Jurisdiction to escheat abandoned intangible personal property
lies in the State of the creditor's last known address on the
debtor's books and records or, absent such address or an escheat
law, in the State of corporate domicile -- but subject to later
escheat to the former State if it proves such an address to be
within its borders and provides for escheat of such property. Pp.
379 U. S.
Page 379 U. S. 675
MR. JUSTICE BLACK delivered the opinion of the Court.
Invoking this Court's original jurisdiction under Art. III, § 2,
of the Constitution, [Footnote
] Texas brought this action against New Jersey, Pennsylvania,
and the Sun Oil Company for an injunction and declaration of rights
to settle a controversy as to which State has jurisdiction to take
title to certain abandoned intangible personal property through
escheat, a procedure with ancient origins [Footnote 2
] whereby a sovereign may acquire title to
abandoned property if, after a number of years, no rightful owner
appears. The property in question here consists of various small
debts totaling $26,461.65 [Footnote
] which the Sun Oil Company, for periods of approximately
seven to 40 years prior to the bringing of this action, has owed to
approximately 1,730 small creditors who have never appeared to
collect them. The amounts owed, most of them resulting from failure
of creditors to claim or cash checks, are either evidenced on the
books of Sun's two Texas offices or are owing to persons whose last
known address was in Texas, or both. [Footnote 4
Page 379 U. S. 676
Texas says that this intangible property should be treated as
situated in Texas, so as to permit that State to escheat it. New
Jersey claims the right to escheat the same property because Sun is
incorporated in New Jersey. Pennsylvania claims power to escheat
part or all of the same property on the ground that Sun's principal
business offices were in that State. Sun has disclaimed any
interest in the property for itself, and asks only to be protected
from the possibility of double liability. Since we held in
Western Union Tel. Co. v. Pennsylvania, 368 U. S.
, that the Due Process Clause of the Fourteenth
Amendment prevents more than one State from escheating a given item
of property, we granted Texas leave to file this complaint against
New Jersey, Pennsylvania and Sun, 371 U.S. 873, and referred the
case to the Honorable Walter A. Huxman to sit as Special Master to
Page 379 U. S. 677
and make appropriate reports, 372 U.S. 926. [Footnote 5
] Florida was permitted in intervene
since it claimed the right to escheat the portion of Sun's
escheatable obligations owing to persons whose last known address
was in Florida. 373 U.S. 948. [Footnote 6
] The Master has filed his report, Texas and New
Jersey each have filed exceptions to it, and the case is now ready
for our decision. We agree with the Master's recommendation as to
the proper disposition of the property.
With respect to tangible property, real or personal, it has
always been the unquestioned rule in all jurisdictions that only
the State in which the property is located may escheat. But
intangible property, such as a debt which a person is entitled to
collect, is not physical matter which can be located on a map. The
creditor may live in one State, the debtor in another, and matters
may be further complicated if, as in the case before us, the debtor
is a corporation which has connections with many States and each
creditor is a person who may have had connections with several
others and whose present address in unknown. Since the States
separately are without constitutional power to provide a rule to
settle this interstate controversy, and since there is no
applicable federal statute, it becomes our responsibility, in the
exercise of our original jurisdiction, to adopt a rule which will
settle the question of which State will be allowed to escheat this
Page 379 U. S. 678
Four different possible rules are urged upon us by the
respective States which are parties to this case. Texas, relying on
numerous recent decisions of state courts dealing with choice of
law in private litigation, [Footnote 7
] says that the State with the most significant
"contacts" with the debt should be allowed exclusive jurisdiction
to escheat it, and that, by that test, Texas has the best claim to
escheat every item of property involved here. Cf. Mullane v.
Central Hanover Bank & Trust Co., 339 U.
; Atkinson v. Superior
Court, 49 Cal. 2d
, 316 P.2d 960, appeals dismissed and cert. denied sub
nom. Columbia Broadcasting System, Inc. v. Atkinson,
357 U. S. 569
the rule that Texas proposes, we believe, would serve only to leave
in permanent turmoil a question which should be settled once and
for all by a clear rule which will govern all types of intangible
obligations like these and to which all States may refer with
confidence. The issue before us is not whether a defendant has had
sufficient contact with a State to make him or his property rights
subject to the jurisdiction of its courts, a jurisdiction which
need not be exclusive. Compare McGee v. International Life Ins.
Co., 355 U. S. 220
Mullane v. Central Hanover Bank & Trust Co., supra;
International Shoe Co. v. Washington, 326 U.
. [Footnote 8
Since this Court has held in Western Union Tel. Co. v.
that the same property cannot
constitutionally be escheated
Page 379 U. S. 679
by more than one State, we are faced here with the very
different problem of deciding which State's claim to escheat is
superior to all others. The "contacts" test, as applied in this
field, is not really any workable test at all -- it is simply a
phrase suggesting that this Court should examine the circumstances
surrounding each particular item of escheatable property on its own
peculiar facts, and then try to make a difficult, often quite
subjective, decision as to which State's claim to those pennies or
dollars seems stronger than another's. Under such a doctrine, any
State likely would easily convince itself, and hope to convince
this Court, that its claim should be given priority -- as is shown
by Texas' argument that it has a superior claim to every single
category of assets involved in this case. Some of them Texas says
it should be allowed to escheat because
the last known
addresses of the creditors were in Texas; others it claims in
the fact that the last known addresses were
in Texas. The uncertainty of any test which would
require us, in effect, either to decide each escheat case on the
basis of its particular facts or to devise new rules of law to
apply to ever-developing new categories of facts might, in the end,
create so much uncertainty and threaten so much expensive
litigation that the States might find that they would lose more in
litigation expenses than they might gain in escheats. [Footnote 9
New Jersey asks us to hold that the State with power to escheat
is the domicile of the debtor -- in this case New Jersey, the State
of Sun's incorporation. This plan has
Page 379 U. S. 680
the obvious virtues of clarity and ease of application. But it
is not the only one which does, and it seems to us that, in
deciding a question which should be determined primarily on
principles of fairness, it would too greatly exalt a minor factor
to permit escheat of obligations incurred all over the country by
the State in which the debtor happened to incorporate itself.
In some respects, the claim of Pennsylvania, where Sun's
principal offices are located, is more persuasive, since this State
is probably foremost in giving the benefits of its economy and laws
to the company whose business activities made the intangible
property come into existence. On the other hand, these debts owed
by Sun are not property to it, but rather a liability, and it would
be strange to convert a liability into an asset when the State
decides to escheat. Cf. 82 U. S.
Wall. 300, 82 U. S. 320
Moreover, application of the rule Pennsylvania suggests would raise
in every case the sometimes difficult question of where a company's
"main office," or "principal place of business," or whatever it
might be designated, is located. Similar uncertainties would result
if we were to attempt in each case to determine the State in which
the debt was created and allow it to escheat. Any rule leaving so
much for decision on a case-by-case basis should not be adopted
unless none is available which is more certain and yet still fair.
We think the rule proposed by the Master, based on the one
suggested by Florida, is.
The rule Florida suggests is that, since a debt is property of
the creditor, not of the debtor, [Footnote 10
] fairness among the States requires that the
right and power to escheat the debt should be accorded to the State
of the creditor's
Page 379 U. S. 681
last known address as shown by the debtor's books and records.
] Such a
solution would be in line with one group of cases dealing with
intangible property for other purposes in other areas of the law.
] Adoption of
such a rule involves a factual issue simple and easy to resolve,
and leaves no legal issue to be decided. It takes account of the
fact that, if the creditor, instead of perhaps leaving behind an
uncashed check, had negotiated the check and left behind the cash,
this State would have been the sole possible escheat claimant; in
other words, the rule recognizes that the debt was an asset of the
creditor. The rule recommended by the Master will tend to
distribute escheats among the States in the proportion of the
commercial activities of their residents. And, by using a standard
of last known address, rather than technical legal concepts of
residence and domicile, administration and application of escheat
laws should be simplified. It may well be that some addresses left
by vanished creditors will be in States other than those in which
they lived at the time the obligation arose or at the time of the
escheat. But such situations probably will be the exception, and
any errors thus created, if indeed they could be called errors,
probably will tend to a large extent to cancel each other out. We
therefore hold that each item of property
Page 379 U. S. 682
in question in this case is subject to escheat only by the State
of the last known address of the creditor, as shown by the debtor's
books and records. [Footnote
This leaves questions as to what is to be done with property
owed persons (1) as to whom there is no record of any address at
all, or (2) whose last known address is in a State which does not
provide for escheat of the property owed them. The Master suggested
as to the first situation -- where there is no last known address
-- that the property be subject to escheat by the State of
corporate domicile, provided that another State could later escheat
upon proof that the last known address of the creditor was within
its borders. Although not mentioned by the Master, the same rule
could apply to the second situation mentioned above, that is, where
the State of the last known address does not, at the time in
question, provide for escheat of the property. In such a case, the
State of corporate domicile could escheat the property, subject to
the right of the State of the last known address to recover it if
and when its law made provision for escheat of such property. In
other words, in both situations, the State of corporate domicile
should be allowed to cut off the claims of private persons only,
retaining the property for itself only until some other State comes
forward with proof that it has a superior right to escheat. Such a
solution for these problems, likely to arise with comparative
infrequency, seems to us conductive to needed certainty and we
therefore adopt it.
Page 379 U. S. 683
We realize that this case could have been resolved otherwise,
for the issue here is not controlled by statutory or constitutional
provisions or by past decisions, nor is it entirely one of logic.
It is fundamentally a question of ease of administration and of
equity. We believe that the rule we adopt is the fairest, is easy
to apply, and, in the long run, will be the most generally
acceptable to all the States.
The parties may submit a proposed decree applying the principles
announced in this opinion.
It is so ordered.
"The judicial Power shall extend . . . to Controversies between
two or more States. . . ."
"In all Cases . . . in which a State shall be Party, the supreme
Court shall have original Jurisdiction."
28 U.S.C. § 1251(a) (1958 ed.) provides in relevant part:
"The Supreme Court shall have original and exclusive
"(1) All controversies between two or more States. . . ."
Enever, Bona Vacantia
Law of England; Note, 61 Col.L.Rev. 1319.
The amount originally reported by Sun to the Treasurer of Texas
was $37,853.37, but payments to owners subsequently found reduced
the unclaimed amount.
The debts consisted of the following:
(1) Amounts which Sun attempted to pay through its Texas offices
owing to creditors some of whose last known addresses were in
Texas, some of whose last known addresses were elsewhere, and some
of whom had no last known address indicated:
(a) uncashed checks payable to employees for wages and
(b) uncashed checks payable to suppliers for goods and
(c) uncashed checks payable to lessors of oil- and gas-producing
land as royalty payments;
(d) unclaimed "mineral proceeds," fractional mineral interests
shown as debts on the books of the Texas offices.
(2) Amounts for which various offices of Sun throughout the
country attempted to make payment to creditors all of whom had last
known addresses in Texas:
(a) uncashed checks payable to shareholders for dividends on
(b) unclaimed refunds of payroll deductions owing to former
(c) uncashed checks payable to various small creditors for minor
(d) undelivered fractional stock certificates resulting from
Texas' motion for leave to file the bill of complaint also
prayed for temporary injunctions restraining the other States and
Sun from taking steps to escheat the property. The other States
voluntarily agreed not to act pending determination of this case,
and so the motion for injunctions was denied. 370 U.S. 929.
Illinois, which claims no interest in the property involved in
this case, also sought to intervene to urge that jurisdiction to
escheat should depend on the laws of the State in which the
indebtedness was created. Leave to intervene was denied. 372 U.S.
E.g., Schmidt v. Driscoll Hotel, Inc.,
249 Minn. 376,
82 N.W.2d 365; Auten v. Auten,
308 N.Y. 155, 124 N.E.2d
99; Haumschild v. Continental Casualty Co.,
7 Wis.2d 130,
95 N.W.2d 814. See also Clay v. Sun Insurance Office,
Ltd., 377 U. S. 179
Watson v. Employers Liability Assurance Corp.,
348 U. S. 66
cf. Richards v. United States, 369 U. S.
; Vanston Bondholders Protective Committee v.
Green, 329 U. S. 156
Nor, since we are dealing only with escheat, are we concerned
with the power of a state legislature to regulate activities
affecting the State, power which, like court jurisdiction, need not
be exclusive. Compare Osborn v. Ozlin, 310 U. S.
Texas argues in particular that at least the part of the
intangible obligations here which are royalties, rents, and mineral
proceeds derived from land located in Texas should be escheatable
only by that State. We do not believe that the fact that an
intangible is income from real property with a fixed situs is
significant enough to justify treating it as an exception to a
general rule concerning escheat of intangibles.
On this point, Florida stresses what is essentially a variation
of the old concept of "mobilia sequuntur personam,
according to which intangible personal property is found at the
domicile of its owner. See Blodgett v. Silberman,
277 U. S. 1
277 U. S.
We agree with the Master that, since our inquiry here is not
concerned with the technical domicile of the creditor, and since
ease of administration is important where many small sums of money
are involved, the address on the records of the debtor, which in
most cases will be the only one available, should be the only
relevant last-known address.
See, e.g., Baldwin v. Missouri, 281 U.
; Farmers' Loan & Trust Co. v.
Minnesota, 280 U. S. 204
Blodgett v. Silberman, 277 U. S. 1
However, it has been held that a State may allow an unpaid creditor
to garnish a debt owing to his debtor wherever the person owing
that debt is found. Harris v. Balk, 198 U.
. But cf. New York Life Ins. Co. v.
Dunlevy, 241 U. S. 518
Cf. Connecticut Mutual Life Ins. Co. v. Moore,
333 U. S. 541
was pointed out in Western Union Tel. Co. v. Pennsylvania,
368 U. S. 71
368 U. S. 77
none of this Court's cases allowing States to escheat intangible
property decided the possible effect of conflicting claims of other
States. Compare Standard Oil Co. v. New Jersey,
341 U. S. 428
341 U. S. 443
Connecticut Mutual Life Ins. Co. v. Moore, supra; Anderson
National Bank v. Luckett, 321 U. S. 233
Security Savings Bank v. California, 263 U.
MR. JUSTICE STEWART, dissenting.
I adhere to the view that only the State of the debtor's
incorporation has power to "escheat" intangible property when the
whereabouts of the creditor are unknown. See Western Union Tel.
Co. v. Pennsylvania, 368 U. S. 71
368 U. S. 80
(separate memorandum). The sovereign's power to escheat tangible
property has long been recognized as extending only to the limits
of its territorial jurisdiction. Intangible property has no spatial
existence, but consists of an obligation owed one person by
another. The power to escheat such property has traditionally been
thought to be lodged in the domiciliary State of one of the parties
to the obligation. In a case such as this, the domicile of the
creditor is, by hypothesis, unknown; only the domicile of the
debtor is known. This Court has thrice ruled that, where the
creditor has disappeared, the State of the debtor's domicile may
escheat the intangible property. Standard Oil Co. v. New
Jersey, 341 U. S. 428
Anderson Nat. Bank v. Luckett, 321 U.
; Security Savings Bank v. California,
263 U. S. 282
Today the Court overrules all three of those cases. I would not do
so. Adherence to settled precedent seems to me far better than
giving the property to the State within which is located the one
place where we know the creditor is not.