent cases to avoid borrowing trouble by declining to
adjudicate premature constitutional issues. Alabama State
Federation of Labor v. McAdory, 325 U.
; United Public Workers of America v.
Mitchell, 330 U. S. 75
Rescue Army v. Municipal Court, 331 U.
In appearance, this is a suit between a few insurance companies
and the New York. But at the heart of the controversy are the
conflicting claims of several States in a hotchpot of
undifferentiated obligations. The proceeds of "abandoned" life
insurance policies cannot, I assume, be seized as for escheat more
than once. Since the rights and liabilities growing out of such
policies are, to a vast extent, the result of a process that
concerns two or more States, their interests may come into conflict
when, in exigent search for revenue, they invoke the opportunities
of escheat against unclaimed proceeds from insurance policies. I
assume merely conflicting State interests and lay aside
considerations that may be drawn from the decision in United
States v. South-Eastern Underwriters Association, 322 U.
In the vigilant search for new sources of revenue, several
States have already sought to tap for their own exchequers the
matured obligations of unclaimed policies. It would be impractical
not to assume that other States will do likewise. Only New York's
claim is before us. It is vital to define the precise nature of
this claim. New York does not lay claim to a particular fund
constituting the proceeds of abandoned matured obligations. This
litigation, it is conceded, seeks to test abstractly the
constitutionality of the New York statute providing for turning
over to her the avails of abandoned matured
Page 333 U. S. 553
insurance policies. New York asks that her right to the hotchpot
of undifferentiated obligations be acknowledged. Of course, New
York may enable its courts to pass on the validity of a
comprehensive statute unrelated to the enforcement of specific
claims to specific funds that came into existence under
circumstances differing in their constitutional significance. It
does not follow, however, that what the New York Court of Appeals
has adjudicated, we must review.
The New York Court of Appeals sustained the power of New York to
claim escheat on abandoned insurance maturities from foreign
insurance companies doing business in New York on the basis of the
insured's residence in New York at the time of the delivery of the
policy in New York. According to this view, as MR. JUSTICE JACKSON
points out, change of residence of the insured or of the
beneficiary long before maturity of the policy, or nonresidence in
New York of a beneficiary, other than the insured at any time,
become utterly immaterial. These are only some of the familiar
situations that are encompassed by the Court of Appeals validation
of the New York statute.
This Court does not purport to affirm all that is included in
the New York judgment. It is fair, however, to say that the Court's
opinion does not enumerate what possible situations included in the
judgment below it has not passed upon. It is explicit in putting to
one side the validity of the New York statute in
"instances where insured persons, after delivery, cease to be
residents of New York or where the beneficiary is not a resident of
New York at maturity of the policy. As interests of other possible
parties not represented here may be affected by our conclusions and
as no specific instances of those types appear in the record, we
reserve any conclusion as to New York's power in such a
But "no specific instances" of any type appear
Page 333 U. S. 554
in the record. Indeed, it may be said that the only instances of
types of transactions as to which escheat is claimed that are in
the record are the types on which the opinion of the Court declines
to pass. The complaint specifically refers to the frequency with
which policies are issued upon the lives of New York residents for
non-New York beneficiaries, as well as the extent with which
holders of policies change their residence. On the state of the
pleadings, these allegations must be accepted as true. To be sure,
New York lays claim to all funds reflecting these situations, and
its highest court has sustained this generalized claim. But, as
already indicated, this is not a suit for any specific fund. For
all we know, there are no funds in New York to which that State
could lay claim even within the circumscribed affirmance by this
Court of the New York judgment.
Whatever the scope of the Court's decision, it is a hypothetical
decision. New York has been sustained below in an abstract
assertion of authority against funds not claimed nor defined,
except compendiously defined as the right to go against insurance
companies doing business in New York for the proceeds of policies
delivered in New York upon the lives of insured then resident in
New York. This generalized decision, the Court rejects. Instead, it
carves out different and limited claims for which New York may go
without any indication that there is anything on which such claims
could feed. In any event, such a mutilated affirmance of the
decision of the New York Court of Appeals, with everything else
left open, is bound to hatch a brood of future litigation. Claims
of the States of domicile of the insuring companies, claims of the
States of residence of the insured at the time of maturity, claims
of the States of residence of beneficiaries other than the insured
at the time of maturity, are all put to one side here as not
presented by the record, though they are as much presented as what
is decided. To
Page 333 U. S. 555
revenue-eager States, these are practical situations full of
potentialities. This Court is all too familiar with the special
position of control claimed by a chartering State and the special
powers the domiciliary a deceased asserts over his
How the conflicting interests of the States should be adjusted
calls for proper presentation by the various States of their
different claims. Words may seek to restrict a decision purporting
to pass on a small fragment of what is in truth an organic
complexity to that isolated part. But such an effort to
circumscribe what has been decided is self-defeating. A decision
has a momentum of its own, and it is nothing new that legal
doctrines have the faculty of self-generating extension. We ought
not to decide any of these interrelated issues until they are duly
pressed here by the affected States, so that a mature judgment upon
this interrelation may be reached. All the considerations of
preventive adjudication -- the avoidance of a truncated decision of
indeterminate scope, with the inevitable duty of reconsidering it
or unconsciously being influenced by implicit overtones of such a
decision -- require that decision await the ripening process of a
defined contest over particular funds as to which different States
make concrete claims.
The way is open to secure a determination by this Court of the
rights of the different States in the variant situations presented
by abandoned obligations on matured insurance policies. It is
precisely for the settlement of such controversies among the
several States that the Constitution conferred original
jurisdiction upon this Court. If Florida, Massachusetts, New York,
and Texas could bring here for determination their right to levy a
death tax in respect to a particular succession, Texas v.
Florida, 306 U. S. 398
even more fitting is it that the claims of various States to seize
the matured obligations of abandoned insurance policies should be
Page 333 U. S. 556
those States at the bar of this Court and be adjudicated here
after full reflection on all these claims. Of course, the insurance
companies have interests to protect and to present. But the
essential problem is the legal adjustment of the conflicting
interests of different States, because each may have some relation
to transactions which give rise to funds that undoubtedly are
subject to escheat. Until that is duly before us, we should not
peck at the problem in an abstract, hypothetical way.
The appeal should be dismissed.
MR. JUSTICE JACKSON, with whom MR. JUSTICE DOUGLAS joins,
I find myself unable to join the Court in this case. I cannot
agree that we may affirm the judgment below without facing, or by
reserving our opinion upon, the constitutional question inherent in
this statute by which New York would escheat unclaimed insurance
proceeds not located either actually or constructively in New York
and which are the property of a beneficiary who may never have been
a resident or citizen of New York.
This action is one for a declaratory judgment as to the validity
of the Act, and we are therefore passing on the Act as an entirety,
and in the abstract. The cases of nonresident beneficiaries are
before us as much as any other concrete case. The Act purports to
escheat in every case in which the policy was issued for delivery
in New York and the insured was then a resident of that state. The
unchallenged complaint alleges the Comptroller's instructions to be
that removal of the insured from the state after issuance of the
policy does not take a case out of the Act. The statute, as written
and as affirmed, obviously intends to reach nonresident claimants
and insured persons, for it provides for binding them by
publication (§ 702(2)), and by publication within New York, at
that. Moreover, and most importantly, in reaching
Page 333 U. S. 557
the judgments which we affirm, the opinion of the Special Term
of Supreme Court, while holding some features of the Act invalid,
expressly considered and upheld these provisions of the Act, and
the Court of Appeals indicated no disagreement. Our affirmance
necessarily sustains the whole judgment below, and that sustains
the Act in these particulars. It is perhaps unfortunate to
adjudicate constitutionality in such a manner. If we had before us
a concrete case, contested by adversary state claimants to the
right of escheat and based on a record that would show some facts
as to residence of parties to the transactions, we would know
better what we are talking about. But since, in a declaratory
judgment action, we can have only hypothetical cases before us, I
cannot ignore one which certainly occurs frequently, and one
embraced within both the Act and the decision below.
Neither the Act nor the decision below contemplates that the
right to escheat is based on residence of the owner of the proceeds
at the time of escheat, or at any other time, but, rather, on these
two facts: (1) that the policy was issued for delivery in New York,
and (2) that the insured was then a resident of New York. Thus, the
State claims power to escheat what is due a beneficiary solely
because it was the residence of the insured when the policy was
issued and irrespective of the nonresidence at that time and at all
times of the beneficiary whose property it takes. Thus, the escheat
of one man's property is based on another man's one-time residence
in the state. Further, the seizure of today is based not even on
the assured's residence at the time the policy matured, but on his
residence at some prior date, which, in view of the long-term
nature of insurance contracts, may have been many years ago.
The effect of the Court's affirmance of the judgment upholding
this statute is that a residence by the insured in New York at the
time a policy was "issued for delivery"
Page 333 U. S. 558
there shows "sufficient contacts with the transaction," so that
the State may escheat proceeds owned by a beneficiary who may never
have lived in that State. Even in the abstract, I find the concept
of "sufficient contacts with the transaction" too vague to be
helpful in defining practical bounds of a state's jurisdiction or
power to escheat. We are given no enlightenment as to why any one
or more events is regarded as "sufficient," nor as to what
jurisprudential context is to be give to the term "contact," which
seems taken over from some vernacular other than that of the law. I
cannot even tell here what the Court thinks the controlling
"transaction" is. If it is issuance of the policy that is the
"contacted" transaction, it would seem that the State where it was
issued, where premiums were paid, or where it was actually
delivered would be more controlling than the place where it was
"issued for delivery." If it is the maturing of the claim, I see
less "contact" from a sometime and remote residence than from a
later one, or one at the time of events which matured the
The weakness of the Court's test of sufficient contacts with the
"transaction" is more fully revealed when we consider that, by its
application today, other states are cut off from escheating the
proceeds (unless the company is subject to multiple escheats),
although, by the same tests, they have many more and much closer
"contacts" with some part of the transaction. If we say New York
may step into the beneficiary's shoes and collect his unclaimed
insurance proceeds solely because the insured lived in New York
when the policy issued for delivery there, how can we deny the
claim of another state to escheat the same fund when its claim is
asserted under any one or more of the following circumstances: (1)
It is the state in which the insured has died or where some other
contingency occurred which brought the claim to maturity. (2) It
Page 333 U. S. 559
the state in which the beneficiary always has resided and was
last known to reside. (3) It is the state of a proved later and
longer residence of the insured. (4) It is the state to which both
the insured and the beneficiary removed and resided after the
policy was taken out in New York. (5) It is the state of actual
permanent domicile, as opposed to mere residence in New York, of
the insured and the beneficiary. (6) It is the state of actual
delivery of the policy, though it was "issued for delivery" in New
York. (7) It is the state where the claim is payable, and where
funds for its discharge are and at all times have been located.
Certainly the foregoing are "contacts," as I would understand the
term, and some of them or some combination of them seem more
persuasive of a right to escheat than the grounds on which we are
affirming New York's right to do so.
I am not unmindful of the Court's pronouncement that it does not
decide what a state other than New York may do, and that it excepts
from its approval
"instances where insured persons, after delivery, cease to be
residents of New York, or where the beneficiary is not a resident
of New York at maturity of the policy."
As to those cases, the Court says it reserves any conclusion.
But how can it reserve a conclusion as to whether "contacts" here
determined to be sufficient in the case of New York will be
sufficient in the case of another state? The issue of "sufficiency
of contacts" is settled by this decision. The premises that are
being applied today lead inescapably to the conclusion that other
states have equally good grounds (i.e.,
contacts") to escheat the same claims. Are we going to repudiate
our reasoning in this case the first time another state invokes it
in conflict with New York, or will we hold the reasoning impeccable
and, hence, the company subject to a double or multiple liability
to escheat? The effort to remain
Page 333 U. S. 560
uncommitted to any conclusion is self-delusive when it is
accompanied, as it is here, by a commitment as to all of the
factors which shape the conclusion "reserved."
It seems to me that the constitutional doctrine we are applying
here, if we are consistent in its application, leaves us in this
dilemma: in sustaining the broad claims of New York, we either cut
off similar and perhaps better rights of escheat by other states or
we render insurance companies liable to two or more payments of
their single liability. If we impale ourselves, and the state and
insurance companies along with us, on either horn of this dilemma,
I think the fault is in ourselves, not in our Constitution.
For the juridical basis on which escheat has from time to time
rested, we need go no farther than the law of New York itself, as
expounded by Judge Cardozo. Escheat survives only as an "incident
of sovereignty," whether the subject of escheat is personal or real
estate. Matter of People (Melrose Ave.).
234 N.Y. 48, 136
N.E. 235, 237. But sovereignty, by itself, means nothing;
sovereignty exists in respect of something or over someone. The two
usual examples of escheat properly incidents of sovereignty
First, sovereignty in the sense of actual dominion over the
property escheated. The State, on this basis, may, of course, take
unto itself lands which fail of private owners through want of
heirs, and tangible personal property lost or abandoned in the
state. The right to appropriate intangible property constructively
within the state also has been upheld by this Court on grounds
"the deposits are debtor obligations of the bank, incurred and
to be performed in the state where the bank is located, and hence
are subject to the state's dominion."
Anderson National Bank v. Luckett, 321 U.
; Security Sav. Bank v. California,
263 U. S. 282
See also United States v. Klein, 303 U.
. But New York can show neither actual nor
Page 333 U. S. 561
constructive dominion over the property sought now to be
escheated. The proceeds to be escheated are held by
out-of-the-state insurance companies, and by no stretch of
imagination are they within New York's dominion. And certainly
residence of the insured at the time the policy issued cannot
generate constructive possession of either the beneficiary's claim
or the actual proceeds at maturity or at the time of
Second, sovereignty over the person, as a resident or citizen,
will justify the state in stepping into his shoes as claimant of
abandoned property. Our federal form of government presupposes a
dual allegiance. In addition to a general allegiance to the United
States, each person has a particular allegiance to the state of
which he is a resident, and hence, under the Fourteenth Amendment,
is a citizen. This status, while it lasts, subjects him and what is
his to state power. But New York, under this statute, does not rely
on this relationship to sustain this escheat. It would step into
the shoes of beneficiaries last known to be citizens of other
states, and even if they were so unfortunate as never to have been
in New York State. The State bases its right to seize such a
nonresident's assets solely on the fact that the insured was there
when the policy issued. But even if the allegiance of the insured
would in some circumstances justify escheat of the beneficiaries'
payments, how can it do so after the allegiance has long since
ceased? The right of a citizen to migrate from one state of the
Union to another, cf. Edwards v. California, 314 U.
, carries with it, of necessity, the right of
expatriation, a right for which this Nation has always contended. A
state cannot fasten its power and will upon a resident so that it
adheres to him for life. I have never before heard it denied that
one, if he makes his intent sufficiently clear, may by migration
bring to an end his allegiance to a state, and, with it, the
state's sovereignty over him. But New York's plan requires
Page 333 U. S. 562
us to say not only that sovereignty over an insured reaches the
property of a third-party beneficiary, but that such a consequence
follows both parties for life, although the insured may have
deliberately acquired a new allegiance and become a citizen of
another state, and the beneficiary may never have been in New
Consideration of these conventional and established grounds of
escheat shows not only that they fail to support the New York
statute in this class of cases, but also that they establish a
superior right of escheat in other states as an incident of their
sovereignty. Of course, the two grounds I have mentioned may bring
two states into conflict. Indeed, such a conflict now exists.
Pennsylvania, apparently relying on the theory of the bank deposit
cases, undertakes to escheat all unclaimed funds in the hands of
companies it has chartered, even though the insured may have been a
resident of New York when the policy issued, so that New York would
claim the same fund. Can we now say New York may take, without
saying Pennsylvania must give? Do we say the company must pay
twice? This makes pertinent the question whether we should not
decline to decide such issues as are here involved when they are
presented only in the abstract by a declaratory judgment action.
See Alabama State Federation of Labor v. McAdory,
325 U. S. 450
325 U. S.
But if we are to entertain the case, I think we should decide it
not by extemporized generalities like "sufficient contacts with the
transaction," but by recognized standards having definite
connotations in the law. New York is not the only state with an
interest in these questions. New York is merely the sole state
whose argument we have heard. The mobility of our population and
the complexity of our life create many confusions in which the
states may properly look to us for some standard by which they may
know what and whom to claim for their
Page 333 U. S. 563
own. It seems to me that we should not unnecessarily confound
what, at best, is confusion by removing the landmarks of state
jurisdiction erected by years of trial and error. Cf.
dissenting or concurring opinion in Duckworth v. Arkansas,
314 U. S. 390
State Tax Commission v. Aldrich, 316 U.
; Williams v. North Carolina,
317 U. S. 287
General Trading Company v. State Tax Commission,
322 U. S. 335
International Harvester Co. v. Wisconsin, 322 U.
; Northwest Air Lines v. Minnesota,
322 U. S. 292
Greenough v. Tax Assessors, 331 U.
; Bob-Lo Excursion Co. v. Michigan,
333 U. S. 28
others probably yet to come.
While we may evade it for a time, the competition and conflict
between states for "escheats" will force us to some lawyerlike
definition or state power over this subject. It is naive beyond
even requirements of the judicial office to assume that this lately
manifest concern of the states over abandoned insurance proceeds
reflects only solicitude for the unknown claimants. If it did, the
states' claims might reconcile more easily. But escheat of these
interests is a newly exploited, if not newly discovered, source of
state revenue. Escheat, of course, is not to be denied on
constitutional grounds merely because the motive of the states
savors more of the publican than of the guardian. But it is
relevant to the caution and precision we should use in sustaining
one state's claim, least we be foreclosing other better founded
This competition and conflict between states already require us,
in all fairness to them, to define the basis on which a state may
escheat. The first Act of this kind was by Pennsylvania in 1937.
Act of June 25, 1937, Pamphlet Laws 2063, Purdon's Pa.Stat., Title
27, § 434. It is also alleged, and not denied, that two other
states have enacted similar laws which are now in force. The
Pennsylvania statute "escheats," as the Court says, only proceeds
of policies issued by companies incorporated in
Page 333 U. S. 564
Pennsylvania. But it escheats all of those, regardless of
residence of the insured or of where the policy was delivered. Its
conflict with the law before us is patent and immediate. We cannot
sustain New York's statute without, to the extent here indicated,
striking down that of Pennsylvania, which is not a party here and
whose claims have not been heard. The original New York statute,
ch. 923, Laws of 1939, was similar to the Pennsylvania Act. It was
attacked as unconstitutional, New York Life Ins. Co. v.
77 N.Y.S.2d 612, but was amended to apply only to
policies issued by New York companies on the lives of residents of
New York. Ch. 602, Laws of 1940. In 1943, these Acts were removed
from the Insurance Law, reenacted as part of the Abandoned Property
Law. Ch. 697, Laws of 1943. In 1944, these present statutes were
enacted, extending to foreign insurance companies and on the basis
here in question. Chs. 497, 498, Laws of 1944. Thus, it represents
a deliberate state plan of escheat based only on issuance, for
delivery in New York, of a policy insuring the life of a then New
York resident, and irrespective of location of the insurer or
residence of the beneficiary.
For the reasons outlined herein, I should express disapproval of
the declaratory judgment below, decline to certify the validity of
this legislation at this time, and deal with this problem only as
presented by concrete cases or controversies involving particular
funds and facts. But, if we are to render a decision in the
abstract, I should say that New York, by this statute, overreaches
its sister states by the tests I have set forth.