Alpern v. Girard Trust Corn Exchange Bank
| Decision Date | 17 April 1961 |
| Parties | Anne X. ALPERN, Attorney General of the Commonwealth of Pennsylvania, v. GIRARD TRUST CORN EXCHANGE BANK, Appellant, and All of the Owners and Beneficial Owners for Whom it Holds Unclaimed Funds. |
| Court | Pennsylvania Supreme Court |
Nauman, Smith, Shissler & Hall, Spencer G. Hall Harrisburg, Barnes, Dechert, Price, Myers & Rhoads Philadelphia, by Arthur E. Newbold, III, Theodore Voorhees Philip Price, Philadelphia, for appellant.
Raymond J. Bradley, Samuel B. Blaskey, Philadelphia, Sp. Counsel, Jack M. Cohen, Deputy Atty. Gen., for appellee.
Before CHARLES ALVIN JONES, C. J., and MUSMANNO, BENJAMIN R. JONES, BOK and EAGEN, JJ.
The Attorney General of the Commonwealth of Pennsylvania, filed a petition in the Court of Common Pleas of Dauphin County, for an order directing the Girard Trust Corn Exchange Bank of Philadelphia, (hereinafter called Girard), to pay into the state treasury, without escheat, certain alleged unclaimed funds, the rightful owners of which are unknown. The respondent, Girard, pursuant to the Act of March 5, 1925, P.L. 23, § 2, 12 P.S. § 673, challenging the jurisdiction of the court below, filed a petition asking dismissal of the action. The court below refused to dismiss and from said order this appeal is prosecuted.
The Commonwealth's petition was filed under the Act of May 16, 1919, P.L. 177, as supplemented and amended, 27 P.S. § 431 et seq., which provides for the payment into the state treasury, without escheat, funds made escheatable under any other statute of the Commonwealth. [1] The petition alleges that the funds involved are escheatable under the Act of June 7, 1915, P.L. 878, as amended, 27 P.S. § 241 et seq. This statute which applies, inter alia, to national banks and trust companies authorizes the escheat of money, property and debts which have remained unclaimed, or where the owners of which have been unknown for a period of seven successive years or more.
While many unique and interesting questions are involved in this issue, the narrow question presently before this Court is, whether or not the Common Pleas Court of Dauphin County may hear and determine the controversy. Whether or not the allegations of the petition can be sustained is not now before us. All we are to decide is, wheter or not under the facts pleaded, the Attorney General may prosecute this action in the court in which it was instituted.
Basically, the action involves funds now held by Girard, or used for its own purposes, which allegedly came into being as a portion of the earnings and profits realized from the use of monies it held in years past in various fiduciary capacities. Count one of the petition concerns interest and earnings realized from the use of funds held by Girard as guardian, executor, administrator, testamentary trustee, inter vivos trustee, agent and trustee under corporate trust indentures, during the period of 1906 through November 23, 1915. Count two involves earnings and profits realized from the use of funds held by Girard in each of the fiduciary capacities specified in count one, except funds held by it under corporate trust indentures, and covers the period of December 1, 1915, through November 30, 1935. Count three involves interest and earnings from the use of funds held by it as a trustee under corporate trust indentures, during the period of December 1, 1915, through November 10, 1936.
The petition alleges, that Girard in the course of its business during the years involved, received the funds and property of a great number of individuals, estates, trusts and corporations, which it had under its controal in a fiduciary capacity; that from time to time, Girard had on hand certain cash balances belonging to those having a beneficial interest in these various fiduciary accounts, which cash it did not invest for the benefit of the owners. Instead, Girard commingled all of this cash and deposited it in accounts, under its own name, with other banking institutions. At intervals, these banking institutions would credit the accounts, standing in Girard's name, with interest earned on these funds. At various times, Girard withdrew some of the cash on deposit in these accounts and made investments in securities and in interest bearing loans, and these earnings were added to the deposits of the accounts maintained in its own name. In lieu of distributing pro rata all of this interest and earnings to the various beneficial owners, entitled thereto, Girard withdrew portions thereof and applied these sums to its own use.
The petition further alleges that, as a result of Girard's commingling these funds, from whence the earnings came; by reason of the commingling of both principal and earnings; by virtue of its failure to segregate, divide and allocate all of the interest and earnings among those legally entitled thereto, it became impossible to ascertain the real and lawful owners of the interest and earnings, either at the date of the commingling or at any later date. Thus, for more than seven successive years, the funds involved have been unclaimed, and the rightful owners thereof unknown.
It is further alleged, that Girard has never accounted for these funds to the lawful owners or to any court and, that the estates or trusts entitled to these funds are no longer active and such of them as were active, when the funds were taken, are now terminated.
Girard contends, that the practice complained of has been customary in banking institutions for many years; that it has always rightfully claimed the funds involved as its own; that the peition for escheat clearly manifests that these funds are trust funds, subject to the jurisdiction of the Orphans' Court of Philadelphia County and other counties; and, that, therefore, the Court of Common Pleas of Dauphin County has no jurisdiction.
It is argued that the funds involved are in large measure either a part of, or derived from, other funds which have been previously distributed by the Orphans' Courts of other counties, principally Philadelphia County, and that any accounting therefor must legally be made in the Orphans' Courts of those counties. Before any escheat or custodial taking can be determined, it must be resolved first that there are funds due others for which no claims by them have been made. This, it is urged, would require a review of all accounts heretofore filed by Girard in Philadelphia County, and all other such counties, to decide whether or not any trust funds or earnings therefrom exist, which were improperly unaccounted for. Therefore, it is strenuously contended that an application for custodial taking or escheat under the Act of 1919, supra, must be made to the Orphans' Courts of the counties, who have jurisdiction of these trust accounts. In support of this position, section one of the Act of 1919, supra, is cited, which states, inter alia, as follows:
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