263 U.S. 282 (1923), 21, Security Savings Bank v. California

Docket Nº:No. 21
Citation:263 U.S. 282, 44 S.Ct. 108, 68 L.Ed. 301
Party Name:Security Savings Bank v. California
Case Date:November 19, 1923
Court:United States Supreme Court
 
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263 U.S. 282 (1923)

44 S.Ct. 108, 68 L.Ed. 301

Security Savings Bank

v.

California

No. 21

United States Supreme Court

Nov. 19, 1923

Submitted October 3, 1923

ERROR TO THE SUPREME COURT

OF THE STATE OF CALIFORNIA

Syllabus

1. Savings deposits, in a state banking corporation having its place of business within the its creation, are intangible property subject, like tangible property, to the dominion of the state. P. 285.

2. A state law requiring a bank, through appropriate procedure, to pay over such deposits, when long unclaimed, to the state as depositary or by way of escheat, violates no right of the bank under the contract clause of the Constitution or the due process clause of the Fourteenth Amendment, since the bank's contracts with the depositors merely give it the use of the money until called for by proper authority, and payment to the state in obedience to a valid law discharges its obligation to them. Id.

3. The two essentials of jurisdiction in a proceeding by the state to effect an escheat of such unclaimed deposits, in order that the depositors may be bound and the bank protected, are seizure of the res at the beginning of the suit and reasonable notice and opportunity to be heard accorded the depositors. P. 287.

4. Under the California statutes here involved, seizure of the res is accomplished by personal service on the bank, in a suit brought by the Attorney General in Sacramento County, and due notice is given the depositors by publication in that county of a summons, with a notice also to all other persons to appear and show cause why the money should not be deposited with the State Treasurer. Id.

5. Proof by affidavit that personal service on depositors is impossible or impracticable is not a constitutional prerequisite to service by publication in such an escheat proceeding where the depositors impleaded are only those who are not known to the bank officials to be alive, whose accounts have not been added to or drawn

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upon for twenty years, and who have not filed with the bank, within that time, any notice or claim giving their then residences. P. 288.

6. In view of other statutes requiring savings banks in California to publish at their several locations annual notices of deposits not added to or drawn upon during the preceding ten years, with the name, last known residence, and other particulars concerning the depositor, this Court cannot say that the escheat statute, in providing for publication of summons in escheat proceedings at Sacramento County only, was unreasonable. P. 289.

186 Cal. 419 affirmed.

Error to a judgment of the Supreme Court of California affirming a judgment of escheat of bank deposits in suit of the state against the savings bank and the depositors.

BRANDEIS, J., lead opinion

MR. JUSTICE BRANDEIS delivered the opinion of the Court.

This suit was brought by the State of California to have transferred to it certain deposits in the Security Savings Bank which had been unclaimed for more than 20 years, and to have these declared escheat. The bank and the depositors were named as defendants. The bank was served personally, and defended. The depositors were served by publication, but none of them appeared.1 The

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bank is a California corporation, and has its only place of business there. The last known residences of the depositors are not stated. All the proceedings were in conformity with § 1273 of the California Code of Civil Procedure and § 15 of its Bank Act, Stat. 1915, c. 608, p. 1106. A judgment for the plaintiff was affirmed by the highest court of the state. State v. Security Savings Bank, 186 Cal. 419. The case is here on writ of error under § 237 of the Judicial Code as amended. The question for decision is whether the statutes violate rights guaranteed a state bank by the federal Constitution.2 It is claimed that they are obnoxious to both the contract clause and the due process clause.

The substantive provision of the legislation is this: if a bank account has not been added to or drawn upon by the depositor for more than 20 years, and no one claiming the money has, within that period, filed with the bank any notice showing his present residence, and the president or managing officer of the bank does not know that the depositor is alive, then the bank shall, upon entry of a judgment establishing these facts, deposit with the state treasurer the amount of the deposit and accumulations. The suit cannot be begun until after the expiration of the 20 years...

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