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.
the judgment is sustained. Pp. 341 U. S.
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.
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.
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.
(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
here involved -- i.e.,
the "debts or demands
due to the escheated estate." Pp. 341 U. S.
(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.
Page 341 U. S. 429
(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.
(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
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.
5 N.J. 281, 74
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
. On appeal to this Court, affirmed,
341 U. S.
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
Page 341 U. S. 430
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
Page 341 U. S. 431
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
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, � 1 of the Constitution of the United
States; (3) the New Jersey courts were without jurisdiction to
enter the judgment, since neither the shares of stock nor the
Page 341 U. S. 432
had a situs in New Jersey for the purpose of escheat, nor were
either lawfully seized in the escheat proceedings. [Footnote 2
-- Appellant contends that the judgment of
escheat deprives the various claimants against Standard Oil of
their property without adequate notice, and since the claimants may
therefore sue appellant later and recover on these claims, this
statute and judgment deprive appellant of its property without due
process of law. [Footnote
Page 341 U. S. 433
The statute, N.J.Rev.Stat. 2:53-21, provides:
"A notice containing a summary of the order designating the time
and place of hearing, as approved by the court shall be published
in a manner directed by the court and shall also be published once
a week for three successive weeks in a newspaper of general
circulation designated by the court. . . ."
The Supreme Court of New Jersey authoritatively construed this
to require "that the notice shall identify the property of which
escheat is sought and the last known owner." 5 N.J. at 307, 74 A.2d
at 577. [Footnote 4
published notice in this case corresponded with this construction.
It described the property in accordance with the state court's
understanding of the requirements of N.J.Rev.Stat. 2:53-21, and
clearly indicated that the petition was one for escheat.
This case differs from Wuchter v. Pizutti, 276 U. S.
, relied on by appellant, since it is not here
attempted to validate a defective statutory provision for notice by
recourse to the sufficiency of the notice which, although not
required by statute, was in fact, given. Here, it is the statute
itself, as interpreted by the state court, which requires what we
think is adequate notice.
In Security Savings Bank v. California, 263 U.
, a case involving statutory escheat of the bank
deposits presumed abandoned, where nothing to the contrary is known
by bank officials, because unused and unclaimed
Page 341 U. S. 434
for twenty years, it was similarly contended the bank was denied
due process because depositors would not be bound by the judgment
of escheat. 263 U.S. at 263 U. S. 286
This Court said
"[T]he essentials of jurisdiction over the deposits are that
there be seizure of the res at the commencement of the suit, and
reasonable notice and opportunity to be heard."
263 U.S. at 263 U. S. 287
The procedural provision made the depositors affected parties and
required publication in Sacramento County, only, of the summons
with no requirement of the depositors' addresses. Delivery of a
copy of the summons on the bank was commanded. It was held, 263
U.S. at 263 U. S. 287
that the personal service on the bank effected seizure of the
deposit and the publication of the summons was effective as similar
publication would be in litigation involving unknown persons with
possible claims to property. Cf. Anderson National Bank v.
Luckett, 321 U. S. 233
321 U. S.
In Mullane v. Central Hanover Trust Co., 339 U.
, in a proceeding to settle trusts with numerous
parties as possible beneficiaries whose names and interests were
unknown to the trustee, we commented on the subject of notice:
"This Court has not hesitated to approve of resort to
publication as a customary substitute in another class of cases
where it is not reasonably possible or practicable to give more
339 U.S. at 339 U. S. 317
We held that:
"Accordingly, we overrule appellant's constitutional objections
to published notice insofar as they are urged on behalf of any
beneficiaries whose interests or addresses are unknown to the
339 U.S. at 339 U. S.
The sound reasons stated in the foregoing cases for deeming the
notices there given adequate to bind interested persons in the
respective proceedings lead us to the conclusion that the notice by
publication in this case was
Page 341 U. S. 435
adequate. If the state has the responsibility of looking after
abandoned property subject to its sovereign power, these
publications are adequate to affect the owner's rights.
Impairment of Contract.
-- Appellant attacks the
validity of the New Jersey escheat statute on the ground that it
impairs the contract rights of the owners of the dividends and
stock certificates in violation of Art. I, § 10, cl. 1, of the
Constitution: "No State shall . . . pass any . . .Law impairing the
Obligation of Contracts. . . ." This New Jersey law was enacted to
authorize the state to take possession of "personal property"
whenever the owner entitled to that "personal property within [New
Jersey] . . . shall be and remain unknown" or his "whereabouts"
remain unknown or the property remains "unclaimed" for fourteen
successive years. N.J.Rev.Stat. 2:53-15 and 17. We need not
consider whether a state possesses inherent power for such
legislation as to personalty as the successor to a prerogative of
royal sovereignty. [Footnote
As a broad principle of jurisprudence, rather than as a result
of the evolution of legal rules, it is clear that a
Page 341 U. S. 436
state, subject to constitutional limitations, may use its
legislative power to dispose of property within its reach,
belonging to unknown persons. [Footnote 6
] Such property thus escapes seizure by would-be
possessors, and is used for the general good, rather than for the
chance enrichment of particular individuals or organizations.
Normally the obligor or holder and the obligee or owner of
abandoned property would, as here, have no contractual arrangement
between themselves for its disposition in case of the owner's
failure to make claim. As the disposition of abandoned property is
a function of the state, no implied contract arises between obligor
and obligee to determine the disposition of such property.
Consequently, there is no impairment of contract by New Jersey's
statute, enacted subsequent to the creation of the obligations here
under examination, but only the exercise of a regulatory power over
abandoned property. [Footnote
Page 341 U. S. 437
Situs of Property.
-- Appellant argues that the escheat
to New Jersey of the stock and the dividends denies it due process
because such property has no situs in New Jersey for the purpose of
escheat. [Footnote 8
also contends that it has neither custody nor possession of these
debts or demands due from it to its stockholders, and therefore
they cannot be seized. Since the property cannot be seized or
escheated, the corporation would remain liable to its stockholders,
and to require the payment to the state denies due process.
Appellant has no tangible property in New Jersey except its
stock and transfer books, kept at its registered office, located in
the office of an individual at Flemington, New Jersey. Appellant
points out that, in the Security Savings Bank
U.S. at 263 U. S. 285
and the Anderson National Bank
case, 321 U.S. at
321 U. S. 241
the contracts of deposit were made in the respective states by
banks doing business therein. A like situation does not exist here,
as the stock was issued and the dividends were held in other
states. Further, it is said that the bank deposit cases did not
deal with escheat statutes, but rather, like the Moore
case, with conservation statutes.
It was not solely the fact that the contracts for bank deposits
were made in California and Kentucky that gave those states power
over the abandoned deposits. Had the contract been one of bailment
between two individual citizens of those states who had
subsequently removed in another state, the courts of the state of
Page 341 U. S. 438
contract would not have controlled, though its laws might have.
The controlling fact was that the banks and the depositors could be
served with process, either personally or by publication, to
determine rights in this chose in action. [Footnote 9
Appellant is a corporation of New Jersey, amenable to process
through its designated agent at its registered office.
N.J.Rev.Stat. 14:4-1, 14:4-2. Cf. State v. Garford Trucking,
4 N.J. 346, 72 A.2d
. This gave New Jersey power to seize the res
involved, to-wit, the "debts or demands due to the escheated
estate." And the fact that this is immediate escheat is not
significant. Escheat is permitted against persons whose addresses
or existence is unknown. [Footnote 10
] The taking-over in the bank deposit cases
foreshadowed escheat. See
U.S. at 221 U. S. 664
Page 341 U. S. 439
Security Savings Bank
case, 263 U.S. at 263 U. S. 283
and 263 U. S. 290
the Anderson National Bank
case, 321 U.S. at 321 U. S.
No matter where the 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 in just
the same way that service on a bank is seizure of the deposit as
shown in the Notice subdivision of this opinion, supra,
341 U. S. 432
That power to seize the debt by jurisdiction over the debtor
provides not only the basis for notice to the absent owner, but
also for taking over the debt from the debtor. Security Savings
Bank v. California, supra,
at 263 U. S. 287
It is true that fiction plays a part in the jurisprudential concept
of control over intangibles. There is no fiction, however, in the
fact that choses in action, stock certificates, and dividends held
by the corporation are property. Whether such property has its
situs with the obligor or the obligee or for some purposes with
both has given rise to diverse views in this Court. [Footnote 11
We see no reason to doubt that, where the debtor and creditor
are within the jurisdiction of a court, that court has
constitutional power to deal with the debt. Since choses in action
have no spatial or tangible existence, control over them can "only
arise from control or power over the persons whose relationships
are the source of the rights and obligations." Estin v.
Estin, 334 U. S. 541
334 U. S. 548
] Situs of an
intangible is fictional, but control over
Page 341 U. S. 440
parties whose judicially coerced action can make effective
rights created by the chose in action enables the court with such
control to dispose of the rights of the parties to the intangible.
] Since such
power exists through the state's jurisdiction of the parties whose
dealings have created the chose in action, we need not rely on the
concept that the asset represented by the certificate or dividend
is where the obligor is found. [Footnote 14
] The rights of the owners of the stock and
dividends come within the reach of the court by the notice,
service by publication; the rights of the appellant
by personal service. That power enables the escheating state to
compel the issue of the certificates or payment of the dividends.
Compare Great Northern
Page 341 U. S. 441
Co. v. Sutherland, 273 U. S. 182
273 U. S. 193
] This gives New
Jersey jurisdiction to act. That action, of course, must be in
accord with the boundaries on legislation set by the
Unclaimed property at the disposal of the state may include
deposits in banks doing business in the particular state, though
incorporated by the Federal Government. 12 U.S.C. § 21 et
seq Anderson Nat. Bank v. Luckett, 321 U.
. Such a deposit "is a part of the mass of
property within the state whose transfer and devolution is subject
to [the same] state control," 321 U.S. at 321 U. S. 248
as would be "tangible property." Security Savings Bank v.
263 U. S. 285
. Moneys owed by foreign insurance
companies, doing business in a state, on life policies issued on
the lives of residents of that state and remaining unclaimed for an
adequate period, are subject to the state's disposition.
Connecticut Mut. Life Ins. Co. v. Moore, 333 U.
Page 341 U. S. 442
We think that stock certificates and undelivered dividends
thereon may also 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 the declaration of abandonment. [Footnote 16
] That rule is applicable
Full Faith and Credit.
-- Finally, we shall deal with
appellant's objection that this statutory escheat takes its
property without due process because it does not protect it from
claims by the owners. The argument is that the protection afforded
by the New Jersey escheat statute is inadequate in that
N.J.Rev.Stat. 2:53-23.1 [Footnote 17
] is no protection beyond the state against
owners of the escheated shares or against escheat or conservation
actions by other states against Standard Oil of New Jersey for the
same debts or demands due from Standard to its stockholders.
] The judgment,
as modified, calls for the reissue of the abandoned certificates to
New Jersey and for the payment to that state of the unpaid
Page 341 U. S. 443
We have indicated above that we consider the notice to the
stockholders adequate to support a valid judgment against their
rights, as well as those of the Company. The res
debt, and the same rule applies as with tangible property.
] The debts or
demands represented by the stock and dividends having been taken
from the appellant company by a valid judgment of New Jersey, the
same debts or demands against appellant cannot be taken by another
state. The Full Faith and Credit Clause bars any such double
escheat. Cf. Baltimore & Ohio R. Co. v. Hostetter,
240 U. S. 620
240 U. S. 624
and cases cited, particularly Harris v. Balk, 198 U.
, 198 U. S.
Dissents suggest that states may enact only custodial statutes
until this Court settles any controversy that may arise between
states over rights to abandoned choses in action. The details of
the method of bringing other states and foreign countries before
this Court for selection of the appropriate sovereignty to receive
the abandoned property are not elaborated upon. The claim of no
other state to this property is before us, and, of course,
determination of any right of a claimant state against New Jersey
for the property escheated by New Jersey must await presentation
The judgment of the Supreme Court of New Jersey is
The Escheat Act defines the term "personal property" to
"moneys, negotiable instruments, choses in action, interest,
debts or demands due to the escheated estate, stocks, bonds,
deposits, machinery, farm crops, livestock, fixtures, and every
other kind of tangible or intangible property and the accretions
In addition to the shares of common stock and the dividends, the
personal property in possession of appellant, which the Chancery
Division of the Superior Court held to be escheated, included
unpaid wages of former employees, money withheld from wages of
former employees for purchase of Liberty Bonds, moneys representing
the amounts of unpresented commercial checks issued by appellant,
and moneys representing unpresented coupons on a debenture issue.
But the Supreme Court of New Jersey held that the Escheat Act did
not apply to debts or demands due the escheated estate that had
been "extinguished, either by satisfaction or by the bar of the
statute of limitations." State v. Standard Oil Co.,
281, 293, 74
, 570. Moneys representing unpaid wages and unpresented
checks and coupons were affected by this ruling. The New Jersey
rule is that the statute of limitation bars the right as well as
the remedy. 5 N.J. at 292, 74 A.2d at 570 et seq. Cf.
Chase Securities Corp. v. Donaldson, 325 U.
, 325 U. S. 311
considering Campbell v. Holt, 115 U.
. The New Jersey Supreme Court also held that
minor claims that were not listed in the notice of the Chancery
Division's proceedings were not escheated. 5 N.J. 281, 310,
. Consequently, appellant complains only of the escheat of
twelve shares of common stock of an aggregate par value of $300,
and of unpaid dividends.
Of course, New Jersey's construction of the escheat statutes is
binding on this Court except where matters of federal law are
involved. Hebert v. Louisiana, 272 U.
, 272 U. S. 317
United States v. Burnison, 339 U. S.
, 339 U. S.
The escheat statute makes the decree a full release of liability
in any jurisdiction in which it is effective, but New Jersey makes
no guarantee to protect appellant against such claims.
The new Jersey Supreme Court did not specifically require that
the address of the last known owner be included in the notice, but
the notice which it approved did, in fact, contain the last known
addresses, and also described the value and character of the
property which was to be escheated. The notice was published once a
week for three successive weeks, in accordance with the statutory
requirement. N.J.Rev.Stat. 2:53-21.
The right of the King at common law to take possession, in
certain circumstances, of abandoned chattels is clear. VII
Holdsworth, History of English Law (2d ed.) 495. E.g.,
treasure trove, Attorney-General v. Trustees of the British
 2 Ch. 598. This doctrine of bona
came to include choses in action, X Holdsworth,
350, such as certificates of stock in corporations,
VII Holdsworth, supra,
515, et seq.;
Disseisin of Chattels, 3 Select Essays in Anglo-American Legal
History 541, 558. Thus, the King possessed as bona
the right to dividends on a claim of a dissolved
corporation in a bankruptcy proceeding against the corporation's
debtor. This was held in 1898 on the theory that the corporation
was "extinct without successor or representative." In re
Higginson & Dean,
 1 Q.B. 325, 330. See
Grant on Corporations (1854 ed.) 303-304. Wright, J., said, 
1 Q.B. 329:
"The Courts will not allow a person who has obtained title or
possession as a mere trustee of chattels to set up
unconscientiously any beneficial title by occupancy, possession, or
Thus, the Crown took the place of the extinct creditor.
Enever, Bona Vacantia
under the Law of
England (1927) 55.
See particularly In re Melrose Ave.,
234 N.Y. 48, 53,
136 N.E. 235.
Cunnack v. Edwards,
 2 Ch. 679, dealt with a
society treated as a legal unit. The members had associated
themselves to provide annuities for their widows. After the death
of all the associates and their widows, � 1250 surplus remained. As
it was not a charity, but rather a business arrangement under which
all obligees had received payment in full, the court held that
neither the cy pres
doctrine nor the doctrine of the
resulting trust applied, and, as Lord Halsbury put it:
"The only other alternative remaining is that which I adopt,
namely, that these funds are bona vacantia,
and belong to
the Crown in that character."
Cunnius v. Reading School District, 198 U.
, 198 U. S. 469
Compare Mormon Church v. United States, 136 U. S.
, 136 U. S. 47
3 Scott, Law of Trusts (1939) § 411.4.
Security Savings Bank v. California, 263 U.
, 263 U. S. 285
Connecticut Mut. Life Ins. Co. v. Moore, 333 U.
, 333 U. S.
-548; Provident Inst. for Savings in Town of
Boston v. Malone, 221 U. S. 660
221 U. S. 663
221 U. S.
Each classified list of debts or demands due to the escheated
estates by the appellant company includes as the last known
addresses of the holders of said claims chiefly points outside New
Jersey. The methods of payment of the different claims have varied.
For example, dividends have been paid from bank accounts maintained
in New York banks by appellant either in its own name or that of
its transfer agent. As we think these business practices are not
significant in determining appellant's liability for these
escheats, they will not be further discussed.
This is like the creditor's ability to garnishee the debtor of
his debtor, wherever the garnisheed debtor may be. Harris v.
Balk, 198 U. S. 215
Louisville & Nashville R. Co. v. Deer, 200 U.
; Baltimore & Ohio R. Co. v.
Hostetter, 240 U. S. 620
Carpenter, 31 Harv.L.Rev. 905, but see
27 Harv.L.Rev. 107. Whatever may be Professor Beale's view of
garnishment, he agrees with the theory of control relied upon
"The true doctrine would seem to be that a debt has in fact, no
situs anywhere -- not merely because it is intangible, but because,
as a mere forced relation between the parties, it has no real
existence anywhere. Like other such relations, it may, of course,
be controlled by the law, and by the courts as instruments of the
law, but the control must be obtained by making use of the
relation. In order to control the relation, the court must have the
power to control both parties to it. Any court which has both
debtor and creditor may compel a release from the creditor and an
assignment of the action of the creditor. In other words, if a debt
is to be legally assigned or discharged, it requires the action of
both parties, and especially the creditor, and the court which has
to apply such a process must do so through its control over both
27 Harv.L.Rev. at 115-116.
Christianson v. King County, 239 U.
, 239 U. S. 368
Hamilton v. Brown, 161 U. S. 256
161 U. S.
Blackstone v. Miller, 188 U. S. 189
overruled by Farmers Loan & Trust Co. v. Minnesota,
280 U. S. 204
280 U. S. 209
The latter case led to a like decision in First National Bank
of Boston v. Maine, 284 U. S. 312
which was in turn overruled by State Tax Comm'n v.
Aldrich, 316 U. S. 174
316 U. S. 181
See Treichler v. Wisconsin, 338 U.
, 338 U. S.
Curry v. McCanless, 307 U. S. 357
307 U. S.
"Such rights are but relationships between persons, natural or
corporate, which the law recognizes by attaching to them certain
sanctions enforceable in courts. The power of government over them
and the protection which it gives them cannot be exerted through
control of a physical thing. They can be made effective only
through control over and protection afforded to those persons whose
relationships are the origin of the rights."
a like ruling in Direction der
Disconto-Gesellschaft v. United States Steel Co.,
300 F. 741,
746, and 267 U. S. 267
22, 267 U. S.
When taxation of intangibles was ruled by Farmers Loan &
Trust Co. v. Minnesota, 280 U. S. 204
the effect that states could not tax intangibles belonging to
nonresidents though owed by residents, Washington held that a
Washington bank deposit, belonging to the estate of a known
nonresident decedent without heirs, could not escheat to
"[T]he situs of this property was at the domicile of its owner,
and therefore it was not property within this state at the time of
his death and not subject to escheat under our statute."
In re Lyons' Estate,
175 Wash. 115, 123, 26 P.2d 615,
618. A contrary view was taken in In re Rapoport's Estate,
317 Mich. 291, 26 N.W.2d 777. There, it was held that the Michigan
bank deposit of a nonresident decedent without heirs passed to
Michigan on the theory that the Michigan escheat statute overruled
the Michigan doctrine of the domiciliary situs of intangibles.
2 Beale, Conflict of Laws § 309.1:
"The picture of bona vacantia
is that of movables
without an owner being taken by the officers of the state. In
reality, the money which [is] represented by the bank deposit was
where the bank was when it was proved to be without an owner."
An obligor in a chose in action, a bank especially, does not
always have tangible assets to represent the liability.
The fact that New Jersey has adopted the Uniform Stock Transfer
Act with its provisions for the transfer of shares and the
replacement of lost certificates is, we think, without a bearing on
the problem of power to escheat. N.J.Rev.Stat. 14:8-27 and 14:8-43.
While those sections provide for transfer of stock certificates
only by delivery and the issue of new certificates only after
notice by publication or otherwise and upon security, they were
apparently treated by New Jersey as inapplicable to the problem of
escheat. See State v. Standard Oil Co.,
5 N.J. 281, 307,
. New Jersey may consider that escheat is a proceeding of
the same general character as matters of internal corporate
management reserved in its decision in Elgart v. Mintz,
123 N.J.Eq. 404, 197 A. 747, 753, an attachment case. The purpose
of the Uniform Stock Transfer Act was to provide a system for
transfer of stock that states might follow to simplify transactions
that touched other states. See, for example,
complications over attachments in Mills v. Jacobs,
231, 4 A.2d 152. As the Uniform Stock Transfer Act was not
specifically directed at shares with unknown owners, New Jersey may
treat such shares in its corporations differently from lost
VII Holdsworth, History of English Law (2d ed.)
"Operation and effect in decree --"
"Any decree entered pursuant to the act to which this act is a
supplement, shall automatically operate as a full, absolute and
unconditional release and discharge of the person having such
property in possession or custody from any and all claim, demand,
or liability to any person whatever other than the State Treasurer
with respect to such property, and such decree may be pleaded as an
absolute bar to any action brought against such person with respect
to such property by any person other than the State Treasurer."
We lay aside without consideration the possibility that the
escheated certificates had legally been transferred to other
parties by the owners prior to publication in this action. " . . .
I think that the risk . . . is not serious enough to justify a
refusal to adjust the differences actually presented."
Direction der Disconto-Gesellschaft v. United States Steel
300 F. 741, 743; 267
U. S. 267
U.S. 22, 267 U. S.
Pennoyer v. Neff, 95 U. S. 714
Hamilton v. Brown, 161 U. S. 256
Pennington v. Fourth National Bank, 243 U.
, 243 U. S. 270
MR. JUSTICE FRANKFURTER, whom MR. JUSTICE JACKSON joins,
I do not understand that the Court affirms the judgment of
escheat on the ground that New Jersey may condition the granting of
a corporate charter on payment
Page 341 U. S. 444
to the dividends unclaimed after 14 years. Indeed, the Court
specifically bars the possibility of double escheat, which would
logically result from such a holding. As I understand it, the
decision must rest upon New Jersey's power over interests which in
a territorial sense are assumed to be within its control. The
foundation of this power is usually conveyed by the concept of
situs. As to this ground of decision, I must dissent. In
Connecticut Mut. Life Ins. Co. v. Moore, 333 U.
, this Court sustained a New York statute allowing
escheat of the unclaimed proceeds of insurance policies on the
basis of the insured's residence in the State at the time of the
delivery of the policy. On that basis, the State where the last
known owner was domiciled certainly has a better claim to abandoned
stock than a State in which it happens that the corporation is
subject to process.
If perchance one is to infer from the opinion that the unclaimed
dividends deposited with the Guaranty Trust Company of New York are
also escheatable by New York and that New York, had she anticipated
New Jersey, could have exhausted all the potentialities of escheat
in the unclaimed dividends, there is an added reason for dissent.
The Constitution ought not to be placed in an unseemly light by
suggesting that the constitutional rights of the several States
depend on, and are terminated by, a race of diligence. The
Bankruptcy Act expresses appropriate condemnation of such unseemly
conduct and accidental solution of competing interests. It is one
thing for a State to take custody of abandoned property as trustee,
leaving open for subsequent determination what State has a
controlling interest justifying escheat. But if a State wishes to
assert its right to escheat property which by its very nature is
not exclusively within its control, other interested States should
be parties to the litigation. The right to resort to this Court for
Page 341 U. S. 445
of conflicting interests among several States has been placed in
the Constitution to avoid crude remedies of self-help in the
settlement of interstate controversies. See Texas v.
Florida, 306 U. S. 398
MR. JUSTICE DOUGLAS, with whom MR. JUSTICE BLACK concurs,
There are several states with possible claims to the escheat of
intangibles. The state of incorporation of the obligor; the state
where the last known owner was domiciled (see Connecticut Mut.
Life Ins. Co. v. Moore, 333 U. S. 541
the state where later on the true residence of the owner was proved
to be; the state of his last known domicile; the state where the
obligor has its main place of business; in case of insurance or
trust property, the state of residence (or domicile) of the
beneficiary. There may be still other states with claims of an
equal or greater dignity to these. In this case, we have heard from
only one -- the state of incorporation.
I think any of several states, including the state of
incorporation, might constitutionally enact a custodial statute
under which it undertook to hold the escheated intangibles pending
determination by this Court of the claims of competing states. New
Jersey has not done that. New Jersey undertakes to appropriate to
her exclusive use (after a short statute of limitations has run)
this vast amount of wealth. Hence, I dissent.